THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 


A  TREATISE 


ON  THE 


Law  and  Proceedings 


IN 


BANKRUPTCY 


BY 

FRANK  O.  LOVELAND 

Clerk  of  the  United  States  Circuit  Court  of  Appeals  for  the  Sixth  Circuit, 
Author  of  "  Forms  of  Federal  Practice." 


THIRD  EDITION 


CINCINNATI 
THE  W.H.ANDERSON  CO. 

1907 


T 
\90T 


COPYRIGHT 

1899 

w. 

H.  ANDERSON  &  CO. 

COPYRIGHT 

1904 

THE 

W.  H.  ANDERSON  CO. 

COPYRIGHT 

1907 

THE 

W.  H.  ANDERSON  CO, 

This  Volume  is  with  great  respect 
dedicated  to  the 

HONORABLE  HORACE  H.  LURTON. 

Presiding  Judge  of  the 
United  States  Circuit  Court  of  Appeals, 
for  the  Sixth  Circuit. 


^^'^COOffk 


PREFACE  TO  THE  THIRD  EDITION. 


I  wish  to  gratefully  acknowledge  the  many  kind  words  of 
approval  expressed  by  judges  and  lawyers  who  have  used  the 
former  editions  of  this  work.  Such  expressions  have  been  a 
source  of  encouragement  in  the  w^ork  of  preparing  the  pres- 
ent edition. 

Three  years  have  passed  since  the  second  edition  was  pub- 
lished. During  that  period  more  than  two  thousand  opinions 
in  bankruptcy  cases  have  been  reported  in  the  books.  Many 
new  questions  of  law  and  procedure  have  arisen  and  been 
decided.  The  construction  given  to  the  several  sections  and 
phrases  in  the  bankruptcy  law  has  become  more  firmly  estab- 
lished by  additional  authority.  ]\Iany  important  questions, 
concerning  which  the  courts  of  bankruptcy  held  conflicting 
views,  have  been  settled  by  the  Supreme  Court  of  the  United 
States. 

In  order  to  bring  in  all  these  matters  in  logical  order  it  has 
been  necessary  to  practically  rewrite  the  book.  In  doing  this 
new  sections  have  been  added  and  many  subjects  treated  which 
were  merely  referred  to  in  the  earlier  editions.  In  making  the 
present  revision  I  have  preserved  the  titles  and  numbers  of 
chapters  and  sections  as  in  the  earlier  editions.  I  have  also  pre- 
served the  plan  adopted  in  the  former  editions,  which  is  as 
follows :  To  consider  the  power  of  congress  upon  the  "sub- 
ject of  bankruptcies"  under  the  constitution,  the  organization 
and  jurisdiction  of  the  courts  of  bankruptcy,  and  then  to 
follow  step  by  step,  in  its  natural  course,  a  proceeding  in  bank- 
ruptcy, from  its  inception,  through  the  court  of  bankruptcy 
and  the  appellate  court.  Under  the  present  Act  proceed- 
ings by  a  debtor,  by  creditors  against  a  common  debtor, 
and  to  have  a  partnership  declared  bankrupt  differ  in  the  mode 


VI  PREFACE. 

of  instituting  them.  After  an  adjudication  and  order  of  ref- 
erence the  proceedings  are  substantially  the  same,  irrespective 
of  how  or  by  whom  commenced. 

By  this  arrangement  the  several  provisions  relating  to  the 
same  proceeding,  which  are  separated  in  the  Act  itself,  are 
collected;  so  that  the  attorney  may  have  before  him  all  parts 
of  the  statute  and  the  authorities  relating  to  the  particular 
question  which  is  being  investigated. 

FRANK  O.  LOVELAND. 

Cincinnati,  May  1,  1907. 


TABLE  OF  CONTENTS, 


CHAPTER  1. 

A   BRIEF    HISTORY   OF    BANKRUPT   LAW. 

PAGE. 

§  1.  Bankrupt  laws  of  the  Romans    1 

2.  Bankrupt  laws  of  other  countries   2 

3.  English  bankrupt  laws    4 

4.  Bankrupt  laws  of  the  United  States   t! 

5.  The  act  of  1800   7 

6.  The  act  of  1841    10 

7.  The  law  of  1867    12 

8.  A  brief  comparison  of  the  acts  of  1867  and  1898 13 

CHAPTER  II. 

THE   POWER  OF   CONGRESS   AND   THE   STATES    TO   ENACT  BANKRUPT  LAWS. 

§  9.  The  power  of  congress  to  enact  bankrupt  laws  17 

10.  Power  of  the  state  to  enact  bankrupt  and  insolvent  laws...  20 

11.  Power  of  the  states  to  enact  bankrupt  and  insolvent  laws. ..  20 

12.  The  effect  of  a  national  bankrupt  law  upon  state  insolvent 

laws  23 

13.  The  effect  of  a  national  bankrupt  law  upon  general  assign- 

ment laws  of  the  states 29 

CHAPTER  III. 

THE    COURTS     OF    BANKRUPTCY    AND     THEIR    TERRITORIAL     JURISDICTION. 

§]  4.     Bankruptcy  courts  created   33 

15.     Territorial  jurisdiction    33 

CHAPTER  IV. 

THE  JU'BISDICTION   OF   COURTS   OF  BANKRUPTCY. 

§  16.     The   statutory   jurisdiction    74 

16a.  The  general  extent  of  the  jurisdiction  of  courts  of  bank- 
ruptcy    76 

17.  Jurisdiction  of  bankruptcy  proceedings  proper 84 

18.  Bankruptcy   jurisdiction   exclusive 91 

19.  Limitations  to  the  exercise  of  jurisdiction 95 


'T'lll  TABLE  OF  CONTENTS. 

PAGE 

§  20.     Jurisdiction  of  suits  at  law  and  in  equity 97 

20a.  Plenary  suits  against  adverse  claimants 100 

21.  Ancillary  proceedings  in  otlier  districts 103 

22.  Power  to  stay  proceedings   in  ottier  courts 105 

23.  Power  to  obtain  possession  of  property 114 

24.  When  a  circuit  court  may  have  jurisdiction  of  bankruptcy 

proceedings 12x 

25.  Jurisdiction  of  circuit  courts  at  law  and  in  equity 122 

CHAPTER    V. 

REFEREES. 

§  26.     The  appointment,  removal  and  districts  of  referees 128 

27.  Qualifications   of   referees 129 

28.  The  oath  and  bond  of  a  reieree 130 

29.  General  powers  of  referees 131 

30.  Power  to  make  an  adjudication 136 

31.  Power  to  administer  oaths  and  examine  witnesses 137 

32.  Power  to  take  possession  and  release  the  bankrupt's  prop- 

erty    139 

32a.  Review  of  referee's  rulings  by  judge 141 

33.  The  administrative  duties  of  referees 145 

34.  Records  of  referees 147 

35.  Offenses  of  referees    148 

36.  Compensation  of  referees 149 

CHAPTER   VI. 

CLERKS,    MARSHALS,   ETC. 

§  37.     Duties  of  the  clerks 153 

38.  Compensation  and  expenses  of  clerks 155 

39.  Marshals 156 

40.  Compensation   and   expenses   of  marshals 156 

41.  Duty  of  the  attorney-general  to  report  annually 158 

41a.  Attorneys 158 

CHAPTER   Vn. 

WHO    MAY    BE    BANKRUPTS. 

§  42.     Voluntary   Bankrupts 168 

43.  Involuntary    Bankrupts    168 

44.  Aliens 171 

45.  Infants 172 

46.  Lunatics 173 

47.  Married  women   174 

48.  Corporations  . 174 

CHAPTER    VIII. 

ACTS    OF   BANKRUPTCY. 

§  49.     AVho  may  commit  an  act  of  bankruptcy 182 

50.     What  are  acts  of  bankruptcy? 183 


TABLE   OF   CONTENTS.  IX 

PAGE 

§  50a.  Insolvency  as  an  act  of  bankruptcy 185 

51.  First:  Fraudulent  transfers  190 

52.  Second:    Preferences  created  by   the  debtor 192 

53.  Third:   Preferences  created  by  legal  proceedings 196 

54.  Fourth:    Assignment  for  the  benefit  of  creditors 199 

55.  Fifth :    Voluntary  petition    202 

56.  Computing   time    203 

CHAPTER    IX. 

PROCEEDINGS    IN    VOLUNTARY    BANKRUPTCY. 

§  57.     Who  may  file  a  voluntary  petition 20G 

58.  In  what  court  the  petition  is  to  be  filed 208 

59.  The  petition   211 

60.  Schedules 212 

61.  Of  filing  the  petition  and  schedules 216 

62.  The  order  of  adjudication  and  reference 218 

63.  Amendments   to  petition  and  schedules 221 

64.  Voluntary  dismissing  a  petition 222 

65.  Proceedings  subsequent  to  the  adjudication 223 

CHAPTER    X. 

INVOLUNTARY    PROCEEDINGS. 

5  66.     Who  may  institute  involuntary  proceedings 224 

67.  Against  whom  a  petition  may  be  filed 230 

68.  In  what  court  an  involuntary  petition  is  filed 234 

69.  The  petition    235 

70.  The  time  and  manner  of  filing  the  petition 240 

71.  The  writ  of  subpoena 242 

72.  In  what  cases  a  subpoena  is  necessary 243 

73.  The  service  of  a  subpoena 244 

74.  The  return  of  a  subpoena 247 

75.  Service  by   publication    248 

76.  How  to  object  to  an  irregularity  of  service  or  subpoena 250 

77.  Interlocutory  orders  tn  protect  the  estate 250 

77a.  Receivers  in  bankruptcy    252 

78.  Temporary  injunction  or  restraining  order 256 

79.  The  seizure  if  the  debtor's  property 258 

80.  Appearing  for  the  purpose  of  becoming  a  party  to  the  pro- 

ceedings    2C0 

81.  Schedules • 2G3 

82.  Pleading   to   the    petition 264 

83.  The   answer    2CG 

84.  The  order  if  proceeding  where  petitions  are  filed  in  differ- 

ent districts    272 

85.  The  order  of  proceeding  where  two  or  more  petitions  are 

filed  in  the  same  court 273 

86.  The    reply    273 

87.  The  hearing  or  t  rial 274 

88.  Order  of  adjudication   •  •  278 


X  TABLE  OF   CONTENTS. 

PAGE 

§  89.     Proceedings  to  set  aside  an  adjudication 279 

90.  Order  of  reference   281 

91.  Proceedings  on  default 282 

92.  Amendments  in  involuntary  proceedings 283 

93.  Dismissing  a  petition    287 

94.  Involuntary  proceedings  as   to  grounds  for  suit  for  dam- 

ages ...   289 

94a.  Costs 289 

95.  Proceedings  subsequent  to  the  adjudication 291 

CHAPTER    XI. 

PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS; 

§  96.     Partnership  bankruptcy   generally    292 

9Ga.  Individual  petition  by  or  against  a  partner 293 

97.  When  a  partnership  may  be  adjudged  bankrupt 296 

98.  How   to   institute   proceedings   to   have   a   partnership   de- 

clared bankrupt 298 

98a,  The  adjudication  and  reference  in  partnership  cases 304 

99.  The  administration  of  partnership  estates 306 

100.  What  is  firm  and  individual  property  respectively 310 

101.  What  are  firm  and  individual  debts  respectively 312 

102.  The  effect  of  a  discharge 318 

CHAPTER   XII. 

MEETINGS    OF    CREDITORS. 

§  103.     Proceedings  after  a  refei-ence  generally 321 

104.  The  time  and  manner  of  calling  the  first  meeting  of  cred- 

itors    321 

105.  Who  are  entitled  to  vote  at  the  first  creditor's  meeting. . .  322 

106.  How  to  conduct  the  first  meeting  of  creditors 327 

107.  Notice  to  trustee  . 333 

108.  Other  meetings  of  creditors 334 

CHAPTER    XIII. 

WHAT    DEBTS    ARE    PROVABLE. 

§  109.     Provable  debts  defined    336 

110.  What  is  "a  debt" 338 

111.  Equitable  debts    344 

112.  Contingent  demands  and  liabilities  not  debts 342 

113.  Debts  which  are  a  fixed  liability  provable 344 

114.  What  constitutes  a  fixed  liability  absolutely  owing 345 

115.  Judgment  debts  provable   346 

116.  Debts  evidence  by  an  instrument  in  writing 351 

117.  Interest 358 

118.  Costs 359 

119      Debts  founded  upon  contract 360 

120.  Rent 365 

121.  Mutual  debts  and  credits 368 

122.  What  are  "mutual  debts"  and  "mutual  credits" 369 


TABLE  OF  CONTENTS.  XI 

PAGE 

§  123.     What  mutuality  is  necessary 371 

124.  The  debts  and  credits  must  be  in  the  same  right 375 

125.  Set-offs  must  be  provable  debts 377 

126.  Debts  acquired  by  purchase  as  set-offs 378 

127.  Rights  of  preferred  creditor  to  set-offs 380 

127a.  Waiver  of  set-off  381 

128.  Torts 381 

129.  Debts  barred  by  the  statutes  of  limitations 382 

CHAPTER    XIV. 

HOW    TO    PROVE   DEBTS. 

I  130.     Necessity  of  proof 384 

131.  Who  may  make  the  proof 385 

132.  The  time  within  which  debts  may  be  proved 388 

133.  The  manner  of  making  the  proof 391 

134.  Proof  by  a  secured  creditor 396 

135.  Proof  by  creditors  who  have  received  preferences 397 

136.  What  is  a  surrender  of  a  security  or  preference? 400 

137.  Filing  proofs  of  debts 402 

138.  Amendments  and  withdrawal  of  proof 403 

139.  Allowance  of  claims  406 

140.  Re-examination   of   claims    409 

141.  How  to  review  the  final  allowance  or  rejection  of  a  claim. .  413 

CHAPTER    XV. 

TRUSTEES. 

§  142.     Appointment  and  qualifications   415 

143.  Bonds  of  trustees   417 

144.  Duties  of  a  trustee  418 

145.  Removal   of  trustee    425 

146.  Suits  which  may  be  prosecuted  or  defended  by  trustees..  427 

147.  Limitations  of  actions  by  or  against  trustees 431 

148.  Compensation  and  expenses  of  trustees 431 

CHAPTER    XVI. 

WHAT   PASSES   TO   THE   TRUSTEE. 

§  149.     Title  to   bankrupt's   property ."■  435 

150.  The  possession  of  the  bankrupt's  property 440 

151.  Trustees  not  bound  to  take  incumbered  interest 443 

152.  Property    of   other  persons  in  the  possession  of  the  bank- 

rupt    444 

152a.  Conditional  sales  448 

152b.  Fraudulent  sales   451 

152c.  Confession  of  goods    454 

152d.  Proceedings  to  recover  property  in  the  possession  of  the 

trustee  

153.  What  property  passes  to  the  trustee  generally 460 

154.  Documents 462 


Xll  TiVBLE  OF   CONTENTS. 

PAGR 

§  155.     Patents,  copyrights  and  trade-marks 4G2 

156.  Powers   of  appointment,   etc 464 

157.  Property  fraudulently  transferred  by  the  bankrupt 466 

158.  Transfers  in  fraud  of  creditors 467 

159.  Transfei-s  to  prefer  creditors 471 

160.  Property  transferred  to  hinder,  delay  or  defraud  creditors  474 

161.  Transfers  void  as  to  creditors  under  state  laws 478 

162.  Real  and  personal  property 479 

163.  Interest   in   real   estate 480 

164.  Dower  and  curtesy  481 

165.  Leaseholds 483 

166.  Growing  crops,  fixtures  and  good-will 488 

167.  Goods  and  chattels  generally 490 

168.  Shares    of   stock    492 

169.  Membership  in  exchanges,  franchises  and  privileges 494 

170.  Negotiable    instruments    496 

171.  Pensions 496 

172.  Insurance    policies    497 

173.  Property  held  by  the  bankrupt  as  trustee 500 

174.  Trust  property  in  which  the  bankrupt  has  a  beneficial  in- 

terest   504 

175.  After-acquired  property  505 

176.  Rights  of  action  upon  contracts  for  injury,  etc.,  to  prop- 

erty  „ 508 

CHAPTER    XVII. 

EXEMPTIONS. 

§  177.     By  what  laws  exemptions  are  governed 513 

177a.  Domicile  of  a  bankrupt 516 

178.  Constitutionality  of  clause  providing  for  exemptions 517 

179.  Title  to  exempt  property 518 

180.  Jurisdiction  of  a  court  of  bankruptcy  over  exempt  prop- 

erty   '  520 

181.  Liens  on  exempt  property 522 

182.  Who  may  claim  exemptions 524 

183.  "Waiver  of  exemption  525 

184.  Waiver  to  exemption  in  property  fraudulently  conveyed...  528 

185.  Dower 531 

186.  How   to   set  apart   exemptions 532 

187.  What  property  is  exempt  generally 536 

CHAPTER    XVIII. 

PREFERENCES    A^^n    I.IENS. 

§  189.     The  general  nature  of  preferences  and  liens 540 

190.  Valid   preferences   and   liens 541 

191.  Invalid  preferences  and  liens   542 

192.  Liens  created  by  judgments,  attachments,  levies,  etc....  543 
192a.  First:  A  lien  must  be  created  through  legal  proceedings..  544 
192&.  Second:  The  lien  must  be  c  eated  within  four  months....  546 


TABLE  OF    CONTENTS.  Xlll 

PAGE 

§  192c.  Third:  The  debtor  must  be  insolvent 550 

192d.  Preserving  liens  under  Sec.  67/  for  general  creditors 551 

193.  Dissolution  of  liens    551 

194.  Preferences  by  transfers    553 

194a.  First:   The  transfer  must  be  made  by  an  insolvent  debtor 

to  his  creditor   556 

194b.  Second:    The  effect  must  be  to  enable  creditor  to  gain  a 

greater  percentage,   etc 559 

194c.  Third:  Reasonable  cause  to  believe,  etc 5G0 

194(Z.  Fourth:   Within  four  months,  etc 566 

195.  Payments 573 

196.  Sales 578 

197.  Mortgages 581 

197a.  Mortgages  made  in  good  faith,  etc 583 

197&.  Mortgages  as   preferences    587 

197c.  Mortgages  invalid  under  state  law 591 

197d.  Mortgages  and  other  liens  invalid  for  want  of  record 394 

198.  Pledges 598 

198a.  Rights  of  pledgee  and  the  trustee  in  property  pledged 602 

199.  As  to  liens  generally 605 

200.  Mechanics'   liens    200 

201.  Admiralty  liens   610 

202.  Rights  of  a  secured  creditor 611 

203.  Suits  to  set  aside  fraudulent  conveyances  and  preferences  613 
203a.  Pleading  and  practice  in  suits  to  recover  property 618 

CHAPTER    XIX. 

EXAMINATIONS. 

§  204.     When  a  bankrupt  may  be  examined 628 

205.  When  persons  other  than  bankrupts  may  be  examined....  630 

206.  How  to  obtain  an  order  for  an  examination 632 

207.  Notice   of    examination    to    bankrupts,    creditors    and    wit- 

nesses    634 

208.  How  an  examination  is  made 636 

209.  Upon  what  topics  the  bankrupt  may  be  examined 641 

210.  Upon  what  topics  witnesses,  other  than   bankrupts,  may 

be  examined 644 

210a.  Examination  of  witnesses  residing  without  the  district 647 

210b.  When  testimony  upon  an  examination  may  be  used 649 

CHAPTER    XX. 

THE  BANKRUPT — DUTIES   AND  EXTRADITION. 

§211.     Who  is  a  bankrupt ,.  651 

212.  Duty  to  attend  meetings 651 

213.  Duty  to  comply  with  the  orders  of  the  court 652 

214.  Duty  with  respect  to  claims  against  his  estate 654 

215.  Duty  to  execute  papers 654 

216.  Duty  to  prepare  a  schedule  of  his  debts  and  assest 654 

217.  Duty  to  submit  to  an  examination. , , . . .  655 


yiv  TABLE  OF  CONTENTS. 

PAGE 

§  218.     Protection   from    arrest G55 

219.  When  a  bankrupt  may  be  arrested 658 

219a.  Ne  exeat 663 

220.  Proceeding    to    release    a    bankrupt    from    imprisonment. 

Habeas  corpus   663 

221.  Extradition  of  bankrupts  668 

222.  Proceedings   to   remove  a  bankrupt   from   one  district  to 

another 670 

223.  Proceedings  before  a  United  States  commissioner 670 

224.  Proceedings  before  the  judge  for  an  order  of  removal 673 

225.  The  order  of  court  granting  or  refusing  a  warrant 674 

226.  Habeas  corpus    •  • .  675 

227.  Abatement • 675 

CHAPTER    XXI. 

OFFKNSES. 

§  228.     Generally 677 

229.  Misappropriation  of  property  by  the  trustee 677 

230.  Concealment  of  property  by  a  bankrupt 678 

231.  False  oath  or  account 683 

232.  Presenting  false  claims    685 

233.  Receiving  property  from   a  bankrupt 686 

234.  Extorting  money  for  forbearing  to  act 686 

235.  Offenses  by  referees  687 

236.  What  court  has  jurisdiction  of  criminal  proceedings 687 

237.  Practice  and  procedure  688 

CHAPTER    XXII. 

PROCEEDINGS    IN    CONTEMPT. 

§  238.     The  power  to  commit 692 

239.  Nature  of  the  proceedings 698 

240.  Practice,  pleadings  and  procedure 699 

CHAPTER    XXIII. 

COMPOSITIONS     AND     ARBITRATIONS. 

§  241.     The  general  nature  of  a  composition 706 

242.  The  power  of  congress  to  provide  for  compositions 707 

243.  Composition  provisions  should  not  be  construed  broadly..  708 

244.  When  a  bankrupt  may  offer  terms  of  composition 708 

245.  Creditors'  meeting  to  consider  terms  of  composition 710 

246.  Application  for  confirmation  712 

247.  Objections   to   a  confirmation 715 

248.  The  hearing  of  objections 722 

249.  The  order  of  confirmation 723 

250.  The  effect  of  a  confirmation  of  a  composition 724 

251.  Proceedings  after  a  confirmation  of  a  composition 727 

252.  Setting  aside  a  confirmation 728 

253.  Arbitration  and  compromise  730 


TABLE  OF  CONTENTS.  XV 
CHAPTER    XXIV. 

now    TO    REDUCE    THE    ESTATE    TO    :^rOXEY. 

PAGE 

§254.     The  general  power  of  trustee  to  collect  estate,  etc 733 

255.  Unencumbered   property    736 

256.  Encumbered    property     738 

25Ga.  First:   Where  trustee  elects  not  to  take,  etc 739 

256b.  Second:    Where  the  trustee  redeems,  etc 739 

256c.  Third:   Where  the  trustee  sells  subject  to  liens 741 

25()d.  Fourth:  The  trustee  may  sell  free  of  liens 742 

257.  When  a  secured  creditor  may  apply  to  have  property,  on 

which  he  has  a  lien,  sold 745 

258.  Disputed    property    749 

259.  Sale   of   perishable  property 749 

260.  The  sale   750 

261.  Setting  aside  a  sale 754 

262.  Costs  of  sale  756 

263.  Of   preferences   and    debts 757 

CHAPTER    XXV. 

THE    DISTEIBFTIOX    OF    THE    ESTATE. 

§  264.     The  general  plan  of  distribution 759 

265.  Who  are  entitled  to  share  in  the  estate 761 

266.  How  and  when  dividends  are  declared 763 

267.  Debts  which  have  priority 766 

267a.  Taxes 767 

267&.  Costs   of  preserving  the  estate 772 

267c.  Filing  fees  and  expenses 773 

2Q7d.  Costs  of  administration   773 

267e.  Labor   claims    776 

267A  Debts  entitled  to  priority  under  the  laws  of  the  states  or 

the   United    States    778 

268.  Dividends  are  not  subject  to  attachment 782 

269.  The  manner  of  paying  dividends 783 

270.  Unclaimed  dividends    784 

271.  The  settlement  of  the  estate 785 

271a.  Reopening  a  case   786 

272.  The  record  of  the  referee  to  be  transmitted  to  the  court. .  787 

CHAPTER    XXVI. 
DISCHABGE. 

§  273.     Application  for  a  discharge 78S 

274.  When  and  where  the  petition  is  filed 790 

275.  Who  may  oppose  a  discharge  791 

276.  How  to  oppose  a  discharge 793 

277.  The  specification  of  grounds  in  opposition  to  a  discharge. .  796 

278.  Grounds  for  opposing  a  bankrupt's  discharge 800 

279.  Fii-st  ground   for  opposing  a  discharge,  that  bankrupt  is 

guilty  of  an  offense 802 


JCVl  TABLE  OF   CONTENTS. 

PAGE 
§  280.     Second    ground    of    opposing    a    discharge,    that    books    of 

account  are  fraudulently  withheld  or  are  not  kept 804 

2S0a.  Third   ground   of  opposing   discharge,   that   the   bankrupt 

has  obtained  property  on  credit  upon  a  false  statement.  809 

280&.  Fourth  ground  of  opposing  a  discharge,  fraudulent  transfer  811 
280c.  Fifth   ground   of  opposing   discharge,   a   discharge   within 

six  years    812 

280d.  Sixth  ground  of  opposing  discharge,  refusal  to  obey  order 

Or  answer  questions  814 

281.  Pleading  to  a  specification 815 

282.  The  hearing  of  objections  to  a  discharge 816 

283.  The  order  granting  a  discharge 821 

284.  The  general  nature  and  effect  of  a  discharge 822 

285.  The  effect  of  a  discharge  upon  liens 823 

286.  The  effect  of  a  discharge  on  foreign  creditors 824 

287.  The  effect  of  a  foreign  discharge  on  American  debts 827 

288.  In  what  court  the  effect  of  a  discharge  is  determined 828 

289.  What  debts  are  released  by  a  discharge 828 

289a,  The  effect  of  a  discharge  in  a  second  proceeding 831 

290.  The  effect  of  a  discharge  on  debts  due  the  United  States. .  832 

291.  The  effect  of  a  discharge  upon  judgments  against  the  bank- 

rupt    834 

292.  The  effect  of  a  discharge  upon  debts  not  scheduled 839 

293.  Debts  created  by  fraud  or  embezzlement 841 

294.  Fiduciary  debts 845 

295.  Debts  created   by  misappropriation 848 

296.  Co-debtors  not  discharged    849 

297.  The  effect  of  a  new  promise  upon  a  discharged  debt 855 

298.  Pleading  a  discharge 858 

299.  Revoking  discharges 861 

300.  The  effect  of  revoking  a  discharge 866 

CHAPTER    XXVII. 

APPELLATE    PROCEEDINGS. 

§  301.     The  appellate  courts   867 

301o.  The  different  kinds  of  appellate  jurisdiction 868 

302.  Appellate  jurisdiction  at  law  and  in  equity  to  revise  the 

action  of  federal  courts 874 

302a.  Conti'oversies  arising  in  bankruptcy 877 

303.  Appellate  jurisdiction  at  law  and  in  equity  to  revise  the 

action  of  a  state  court 881 

304.  Jurisdiction  of  the  supreme  court  of  appeals  in  bankruptcy  884 

305.  Writs  of  certiorari  from  the  supreme  court 886 

306.  Certiorari  to  complete  records 886 

307.  Certiorari  to  remove  a  case  for  review 889 

308.  The  application  for  writ  of  certiorari  to  remove  a  case  to 

the  supreme  court   890 

309.  Certifying  questions  to  the  supreme  court 893 

310.  Appeals  to  the  supreme  courts  of  the  territories 898 


TABLE  OF   CONTENTS. 


ZVII 


PAGE) 

311.  The  twofold  jurisdiction  of  the  circuit  court  of  appeals 898 

312.  The  supervisory  powers  of  the  circuit  courts  of  appeals..  900 

313.  Application  to  superintend  and  revise  matters  of  law 906 

313a.  Petition  and   record   on   revision 907 

313b.  Proceedings  on  a  petition  to  review 910 

314.  Appellate  jurisdiction  in  bankruptcy  of  the  circuit  courts 

of  appeals    911 

314a.  Cross-appeals 916 

314b.  Writs  of  error 916 

315.  Time  within  which  an  appeal  must  be  taken 919 

316.  How  to  take  an  appeal  in  bankruptcy 922 

317.  Parties   to  an   appeal    924 

318.  Petition  for  appeal    928 

319.  Assignments   of  error 929 

320.  Bond  on  appeal    930 

321.  Supersedeas 931 

322.  Citation     933 

323.  The   record    935 

324.  Amendments  to  the  record 938 

325.  Perfecting  an  appeal  and  filing  the  record 940 

32G.     Proceedings  in  a  circuit  court  of  appeals 942 

327.  Death  of  a  party 945 

327a.  Costs   in   the  appellate   court 947 

328.  The  mandate    949 

General    Orders    ^ 951 

Official  forms    973 

Bankrupt  act  of  1898 1225 

Bankrupt  Law  of  1867 1313 

Table  of  Cases   1351 

Index 1443 


THE  LAW  AND  PROCEEDINGS  IN 

BANKRUPTCY. 


CHAPTER  I. 

A  BRIEF  HISTORY  OF  BANKRUPT  LAW. 

§  I.     Bankrupt  laws  of  the  Romans. 

In  very  early  tiines  the  debtor  was  at  the  mercy  of  his 
creditors.^  He  might  be  imprisoned  or  suffer  bodily  torture, 
as  his  creditors  willed. 

The  first  steps  toward  a  system  of  bankruptcy  were  taken 
with  the  object  of  relieving  the  debtor.  These  laws  in  some 
cases  were  carried  to  such  an  extent  as  to  work  great  injustice 
to  the  creditors.  The  rights  of  the  creditors  were  then  again 
considered,  but  in  connection  with  the  rights  of  the  debtor. 
Then  for  the  first  time  appeared  the  chief  principles  of  the 
law  of  bankruptcy,  namely,  that  when  a  man  is  unable  to  pay 
his  just  debts  the  property  remaining  to  him  rightly  belongs 
to  his  creditors,  and  ought  to  be  distributed  ratably  among 
them  towards  the  satisfaction  of  their  debts.  It  was  later 
that  the  debtor  was  released  from   future  liability  in  respect 

1  Mr.  Justice  Blackstone,  in  his  and  hard  labor  at  their  mercy,  and 

Commentaries    (Vol.    2,    pp.    472,  sometimes  sell  him,  his  wife  and 

473),  refers   to   the  early  Roman  children    into    perpetual    slavery. 

laws  on  this  subject.      The  laws  Later,  it  is  true,  an  equally  vicious 

of  the  twelve  tables  provided  that  law  was  enacted  for  the  benefit  of 

the  creditors  might  cut  the  debt-  the  debtor,  which  provided  that  if 

or's  body  in   pieces,  and  each  of  an  insolvent  debtor  would  sicear 

them  take  his  proportionate  share.  that   he   had   not  enough  left  to 

Other  laws  provided  that  the  cred-  pay  his  debts,  he  should  not  be  re- 

itors  might  imprison  the  debtor  in  quired  to  give  up  even  that  which 

chains,  or   subject  him  to  stripes  he  had  in  his  possession. 

I 


4  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

to  those  debts,  although  from  the  Brst  he  was  relieved  from 
corporal  punishment. 

The  first  law  resembling  in  any  marked  degree  a  bankrupt 
law,  as  it  is  understood  at  the  present  time,  is  found  in  the 
Roman  law  of  cession — cessio  bonorum.  It  was  introduced 
by  Julius  Caesar,  and  provided  that  if  a  debtor  yielded  up  all 
his  fortune  to  his  creditors  he  was  secured  from  being  dragged 
to  a  goal  ''''  07nni  qiioqiie  corporali  cntciatu  semoto.  "  ^ 

The  law  of  cessions  extended  to  all  classes  of  persons,  much 
like  the  present  bankrupt  law  of  the  United  States,  but  it  did 
not  release  or  discharge  the  debt  or  exempt  the  future  acqui- 
sitions of  the  debtor  from  execution  for  the  debt.^  It  mereh 
exempted  the  debtor  from  imprisonment  and  corporal  pun- 
ishment. 


§  2.     Bankrupt  laws  in  other  countries. 

Similar  laws  were  introduced  in  other  continental  countries 
in  Europe.  Chancellor  Kent,  writing  in  the  first  quarter  of 
the  present  century,  said  :^  "And  it  may  be  laid  down  as  the 
law  of  Germany,  France,  Holland,  Scotland,  England,  etc., 
that  insolvent  laws  are  not  more  extensive  in  their  operation 
than  the  cessio  bonoritm  of  the  civil  law.  In  many  parts  of 
Germany,  as  we  are  informed  by  Huberus  and  Heineccius,  a 
cessio  bonorum  does  not  even  work  a  discharge  of  the  debtor's 
person,  and  much  less  of  his  future  property.  But  in  Germany 
the  cessio  bonorum  has  the  severe  operation  of  depriving  the 
insolvent  of  his  remedy  for  a  personal  trespass  committed 
prior  to  the  cession,  so  far  as  pecuniary  compensation  is  in 
question."  According  to  the  Spanish  law,  property  which 
the  debtor  acquired  after  his  cession'^was  not  all  liable  for  his 
debts,  but  only  so  much  of  it  as  exceeded  the  amount  neces- 
sary for  his  support.* 


1  2  Black.  Com.  473. 

2  I  Kent  Com.  422-3.  In  Fitz- 
gerald V.  Phillips,  4  Martin  (La.), 
O.  S.  292,  Judge  Derbigny  cites 
the  cessio  bouoi-um  (1.  4,  5  and  6) 
of  the  Roman  law  to  the  effect  that 
only  so  much  of  the  property  ac- 
quired after  a  cession  as  exceed- 
ed the  amount   necessary  to  the 


debtor's  support  was  liable  for  his 
debts  prior  to  the  cession. 

'^  I  Kent  Com,  423. 

•*  But  the  early  law  of  Louisiana, 
which  was  also  founded  on  the 
civil  law,  contained  no  such  ex- 
emption. Fitzgerald  v.  Phillips, 
3  Martin,  O.  S.  588;  s.  c.  4  Mar- 
tin, O.  S.  292. 


BRIEF    HISTORY    OF    BANKRUPT    LAW.  3 

It  is  not  within  the  scope  of  this  sketch  to  consider  the 
bankrupt  laws  of  all  countries.  While  the  present  act  was 
pending,  the  judiciary  committee  of  the  House  of  Represent- 
atives took  no  little  pains  to  ascertain  from  different  sources 
what  other  countries  had  done  in  respect  to  bankruptcy  legis- 
lation. This  committee  reported  to  congress  December  i6, 
1897,  that  the  following  countries  have  bankruptcy  laws: 
Argentina,  Austria-Hungary,  Belgium,  Bolivia,  Brazil,  Costa 
Rica,  Denmark,  England,  France,  Germany,  Guatemala, 
Haiti,  Honduras,  Ireland,  Italy,  Liberia,  Mexico,  Nether- 
lands, Norway,  Paraguay,  Portugal,  Roumania,  Russia,  Scot- 
land, Spain,  Sweden,  Turkey,  Uruguay  and  Wales.  The  com- 
mittee did  not  ascertain  whether  or  not  there  was  a  bank- 
ruptcy law  in  Chile,  Columbia,  Dominican  Republic,  Hawaii, 
Japan,  Korea,  Peru,  Syria,  Switzerland  or  Venezuela.  It 
will  be  observed  that,  aside  from  China  and  possibly  Japan, 
there  are  no  countries  of  any  considerable  importance  but 
what  have  bankruptcy  laws  in  the  modern  sense  of  the  word. 

"In  China  the  various  foreign  nationalities,  except  the 
United  States,  have  bankruptcy  laws  which  are  enforced 
against  their  nationals,  those  of  Germany  being  very  strict, 
and  others  perhaps  less  so.  .  .  .  There  never  was  such 
a  law  in  existence  among  the  Chinese  as  a  bankruptcy  law. 
All  delinquents  in  China  pass  into  the  dishonored  class,  and 
are  soon  put  under  process  of  coercive  termination  of  a  busi- 
ness career,  and  are  subject  to  punishment  by  bamboo  blows. 
The  laws  against  bankrupts  in  China  are,  theoretically,  very 
severe,  a  failure  of  $1,500  to  $5,000  entailing  banishment, 
and  from  $5,000  upward,  summary  decapitation.  No  distinc- 
tion is  made  between  fraudulent  bankruptcy  and  unavoidable 
ones. ' ' 

In  Guadeloupe  there  is  no  relief  whatever  for  a  bankrupt. 

In  Siam  "there  are  no  bankruptcy  laws,  as  we  understand 
them.  When  a  man's  assets  fall  short  of  his  liabilities  he 
either  compounds  with  his  creditors  or  leaves  the  country 
hurriedly.  If  taken,  his  own  person  and  those  of  his  family 
may  be  held  until  the  debt  be  paid." 


4  LAW    AND    PROCHEDINGS    IN    BANKRUPTCY. 

§  3.     English  bankrupt  laws. 

The  bankrupt  law  was  an  innovation  on  the  common  law. 
The  English  system  of  bankruptcy  was  borrowed  directly 
from  continental  jurisprudence.'  "We  have  fetched,"  said 
Lord  Coke,  "as  well  the  name  as  the  wickedness  of  bankrupts 
from  foreign  nations."-  The  English  word  bankrupt  is 
derived  from  the  Italian,  banca  rotta^  meaning  a  broken  bank 
or  bench. ^ 

The  English  system  of  bankruptcy  originated  in  1542  with 
the  statute  of  34  and  35  Henry  VIII.,  chap.  4.  It  has  been 
frequently  modified  by  subsequent  legislation,  but  it  has 
never  been  abolished  during  any  period  since  that  time. 
Originally  a  bankrupt  was  considered  a  criminal  offender.* 

The  law  of  Henry  VIII.  was  directed  against  debtors, 
whether  traders  or  not,  who  sought  fraudulently  to  evade  the 
payment  of  their  debts,  or,  as  it  was  expressed  in  the  act, 
"who,  craftily  obtaining  into  their  hands  great  substance  of 
other  men's  goods,  do  suddenly  flee  to  parts  unknown  or  keep 
their  houses,  not  minding  to  pay,  or  return  to  pay,  any  of 
their  creditors  their  debts  and  duties,  but  at  their  own  wills 
and  pleasures  consume  the  substance  obtained  by  credit  from 
other  men  for  their  own  pleasure  and  delicate  living,  against 
all  reason,  equity  and  good  conscience. "  The  next  statute 
was  that  of  13  Elizabeth,  chap.  7.  By  this  statute  the  law 
of  bankruptcy  was  restricted  to  traders,  and  certain  acts  were 


1  2  Blackstone's  Cora.  472.  "  Some  choose  to  adopt  the  word 
24  Inst.  277.  route,  which  in  French  signifies  a 
8  See   Skeat's    Et5'm.  Die,   sub-  trace,  or  track,  and  tells  us  that  a 
ject,  Bankrupt;  Century  Die,  sub-  bankrupt   is  one    who    hath    re- 
ject.   Bankrupt;     2    Blackstone's  moved  his  ban  que,  leaving  but  a 
Com.  472.  trace  behind.     (4  Inst.  277.)    And 
"  It  is  said  to  have  been  the  cus-  it  is  observable  that  the   title  of 
torn  in  Ital}'  to  break  the  bench,  the  first  English  statute  concern- 
or  counter,  of   a   money-changer  ing    this    offence    (34    Hen.  VII., 
upon  his  failure;  but  the  allusion  c.  4),  'against  such  persons  as  do 
is  probabh^  figurative,   \\\l.q.  break,  make  bankrupt '  is  a  literal  trans- 
crasli,  smash,    similarly'    used    in  lation  of  the  French    idiom,  qui 
English." — Century  Die,  Bank-  font   banque    routed  —  2    Black- 
RUPT.  stone's  Com.  472  N. 

Mr.  Justice  Blackstone  suggests  *  2  Blackstone's  Com.  471. 
another  derivation,  when  he  says: 


BRIEF    HISTORY    OF    BANKRUPT    LAW.  5 

prescribed,  called  acts  of  bankruptcy,  upon  the  committing 
of  which  a  trader  became  liable  to  be  adjudged  a  bankrupt. 
It  was  not  until  the  statutes  of  4  Anne,  chap.  17,  and  10 
Anne,  chap.  15,  that  the  bankrupt  law  lost  its  criminal 
nature.  The  bankrupt  law  then  became  an  equitable  system. 
The  bankrupt,  upon  surrendering  his  property  and  conform- 
ing to  the  requisitions  of  the  bankrupt  law,  was  entitled  to  a 
certificate  of  discharge.  This  was  obtained  only  with  the 
consent  of  a  specified  majority  of  his  creditors.  When  it  was 
issued  it  released  him  from  liability  for  his  prior  debts. 

In  1825,  by  the  general  bankrupt  act  of  6  George  IV., 
chap.  16,  the  former  statutes  were  consolidated  and  many 
important  alterations  introduced. 

In  the  year   1831   an  important  change  was  made  in  the 
mode  of  administering  the  bankrupt  law.      Courts  of  bank- 
ruptcy were  established  by  the  statute  of  i  and  2  William  IV., 
chap.  56.      Before  this  time  the  law  had   been  administered 
by  the  lord  chancellor  or  by  commissioners  appointed  by  the 
chancellor.     This  statute  removed  the  jurisdiction  of  bank- 
rupt cases  in  the  first  instance  from  the  court  of  chancery  to 
that  of  bankruptcy,  reserving  only  an  appeal  from  that  court 
to  the  lord  chancellor  as  to  matters  of  law  and  equity  and 
questions  of  evidence.      Other  important  alterations  were  in- 
troduced.    Thus  under  this  statute  there  was  no  deed  of  as- 
signment of  the  bankrupt's  property,  but  the  property  vested 
in  the  assignees  by  operation  of  law  under  their  appointment. 
This  statute  was  followed   by  5  and   6  William  IV.,  chap. 
29,  and  by  5  and  6  Victoria,  chap.  122,  which  further  mod- 
ified the  law  and  the  organization  of  the  courts.     The  numer- 
ous statutes  relating  to  bankruptcy  were  again  consolidated 
by  the  bankrupt  law  consolidation  act  of   1849.     This  was 
amended  in  a  few  particulars  by  the  act    15  and    16  Victoria, 
chap.  ']'],  and  by  the  bankruptcy  act,  1854.     A  further  amend- 
ment of    the  law  of    bankruptcy,  known   as  the  "Bankrupt 
Act,    1861,"    24    and    25  Victoria,  chap.  134,  abolished   the 
court  for  the  relief  of  insolvent  debtors  and  transferred  its 
jurisdiction  to  the  court  of  bankuptcy.       By  this  act  non- 
traders  were  made  subject  to  the  law  of  bankruptcy.      By  the 
"Bankruptcy  Amendment  Act,  1868,"  31   and   32  Victoria, 
chap.  104,  further  changes  were  made. 


6  LAW   AND    PROCEEDINGS    IN    BANKRUPTCY. 

After  unsuccessful  attempts  in  several  successive  sessions 
of  parliament  to  reform  the  bankrupt  laws,  the  general  bank- 
rupt act  of  32  and  33  Victoria,  chap.  71,  was  passed  in  1869. 
This  act  in  turn  was  followed  by  an  act  entitled  "An  act  to 
amend  and  consolidate  the  laws  of  bankruptcy,"  46  and  47 
Victoria,  chap.  52,  passed  in  1883,  to  take  effect  from  the 
first  of  January,  1884.  This  act,  with  its  amendments,  com- 
prises all  the  statute  law  relating  to  bankrupts,  except  the 
provisions  for  the  punishment  of  fraudulent  debtors,  which 
are  contained  in  the  Debtors'  Act  of  1869,  32  and  33  Victoria, 
chap.  62,  which  were  not  repealed  by  the  act  of  1883.^  This 
act  of  1883  has  been  several  times  amended.  The  principal 
amendments  are:  the  act  of  50  and  51  Victoria,  chaps.  57 
and  66,  passed  September  16,  1887;  the  act  of  51  and  52 
Victoria,  chap.  62,  passed  December  24,  1888;  the  act  of 
53  and  54  Victoria,  chap.  71,  passed  August  18,  1890,  and 
the  act  of  60  and  61  Victoria,  chap.  19,  passed  July  15,  1897. 

It  is  not,  however,  within  the  scope  of  this  work  to  discuss 
the  English  acts  at  length,  or  to  follow  step  by  step  the 
development  of  the  present  system  of  bankruptcy  in  England. 
For  this  purpose  the  reader  is  referred  to  modern  works  on 
English  bankrupt  laws.^ 

§  4.     Bankrupt  laws  of  the  United  States. 

Congress  has  established  four  systems  of  national  bank- 
ruptcy in  this  country.  The  first  system  originated  with  the 
act  of  April  4,  1800,^  which  was  repealed  December  19, 
1803.^  There  was  no  national  bankruptcy  act  thereafter 
until  the  act  of  August  19,  1841.^  This  statute  was  repealed 
within  two  years  after  its  passage,"  and  again  the  nation  was 
without  a  uniform  system  of  bankruptcy.     The  third  general 

1  "  By  the  Bankruptcy  Act,  1883,  ,       ^  Robson's    Law    and    Practice 

the    Bankruptcy  Act,  1869,  is    re-  in  Bankruptcy  (1894);    Williams' 

pealed,  subject   to   provisions   for  Bankruptcy  Practice  (1898). 

carrying  out  proceedings  pending  •'  2  Stat,  at  L.  19. 

under  it.     But  the  Debtor's  Act,  *  2  Stat,  at  L.  248. 

1869,   remains    in    force,    subject  ^  5  Stat,  at  L.  440. 

only  to  such  alterations  as  were  <^  Act  of  INIarch  3,  1843,  5  Stat. 

nece.ssar\'  for    adapting  it  to  the  at  L.  614. 
new  Bankruptcy  Act."     (Robson. 
Bank.,  page  21. 


BRIEF    HISTORY    OF    BANKRUPT    LAW.  7 

act  was  passed  March  2,  1867/  by  the  39th  Congress.  The 
system  established  by  this  statute  existed  eleven  years,  and 
was  terminated  September  i,  1878,  by  the  act  of  June  7, 
1878.2  The  present  statute,  establishing  a  uniform  system 
of  bankruptcy  throughout  the  Uuited  States,  was  passed  July 
I,  1898,^  and  amended  by  the  Act  of  Fd).  5,  1903.^* 

It  may  be  observed  that  each  of  these  systems  differed 
materially  from  all  the  others,  although  necessarily  similar 
in  many  respects.  It  may  be,  therefore,  of  interest  m  con- 
sidering the  present  statute  to  review  briefly  the  principal 
provisions  of  the  former  legislation  in  the  United  States  on 
the  subject  of  bankruptcies. 

§  5.     The  Act  of  1800. 

The  first  national  bankrupt  act*  was  confined  to  "any  mer- 
chant, or  other  person,  residing  in  the  United  States,  actually 
using  the  trade  of  merchandise,  by  buying  and  selling  in 
gross  or  by  retail,  or  dealing  in  exchange,  or  as  a  banker, 
broker,  factor,  underwriter  or  marine  insurer."  ^  Under  this 
act  proceedings  in  bankruptcy  could  be  instituted  only  by  a 
creditor — involuntary  bankruptcy — and  not  by  the  insolvent 
himself.  There  was  no  provision  in  this  act  for  voluntary 
bankruptcy. 

Under  this  statute  bankruptcy  proceedings  could  be  com- 
menced only  after  the  person  to  be  adjudged  a  bankrupt  had 
committed  an  act  of  bankruptcy  specified  in  the  act. 

The  act  provided  that  it  should  constitute  an  act  of  bank- 
ruptcy if  a  person  liable  to   be  adjudged  a  bankrupt,  "with 

1  14  Stat,  at  L.  517.  P^^  ^        3  ^   p^,  C.  C.  15; 

^20  Statat  L.  99,1  Supp   170.      p^;,,,3  ..piinngton,  No.  10:5  Fed. 

330  Stat,  at  L.  544.     This  statute  „,    *?    ^'  ,.     , 

.        •  ,   ,  •     -  1,     7,1  .     r  ,,  ■       Cas..s.  c  I  Wash.  C.  C.  29;  Marks 

IS  printed  m  lull  at  the  end  of  this      ^  ■^  <  y 

YQluj^g  V.  Barker,  No.  9096  Fed.  Cas.,  s.  c. 

3*32  Stat,  at  L.  797.  I  Wash.  C.  C.  178;   Humphreys  v. 

*Act  of  April  4,  1800.     2  Stat.  Blight,  No.  6870  Fed.  Cas.,  s.  c.  i 

at  L.  19.  Wash.  C.  C.  44,  4   Dall.  370;    Lu- 

Cases  arising  under  or  constru-  cas  v.  Morris,  No.  8587,  Fed.  Cas., 

ing  this  act  are  :  Tucker  v.  Oxley,  s.  c.  i  Paine,  396. 

5Cranch,  34;  Harrison  v.  vSterr^-,  5  As  to  the  powers  of  Congress, 

Cranch,  289;  Comegys  v.  Vasse,  i  .see  also  Sttirges  v.  Crowninshield, 

Pet.   193;  Richards  v.   Ins.  Co.,  8  4  Wheat.  122;  Sec.    g,  post. 

Cranch,  84;  Woods  v.  Owings,   i  ^  Act  of  April  4,  1800,  2  Stat,  at 

Cranch,  239;  Blight  v.  Ashley,  No.  L.  19  Sec.  i. 


8  LAW   AND    PROCEEDINGS    IN    BANKRUPTCY. 

intent  unlawfully  to  delay  or  defraud  his  or  her  creditors,  de- 
part  from  the  state  in  which  such  person  usually  resides,  or 
remain  absent  therefrom,  or  conceal  him  or  herself  therein,  or 
keep  his  or  her  house,  so  that  he  or  she  can  not  be  taken,  or 
vserved  with  process,  or  willingly  or  fraudulently  procure  him 
or  herself  to  be  arrested,  or  his  or  her  lands,  goods,  money  or 
chattels  to  be  attached,  sequestered  or  taken  in  execution,  or 
shall  secretly  convey  his  or  her  goods  out  of  his  or  her  house, 
or  conceal  them  to  prevent  their  being  taken  in  execution,  or 
make  or  cause  to  be  made  any  fraudulent  conveyance  of  his  or 
her  lands  or  chattels,  or  make  or  admit  any  false  or  fraudulent 
security  or  evidence  of  debt,  or  being  arrested  for  debt,  or 
having  surrendered  him  or  herself  in  discharge  of  bail,  shall 
remain  in  prison  two  months  or  more,  or  escape  therefrom, 
or  whose  land  or  effects  being  attached  by  process  issuing  out 
of  or  returnable  to  any  court  of  common  law,  shall  not,  within 
two  months  after  written  notice  thereof,  enter  special  bail 
and  dissolve  the  same,  or  in  districts  in  which  attachments 
are  not  dissolved  by  the  entry  of  special  bail,  being  arrested 
for  debt  after  his  or  her  lands  and  effects,  or  any  part  thereof, 
have  been  attached  for  a  debt  or  debts  amounting  to  one 
thousand  dollars  or  upwards,  shall  not,  upon  notice  of  such 
attachment,  give  sufficient  security  for  the  payment  of  what 
may  be  recovered  in  the  suit  in  which  he  or  she  may  be 
arrested  at  or  before  the  return  day  of  the  same,  to  be  ap- 
proved by  the  judge  of  the  district,  or  some  judge  of  the 
court  out  of  which  the  process  issued  upon  which  he  is 
arrested,  or  to  which  the  same  shall  be  returnable,  every  such 
person  shall  be  deemed  and  adjudged  a  bankrupt."  ^ 

Within  six  months  after  such  act  had  been  committed  a 
petition  for  a  commission  of  bankruptcy  might  be  preferred 
by  a  creditor  or  partnership  whose  single  debt  amounted  to 
one  thousand  dollars,  or  by  two  creditors  whose  debts 
amounted  to  fifteen  hundred  dollars,  or  by  more  than  two 
creditors  whose  debts  amounted  to  two  thousand  dollars. 
'  Under  the  act  of  1800,  proceedings  in  bankruptcy  were 
instituted  by  filing  a  petition  for  a  commission  of  bankruptcy 
in  the  district   court   for  the  district    in  which   the  debtor 

1  2  Stat,  at  L.  21,  Sec.  i. 


BRIEF    HISTORY   OF    BANKRUPT    LAW.  9 

resided.  The  judge  of  the  district  court  thereupon  issued 
such  commission,  appointing  commissioners  of  such  bankrupt 
not  exceeding  three  in  number.  ^  Immediately  upon  taking 
the  oath  prescribed  by  the  act,  they  proceeded  to  execute  the 
commission  and  to  administer  the  estate  of  the  bankrupt. 

The  administration  of  the  estate  in  brief  was  as  follows: 
Upon  due  examination  and  sufficient  cause  shown  against 
the  person  charged,  the  commissioners  declared  him  to  be  a 
bankrupt,  and  took  into  their  possession  all  of  his  real  and 
personal  property,  together  with  his  deeds,  books  of  account, 
papers,  etc.       They    held    the    same   until   an   assignee   was 
chosen  by  the  creditors  at  a  meeting  called  for  that  purpose. 
It  was  the  duty  of  the  assignee  to  hold  the  title  to  the  estate 
and  to  collect  the  assets  of  the  bankrupt.      Within  one  year 
after  the  commission  issued  the  assignee  was  required  to  re- 
port the  amount  of  moneys  in  his  possession  at  a  meeting  of 
the  commissioners  and  creditors  duly  called  by  notice.     The 
commissioners  in  their  judgment  declared  the  first  dividend 
at  this  meeting.     This  was  paid  to  all   creditors  who  had 
proved  their  claims  before  the  commissioners.      Provisions 
were  made  for  similar  dividends  subsequently,  until  the  whole 
estate  of  the  bankrupt  had  been  distributed  pro  rata  among 

the  creditors. 

The  commissioners  reported  to  the  court  what  had  been 
done  in  making  their  return  of  the  commission.  The  debtor 
was  thereupon  entitled  to  be  discharged  from  all  debts  by 
him  due  and  owing  at  the  time  he  was  declared  a  bankrupt. 
A  certificate  of  discharge  was  issued  by  the  court  to  such 
bankrupt,  which  might  be  pleaded  in  bar  of  any  claims  which 
had  been  or  might  have  been  proven  before  the  commissioners. 

The  life  of  this  act  was  limited  to  five  years,  but  owing 
to  the  inconvenience  of  reaching  federal  courts  this  system 
became  unpopular,  and  the  act  was  repealed  by  the  act  of 
December  19,  1803.^ 

1  By  Sec.  14  of  the  Act  of  April      appoitited  by  the  President  of  the 
29,    1802,   2   Stat,  at  L.    164,  pro-      United  State.s. 
vision  was  made  for  general  com-  ^  2  Stat,  at  ly.  248. 

missioners   of  bankruptcy   to   be 


16  LAW   AND    PROCEEDINGS    IN    BANKRUPTCY. 

§  6.     The  Act  of  1841. 

The  second  act'  provided  for  voluntary  as  well  as  involun- 
tary bankruptcy. 

Any  person  whatsoever  residing  in  the  United  States  owing 
debts  which  were  not  created  in  consequence  of  a  defalcation 
as  a  public  officer,  or  an  executor,  administrator,  guardian  or 
trustee,  or  while  acting  in  any  other  fiduciary  capacity,  was 
entitled  under  this  act  to  be  declared  a  bankrupt  upon  his 
own  request  and  to  have  his  estate  administered  accordingly. 

Any  person  being  a  merchant,  or  using  the  trade  of  mer- 
chandise, or  a  retailer  of  merchandise,  or  any  banker,  factor, 
broker,  underwriter  or  marine  insurer  owing  debts  to  the 
amount  of  not  less  than  two  thousand  dollars,  was  liable  to 
be  declared  a  bankrupt  at  the  request  of  one  or  more  of  his 
creditors  to  whom  he  owed  debts  amounting  in  the  whole  to 
not  less  than  five  hundred  dollars,  provided  he  had  committed 
an  act  of  bankruptcy. 

An  act  of  bankruptcy  was  defined  in  these  words,  ' '  whenever 
such  person,  being  a  merchant,  or  actually  using  the  trade  of 
merchandise,  or  being  a  retailer  of  merchandise,  or  being  a 
banker,  factor,  broker,  underwriter  or  marine  insurer,  shall 
depart  from  the  state,  district  or  territory  of  which  he  is  an 

1  Act  of  August  19,  1841,  5  Stat,  i  N.  Y.  Leg.  Obs.  310,    s.  c.  No. 

at  L.  440.  1632,  Fed.  Cas. ;    Fisher,  et  al.,  v. 

The  following  are  cases  under  Currier,  5  Law  Rep.  217,  No.  4818, 

the  act :  Nelson  v.  Garland,  i  How.  Fed.  Cas. ;  Jones  v.  Sleeper,  2  N.  Y. 

265;  Chapman  v.  Forsyth,  2  How.  Leg.  Obs.  131,8.  c.  No.  7496,  Fed. 

202;    Lessee    of   Waller    v.  Best,  Cas.;     Stewart    v.    Loomis,     No. 

3     How.     in;      Ex    parte     The  13433.    Fed-    Cas.;      Baldwin     v. 

City    Bank    of   New    Orleans,  3  Rosseau,  :  N.  Y.  Leg.  Obs.  391,  s. 

How.  292;    Nugent,   Assignee,  v.  c.  No.  803,  Fed.  Cas.;  /;?  r^ House, 

Boyd,  3  How.  426;  Black  v.  Zach-  i  N.  Y.  Leg.    Obs.  348,    s.    c.  No. 

arie,    3    How.    483;    Shawhan    v.  6735,  Fed.  Cas.;  Ex  parte    Potts, 

Wherrett,    7    How.    627;     In    re  Crabbe,  469,  s.  c.  No.   1 1344,  Fed. 

Shouse,  Crabbe,    482,    s.    c.    No.  Cas. ;  Barton  v.  Tower,  5  Law  Rep. 

112815,   Fed.    Cas.;    Wakeman    v.  214,  s.  c.  No.  1085,  Fed.  Cas. ;  ^.r 

Hoyt,  5  Law  Rep.  309,  s.   c.    No.  parte  Galbraith,  i  N.  Y.  Leg.  Obs. 

17051,   Fed.    Cas.;   Albany   Exch.  (note)  5,  s.  c.  No.  5187,  Fed.  Cas.; 

Bank  v.  Johnson,  5  Law  Rep.  313,  Gassett,  et    al.,  v.  Morse,  3  N.  Y. 

s.  c.  No.  131,  Fed.  Cas.;   Atkinson  Leg.  Obs.  350,  s.  c.  No.  5264,  Fed. 

V.  Farmers' Bank,   Crabbe,  529,  s.  Cas.;  Hutchins  v.  Taylor,  5    Law 

c.  No.  609,  Fed.  Cas. ;  In  re  Bonnet,  Rep.  289,  S.  c.  No.  6953,  Fed.  Cas. 


BRIEF   HISTORY   OF   BANKRUPT   I.AW.  Il 

inhabitant,  with  intent  to  defraud  his  creditors;  or  shall  con- 
ceal himself  to  avoid  being  arrested ;  or  shall  willingly  or 
fraudulently  procure  himself  to  be  arrested,  or  his  goods  and 
chattels,  lands  or  tenements,  to  be  attached,  distrained,  se- 
questered, or  taken  in  execution ;  or  shall  remove  his  goods, 
chattels  and  effects,  or  conceal  them  to  prevent  their  being 
levied  upon  or  taken  in  execution,  or  by  other  process;  or 
make  any  fraudulent  conveyance,  assignment,  sale,  gift,  or 
other  transfer  of  his  lands,  tenements,  goods,  or  chattels,  or 
evidence  of  debt."  ^ 

Proceedings  under  this  act  were  instituted  by  a  petition 
filed  by  the  bankrupt,  setting  forth  a  list  of  his  creditors, 
with  the  amounts  due  each,  together  with  an  inventory  of 
his  property  and  assets  of  every  description ;  or  by  a  petition 
filed  by  a  creditor,  stating  the  nature  of  the  act  of  bankruptcy, 
the  amount  of  his  debts,  and  alleging  the  total  indebtedness 
of  the  bankrupt  to  be  more  than  two  thousand  dollars. 

This  petition  was  filed  and  all  proceedings  in  the  case  were 
had  in  the  district  court  for  the  district  in  which  the  person 
supposed  to  be  a  bankrupt  resided  or  had  his  place  of  busi- 
ness. The  court  appointed  an  assignee,  in  whom  the  title  to 
all  the  bankrupt's  property,  real,  personal  and  mixed,  vested 
by  operation  of  law.  The  assignee  proceeded  to  collect  the 
assets  of  the  bankrupt,  prosecute  and  defend  suits,  and  had 
general  authority  to  sell,  manage  and  dispose  of  the  estate. 
Proof  of  debts  and  claims  were  made  before  the  court,  either 
by  oral  testimony  or  depositions.  In  order  to  secure  a  speedy 
settlement  and  close  the  proceedings,  it  was  made  the  duty 
of  the  court  to  order  and  direct  a  collection  of  the  assets  and 
a  reduction  of  the  same  into  money  and  a  distribution  thereof 
at  as  early  a  period  as  practicable,  consistently  with  a  due 
regard  to  the  interests  of  the  creditors. 

A  bankrupt  who  made  a  bona  fide  surrender  of  his  property 
and  complied  with  the  orders  and  directions  of  the  court  was 
entitled  to  a  certificate  of  discharge  from  all  his  debts.  This 
was  to  be  decreed  and  allowed  by  the  court  which  had  de- 
clared him  a  bankrupt.  There  were  several  exceptions  to 
this  rule,  but  they  are  not  important  in  this  connection. 

1  5  Stat,  at  L.  442- 


12 


LAW   AND   PROCEEDINGS    IN    BANKRUPTCY. 


The  same  objection  was  raised  to  this  act  that  had  been 
made  to  the  act  of  1800,  for  the  nation  was  still  in  its  infancy, 
and  the  means  of  transportation  were  exceedingly  limited. 
But  in  addition  to  this,  the  following  is  found  in  the  report  of 
the  judiciary  committee  in  the  52d  Congress,  first  session,  in 
its  discussion  of  the  act  of  1841 :  "That  law  became  the  sub- 
ject of  political  contention,  and  was  repealed,  to  take  effect 
March  3,  1843."  ^ 

§  7.     Law  of  1867. 

The  act  of  1867, ^  with  its  subsequent  amendments,^  estab- 
lished a  system  of  national  bankruptcy,  which  was  in  full 
operation  for  eleven  years.  Although  the  act  of  1867  differs 
in  many  respects  from  that  of  1898,  there  are  many  points  of 
similarity  between  the  two  statutes.  The  courts  were  fre- 
quently called  upon  to  construe  the  provisions  of  the  act  of 
1867  and  its  amendments.  Many  questions,  which  will  arise 
under  the  present  act,  may  be  considered  settled  by  these  deci- 
sions. Although  many  decisions  under  the  former  act  are 
not  controlling  with  reference  to  very  many  provisions  of  the 
present  act,  yet  very  many  of  them  are  important  in  throwing 
light  upon  the  meaning  of  terms  and  provisions  employed. 
It  is  obvious  that  certain  provisions  were  introduced  in  the 
present  act  for  the  purpose  of  settling  disputed  questions  and 
to  avoid  judicial  construction  of  provisions  of  the  prior  act. 

The  cases  decided  under  the  act  of  1867  therefore  become 


1  Act  of  March  3,  1843,  5  Stat,  at 
L.  614. 

See  Report  of  the  House  Com- 
mittee on  Judiciary,  55th  Con- 
gress, 2d  session,  discussing  the 
Act  of  1898. 

2  Act  of  March  2,  1867,  14  Stat. 

at  L.  517- 

8  The  principal  amendment  to 
this  act  was  passed  June  22,  1874, 
18  Stat,  at  L.  178,  and  at  the  same 
time  a  complete  substitute  for  the 
act  was  enacted  in  title  sixty-one 
of  the  Revised  Statutes.  The  pro- 
visions of  the  amendment  of  1874 
are   incorporated   in  the   Revised 


Statutes,  edition  of  1878.  The 
Act  of  1867  was  also  amended  by 
the  Act  of  July  27,  1868,  15  Stat, 
at  L.  227;  by  the  Act  of  June  30, 
1870,  16  Stat,  at  L.  173;  by  the 
Act  of  July  14,  1870,  16  Stat,  at  L. 
276;  by  the  Act  of  June  8,  1872, 
17  Stat,  at  L.  334:  by  the  Act  of 
Feb.  13,  1873,  17  Stat,  at  L.  436; 
by  the  Act  of  March  3,  1873.  17 
Stat,  at  L.  577 ;  by  the  Act  of  Feb. 
18,  1875,  18  Stat,  at  L.  320;  by  the 
Act  of  July  26.  1876,  19  Stat,  at  h. 
102,  and  by  the  Act  of  Feb.  27, 
1877,  19  Stat,  at  L,.  252. 


BRIEF    HISTORY   OF    BANKRUPT    LAW.  1 3 

important  in  construing  the  present  statute.  To  intelligently 
use  the  earlier  decisions  in  construing  and  applying  the  pres- 
ent act,  it  will  be  necessary  to  constantly  consult  the  text  of 
the  act  itself,  and  to  compare  it  with  similar  provisions  of 
the  act  of  1898.  For  this  purpose  the  act  of  1867,  as  revised 
and  amended,  is  printed  in  full  in  another  place.  ^  It  is  there- 
fore unnecessary  to  state  the  general  scheme  of  this  system  here. 
The  reader  is  referred  to  the  act  itself  for  such  information. 

The  principal  objection  to  the  act  of  1867  was  the  great 
expense  of  administering  it,  and  in  some  parts  of  the  country 
the  inefficiency  of  the  officers  appointed  to  assist  the  courts  in 
executing  the  law.  It  was  repealed,  to  take  effect  September 
I,  1878.2 

The  next  national  system  of  bankruptcy  in  this  country 
was  established  by  the  act  of  July  i,  1898.^ 

§  8.     A  brief  comparison  of  the  Acts  of  1867  and  1898. 

Similarity  of  the  x\cts. — The  general  scope  and  objects 
sought  to  be  accomplished  by  these  two  statutes  are  substan- 
tially the  same.  In  both  instances  congress  evidently  in- 
tended to  legislate  fully  on  "the  subject  of  bankruptcies." 
Each  statute  provides  that  proceedings  may  be  instituted  by 
the  insolvent  or  by  his  creditors.  In  other  words,  each  statute 
establishes  voluntary  as  well  as  involuntary  bankruptcy. 

The  principal  ends  of  each  statute  are  to  provide  a  system 
of  bankruptcy,  the  object  of  which  is,  firsts  to  ascertain 
whether  the  person  whose  affairs  are  drawn  in  question  has 
become  a  bankrupt ;  second^  if  so,  to  take  into  legal  custody 
all  his  property  and  assets  of  every  description  for  the  purpose 
of  making  a  fair  and  just  distribution  among  his  creditors; 
thirds  to  protect  the  creditors  from  frauds  and  unjust  prefer- 
ences; fourth^  to  ascertain  the  amount  due  to  the  several 
creditors  and  their  priority;  fifths  to  relieve  the  bankrupt 
from  his  load  of  debts  and  to  discharge  him  free  to  acquire 
property,  which  shall  not  be  liable  to  the  payment  of  ante- 
bankrupt  debts.  In  short,  the  acts  seek  to  enable  every 
honest  debtor,  irrespective  of  whether  he  becomes  bankrupt 

1  See  page  865,  post.  ^  30  Stat,  at  L.  544    This  act,  as 

2  Act  of  June  7,  1878,  20  Stat,  at     amended   Feb.   5,   1903,  i2  Stat,  at 
L.  99,  I  Supp.  170.  L.    397,    is    also    printed    in    full    at 

page  — ,  post. 


14  LAW   AND    PROCEEDINGS    IN    BANKRUPTCY. 

upon  his  own  or  the  petition  of  his  creditors,  to  have  fair 
treatment  and  a  speedy  consideration  of  his  rights ;  and  that 
the  creditors  shall  have  their  claims  considered,  allowed,  and 
the  assets  of  the  debtor  ratably  divided. 

The  administration  of  each  law  is  confided  to  particular 
United  States  courts,  designated  as  courts  of  bankruptcy. 
These  courts  act  to  a  large  extent  through  special  officers, 
subject  to  have  their  action  reviewed  by  the  judge.  In  1867 
these  officers  were  called  registers  and  assignees;  in  1898  they 
are  called  referees  and  trustees.  The  action  of  the  courts  of 
bankruptcy  under  each  act  is  subject  within  limits  to  review 
by  the  appellate  courts  of  the  United  States. 

Points  of  Difference  between  the  Acts. — The  act 
of  1898  differs  in  many  respects  from  the  act  of  1867.  The 
chief  points  of  difference  between  the  acts  may  be  briefly 
stated  as  follows: 

Firsts  Under  the  act  of  1867  a  person  could  take  advantage 
of  voluntary  bankruptcy  only  when  his  debts  exceeded  the 
amount  of  three  hundred  dollars.  Under  the  present  act  all 
limitation  is  removed  as  to  the  amount  of  indebtedness.  He 
may  even  proceed  without  expense  upon  filing  an  affidavit  of 
his  poverty. 

Second^  Under  the  act  of  1867  corporations  could  take  the 
benfit  of  their  voluntary  provisions.  A  corporation  can  not 
institute  proceedings  to  declare  itself  a  bankrupt  under  the 
present  act. 

Thirds  Under  the  act  of  1867,  as  amended,  any  person 
owing  debts  provable  in  bankruptcy  exceeding  the  amount 
of  three  hundred  dollars  could  be  proceeded  against  by  one 
of  his  creditors,  but  under  the  act  of  1898  a  person  must  be 
indebted  to  the  amount  of  one  thousand  dollars  or  more  in 
order  to  be  adjudged  a  bankrupt. 

Fourth^  Under  the  act  of  1867  a  person  might  become  a 
bankrupt  although  solvent,'   but  solvency  may    be  pleaded 

iBy  reference  to  Section  5021  stopped  or  suspended  and  not  re- 
ef the  Revised  Statutes  it  will  be  sumed  payment  of  his  commercial 
seen  that  the  act  of  1867,  as  paper  within  a  period  of  fourteen 
amended,  provides  that  any  bank-  da3\s  shall  be  deemed  to  have 
er,  broker,  merchant,  trader,  man-  committed  an  act  of  bankruptcy, 
ufacturer,    or     miner,  who     has  and  to  have  become  liable  to  be 


BRIEF    HIvSTORY   OP    BANKRUPT   LAW.  I5 

in  bar  of   any  proceeding  in  bankruptcy  under    the    act    of 
1898.1 

Fifths  Another  important  difference  between  the  two  acts 
is  in  the  time  when  the  property  passes  out  of  the  bankrupt. 
Under  the  act  of  1867  the  title  to  the  bankrupt's  property 
vested  upon  a  deed  of  conveyance  in  the  assignee  as  of  the 
date  of  filing  the  petition  in  bankruptcy ;  but  it  vests  in  the 
trustee  by  operation  of  law  under  the  act  of  1898  as  of  the 
date  of  the  adjudication  in  bankruptcy. 

Sixths  Another  difference  in  the  manner  of  administering 
the  bankrupt's  estate  is  the  more  convenient  number  of 
officers.  Under  the  act  of  1867  one  or  more  registers  were 
appointed  for  the  district,  but  the  act  of  1898  provides  for 
at  least  one  referee  in  each  county  in  the  state. 

Seventh^  The  act  of  1867  provided  no  means  of  arbitration 
in  addition  to  the  regular  course  in  bankruptcy.^  Under  the 
present  act  the  majority  of  all  creditors,  whose  claims  have 
been  allowed,  may  secure  the  possession  of  the  property,  and 
obtain  for  the  debtor  a  dismissal  of  the  case.  In  addition  to 
this,  provision  is  also  made  for  the  arbitration  and  for  the 
compromise  of  controversies. 

Eighth^  Under  the  act  of  1867  the  "operative,  clerk  and 
house  servant"  were  allowed  priority  over  other  claims  to  an 
amount  not  exceeding  fifty  dollars  for  labor  performed. 
Under  the  present  act  the  amount  is  fixed  at  three  hundred 
dollars  to  each  claimant. 

Ninths  Under  the  act  of  1867,  as  amended,  no  discharge 
was  granted  to  a  debtor  whose  assets  did  not  equal  fifty  p?r- 
centum  of  the  claims  proved  against  his  estate,  for  which  he 
was  held  liable  as  principal  debtor,  unless  the  assent  in  writ- 
ing of  a  majority  in  number  and  value  of  his  creditors  was 
filed  in  the  case  at  or  before  the  time  of  the  hearing  of  the 

adjudged  a  bankrupt.     He  may  be  stituted  an    act  of  bankruptcy  at 

worth  a  million  dollars  over  and  once. 

above  his  liabilities,  and  yet  such  '  B.  A.  1898,  Sec.  3^. 

a  failure  for  fourteen  days  would  '^  It,    however,    was    introduced 

make  him  liable  to  the  involun-  by  the   amendment    of  June    22, 

tary  provisions  of  the  act;  or  if  1874,   18   Stat,  at  L,.  178,  Sec.   17. 

he  fraudulently  stopped  payment  R.  S.,  Sec.   5103. 

of  his  commercial  paper,  that  con- 


l6  LAW   AND    PROCEEDINGS    IN    BANKRUPTCY. 

application  for  a  discharge.  Under  the  act  of  1898  no  assent 
is  required  from  the  creditors.  If  the  debtor  has  acted  dis- 
honestly by  committing  certain  acts  forbidden  in  the  act  he 
will  not  be  discharged ;  if  he  has  acted  honestly  he  will  be. 
The  granting  or  withholding  of  it  is  dependent  upon  the 
honesty  of  the  man,  not  upon  the  value  of  his  estate. 

Tenth,,  Another  point  of  difference  between  the  two  acts 
will  be  noticed  in  a  comparison  between  the  fees  allowed. 
The  expense  of  the  proceedings  is  very  much  reduced  in  the 
act  of  1898. 

There  are  other  differences  which  will  be  referred  to  here- 
after as  the  various  questions  arising  under  the  present  statute 
are  discussed. 


POWER   TO    KNACT   BANKRUPT    LAWS. 


17 


CHAPTER  II. 

THE    POWER   OF   CONGRESS   AND   THE    STATES   TO   ENACT 

BANKRUPT    LAWS. 

§  9.     The  power  of  Congress  to  enact  bankrupt  laws. 

The  power  of  congress  to  establish  a  system  of  bankruptcy 
depends,  like  the  other  powers  of  congress,  solely  upon  the 
constitution  of  the  United  States.  The  only  provision  in 
the  constitution  relating  to  such  legislation  is  that  "congress 
shall  have  power  ...  to  establish  .  .  .  uniform 
laws  on  the  subject  of  bankruptcies  throughout  the  United 
States.  "1 

This  has  been  construed  by  the  courts  to  be  a  grant  of 
plenary  power. ^  Under  the  authority  of  this  provision  con- 
gress has  full  power  to  legislate  on  "the  subject  of  bank- 
ruptcies," with  the  one  qualification  that  its  laws  thereon 
shall  be  uniform  throughout  the  United  States. 

It  is  therefore  necessary  to  consider  what  is  meant  by  "the 
subject  of  bankruptcies."  It  was  contended  at  one  time  that 
the  framers  of  the  constitution  intended  to  restrict  the  laws 
of  congress  with  such  scope  only  as  the  English  bankrupt 
laws  had  when  the  constitution  was  adopted.  But  the  courts 
ruled  that  the  subject  was  not  so  limited.^ 


lU.    S.    Const.   Art.   i,     Sec.  8, 
clause  4.     See  Story  on  the  Con- 
stitution, Sees.  1105-1115. 

^  In  re  Klein,  i  How.  2-;'j,  note; 
Silverman's  case.  No.  12855,  Fed. 
Cas.,  s.  c.  I  Saw.  410;  /«  r<?  Cali- 
fornia Pac.  R.  Co.,  No.  2315,  Fed. 
Cas.,  s.  c.  3  Saw.  240;  In  re  Jor- 
dan, No.  7514,  Fed.  Cas.,  s.  c.  8 
N.  B.  R.  180;  In  re  Irwine,  i 
Penn.  L.J.  291;  Kunzler  v.  Ko- 
haus,  5  Hill,  317;  hi  re  Reiman 
No.  1 1673,  Fed.  Cas.,  s.  c.  7  Ben. 

455- 

In  Parmenter  Mfg.  Co.  v.  Hamil- 


ton, 51  N.  E.  529,  the  Supreme 
Court  of  Massachusetts,  constru- 
ing the  present  act,  and  speaking 
of  the  power  of  congress  to  pass  a 
bankrupt  law  superseding  state 
insolvent  laws,  said :  "  Of  the 
power  of  congress  to  pass  an  act 
having  this  effect  there  can  be  no 
doubt."  See  also,  In  re  Bruss- 
Ritter  Co.,  90  Fed.  Rep.  651. 

3  In  re  Reiman,  No.  11673,  Fed. 
Cas.,s.  c.  7  Ben.  455;  In  re  Klein, 
I  How.  2-j'],  note;  hi  r^ Silverman, 
No.  12855,  F^<i-  Cas.,  s.  c.  i  Saw. 
410. 


i8 


LAW   AND    PROCEEDINGS    IN    BANKRUPTCY. 


Again,  it  was  contended  that  it  was  restricted  to  bankrupt 
laws  as  distinguished  from  insolvent  laws.  But  it  may  be 
regarded  as  settled  that  the  subject  of  bankruptcies,  as  used 
in  the  constitution,  includes  both  bankrupt  and  insolvent 
laws,^  Speaking  of  this  distinction,  Mr.  Justice  Marshall 
observed:^  "This  difficulty  of  discriminating  with  any  accu- 
racy between  insolvent  and  bankrupt  laws  would  lead  to  the 
opinion  that  a  bankrupt  law  may  contain  those  regulations 
which  are  generally  found  in  insolvent  laws;  and  that  an 
insolvent  law  may  contain  those  which  are  common  to  a 
bankrupt  law."  And  Judge  Cowen,  after  reviewing  the 
definition  of  bankruptcy,  said  :^  "Looking  thus  at  the  uniform 
popular  acceptation  of  the  word  from  earliest  times,  and  in 
all  English  countries,  and  supposing  that  to  be  the  true  one, 
I  read  the  constitution  thus:  'Congress  shall  have  power  to 
establish  uniform  laws  on  the  subject  of  any  person's  general 
inability  to  pay  his  debts  throughout  the  United  States.'  " 

It  has  also  been  held  that  the  power  of  the  national  legis^ 
lature  is  not  limited  to  bankrupt  laws  relating  to  any  particu- 
lar class  of  persons,  as  traders,  merchants,  etc.,  but  that 
congress  may  pass  laws  applying  to  all  or  any  persons  within 
the  United  States." 

Congress  has  power  also  to  modify  the  obligation  of  con- 
tracts in  the  legitimate  exercise  of  the  power  to  establish 
bankrupt  laws.^      This  is  incidental  to  the  power  directly 


1  In  re  Klein,  i  How.  277,  note ; 
Thompson  v.  Alger,  53  Mass.  442 ; 
Kunzler  v.  Kohaus,  5  Hill,  317; 
Keene  v.  Mould,  16  Ohio  12 ;  Mc- 
Cormick  v.  Pickering,  4  N.  Y.  276 ; 
Rowan  v.  Holcomb,  16  Ohio,  463 ; 
Loud  V.  Pierce,  25  Me.  233;  Lalor 
V.  Wattles,  8  111.  225;  State  Bank 
V.  Wilborn,  6  Ark.  35 ;  Reed  v. 
Vaughn,  15  Mo.  137;  Cutter  v.  Fol- 
som,  17  N.  H.  139;  In  re  Irwine, 
I  Penn..  L.  J.  291 ;  Morse  v.  Hovey, 
I    Sandf.   Ch.    187. 

-  In  Sturgis  v.  Crowninshield,  4 
Wheat.   195. 

3  In   Kunzler  v.    Kohaus,  5  Hill, 


321. 


*  Leidigb  Carriage  Co.  v.  Stengel, 


95  Fed.  Rep.  637,  s.  c.  27  C.  C.  A. 
210 ;  Hanover  Nat.  Bank  v.  Moyses, 
186  U.  S.  181 ;  In  re  Klein,  i  How. 
277,  note ;  In  re  California  Pac.  R. 
Co..  No.  2315,  Fed.  Cas.,  s.  c.  3 
Saw.  240 ;  Sweatt  v.  Boston,  etc., 
R'.  Co.,  No.  13684,  s.  c.  3  Cliff.  339; 
Winter  v.  Iowa,  etc.,  R.  Co.,  No. 
17890,  Fed.  Cas.,  s.  c.  2  Dill,  487; 
Kunzler  v.  Kohaus,  5  Hill  317. 

^  In  re  Klein,  i  How.  277,  note , 
Kunzler  v.  Kohaus,  5  Hill  317; 
Sackett  v.  Andrews,  5  Hill  327; 
Keene  v.  Mould,  16  Ohio  12;  Mc- 
Cormick  v.  Pickering,  4  N.  Y.  276; 
Loud  V.  Pierce,  25  Me.  233;  In  re 
Reiman,  No.  11675,  Fed,  Cas.,  s.  c. 
12  Blatch.   562. 


POWER    TO    ENACT    BANKRUPT    LAWS. 


i9 


given  by  the  constitution.  Hence  congress  may  provide  for 
the  discharge  of  a  debtor,  releasing  him  from  contracts  exist- 
ing at  the  time  the  law  is  passed.  An  act  of  congress  may 
be  constitutional,  when,  if  the  same  act  was  passed  by  a  state 
legislature,  it  would  be  unconstitutional.' 

Another  incident  growing  out  of  this  delegated  power  is 
the  authority  to  commit  the  execution  of  the  system  to  the 
courts  of  the  United  States,  and  to  prescribe  such  modes  of 
procedure  and  means  of  administering  the  system  as  it  may 
deem  best  suited  to  carry  the   law  into  successful  operation.^ 

It  may  be  observed  that  the  extent  to  which  this  power 
shall  be  exercised  rests  in  the  discretion  of  congress,  subject 
only  to  the  qualification  that  such  laws  shall  be  uniform 
through  the  United  States.  The  uniformity  required  relates 
to  national  legislation  only,  and  therefore  the  laws  of  the 
several  states,  as  those  regulating  exemptions,  may  be  left  in 
force  so  long  and  to  such  extent  as  congress  may  see  fit.^ 

The  power  of  congress  to  establish  laws  on  the  subject  of 
bankruptcies  is  exclusive,  while  exercised,  but  when  or  so  far 
as  it  is  not  exercised  its  existence  does  not  defeat  state  legis- 
lation.*    The  effect  of  a  national  bankrupt   law  is  to  suspend 


1  The  Constitution  expressly 
prohibits  states  from  passing  laws 
"  impairingthe  obligation  of  a  con- 
tract."    Const.,  Art.  i,  Sec.  lo. 

In  re  Jordan,  No.  7514,  Fed. 
Gas.,  s.  c.  8  N.  B.  R.  180.  Judge 
Dick,  speaking  of  the  Bankruptcy 
Act  of  1867,  said:  "  If  this  state 
had  adopted  the  present  bankrupt 
law  it  would  have  been  unconsti- 
tutional, as  it  impairs  the  obliga- 
tion of  contracts  and  affects  the 
rights  of  citizens  of  other  states. 
Congress,  however,  could  adopt 
the  very  language  and  principles 
of  such  state  law  and  enact  it  as  a 
rational  law,  and  such  action 
-vould  be  constitutional;  as  it 
vould  constitute  a  system  of  bank- 
ruptcy uniform  among  the  states." 

2  Mitchell  v.  Mf  Co.,  No.  9662, 


Fed.  Cas.,  s.  c.  2  Stor^',  648;  Good- 
all  V.  Tuttle,  No.  5533,  Fed.  Cas., 
s.  c.  3  Biss.  219;  Sherman  V.  Bing- 
ham, No.  \2-]^2,  Fed.  Cas.,  s.  c.  3 
CHff.  552. 

3  Darling  v.  Berrj^  13  Fed.  Rep. 
668;  In  re  Beckerford,  No.  1209, 
Fed.  Cas.,  s.  c.  i  Dill,  45;  In  re 
Jordan,  No.  7514,  Fed.  Cas.,  s.  c.  8 
N.  B.  R.  I  So;  In  re  Jordan,  No. 
7515,  Fed.  Cas.,  s.  c.  10  N.  B.  R. 
427;  /;/  re  Kean,  No.  7630,  Fed. 
Cas.,  s.  c.  2  Hughes,  322;  hi  re 
Rouse,  Hazard  &  Co.,  41  Law  Bui. 
(Cinti.)  34,  s.  c.  I  Nat.  Bank  News, 

75- 

*  Sturges  v.  Crowninshield,  4 
Wheat.  122;  Baldwin  v.  Hale,  i 
Wall,  228;  Cook  v.  Moflfat,  5  How. 
295.  See  also  Power  of  States,  Sec. 
10,  post. 


20  LAW   AND    PROCEEDINGS   IN    BANKRUPTCY. 

only,  not  to  extinguish  state  laws.^  The  disability  is  re- 
moved when  the  act  of  congress  is  repealed,  and  the  state 
laws  become  immediately  operative  without  reenactment.* 

The  Bankruptcy  Act  of  1898  is  constitutional  and  valid 
legislation."* 

§  10.     Power  of  the  states  to  enact  bankrupt  and  insolvent  laws. 

Prior  to  the  adoption  of  the  constitution  of  the  United 
States  the  several  "states  could  exercise  almost  every  legis- 
lative power,  and  among  others,  that  of  passing  bankrupt 
laws.  "^  They  retained  all  such  powers  after  its  adoption, 
except  those  expressly  granted  to  the  national  government. 
A  part  of  the  powers  so  granted  are  to  be  exercised  exclusively 
by  congress,  and  the  subject  is  completely  taken  away  from 
the  state  legislatures.  Other  powers  were  yielded  by  the 
states  to  be  exclusively  exercised  by  congress,  provided  that 
body  saw  fit  to  legislate  upon  the  subject.  But  until  the 
national  legislature  exercised  this  power,  the  state  legislatures 
retained  the  power  to  enact  laws  on  the  same  subject.  The 
power  to  pass  laws  on  "the  subject  of  bankruptcies"  is  of  the 
latter  class  of  grants.* 

It  is  well  settled  that  the  several  states  may  pass  bankrupt 
and  insolvent  laws,  subject  to  two  restrictions  only:^ 

Firsts  A  state  has  no  power  to  enact  a  bankrupt  law  im- 

1  Ex  parte  Eames,  No.  4237,  Fed.  Crowninshield,  4  Wheat.  122 ;  Tua 
Cas.,  s.  c.  2  Story,  322;  Thornhill  v.  Carriere,  117  U.  S.  201;  Ogden 
V.  Bank,  No.  13992,  Fed.  Cas.,  s.  c.  v  Saunders,  12  Wheat.  273,  275, 
I  Woods,  i;  SulHvan  v.  Hieskill,  280,  306,  310,  314,  335,  369;  see 
No.  I3S94,  s.  c.  Crabbe,  525 ;  Rowe  Hale  v.  Baldwin,  i  Wall.  223 ;  But- 
V.  Page,  54  N.  H.  190;  Van  Nos-  ler  v.  Goreley,  146  U.  S.  303;  and 
trand  v.  Carr,  30  Md.  128;  Shears  the  many  cases  recognizing  the 
V.  Solhinger,  10  Abb.  Pr.,  N.  S.  right  of  the  states  to  pass  bankrupt 
287;  Martin  v.  Berry,  ^tl  Cal.  208;  and  insolvency  laws,  when  there  is 
Griswold  v.  Pratt,  9  Met.  16;  Blan-  no  bankrupt  law  iii  existence, 
chard  v.  Russell,   13  Mass.   i.  An  opposite  opinion  has  been  en- 

2  Baldwin  v.  Hale,  i  Wall.  223;  tertained  by  jurists,  see  Ogden  v. 
Butler  V.  Goreley,  146  U.  S.  303;  Saunders,  12  Wheat.  267  to  270; 
Tua  V.   Carriere,  117  U.  S.  209.  Golden    v.    Prince,    No.    5509,    Fed. 

2*  Hanover  Nat.  Bank  v.  Moyses,  Cas.,  s.  c.  3  Wash.  C.  C.  313. 
186  U.  S.  181 ;  Leidigh  Carriage  Co.  ^  Sturges     v.     Crowninshield,     4 

V     Stengel,    95    Fed.    Rep.    637,    y?  Wheat.  120;  Farmers  and  Mechan- 

C   C.  A.  210.  ics   Bank  v.   Smith,  6  Wheat.   130; 

3  Chief  Justice  Marshall,  in  Stur-  Ogden  v.  Saunders,  12  Wheat.  213; 
ges  V.  Crowninshield,  4  Wheat.  122.  Baldwin  v.  Hale,  i  Wall.  223 ;  Tua 
See  also  Blanchard  v.  Russell,  13  v  Carriere,  117  U.  S.  201;  Wood- 
Mass.  I.  hull    V.    Wagner,    No.    17975,    Fed. 

*  This    rule    is    now    well    settled      Cas.,   s.   c.    Bald.  296. 
6y   judicial   decisions.     Sturges    v. 


POWER   TO    ENACT    BANKRUPT    LAWS.  21 

pairing  the  obligation  of  contracts,  whether  there  is  a  national 
bankrupt  act  or  not. 

Second^  The  other  restriction  depends  solely  upon  the  action 
of  congress.  The  moment  it  establishes  a  system  of  national 
bankruptcy,  the  state  law,  in  so  far  as  it  is  in  conflict  with  the 
act  of  congress,  is  superseded  and  limited  by  the  national  act, 
so  long  as  it  is  in  force. 

§  II.  State  bankrupt  laws  with  reference  to  impairing  the  obli- 
gation of  a  contract. 

The  constitution  expressly  forbids  a  state  passing  any  law 
impairing  the  obligation  of  a  contract.'  This  prohibition 
applies  to  bankrupt  laws  and  acts  as  a  general  limitation  upon 
the  power  of  the  state  legislature,  whether  there  is  a  national 
bankrupt  law  in  force  or  not.  Yet  each  state,  so  long  as  it 
does  not  impair  the  obligation  of  any  contract,  has  the  power 
by  its  laws  to  regulate  the  conveyance  and  disposition  of  all 
property,  personal  or  real,  within  its  limits  and  jurisdiction. ^ 

A  state  has  no  power  to  enact  a  bankrupt  law  which  op- 
erates to  discharge  a  debtor  from  a  contract  entered  into 
previous  to  its  passage,''  This  is  true,  whether  the  parties  to 
the  contract  are  citizens  of  the  same  or  different  states.*  The 
reason  for  this  rule  is  that  the  effect  of  such  a  law  is  to 
terminate  the  obligation  under  a  contract,  which  was  not  and 
could  not  have  been  made  in  view  of  the  statute,  because  it 
was  not  in  existence  at  the  time  the  contract  was  made. 

Whether  a  state  may  pass  a  bankrupt  law  which  shall  dis- 
charge a  debtor  from  contracts  entered  into  after  the  passage 
of  the  act  has  been  the  subject  of  much  discussion.  From 
the  decisions  it  may  be  stated  that  a  fair  and  ordinary  exer- 
cise of  the  power  to  pass  bankrupt  laws  by  the  state  does  not 
necessarily  involve  a  violation  of  the  obligation  of  contracts, 
multo  fortiori  oi  posterior  contracts.      Whether  such  a  state 

1  U.  S.  Const.,  Art.  i,  Sec.   lo.  man's  Car    Co.  v.    Pennsylvania, 

2  Smith  V.  Union  Bank,  5   Pet.       141   U.  S.   18,  22. 

518,526;  Crapo  V.  Kelly,  16  Wall.  ^  gturges    v.    Crowninshield,    4 

610,  630;  Denny  v.  Bennett,  128  Wheat.  122;  Farmers  and  Me- 
U.  S.  489,  498;  Walworth  v.  Har-  chanics  Bank  v.  Smith,  6  Wheat, 
ris,  129  U.    S.    355;    Geilinger  v.       130. 

Philippi,   133  U.  S.  246,  257;  Pull-  *  Farmers  and  Mechanics  Bank 

V.  Smith,  6  Wheat.  130, 


22  LAW   AND    PROCEEDINGS    IN    BANKRUPTCY. 

statute  is  repugnant  to  the  constitution  or  not  depends  upon 
the  citizenship  of  the  parties  to  the  contract.  It  was  held  by 
a  divided  court  in  the  case  of  Ogden  v.  Saunders  ^  that  a  state 
bankrupt  law  discharging  the  person  and  property  of  the 
debtor  does  not  violate  the  obligation  of  a  contract  entered 
into  subsequent  to  its  passage  by  citizens  of  that  state.  The 
reason  is,  that  the  citizens  of  a  state  are  subject  to  its  laws, 
and  contracts  made  by  them  within  its  territory  are  made 
with  reference  to  such  laws.  The  principle  established  by 
this  case  has  never  been  overruled  nor  extended  in  subsequent 
cases.  It  has  been  uniformly  held  that  a  state  bankrupt  or 
insolvent  law  could  have  no  effect  upon  a  contract  made, 
either  within  or  without  such  state,  between  citizens  of  differ- 
ent states.'-^  The  reason  for  this  is,  that  the  state  has  no  juris- 
diction beyond  its  own  territory,  and  can  not  affect  a  contract 
entered  into  by  a  person  of  another  state  who  can  not  be 
presumed  to  act  with  reference  to  the  laws  of  a  state  of  which 
he  is  not  a  citizen.  Such  state  laws  are  held  not  to  apply  to 
contracts  by  citizens  of  the  same  state  unless  made  within 
such  state. ^     It  makes  no  difference  that  the  contract  entered 

1  12    Wheat.  213.     In  this  case,  l^w  can  discharge  the  obligation 

Saunders,  a  citizen  of  New  York,  of  any  contract  made  in  the  state, 

drew  bills  on  Ogden  in  New  York,  except  such  contracts  as  are  made 

which  were  accepted  and  protested  between  citizens  of  that  state.  He 

there.     Ogden  was  afterwards  dis-  refers    to    the   case   of  Ogden  v. 

charged  under  the  insolvent  laws  Saunders,  supra,  to   support  this 

of  New  York,  passed  previous  to  proposition. 

the   contract    of  acceptance.     He  2  goyig   v.  Zacharie,  6  Pet.  348; 

pleaded  this  discharge  to  an  action  Suydam   v.  Broadnax,  14  Pet.  67; 

brought  against  him    in  the  dis-  Cook    v.   Mofifatt,    5     How.    295; 

trict  court  of  Louisiana.     A   ma-  Baldwin     v.    Hale,    i    Wall.    223; 

jority   of  the    court   decided  that  Springer  v.  Foster,  No.  13266,  Fed. 

the  bankrupt    or    insolvent    law  Cas.,  s.  c.  2  Stor}',  383;    Woodhill 

was  not  a  law  impairing  the  obli-  v.  Wagner,  No.   17975,  Fed.  Cas., 

gation  of  that  contract,  but  over-  s.  c.  Baldwin,  296. 
ruled  his  plea  of  discharge  under  »  MclMillan  v.  McNeill,  4  Wheat, 

that  act.  209.     But  see  Marsh  v.  Putnam,  3 

See  also  Springer  v.  Foster,  No.  Gray,  551,  where  the  contracting 

13266,  Fed.  Cas.,  s.  c.  2  Story,  3 S3,  parties  were  citizens  of  the  state 

in  which  Judge  Story  stated  the  passing    the    insolvent  law;  also 

settled  doctrine  of  the  supreme  Blanchard  v.  Russell,  13  Mass.  i. 
court  to  be  that  no  state  insolvent 


POWER    TO    ENACT    BANKRUPT    LAWS.  23 

into  between  a  citizen  of  one  state  and  a  citizen  of  another  is 
made  payable  where  the  insolvent  law  cxi.'-is. ' 

If,  however,  the  creditor  makes  hiniseif  a  party  to  proceed- 
ings under  the  insolvent  law  he  will  be  bound  b)  tliLm,  like 
any  other  party  to  judicial  proceedings,  and  is  not  to  be  heard 
afterwards  to  object  that  his  debt  was  excluded  by  the  consti- 
tution from  being  affected  by  the  law.-' 

§  12.  The  effect  of  a  national  bankrupt  law  upon  state  insol- 
vent laws. 

Another  restriction  upon  the  operation  of  state  insolvent 
laws  arises  when  congress  establishes  a  system  of  bankruptcy. 
As  soon  as  a  national  bankrupt  act  goes  into  effect  the  state 
law  must  yield  so  far  as  it  conflicts  with  the  act  of  congress. 

It  is  well  settled  by  the  decisions,  both  federal  and  state, 
that  the  effect  of  a  national  bankrupt  law  is  to  suspend  the 
operation  of  any  state  bankrupt  or  insolvent  law  regulating  the 
assignment  and  distribution  of  the  property  of  insolvents,  and 
affecting  the  same  persons,  property  and  rights  that  would 
be  affected  by  proceedings  under  the  bankrupt  act.^  But  the 
act  of  congress  does  not  repeal  such  state  laws.  They  imme- 
diately become  operative,  without  reenactment,  upon  the  re- 
peal of  the  act  of  congress.* 

The  first  inquiry  naturally  is,  when  did  the  bankrupt  act  of 
1898  take  effect  to  suspend  the  insolvent  and  bankrupt  laws 
of  the  several  states?  Of  this  there  can  be  little  doubt.  The 
act  expressly  provides  that  it  "shall  go  into  full  force  and 
effect  upon  its  passage,"  which  was  July  i,  1898.      But  "no 

1  Baldwin   v.  Hale,  i  Wall.  223;  s.  c.  Crabbe,  525;    Rowe  v.  Page, 

Baldwin  v.  Bank   of  Newberry,  i  54   N.  H.   190;    Van   Nostrand  v. 

Wall.  234;  Gillman  v.  Lockwood,  Carr,  30   Md.  128;  Shears  v.  Sol- 

4  Wall.  409.  hinger,   10     Abb.  Pr.,  N.  S.    287; 

^  Clay  V.Smith,  3  Pet.  411;  Gil-  Martin    v.    Berrj-,    n    Cal.    208; 

man  v.  Lockwood,    4   Wall.   409;  Griswold    v.    Pratt,    9    Met.     16; 

Baldwin    v.    Hale,    i     Wall.    223;  Blanchar-d  v.  Russell,  13  Mass,   i; 

Perlej'  v.  Mason,  64  N.  H.  6.  Parmenter  Mf.    Co.   v.  Carpenter, 

^  Ex   parte    Eames,   No.   4237,  51N.  E.  529;  Bruss-Ritter  Co.,  90 

Fed.  Cas.,  s.  c.  2  Story,  322  ;    hire  Fed.  Rep.  651;    In  re    Gutwillig, 

Reynolds,  No.  11723,  Fed.  Cas.,  s.  90  Fed.  Rep.  475. 

c.  9  N.  B.  R.  50;  Thornhill  v.  Bank,  *  Baldwin  v.  Hale,  i    Wall.  223; 

No.  13992,  Fed.  Cas.,  s.  c.  i  Woods,  Butler   v.  Goreley,  146   U.  S.  303; 

i;  Sullivan  v.  Heiskill,  No.  13594,  Tua  v.  Carriere,  117  U.  S.  209. 


24 


LAW   AND    PROCEEDINGS    IN    BANKRUPTCY. 


petition  for  voluntary  bankruptcy  shall  be  filed  within  one 
month  of  the  passage  thereof,  and  no  petition  for  involuntary 
bankruptcy  shall  be  filed  within  four  months  of  the  passage 
thereof."  ^  In  this  respect  the  present  act  differs  from  that 
of  1867,  which  fixed  the  date  at  which  the  act  took  effect 
for  some  purposes  as  June  i,  1867.2  It  also  differs  in  like 
respect  from  the  act  of  August  19,  1841,  which  provided  that 
the  act  should  take  effect  from  and  after  the  first  day  of  Feb- 
ruary, 1842.^     It  is  expressly  provided  by  the  act,  however, 


1  Last  clause  of  the  Act  of  July 
I,  1898.  In  re  Bruss-Ritter  Co., 
90  Fed.  Rep.  651;  Blake,  Moffitt 
&  Tovvne  v.  Francis- Valentine 
Co.,  89  Fed.  Rep.  691 ;  hi  re  Rouse, 
Hazard  &  Co.,  91  Fed.  Rep.  96; 
In  re  Curtis,  91  Fed.  Rep.  "JZT, 
Leidigh  Carriage  Co.  v.  Stengel,  95 
Fed.  Rep.  637,  s.  c.  z^  C.  C.  A.  210. 

In  Parmenter  Mf.  Co.  v.  Hamil- 
ton, 51  N.  E.  Rep.  529,  the  Su- 
preme Judicial  Court  of  Massa- 
chusetts, construing  the  present 
statute,  said : 

"  The  language  is  materially 
different  from  that  of  the  bank- 
ruptcy act  of  1867  and  from  that 
of  the  earlier  bankruptcy  law  of 
1841.  The  argument  that  the 
change  in  question  was  intention- 
al is  almost  irresistible.  The  act 
is  '  to  go  into  full  force  and  effect 
upon  its  passage  ' ;  that  is  to  say, 
the  rights  of  all  persons,  in  the 
particulars  to  which  the  act  refers, 
are  to  be  determined  by  the  act 
from  the  time  of  its  passage. 
Among  these  rights  is  the  right 
to  have  insolvent  estates  settled 
in  bankruptcy  under  the  provis- 
ions of  the  act,  including  the  rights 
to  have  acts  of  bankruptcy  affect- 
ing the  .settlement  of  estates  de- 
termined by  it  (Sec.  3),  to  have  the 
rights  of  debtors  to  file  voluntary 
petitions,  and  of  creditors  to  file 
involuntary  petitions,  determined 


by  it  (Sec.  4),  and  to  have  prefer- 
ences and  liens  governed  by  the 
provisions  of  it  (Sees.  60  and  67). 
These  various  provisions  affecting 
the  rights  and  conduct  of  debtors 
and  creditors  are  different  from 
those  previously  existing  in  most 
of  the  states,  and  perhaps  differ- 
ent from  those  found  in  the  laws 
of  any  state,  and  they  supersede 
all  conflicting  provisions.  The 
onh'  limitation  upon  the  full  and 
complete  operation  of  the  act  up- 
on its  passage  is  that  the  right  to 
begin  proceedings  is  postponed 
one  month  in  the  case  of  volun- 
tary petitions,  and  four  months  in 
the  case  of  involuntary  petitions. 
Whenever  the  proceedings  are 
commenced  the  conduct  of  the 
parties  after  the  passage  of  the  act 
is  to  be  tested  by  its  requirements. 
The  only  saving  clause  affecting 
the  jurisdiction  of  state  courts 
provides  for  cases  commenced  in 
those  courts  before  the  passage  of 
the  act." 

2  Act  of  March  2,  1867,  14  Stat, 
at  L.  541,  vSec.  50;  Traders  Bank 
V.  Campbell,  14  Wall.  94;  Martin 
V.  Berry,  37  Cal.  208;  Day  v.  Bar- 
dell,  97  Mass.  246;  Chamberlain 
V.  Perkins,  51  N.  H.  340. 

3  Act  of  August  19,  1 84 1,  5  Stat, 
at  L.  449,  Sec.  17;  Griswold  v. 
Pratt,  9  Met.  16. 


POWER   TO   ENACT   BANKRUPT    LAWS. 


25 


that  proceedings  commenced  under  the  state  insolvency  laws 
before  July  i,  1898,  shall  not  be  affected  by  the  national  act.^ 

The  reason  that  state  bankruptcy  and  insolvency  laws  are 
inoperative  is  not  because  the  proceedings  under  them  are 
less  plenary,  but  for  the  sole  reason  that  a  different  tribunal 
is  selected  than  that  provided  by  congress.'  General  juris- 
diction of  bankruptcy  proceedings  is  conferred  upon  courts 
specified  as  courts  of  bankruptcy.^  This  jurisdiction  must 
necessarily  be  exclusive  of  the  state  courts.^ 

It  may  be  contended  that  the  bankrupt  law  does  not  sus- 
pend proceedings  under  the  state  law  until  proceedings  are 
instituted  in  a  court  of  bankruptcy.^  But  if  this  were  so 
"the  law  would  be  imperfect,  and  all  the  evils  would  be 
experienced  of  two  different  systems  of  distributing  the  assets 
of  insolvent  debtors,  with  the  strongly  objectionable  feature 
that  one  of  those  systems,  the  state  insolvent  law,  was  of  such 
a  character  as  to  be  liable  to  have  the  proceedings  under  it 
superseded  by  proceedings  being  instituted  under  the  other  at 
the  election  of  the  insolvent  or  of  his  creditors,  if  a  case 
existed  for  compulsory  bankruptcy.""  Another  objection 
to  such  a  construction  is,  that  it  would  defeat  the  very  object 
of  the  national  bankrupt  system,  namely,  uniformity  through- 

1  Last  clause  of  the  Act  of  July  ors  without  preferences  is  neces- 
I.  1898.  saril}'  a  fraud  under  the  bankrupt 

2  Globe  Ins.  Co.  v.  Cleveland  law,  defeating  the  operation  of  the 
Ins.  Co.,  No.  5486,  Fed.  Cas.,  s.  c.  law,  because  it  provides  for  the 
14  N.  B.  R.  311,  where  Judge  Em-  administration  of  the  estate  in  a 
mons  used  substantially  the  Ian-  different  way  from  that  provided 
guage  of  the  text.  by  the   bankrupt  law,  and  by  an 

In    Piatt  V.  Preston,  No.  11 219,      assignee  selected  by  the  bankrupt 
s.  c.  19  N.  B.  R.  241,  Judge  Choate      himself" 
said:  ^B.   A.   i'898.  Sec.   2.     See   also 

"  As  to  the  general  assignment,      Jurisdiction     of  Courts  of   Bank- 
it  is  insisted  that  it  is  rvoX.  per  se  a      ruptcy.  Sec.  16,  et  seq.,post. 
fraud  upon  the  bankrupt  law,  but  *  R.  S.  Sec.  711,  clause  6. 

void  if  actual  intent  to  defraud  or  s  Bostwick   v.  Burnett,  74  N.  Y. 

to  defeat  the  law  shall  be  shown.      317;  Sadler   v.    Immel,    15     Nev. 
This  may  still  be  regarded  as  be-      265:    Ostrander     v.    Meunch,    12 
ing  an  open   question   in  the  su-      Fed.  Rep.   562 ;  Reed  Brothers  & 
preme  court  of  the  United  States.      Co.  v.  Taylor,  32  Iowa,  209. 
Maj'er  v.  Hellman,  91    U.  vS.  496.  "Judge   Dewey,  in   Griswold  v. 

But  the  great  weight  of  authority      Pratt,  9    Met.  16;    see   also   cases 
at   present   is,  that   a  general  as-      cited  in  note  next  below, 
signment  for  the  benefit  of  credit- 


26 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


out  the  United  States;  some  cases  would  be  instituted  under 
the  national  bankrupt  act  and  others  proceed  under  the  laws 
of  the  various  states,  provided  no  objection  was  raised  to  such 
proceedings  in  the  state  court.  Clearly  it  was  not  the  inten- 
tion of  the  framers  of  the  constitution  or  of  congress  when  it 
enacted  this  act  to  have  in  existence  two  distinct  and  diverse 
systems  affecting  the  same  property  and  rights,  leaving  it  to 
the  option  of  the  debtor  to  look  to  one  or  the  other  at  his 
pleasure.^ 

Under  the  act  of  1841,  as  well  as  under  the  act  of  1867, 
this  question  does  not  appear  to  have  been  directly  decided 
by   the  supreme  court  of   the  United  States,^  for  the  reason 

1  Sturges     V.    Crowniushield,  4      ment    and    prior    to   bankruptcy 

proceedings. 

In  Boese  v.  King,  108  U.  S.  379, 
the  court  held  that  creditors,  who 
permitted  a  debtor  to  surrender 
his  propertj'  for  distribution  and 
to  proceed  under  a  state  insolvent 
act  until  they  acquired  prefer- 
ences over  the  other  creditors  un- 
der the  bankrupt  act,  were  es- 
topped, in  a  proceeding  by  the  re- 
ceiver of  such  creditors  to  set 
aside  such  distribution  to  ques- 
tion the  legality  of  the  proceeding. 
But  Mr.  Justice  Matthews,  with 
whom  concurred  Justices  Miller, 
Gray  and  Blatchford,  dissented 
upon  the  ground  that  the  state 
law  being  inoperative  no  title  un- 
der it  could  pass,  and  that  the 
judgment  creditors  who  had  ac- 
quired a  lien  upon  the  fund  in  the 
hands  of  the  assignee  were  en- 
titled to  appropriate  it  as  the 
property  of  their  debtor  to  the 
payment  of  their  claims.  These 
decisions,  together  with  decisions 
of  the  justices  holding  the  circuit 
courts,  indicate  that  the  supreme 
court  was  divided  at  that  time  up- 
on the  question  whether  the  bank- 
rupt law  ipso  facto  made  proceed- 


Wheat.  122;  Ogden  v.  Saunders, 
12  Wheat.  213 ;  In  re  Klein,  i  How. 
2-]-],  note;  Ex  parte  Eames,  No. 
4237,  Fed.  Cas.,  s.  c.  2  Story,  322; 
Globe  Ins.  Co.v. Cleveland  Ins.  Co., 
5486,  Fed.  Cas.,  s.  c.  14  N.  B.  R. 
311  ;  Thornhill  v.  Bank,  No. 
13992,  Fed.  Cas.,s.  c.  i  Woods,  i  ; 
vSuUivan  v.  Hieskill,  No.  13594,  s. 
c.  Crabbe,  525;  In  re  Reynolds, 
No.  1 1723,  Fed.  Cas.,  s.  c.  9  N.  B. 
R.  50 ;  Rowe  v.  Page,  54  N.  H. 
190;  Van  Nostrand  v.  Carr,  30 
Md.  128;  Shears  v.  Solhinger,  10 
Abb.  Prac.  N.  S.  287;  Martin  v. 
Berry,  37  Cal.  208 ;  Griswold  v. 
Pratt,  9  Met.  16;  Blanchard  v. 
Russell,  13  Mass.  i;  Parmenter 
Mf.  Co.  v.  Hamilton  (Mass.),  51  N. 
E.  Rep.  529;  Bruss-Ritter  Co.,  90 
Fed.  Rep.  651. 

See  also  discussion  with  refer- 
ence to  general  assignment  laws 
next  section  below. 

2  In  Mayer  v.  Hellman,  91  U.  S. 
502,  the  question  is  referred  to,  but 
the  court  expressly  declined  to  ex- 
press an  opinion. 

In  Reed  v.  Mclntyre,  98  U.  S. 
507,  the  court  held  that  property 
in  the  hands  of  an  assignee  was 
not  liable  to  an  attachment  sued 
out   and    levied   after  the  assign- 


in  gs  under  the  state  law  invalid. 


POWER  TO  HNACT  BANKRUPT  LAWS. 


27 


probably  that  the  supreme  court  had  no  appellate  jurisdiction 
in  bankruptcy.'  The  weight  of  authority  in  the  circuit 
courts  (having  final  jurisdiction  of  bankruptcy  cases)  as  well 
as  in  the  state  courts,  is  to  the  effect  that  the  national  bank- 
rupt law  of  1867  ipso  facto  suspended  all  state  legislation 
upon  the  subject  of  bankruptcies.-      The  same  rule  has  been 


applied  under  the  present  act. 

1  Cleveland  Insurance  Co.  v. 
Globe  Ins.  Co.,  98  U.  S.  366;  N. 
O.,  etc.,  R.  Co.  V.  Delamore,  114  U. 
S.  506. 

2  Judge  Emmons,  in  the  well- 
considered  cavSe  of  the  Globe  In- 
surance Co.  V.  Cleveland  Insur- 
ance Co.,  No.  5486,  Fed.  Cas.,  s.  c. 
14  N.  B.  R.  31 1,  laj-s  down  the  rule 
that  "  if  the  state  statute  author- 
izes a  transfer  of  all  a  debtor's 
property  for  equal  distribution 
among  his  creditors,  in  the  lan- 
guage of  many  of  the  cases  'acting 
upon  the  same  persons  and  prop- 
erty,' a  transfer  under  it  is  void; 
not  because  the  proceedings  are 
less  plenary,  but  for  the  sole  rea- 
son that  a  different  tribunal  is  se- 
lected than  that  provided  b}-  con- 
gress." 

See  also  In  re  Beisenthal,  Xo. 
1236,  Fed.  Cas.,  s.  c.  14  Blatch. 
146;  In  re  Independent  Insurance 
Co.,  No.  7017,  Fed.  Cas.,  s.  c. 
Holmes,  103 ;  Macdonald  v. 
Moore,  No.  8763,  Fed.  Cas.,  s.  c. 
8  Ben.  579;  In  re  Re\-nolds,  No. 
1 1723,  Fed.  Cas.,  s.  c.  9  N.  B.  R. 
50;  Inre  Stubbs,  No.  13557,  Fed. 
Cas.,  s.  c.  4  N.  B.  R.  376;  Piatt  v. 
Preston,  No.  112 19,  s.  c.  19  N.  B. 
R.  241  ;  Van  Nostrand  v.  Carr,  30 
Md.  128;  Rowe  V.  Page,  54  N.  H. 
194;  Chamberlain  v.  Perkins,  51 
N.  H.  340  ;  ]\Iartin  v.  Berr}',  37 
Cal.  208 ;  Shears  v.  Solhinger,  10 
Abb.  Prac,  N.  S.  287. 

But  see  contra  Reed  Bros.  & 
Co.  V.  Taylor,  32  Iowa,  209;  Cook  v- 


\ 


Rogers,  31  INIich.  391  ;  Langley  v. 
Perry,  No.  8067,  s.  c.  2  N.  B.  R. 
596 ;  Sedgwick  v.  Place,  No. 
12622,  Fed.  Cas.,  i  N.  B.  R.  673; 
Bostwick  V.  Burnett,  74  N.  Y.  317; 
Sadler  v.  Immel,  15  Nev.  265. 

3  The     Parmenter  Manufactur- 
ing Co.  V.  Hamilton,  51  N.  E.  Rep. 
529  ;  1)1  re  Bruss-Ritter  Co.,  90  Fed. 
Rep.  651 ;  In  re  vSmith,  92  Fed.  Rep. 
135 ;  In  re  Curtis,  91  Fed.  Rep.  "jyj ; 
Ketcham    v.    McNamara,    72    Conn. 
709 ;  6  Am.  B.  R.  160 ;  In  re  Macon 
Sash   Door  &  Lumber   Co.,  7  Am. 
B.    R.    66. 

In  Parmenter  Manufacturing  Co. 
V.  Hamilton,  supra,  the  Supreme 
Judicial  Court  of  Massachusetts 
used  this  language : 

"  The  question  in  this  case  is', 
whether  this  act  so  far  superseded 
the  insolvency  laws  of  this  com- 
monwealth from  the  time  of  its 
passage  as  to  deprive  our  courts 
of  jurisdiction  to  entertain  peti- 
tions for  the  commencement  of  in- 
solvency proceedings  filed  after 
July  I,   1898.       .       .       .       .       .       . 

The  plain  implication  is,  that 
proceedings  commenced  in  the 
state  courts  after  the  passage  of 
the  act  are  unauthorized.  This  is 
in  accordance  with  the  earlier  lan- 
guage giving  the  statute  full  force 
and  effect  from  the  time  of  its 
passage,  except  that  the  filing  of 
petitions  is  to  be  postponed  for  a 
short  time.  We  are  of  opinion 
that  the  language  was  chosen  to 
make  clear  the  purpose  of  Con- 
gress that  the  new  system  of  bank- 
ruptcy should  supersede  all  state 
laws  in  regard  to  insolvency  from 
the  date  of  the  passage  of  the 
statute." 


28  LAW   AND    PROCEKDINGS    IN    BANKRUPTCY. 

It  is  clear  that  any  person  or  corporation  not  subject  to  the 
act  of  1898  may  take  the  benefit  of  an  insolvent  state  law.i 
Any  person  who  owes  debts,  except  a  corporation,  may  be- 
come a  voluntary  bankrupt.^  This  provision  of  tlie  act 
limits  the  jurisdiction  of  the  state  courts  to  corporations 
which  are  not  liable  to  be  adjudged  bankrupts  upon  the  peti- 
tion of  creditors.  Such  are,  first,  corporations  «c/"  engaged 
'  principally  in  manufacturing,  trading,  printing,  publishing, 
mining,  or  mercantile  pursuits,  owing  debts  to  the  amount  of 
$1,000  or  over."  In  this  class  may  be  included  corporations 
not  for  profit,  such  as  religious  and  benevolent  societies,  social 
clubs  and  municipal  corporations;  second,  banks  incorporated 
under  state  or  territorial  laws.  National  banks  are  also  ex- 
cluded from  the  operation  of  the  bankrupt  act,  but  congress 
has  provided  another  method  of  winding  up  the  affairs  of  an 
insolvent  national  bank.' 

If  proceedings  in  insolvency  are  instituted  in  a  state  court 
after  the  law  of  1898  went  into  effect,  by  what  steps  is  it  pos- 
sible to  transfer  the  property  and  proceedings  to  a  court  of 
bankruptcy?  Two  plain  remedies  exist.  Firsts  If  it  be  a 
case  in  which  the  debtor  may  be  adjudged  a  bankrupt  on 
petition  of  a  creditor — involuntary  bankruptcy — proceedings 
may  at  once  be  instituted  in  a  court  of  bankruptcy  by  the 
creditors.  Such  proceedings  supersede  the  proceedings  in  the 
state  court.^*  If  the  state  court  refuses  to  yield,  the  question 
of  how  far  a  court  of  bankruptcy  may  interfere  with  a  state 
court  arises.  This  is  discussed  in  another  place.*  Second, 
If  the  case  in  the  state  court  is  not  properly  within  involun- 
tary bankruptcy,  under  the  act  of  1898,  but  is  a  case  within 
the  voluntary  provisions  of  that  act,  the  procedure  is  differ- 
ent. Clearly  a  person  can  not  be  directly  compelled  to  volun- 
tarily go  into  a  court  of  bankruptcy.  If  the  state  court  holds 
jurisdiction  after  a  proper  objection  has  been  made  by  any 
of  the  creditors,  the  case  may  be  taken  to  the  highest  court 
of  the  state  in  which  it  is  reviewable.     If  such  court  decides 

1  As  to  who  may  be  adjudged  2* /n  re  Macon  Sash,  Door  & 
bankrupts  under  the  Act  of  1898,  Lumber  Co.,  7  Am.  B.  R.  66; 
see  Sees.  42,  et  seq.,  post.  Ketcham  v.    McNamara,  6  Am.   B. 

2  B.      A.      1898,      Sees.      4a,      as  R.    160,    72   Conn.    709. 
amended   Feb.    5,    1903,   32    Stat,   at  *  How  far  a  court  of  bankruptcy 
L.    797.  may    interfere    with    a    state    court, 

3  R.  S.  Sees.  5220  to  5243.  Sees.  22  and  23,  post. 


POWER    TO    ENACT    BANKRUPT    LAWS.  29 

in  favor  of  the  jurisdiction  of  the  state  court,  this  decision 
may  be  reviewed  by  the  supreme  court  of  the  United  States/ 

§  13.     The  effect  of  a  national  bankrupt  law  upon  general  as- 
signment laws  of  the  states. 

Under  the  act  of  1841  is  was  generally  conceded  that  a 
general  assignment  for  the  benefit  of  creditors  was  unlawful 
from  and  after  the  date  that  the  act  went  into  effect.^  Under 
the  act  of  1867  a  difference  of  opinion  existed  with  reference 
to  the  effect  of  the  act  upon  state  laws  regulating  assignments 
for  the  benefit  of  creditors.^ 

It  will  be  observed  that  it  is  insolvent  and  bankrupt  laws 
only  which  are  suspended  by  the  act  of  1898.  A  state  statute 
which  is  merely  declarative  of  principles  of  enforcing  a  trust 
substantially  such  as  a  court  of  chancery  would  apply  in  the 
absence  of  any  statutory  provision  is  not  such  a  law.* 

There  is  a  substantial  difTerence  between  a  proceeding  under 
a  general  insolvency  statute  and  one  under  a  statute  permitting 
general  assignments.  The  one  administers  upon  the  estate  of 
an  insolvent  as  a  proceeding  in  the  courts,  derives  its  potency 
from  the  law,  winds  up  the  estate  judicially,  and  discharges 
the  debtor.     Such  is  essentially  a  proceeding  in  bankruptcy, 

^  R.    S.    Sec.    709.  acquiesced  in  at  that  time  than  that 

2  See    McLean    v.    Johnson,    No.  general  assignments  for  the  benefit 

S883,    Fed.    Cas.,    s.    c.    3    McLean,  ot  creditors    had   become  unlawful. 

202;   McLean  v.   Meline,   No.  8890.  Every  lawyer  of  large  practice  will 

Fed.  Cas.,  s.  c.  3  McLean,  199;  Ex  be  enabled  to  say  that  the  practice 

parte  Fames,   No.   4237,   Fed.   Cas.,  was      abandoned     throughout      the 

s.  c.  2  Story,  322;  Griswold  v.  Pratt,  country.    The  local  judgments  were 

9    Met.    16 ;    In    re    Breneman,    No.  then   less    frequently   reported   than 

1830,  Fed.  Cas.,  s.  c.  Crabbe,  456.  now,   or  they  would  have  been   as 

Speaking  of  this  act,  Judge  Fm-  numerous  in  the  books  as  they  are 

mons,    in    Globe    Insurance    Co.    v.  under   the    law   of   1867."     But    see 

Cleveland  Insurance  Co.,  No.  5486,  ex  parte  Ziegenfuss,  2  Iredell    (N. 

Fed.   Cas.,  s.   c.   14   N.   B.   R.   311,  Car.)   463. 

observes :  ^  See  note  2,  page  27. 

"  Under  the  law  of   1841    several  *  Randolph  v.  Scruggs,  190  U.  S. 

decisions    of    this    precise    question  533,   10  Am.  B.  R.   i  ;  In  re  Watts 

were  made.     During  the  administra-  and   Sachs,  190  U.   S.   i  ;   Mayer  v. 

tion  of  that  law,  when  at  the  bar,  Hellman,  91   U.  S.  502.     The  Ohio 

we    had    occasion    to    examine    it.  law  was  under  consideration  in  this 

Few  doctrines  were  more  generally  last  case. 


30 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


and  such  is  undoubtedly  superseded  by  the  act  of  congress  in 
question,^  The  other  derives  its  potency,  not  from  the  law, 
but  from  the  contract  or  deed  of  the  debtor,  is  administered 
under  and  according  to  the  provisions  of  the  deed,  supple- 
mented only  by  salutary  legislative  safeguards,  and  does  not 
result  in  a  discharge  of  the  debtor  from  his  obligations. 

Proceedings  therefore  under  a  general  assignment  law  of  a 
state  (not  a  bankruptcy  or  insolvency  law  strictly  so-called) 
or  under  a  common  law  deed  are  not  void,  whether  bankruptcy 
proceedings  are  instituted  or  not.*'  If  no  bankruptcy  pro- 
ceeedings  are  instituted  within  four  months  the  state  court 
may  proceed  to  administer  the  estate  and  the  proceedings  can- 
not be  assailed  by  a  trustee  in  bankruptcy  subsequently  ap- 
pointed or  by  the  creditors.^ 

The  bankruptcy  act  makes  a  general  assignment  for  the 
benefit  of  creditors  *  or  the  appointment  of  a  receiver  by  a 
state  court  °  an  act  of  bankruptcy.  It  has  been  held  that  an 
assignee,  under  a  deed  of  general  assignment  and  the  execution 
of  which  deed  is  the  act  of  bankruptcy  upon  which  an  adjudica- 
tion is  made  although  the  assignee  has  qualified  and  is  acting 
under  the  orders  of  the  state  court,  does  -not  hold  the  estate 
of  the  bankrupt  adversely  to  the  trustee  in  bankruptcy.^*'  If 
proceedings  in  bankruptcy  are  instituted  within  four  months 
after  the  general  assignment  or  the  appointment  of  the  receiver 


^  Parmenter  Manf.  Co.  v.  Ham- 
ilton, 51  N.  E.  Rep.  528;  In  re 
Smith,  92  Fed.  Rep.  135;  In  re 
Etheridge  Furniture  Co.,  92  Fed. 
Rep.  329;  In  re  Richard,  94  Fed. 
Rep.  633;  Ketcham  v.  McNamara, 
72  Conn.  709,  6  Am.  B.  R.  160; 
In  re  Macon  Sash,  Door  &  Lumber 
Co.,  7  Am.  B.  R.  66.  But  see  Boese 
V    King,  108  U.  S.  379- 

6  Randolph  v.  Scruggs,  190  U.  S. 
533 ,  ID  Am.  B.  R.  I ;  In  re  Sievers, 

91  Fed.  Rep.  366;  In  re  Romanow, 

92  Fed.  Rep.  510;  i  Am.  B.  R.  461. 
■!■  Randolph  v.  Scruggs,  190  U.  S. 

533 ,    10   Am.    B.    R.    I  ;    Mayer   v. 
Hellman,   91    U.    S.   496;    Boese   v. 


King,  108  U.  S.  379;  Patty-Joiner 
&  Enbank  Co.  v.  Cummins,  (Texas 
Sup.  Ct.)  4  Am.  B.  R.  269,  57  S. 
W.  Rep.  566. 

SB.  A.  1898,  Sec.  3,  as 
amended  Feb.  5,  1903,  32  Stat,  at 
L.     797;     West     Co.     V.    Lea,     174 

U.   S.  590. 

9  B.  A.  1898,  Sec.  3,  clause  4,  as 
amended  by  the  act  of  February  S, 
1903,  32  Stat,  at  L.  797. 

10  Bryan  v.  Bernheimer,  181  U. 
S.  188,  5  Am.  B.  R.  623;  Leidigh 
Carriage  Co.  v.  Stengel  (C.  C.  A. 
6th  Cir.),  95  Fed.  Rep.  645;  2  Am. 
B.   R.   383. 

As  to  when  a  receiver  does  not 


POWER    TO    ENACT    BANKRUPT    LAWS. 


31 


5)Uch  state  proceedings  are  void  as  against  the  trustee  of  thc- 
bankrupt  so  far  as  -it  interferes  with  his  administration  of  the 
property  of  the  debtor/^ 

The  general  rule  is  that  where  the  property  of  a  debtor  has 
gone  into  the  custody  of  a  state  court,  its  right  to  control 
and  administer  it  for  the  purpose  of  that  suit  is  superior  to 
that  of  the  bankruptcy  court,  provided  such  suit  was  com- 
menced and  the  seizure  made  before  the  beginning  of  the  four 
months  period/-  If  the  suit  in  the  state  court  was  beeun 
and  the  seizure  made  within  that  period  the  right  of  the  bank- 
ruptcy court  over  the  property  is  not  only  superior,  but  after 
the  adjudication  is  exclusive,  providing  proper  steps  are  taken 
by  the  trustee  to  obtain  possession  of  the  property  for  the 
purpose  of  administering  it."  The  trustee  should  apply  to 
the  state  court  for  an  order  to  deliver  to  him  the  assets  of  the 
debtor.'*  The  state  court  will  regularly  pass  such  an  order  in 
a  proper  case. 


hold  adversely,  see  /n  re  Watts  & 
Sachs,   190  U.  S.   I. 

11  Randolph  v.  Scruggs,  190  U.  S. 
533 ,  10  Am.  B.  R.  I ;  West  Co.  v. 
Lea,  174  U.  S.  590;  Bryan  v.  Bern- 
heimer,  181  U.  S.  188,  5  Am.  B.  R. 
623;  Armour  Packing  Co.  v.  Brown 
tlViini.),  70  N-  W.  Rep.  522;  Lum- 
"^er' Co.  V.  Sanger  (Minn.),  78  N. 
W.   Rep.    1038, 

12  Consult  Metcalf  v.  Barker, 
187  U.  S.  165,  9  Am.  B.  R.  36; 
Pickens  v.  Roy,  187  U.  S.  177;  Fra- 
zier  V.  Southern  Loan  &  Trust  Co., 
99  Fed.  707;  40  C.  C.  A.  76,  where 
the  suits  in  the  state  courts  had 
been  instituted  more  than  four 
months  before  the  commission  of 
the  acts  of  bankruptcy,  and  conse- 
quently the  state  courts  were  not 
deprived  of  jurisdiction  over  the 
property. 

In  Pickens  v.  Roy,  187  cT,  .«.  180, 
the  court,  in  referring  to  the  rules 
governing  cases  of  priority  of  juris- 
diction, imputes  to  Judge  Goff  the 


following    language,    which    is    ap- 
proved : 

"  The  bankruptcy  act  of  1898  does 
not  in  the  least  modify  this  rule,  but 
with  unusual  carefulness  guards  it 
in  all  of  its  details,  provided  the 
suit  pending  in  the  state  court  was 
instituted  more  than  four  months 
before  the  district  court  of  the 
L'nited  States  had  adjudicated  the 
bankruptcy  of  the  party  entitled  to 
or  interested  in  the  subject-matter 
of  such  controversy." 

Though  there  is  error  in  the  ci- 
tation, as  Judge  Goff  did  not  sit  in 
Frazier  v.  Southern  Loan  &  Trust 
Co.,  99  Fed.  707;  40  C.  C.  A.  76, 
the  language  is  found  in  Pickens  v. 
Dent,  106  Fed.  657;  45  C.  C.  A. 
522,  the  decision  in  which  was  un- 
der review  in  Pickens  v.  Roy,  and 
there   affirmed. 

13  /„  re  Watts  &  Sachs,  190  U.  S. 
I  ;  In  re  Knight,  125  Fed.  Rep.  35. 

"/«  re  Knight,  125  Fed.  Rep.  35; 
In  re  Watts  &  Sachs,  190  U.  S.  I. 


32 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


If  the  state  court  refuses  to  order  its  assignee  for  the  bene- 
fit of  creditors  to  deliver  assets  in  his  possession  to  the  trustee 
in  bankruptcy,  the  trustee  may  apply  to  the  court  of  bank- 
ruptcy for  an  order  to  bring  in  the  assignee  under  the  assign- 
ment, which  constitutes  an  act  of  bankruptcy,  and  require  him 
to  deliver  to  the  trustee  assets  of  the  estate  which  came  into 
his  possession  under  the  assignment,^^  but  the  assignee  cannot 
be  required  by  a  summary  order  on  notice  to  pay  over  money, 
which  he  has  paid  out  in  the  administration  of  the  estate  in 
the  state  court,^®  or  the  trustee  may  proceed  to  have  the  con- 
veyance to  the  assignee  set  aside  under  Sec.  67^/^  or  he  may 
apply  to  the  court  of  bankruptcy  for  an  order  to  stay  pro- 
ceedings in  the  state  court. ^^ 


1^  Bryan  v.  Bernheimer,  181  U.  S. 
188,  5  Am.  B.  R.  623;  In  re 
Thompson,  122  Fed.  Rep.  174;  Lei- 
digh  Carriage  Co.  v.  Stengel  (C.  C. 
A.,  6th  Cir.),  95  Fed.  Rep.  637,  2 
Am.  B.  R.  383 ;  In  re  Stokes,  106 
Fed.  Rep.  312;  In  re  Knight,  125 
Fed.  Rep.  35. 

16  Louisville  Trust  Co.  v.  Com- 
ingor,  184  U.  S.  18 ,  7  Am.  B.  R. 
421,  affirming  Ex  parte  Comingor 
(C.  C.  A.,  6th  Cir.),  107  Fed.  Rep. 


898,  5  Am.  B.  R.  537;  In  re  Klein 
&  Co.,  8  Am.  B.  R.  559,  116  Fed. 
Rep.  523 ;  In  re  Carver  &  Co.,  7  Am. 
B  R.  539 ;  In  re  Manning,  10  Am. 
B.  R.  497. 

!■'■  Randolph  &  Scruggs,  190  U.  S. 
533-,  ID  Am.  B.  R.  I ;  In  re  Gutwil- 
lig,  90  Fed.  Rep.  475,  s.  c.  92  Fed. 
Rep.  zy? ;  Davis  v.  Bohle,  92  Fed. 
Rep.  325. 

18  /„  yg  Watts  &  Sachs,  190  U.  S. 
I ;  In  re  Knight,  125  Fed.  Rep.  35. 


COURTS    AND    TllElK    TERRITORIAL    JURISDICTION.  33 


CHAPTER  III. 

THE      COURTS      OF      BANKRUPTCY      AND      THEIR      TERRITORIAL 

JURISDICTION. 

§  14.     Bankruptcy  courts  created. 

The  statute  creates  courts  of  bankruptcy  by  conferring 
jurisdiction  in  bankruptcy  on  the  district  courts  of  the  United 
States  in  the  several  states,  the  supreme  court  of  the  District 
of  Cokunbia,  the  district  courts  of  the  several  territories,  and 
the  United  States  courts  in  the  Indian  Territory  and  the  Dis- 
trict of  Alaska.^ 

The  jurisdiction  in  bankruptcy  is  conferred  upon  existing 
courts  instead  of  being  vested  in  new  tribunals.  But  these 
courts,  when  acting  as  courts  of  bankruptcy,  are  none  the 
less  separate  and  distinct  courts,  and  exercise  powers  and 
jurisdiction  separate  and  distinct  from  their  powers  and  juris- 
diction as  originally  constituted,  to  the  same  extent  as  if  they 
were  separate  and  distinct  tribunals." 

The  courts  of  bankruptcy  are  courts  of  record,  having  a 
limited  jurisdiction,  but  are  not  inferior  courts,  in  the  technical 
sense  of  those  words,  whose  judgments,  taken  alone  are  to  be 
disregarded.^ 

§  15.     Territorial  jurisdiction. 

The  several  courts  of  bankruptcy  have  the  same  territorial 
limits  respectively  as  the  courts  upon  which  bankruptcy  juris- 
diction is  conferred  now  have,  or  as  they  may  hereafter  be 
changed.*  Each  state  and  territory  is  divided  into  judicial 
districts.     In  many  states   there   are  two  or  more  districts, 

1  B.  A.  1898,  Sec.  I,  clanse  8,  and  Co.,  loi  Fed.  Rep.  965  ,  4  Am.  B.  R. 
Sec.  2.  411;     Kennedy    v.     Bank,    8    How. 

2  See     Norris'     Case     No.     10304,  586;  In  re  Williams,  120  Fed.  Rep. 
Fed.  Cas.,  s.  c.  4  N.  B.  R.  35-  38. 

3  7m    re     Columbia     Real     Estate  *  B.  A.    1898,   Sec.  2. 


34  l.AW     AND     PROCEEDINGS    IN     BANKRUPTCY. 

and  some  ni  the  large  districts  are  again  divided  into  divisions. 
\\'hen  a  district  consists  of  a  state,  its  boundaries  vary  as  those 
of  the  state  vary.''  A  court  of  bankruptcy  is  established  by 
the  act  of  1898  in  each  judicial  district,  whether  it  consists 
of  one  or  more  divisions. 

A  court  of  bankruptcy,  like  a  court  of  equity,  is  deemed 
always  open  for  filing  papers,  issuing  process,  making  orders, 
etc.  The  Bankruptcy  Act  seems  to  contemplate  that  from 
the  filing  of  the  petition  to  the  closing  of  the  estate,  the  pro- 
ceeding shall  be  continuous,  and  a  court  of  bankruptcy  always 
open,  like  surrogate  and  probate  courts,  where  estates  are 
administered  and  which  have  no  terms.''  Bankruptcy  pro- 
ceedings may  be  entertained  and  determined  in  vacation,  in 
chambers,  and  during  the  respective  terms  of  the  courts  created 
courts  of  bankruptcy. 

The  time  and  place  of  holding  the  several  district  courts 
are  given  below,  in  connection  with  the  counties  comprising 
the  several  districts.  It  has  been  found  necessary  in  many 
districts,  where  court  is  held  at  different  places  in  the  district, 
to  designate  certain  days,  in  addition  to  the  regular  term 
days,  on  which  the  judge  will  be  present  at  these  several 
places  for  the  purpose  of  hearing  bankruptcy  matters. 

The  judicial  districts  by  states  are  as  follows : 

Alabama  (fifth  circuit)  is  divided  into  three  districts,  called 
the  northern,  middle  and  southern  districts. 

The  northern  district  is  divided  into  four  divisions,  called 
the  northern,  southern,  eastern  and  western  divisions  of  the 
northern  district. 

The  northern  division  of  the  northern  district  consists  of 
the  counties  of  Colbert,  Cullman,  Franklin,  Jackson,  Lauder- 
dale, Lawrence,  Limestone,  Madison,  Marion,  Marshall,  Mor- 
gan, and  Winston. 

The  southern  division  of  the  northern  district  consists  of 

^'  Ex  parte  Devoe  Manufacturing  /;;   re  Lemon  Gale  Co.    (C.   C.  A., 

Co.,  io8  U.  S.  401,  27  L.  Ed.  764,  6th    Cir.),    112    Fed.    Rep.    696,    7 

'''In  re  Ives  (C.  C.  A.,  6th  Cir.),  Am.  B.  R.  291 ;  In  re  Bimberg,  121 

7  Am.  B.  R.  692.  113  Fed.  Rep.  91  t;  Fed.  Rep.  942,  9  Am.  B.  R.  601. 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  35 

the  counties  of   Blount,   Dekalb,   Fayette,   Jefferson,   Lamar, 
St.  Clair,  Shelby,  and  Walker. 

The  eastern  division  of  the  northern  district  consists  of 
the  counties  of  Calhoun,  Cherokee,  Clay,  Cleburne,  Etowah, 
and  Talladega. 

The  western  division  of  the  northern  district  consists  of 
the  counties  of  Bibb,  Greene,  Pickens,  Sumter,  Tuscaloosa. 

The  time  and  place  of  holding  district  courts  for  the  north- 
ern division  are  the  first  Tuesday  in  April  and  second  Tuesday 
in  October,  at  Huntsville;  for  the  southern  division  the  first 
Mondays  in  March  and  September,  at  Birmingham;  for  the 
eastern  division  the  first  Monday  in  May  and  November,  at 
Anniston;  for  the  western  division  the  first  Tuesday  in  Jan- 
uary and  June,  at  Tuscaloosa. 

The  middle  district  consists  of  the  counties  of  Autauga, 
Barbour,  Bullock,  Butler,  Chilton,  Chambers,  Coffee,  Coosa, 
Covington,  Crenshaw,  Dale,  Elmore,  Geneva,  Houston,  Henry, 
Lee,  Lowndes,  Macon,  ^lontgomery.  Pike,  Randolph,  Rus- 
sell and  Tallapoosa. 

The  time  and  place  of  holding  the  district  court  of  this  dis- 
trict are  the  first  Tuesdays  of  May  and  December,  at  Mont- 
gomery. A  session  of  this  court  is  also  held  on  the  first 
Monday  of  each  month,  under  rules  adopted. 

The  southern  district  is  divided  into  two  divisions  called 
the  northern  and  southern  divisions  of  the  southern  district. 

The  northern  division  of  the  southern  district  consists  of 
the  counties  of  Dallas,  Hale.  Marengo,  Perry  and  Wilcox. 

The  southern  division  of  the  southern  district  consists  of 
the  counties  of  Baldwin,  Choctaw,  Clarke,  Conecuh,  Escam- 
bia, Mobile,  Monroe  and  Wasliington. 

The  district  court  is  held  the  fourth  Monday  of  November 
and  the  first  Monday  of  May,  at  ^Mobile;  first  Monday  in 
May  and  first  Monday  in  November,  at  Selma. 

Alaska  (ninth  circuit).  The  district  comprises  the  entire 
territory  and  is  divided  into  three  divisions. 

The  first  division   includes  all   of  that  portion   of   Alaska 


36  LAW     AND     PROCEEDINGS    IN     i!AN  KRLTPTCV. 

east  of  the  owe  luuulrctl  aiul  forty-llrst  degree  of  west  longi- 
tude. 

At  least  four  terms  of  eourt  in  the  di\'ision  each  year — two 
at  Juneau  and  two  at  Skagway — and  the  judge  shall,  as  near 
January  1  as  practicable,  designate  the  time  of  holding  the 
terms  during  the  current  year. 

Recording  districts :  Wrangell,  No.  1 ;  Juneau,  No.  2 ; 
Skagway,  No.  3;  Sitka,  No.  4;  Kodiak,  No.  5;  Valdes,  No.  6; 
Porcupine,  No.  7;  Ketchikan,  No.  8. 

The  second  division  of  Alaska  consists  of  all  that  territory 
lying  west,  northwest,  and  north  of  that  certain  line  described 
as  follows :  Commencing  at  the  mouth  of  the  Colville  River, 
on  the  north  coast  of  the  district  of  Alaska ;  thence  following 
the  Colville  River  south  and  west  to  a  point  where  said  river 
crosses  the  one  hundred  and  fifty-fourth  meridian  line  the  sec- 
ond time ;  thence  following  the  one  hundred  and  fifty-fourth 
meridian  line  south  to  the  west  side  of  Tohtankella  Mountain 
and  to  the  Yukon  River ;  thence  in  a  southeasterly  direction 
to  the  western  side  of  Mount  McKinley ;  thence  in  a  south- 
westerly direction  to  the  most  northern  point  of  Lake  Clark ; 
thence  along  the  northwest  side  of  Lake  Clark  to  the  sixtieth 
degree  of  north  latitude ;  thence  west  along  said  degree  of 
latitude  to  Kuskokwim  Bay.  This  division  also  includes  the 
mainland  west  of  said  bay  and  all  of  the  islands  north  of  the 
fifty-ninth  degree  of  north  latitude. 

There  shall  be  at  least  one  term  of  court  each  year  at  St. 
Michael,  beginning  the  third  Monday  in  June.  Special  term 
at  Council  each  year  at  a  time  fixed  by  the  court.  Special 
terms  held  at  Nome  as  the  business  requires. 

The  third  division  consists  of  all  that  portion  of  Alaska 
not  included  within  the  first  or  second  divisions. 

At  least  one  term  of  court  is  held  each  year  at  Eagle,  be- 
ginning on  the  first  Monday  in  July.  Special  terms  are  held 
at  times  and  places  as  the  judge  or  attorney  general  may 
direct.  Special  terms  have  been  held  at  Eagle,  Circle  City, 
Fairbanks,  Nushagak,  Valdez,  Rampart  and  Coklfoot. 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  Z7 

Arizona  (ninth  circuit)  is  divided  into  live  districts.  The 
counties  in  the  (h'strict  are : 

First  judicial  cHstrict:     Pima  and  Yuma. 

Second  judicial  district:     Cochise  and  Santa  Cruz. 

Third  judicial  district:     Maricopa  and  Pinal. 

Fourth  judicial  district:  Apache,  Coconino,  Mohave,  Nav- 
ajo and  Yavapai. 

Fifth  judicial  district:     Graham  and  Gila. 

Times  and  places  of  holding  courts  are :  Supreme  court : 
Second  Monday  in  January  each  year  at  Phtenix. 

First  judicial  district :  Fourth  Mondays  in  April  and  Oc- 
toher,  at  Tucson. 

Second  judicial  district :  Fourth  Mondays  in  April  and 
October,  at  Tombstone. 

Third  judicial  district:  Third  Mondays  in  April  and  Octo- 
ber, at  Phoenix. 

Fourth  judicial  district:  First  Mondays  in  May  and  No- 
vember, at  Prescott. 

Fifth  judicial  district:  First  Mondays  in  April  and  Octo- 
ber, at  Solomonville. 

Arkansas  (eighth  circuit)  is  divided  into  two  districts 
called  the  eastern  and  western  districts. 

The  eastern  district  is  divided  into  tlu'ee  divisions,  called 
the  eastern,  northern  and  western  divisions. 

The  eastern  division  of  the  eastern  district  (returnable  to 
Helena)  includes  the  counties  of  Mississippi,  Crittenden,  Lee, 
Phillips,  Clay,  Craighead,  Poinsett,  Greene,  Cross,  St.  Francis 
and  Monroe. 

The  northern  division  of  the  eastern  district  (returnable  to 
Batesville)  consists  of  the  counties  of  Independence,  Cleburne, 
Stone,  Izard,  Sharp,  Fulton,  Randolph,  Lawrence  and  Jack- 
son. 

The  western  division  of  the  eastern  district  (returnable  to 
Little  Rock)  includes  the  counties  of  Arkansas,  Ashley,  Brdd- 
ley,  Chicot,  Clark,  Cleveland,  Conway,  Dallas,  Desha,  Drew, 
Faulkner,   Garland,   Grant,   Hot   Springs,  Jefiferson,   Lincoln, 


38  LxVW     AND    I'ROCEEUINGS    IN     BANKRUPTCY. 

Lonoke,  Montgomery,  Perry,  Pope,  Prairie,  Pulaski,  Saline, 
Van  Buren,  A\  bite  and  Woodruff. 

I'he  time  and  place  of  holding  district  courts  are  the  fourth 
Monday  in  May  and  second  Monday  in  December,  at  Bates- 
ville ;  the  second  Monday  in  March  and  first  Monday  in  Octo- 
ber, at  Helena ;  and  the  first  Monday  in  April  and  third  Mon- 
day in  October,  at  Little  Rock. 

The  western  district  is  divided  into  the  Texarkana  division, 
the  Harrison  division  and  the  Fort  Smith  division. 

The  Texarkana  division  of  the  western  district  includes  the 
counties  of  Sevier,  Howard,  Pike,  Little  River,  Hempstead, 
Miller,  Lafayette,  Columbia,  Nevada,  Ouachita,  Calhoun  and 
Union. 

The  Fort  Smith  division  of  the  western  district  comprises 
the  counties  of  Benton,  Crawford,  Franklin,  Johnson,  Logan, 
Polk.  Sebastian,  Scott,  Washington  and  Yell. 

The  Harrison  division  of  the  western  district  consists  of  the 
counties  of  Baxter,  Boone,  Carroll,  Madison,  Marion,  New- 
ton and  Searcy. 

The  time  and  place  of  holding  the  districts  courts  are :  At 
Texarkana,  second  Mondays  in  May  and  November ;  at  Fort 
Smith,  second  Mondays  in  January  and  June;  at  Harrison, 
second  Mondays  in  April  and  October. 

California  (ninth  circuit)  is  divided  into  two  districts 
called  the  northern  and  southern  districts. 

The  counties  in  the  northern  district  are  Alameda,  Alpine, 
Amador,  Butte,  Calaveras,  Colusa,  Contra  Costa,  Del  Norte, 
Fl  Dorado,  Glenn,  Humboldt,  Lake,  Lassen,  Marin,  Mendo- 
cino, Modoc,  Mono.  Monterey,  Napa,  Nevada,  Placer,  Plu- 
mas, Sacramento,  San  Benito,  San  Francisco,  San  Joaquin, 
San  Mateo,  Santa  Clara,  Santa  Cruz,  Shasta,  Sierra,  Siski- 
you, Solano,  Sonoma,  Stanislaus,  Sutter,  Tehema,  Trinity, 
Tuolumne,  Yolo  and  Yuba. 

The  time  and  place  of  holding  district  courts  are :  San 
Francisco,  first  Monday  in  March,  second  Monday  in  July 
and  first  Mondav  in  No\-em1)er ;  at  Eureka,  third  Monday  in 
July. 


COURTS     AND    THEIR    TERRITORIAL    JURISDICTION.  39 

The  southern  district  is  divided  into  two  divisions,  the 
northern  and  southern  divisions. 

The  northern  division  of  the  southern  district  consists  of 
the  counties  of  Fresno,  Inyo,  Kern,  Kings,  Madera,  Mari- 
posa, Merced  and  Tulare. 

The  southern  division  of  the  southern  (hstrict  consists  of 
the  counties  of  Los  Angeles,  Orange,  Riverside,  San  Bernar- 
dino, San  Diego,  San  Luis  Obispo,  Santa  Barbara  and  Ven- 
tura. 

The  time  and  place  of  holding  district  court  for  the  north- 
ern division  are  the  first  Monday  in  May  and  second  Monday 
in  November,  at  Fresno ;  for  the  southern  division  the  second 
Mondays  in  January  and  July,  at  Los  Angeles. 

Colorado  (eighth  circuit)  constitutes  one  judicial  district.^ 
Suits  removed  from  state  courts  in  Archuleta,  Conejos,  Cos- 
tilla, Dolores,  La  Plata,  Mineral,  Montezuma,  Rio  Grande  and 
San  Juan  counties  shall  be  filed  at  Del  Norte.  Suits  removed 
from  state  courts  in  Baca,  Bent,  Chaffee,  Custer,  Delta,  Fre- 
mont, Gunnison,  Hinsdale,  Huerfano,  Kiowa,  Las  Animas, 
Mesa,  Montrose,  Otero,  Ouray,  Prowers,  Pueblo  and  San 
Miguel  counties  shall  be  filed  at  Pueblo.  Suits  removed  from 
state  courts  in  counties  not  specified  abo\e  shall  be  filed  at 
Denver.  Bankruptcy  proceedings  from  these  counties  should 
be  filed  in  the  same  court  as  suits  removed  from  a  state  court. 

The  time  and  place  of  holding  district  courts  are :  At  Den- 
ver, first  Tuesdays  in  May  and  November ;  at  Pueblo,  first 
Tuesday  in  April ;  at  Montrose,  second  Tuesday  in  September. 

Connecticut  (second  circuit)  constitutes  one  judicial  dis- 
trict. 

The  district  court  is  held  at  New  Haven  on  the  fourth 
Tuesdays  in  February  and  August ;  at  Hartford,  fourth  Tues- 
day in  May  and  the  first  Tuesday  in  December. 

Delaware  (thinl  circuit)  constitutes  one  judicial  district. 
The  district  court  is  held  on  the  second  Tuesdays  in  Janu- 
ary, April.  June  and  September,  at  \Mlmington. 

8  Act  of  June  26,    1876,    19   Stat,  at  L.  61. 


40  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

The  District  of  Columbia.  The  district  comprises  all 
the  District  of  Columbia. 

The  supreme  court  is  held  on  the  first  Mondays  in  January, 
April  and  October. 

Florida  (fifth  circuit)  is  divided  into  two  districts,  called 
the  northern  district  and  the  southern  district. 

The  northern  district  embraces  the  counties  of  Calhoun, 
Escambia,  Franklin,  Gadsden,  Holmes,  Jackson,  Jefferson. 
Lafayette,  Leon,  Levi,  Liberty,  Santa  Rosa,  Taylor,  Wakulla, 
Walton  and  Washington. 

The  time  and  place  of  holding  district  courts  are  first  Mon- 
day in  February,  at  Tallahassee;  first  Monday  in  March,  at 
Pensacola. 

The  counties  of  the  southern  district  are  Alachua,  Baker, 
Bradford,  Brevard,  Citrus,  Clay,  Columbia,  Dade,  Duval, 
Hamilton,  Lake,  Madison,  Marion,  Nassau,  Orange,  Osceo- 
la, Putnam,  St.  Johns,  Sumter,  Suwannee,  Volusia,  Monroe, 
Manatee,  Lee,  De  Soto,  Hillsboro,  Hernando,  Polk  and  Pasco. 

The  time  and  place  of  holding  district  courts  are  second 
Monday  in  February,  at  Tampa;  first  Mondays  in  May  and 
November,  at  Key  West ;  first  Monday  of  December,  at  Jack- 
sonville ;  third  Monday  in  January,  at  Ocala ;  fourth  Monday 
in  April,  at  Miami ;  first  Monday  in  April,  at  Fernandina. 

Georgia  is  divided  into  two  districts,  the  northern  district 
and  the  southern  district. 

The  northern  district  is  divided  into  four  divisions,  called 
the  eastern  division  of  the  northern  district,  the  western  divi- 
sion of  the  northern  district,"  the  northern  division  of  the 
northern  district  and  the  northwestern  division  of  the  northern 
district. 

The  eastern  division  of  the  northern  district  comprises  the 
counties  of  Banks,  Clarke,  Elbert,  Franklin,  Greene,  Haber- 
sham, Hart,  Jackson,  Morgan,  Madison,  Oglethorpe,  Oconee, 
Rabun,  Walton,  Stephens  and  White. 

The  time  and  place  of  holding  district  courts  are  at  Athens 
on  fourth  Monday  in  April  and  first  Monday  in  November. 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  41 

The  western  division  of  the  northern  district  comprises  the 
counties  of  Clay,  Early,  Harris,  Heard,  Meriwether,  Marion, 
Muscogee,  Quitman,  Randolph,  Schley,  Stewart,  Talbot,  Tay- 
lor, Terrell,  Troup  and  Webster. 

The  district  courts  of  this  division  are  held  at  Columbus 
on  first  Mondays  in  May  and  December. 

Northern  division  of  the  northern  district  comprises  the 
following  counties  of  Campbell.  Carroll,  Cherokee,  Clayton, 
Cobb,  Coweta,  Dawson,  Dekalb,  Douglas,  Fannin,  Fayette, 
Forsyth,  Fulton,  Gilmer,  Gwinnett,  Hall,  Henry,  Lumpkin, 
Milton,  Newton,  Pickens,  Rockdale,  Spalding,  Towns  and 
Union. 

The  time  and  place  of  holding  district  courts  are  at  Atlanta, 
first  Mondays  in  October  and  second  Mondays  in  March. 

Northwestern  division  of  the  northern  district  consists  of 
the  counties  of  Bartow,  Catoosa,  Chattooga,  Dade,  Floyd, 
Gordon,  Haralson,  Murray,  Paulding,  Polk,  \\'alker  and 
Whitfield. 

The  time  and  place  of  holding  district  courts  are  at  Rome, 
third  Mondays  in  May  and  No\'ember. 

The  southern  district  is  divided  into  five  diA'isions,  called 
the  eastern  division  of  the  southern  district,  the  western  divi- 
sion of  the  southern  district,  the  northeastern  division  of  the 
southern  district,  the  southwestern  division  of  the  southern 
district  and  the  Albany  division  of  the  southern  district. 

The  eastern  division  of  the  southern  district  comprises  the 
counties  of  Appling,  Bulloch,  Bryan,  Camden,  Chatham, 
Emanuel,  Efiingham,  Glynn,  Liberty,  Montgomery,  ]\IcLitosh, 
Screven,  Tattnall  and  Wayne. 

The  district  court  is  held  at  Savannah,  second  Tuesdays  in 
February,  May,  August  and  November. 

The  western  division  of  the  southern  district  comprises  the 
counties  of  Baldwin,  Bibb,  Butts,  Crawford.  Dodge,  Dooley, 
Hancock,  Houston,  Jasper,  Jeff  Davis,  Jones,  Laurens,  Macon, 
Monroe,  Pike,  Pulaski,  Putnam,  Sumter,  Telfair,  Twiggs, 
Upson,  Wilcox  and  Wilkinson. 

The  district  court  of  this  division  is  .held  at  Macon,  first 
Mondays  in  May  and  October. 


42  LAW    AND    PROCEEDINGS    IN     BANKKUPTCY. 

The  northeastern  division  of  the  southern  district  comprises 
the  counties  of  Burke,  Columbia,  Glascock,  Jefferson,  John- 
son, Lincoln,  McDuffie,  Richmond,  Taliaferro,  Washington, 
Wilkes  and  Warren. 

The  district  court  of  this  division  is  held  at  Augusta  on  the 
first  Monda}-  in  April  and  the  third  Monday  in  November. 

The  southwestern  division  of  the  southern  district  comprises 
the  counties  of  Berrien,  Brooks,  Charlton,  Clinch,  Coffee,  De- 
catur, Echols,  Grady,  Irwin,  Lowndes,  Pierce,  Thomas  and 
Ware. 

The  district  court  of  this  division  is  held  at  Valdosta,  second 
Mondays  in  June  and  December. 

The  Albany  division  of  the  southern  district  consists  of  the 
counties  of  Baker,  Calhoun,  Colquitt,  Crisp,  Dougherty,  Lee, 
Miller,  Mitchell,  Tift,  Turner  and  Worth. 

The  district  court  of  this  division  is  held  at  Albany,  third 
Mondays  in  June  and  December. 

Hawaii  (ninth  circuit)  constitutes  one  judicial  district.  It 
compromises  the  islands  of  Hawaii,  Kahoolawe,  Kauai,  Lanie, 
Mauie,  Molokai,  Niihau,  Oahu,  and  a  number  of  uninhabited 
islands. 

The  time  and  place  of  holding  district  courts  are  at  Hono- 
lulu the  second  Mondays  in  April  and  October,  and  at  Hilo  the 
last  Wednesday  in  January.  Special  terms  may  be  held  at 
such  times  and  places  as  the  judge  may  deem  expedient. 

Idaho  (ninth  circuit)  constitutes  one  judicial  district.  It 
is  divided  into  three  divisions,  called  the  northern,  central 
and  southern  divisions. 

The  northern  division  comprises  the  counties  of  Latah,  Nez 
Perces,  Idaho,  Shoshone  and  Kootenai. 

The  district  court  of  this  division  is  held  at  Moscow,  second 
Monday    in  May  and  fourth  Monday  in  October. 

The  central  division  comprises  the  counties  of  Ada.  Lin- 
coln, Blaine,  Boise,  Canyon.  Cassia,  Elmore,  Owyhee  and 
Washington. 


COURTS    AND    THEIR    TliKKlTORlAL    JURISDICTION.  43 

The  district  court  of  this  division  is  held  at  Boise,  second 
Mondays  in  March  and  September. 

The  southern  division  comprises  the  counties  of  Bear  Lake, 
Bingham,  Bannock,  Custer,  Fremont,  Lemhi  and  Oneida. 

The  district  court  of  this  division  is  held  at  Pocatello  on  the 
second  Monday  in  April  and  the  first  Monday  in  October. 

Illinois  (seventh  circuit)  has  three  districts  called  the 
northern,  southern  and  eastern  districts. 

The  northern  district  is  divided  into  two  divisions,  the 
eastern  and  western  divisons  of  the  northern  district. 

The  eastern  division  of  the  northern  district  comprises 
the  counties  of  Cook,  Dekalb,  Du  Page,  Grundy,  Kane,  Ken- 
dall, Lake  La  Salle,  McHenry  and  Will. 

The  time  and  place  of  holding  district  courts  of  this  division 
are  on  the  first  Monday  in  July  and  the  third  Monday  in 
December,  in  Chicago. 

The  western  division  of  the  northern  district  comprises  the 
counties  of  Boone,  Carroll,  Lee,  Jo  Daviess,  Ogle,  Stephenson, 
Whiteside  and  Winnebago. 

The  time  and  place  of  holding  district  courts  of  this  division 
are  on  third  Mondays  in  April  and  October,  at  Freeport. 

"Adjourned  terms"  (created  by  rule  of  court)  :  Chicago, 
first  Mondays  in  March,  ]\Liy  and  October. 

The  southern  district  is  divided  into  two  divisions,  the 
northern  and  southern  divisions  of  the  southern  district. 

The  northern  division  of  the  southern  district  comprises 
the  counties  of  Bureau,  Fulton,  Henderson,  Henry,  Knox, 
Livingston,  Marshall,  McDonough,  Mercer,  Peoria,  Putnam, 
Rock  Island,  Stark,  Tazewell,  Warren  and  Woodford. 

The  district  courts  of  this  division  are  held  on  the  third 
Mondays  in  April  and  October,  in  Peoria. 

The  southern  division  of  the  southern  district  comprises 
the  counties  of  Adams,  Bond,  Brown,  Calhoun,  Cass,  Chris- 
tian, Dewitt,  Greene,  Hancock,  Jersey,  Logan,  Macon, 
Macoupin,  Madison,  Mason.  McLean,  Manard,  Morgan, 
Montgomery,  Pike,  Sangamon,  Schuyler  and  Scott. 

The  district  courts  of  this   division  are  held   on  the  first 


44  LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 

Mondays  in  January  and  June,  at  Spring-field;  first  Monday 
in  September,  at  Qnincy. 

The  eastern  district  of  Illinois  embraces  the  counties  of 
Alexander,  Champaign,  Clark,  Clay,  Clinton,  Coles,  Craw- 
ford, Cumberland,  Douglas,  Edgar,  Edwards,  Effingham, 
Fayette,  Ford,  Franklin,  Gallatin,  Hamilton,  Hardin,  Iro- 
quois, Jackson,  Jasper,  Jefferson,  Johnson,  Kankakee,  Law- 
rence, Moultrie,  Marion,  Massac,  Monroe,  Perry,  Piatt,  Pope, 
Pulaski,  Randolph,  Richland,  St.  Clair,  Saline,  Shelby,  Union, 
Vermillion,  Wabash,  Washington,  Wayne,  White  and  Will- 
iamson. 

The  time  and  place  of  holding  district  courts  of  this  dis- 
trict are  the  first  Mondays  in  March  and  September,  at  Dan- 
ville; first  Mondays  in  April  and  October,  at  Cairo;  and  first 
Mondays  in  May  and  November,  at  East  St.  Louis. 

Indiana  (seventh  circuit)  constitutes  one  judicial  district. 

The  time  and  place  of  holding  district  courts  are  the  first 
Tuesdays  in  May  and  November,  at  Indianapolis ;  first  Mon- 
days in  January  and  July,  at  New  Albany;  first  Mondays  in 
April  and  October,  at  Evansville ;  second  Tuesdays  in  June  and 
December  at  Fort  Wayne;  third  Tuesdays  in  April  and  Oc- 
tober, at  Hammond. 

Indian  Territory*  (eighth  circuit)  is  divided  into  three 
districts,  called  the  western,  central  and  southern  districts. 

The  western  division  comprises  the  Creek  and  Seminole  na- 
tions, and  portions  of  the  Cherokee  and  Choctaw  nations  adja- 
cent to  the  eastern  and  southern  boundary  of  the  Creek  nation. 

The  time  and  place  of  holding  courts  are :  At  Eufaula, 
fourth  Monday  in  January  and  third  Mondays  in  February 
and  November ;  at  Muscogee,  second  Mondays  in  January  and 
April  and  first  Monday  in  October ;  at  Okmulgee,  second  Mon- 
day in  January  and  first  Mondays  in  February  and  November ; 
at  Sapulpa,  third  Monday  in  March,  fourth  Monday  in  May 
and  first  Monday  in  December;  at  Wagoner,  first  Monday  in 
March,  fourth  Monday  in  April  and  second  Monday  in  De- 
cember; at  Wewoka,  second  Mondays  in  April  and  May  and 

*Sce  Oklahoma  State  post. 


COURTS     AND    THEIR    TERRITORIAL    JURISDICTION.  45 

fourth  Monday  in  October ;  at  Tnlsa,  second  Monday  in  Veh- 
ruary,  first  Monday  in  June  and  third  Monday  in  September. 

The  central  district  comprises  the  Choctaw  nation  and  a 
small  portion  of  the  southeast  part  of  the  Chickasaw  nation. 
The  time  and  place  of  holding  district  courts  are:  Antlers, 
third  Monday  in  March,  second  Monday  in  September  and 
first  Monday  in  December;  Atoka,  first  Monday  in  January, 
third  Monday  in  April  and  first  Monday  in  October ;  Durant, 
third  Monday  in  February,  the  first  Monday  in  June  and  the 
second  Monday  in  November ;  Poteau,  third  Mondays  in  Janu- 
ary, April  and  October;  South  McAlester,  first  Monday  in 
February,  May  and  November;  Wilburton,  first  Mondays  in 
January,  April  and  October. 

The  southern  district  comprises  all  of  the  Chickasaw  nation, 
except  a  small  portion  of  southeast  part  of  same,  which  is 
attached  to  central  district. 

Iowa  (eighth  circuit)  is  divided  into  two  districts,  called 
the  northern  and  southern  districts. 

The  northern  district  of  Iowa  is  divided  into  four  divisions, 
the  eastern  division  of  the  northern  district,  the  Cedar  Rapids 
division  of  the  northern  district,  the  central  division  of  the 
northern  district,  and  the  western  division  of  the  northern 
district. 

The  eastern  division  of  the  northern  district  comprises  the 
counties  of  Allamakee,  Blackhawk,  Bremer,  Buchanan,  Chick- 
asaw, Clayton,  Delaware,  Dubuque,  Fayette,  Floyd,  Howard, 
Jackson,  ^Mitchell  and  Winneshiek. 

The  district  courts  of  the  eastern  division  are  held  at  Du- 
buque on  the  fourth  Tuesday  in  April  and  the  first  Tuesday  in 
December. 

The  Cedar  Rapids  division  of  the  northern  district  em- 
braces the  counties  of  Benton,  Cedar,  Grundy,  Hardin,  Iowa, 
Johnson,  Jones,  Linn  and  Tama. 

The  district  courts  of  the  Cedar  Rapids  division  are  held  on 
the  first  Tuesday  in  April  and  the  second  Tuesday  in  Sep- 
tember, at  Cedar  Rapids. 


46  LAW    AND    rROCEEDINGS    IN    BANKRUPTCY. 

The  central  tlivision  of  the  northern  district  comprises  the 
counties  of  Butler,  Calhoun,  Cerro  Gordo,  Emmet,  Franklin, 
Hamilton,  Hancock,  Humboldt,  Kossuth,  Palo  Alto,  Poca- 
hontas, Webster,  Winnebago,  Worth  and  Wright. 

The  district  courts  of  the  central  division  of  the  northern 
district  arc  held  at  Fort  Dodge  on  the  second  Tuesday  in  June 
and  the  second  Tuesday  in  November. 

The  western  division  comprises  the  counties  of  Buena  Vista, 
Cherokee,  Clay,  Dickinson,  Ida,  Lyon,  Monona,  O'.Brien,  Os- 
ceola, Plymouth,  Sac,  Sioux  and  Woodbury. 

The  district  courts  of  the  western  division  are  held  at  Sioux 
City  on  the  fourth  Tuesday  in  JNIay  and  the  first  Tuesday  in 
October. 

The  southern  district  of  Iowa  is  divided  into  five  divisions, 
called  the  eastern  division  of  the  southern  district,  the  central 
division  of  the  southern  district,  the  western  division  of  the 
southern  district,  the  southern  division  of  the  southern  district 
and  the  Davenport  division  of  the  southern  district. 

The  counties  in  the  eastern  division  of  the  southern  district 
are  Appanoose,  Davis,  Des  Moines,  Henry,  Jefferson,  Lee, 
Louisa,  Van  Buren  and  Wapello. 

The  district  court  of  the  eastern  division  is  held  at  Keokuk 
on  the  second  Tuesday  in  April  and  the  third  Tuesday  in 
October. 

The  counties  in  the  central  division  of  the  southern  district 
are  Boone,  Dallas,  Greene,  Guthrie,  Jasper,  Madison,  Ma- 
haska, Marion,  Marshall,  Monroe,  Polk,  Poweshiek,  Story 
and  Warren. 

The  district  courts  of  the  central  division  of  the  southern 
district  are  held  at  Des  Moines  on  the  second  Tuesday  in  May 
and  the  third  Tuesday  in  November. 

The  western  division  of  the  southern  district  comprises  the 
counties  of  Audubon,  Carroll,  Cass,  Crawford,  Harrison, 
Mills,   Montgomery,    Pottawattamie  and   Shelby. 

District  courts  held  at  Council  Bluffs  on  the  second  Tuesday 
in  March  and  third  Tuesday  in  September. 

The  southern  division  of  the  southern  district  comprises  the 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  47 

counties  of  Adair,  Adams,  Clarke,  Decatur,  Fremont,  Lucas, 
Page,  Ringold,  Taylor,  Union  and  Wayne. 

The  district  courts  of  this  division  are  held  at  Creston  on 
the  fourth  Tuesday  in  March  and  the  first  Tuesday  in  Novem- 
ber. 

The  Davenport  division  of  the  southern  district  comprises 
the  counties  of  Clinton,  Keokuk,  ]\Iuscatine,  Scott  and  Wash- 
ington. 

The  district  courts  of  this  division  are  held  at  Davenport  on 
the  fourth  Tuesday  in  April  and  the  first  Tuesday  in  October. 

Kansas  (eighth  circuit)  constitutes  one  judicial  district. 

It  is  divided  into  three  divisions,  called  the  first,  second  and 
third  divisions. 

The  first  division  includes  the  counties  of  Atchison,  Brown, 
Chase,  Cheyenne,  Clay,  Cloud,  Decatur,  Dickinson,  Doniphan, 
Douglas,  Ellis,  Franklin,  Geary,  Gove,  Graham,  Jackson,  Jef- 
ferson, Jewell,  Johnson,  Leavenworth,  Lincoln,  Logan,  Lyon, 
Marion,  Marshall,  Mitchell,  Morris,  Nemaha,  Norton,  Osage, 
Osborne,  Ottawa,  Phillips,  Pottawatomie,  Rawlins,  Republic, 
Riley,  Rooks,  Russell,  Saline,  Shawnee,  Sheridan,  Sherman, 
Smith,  Thomas,  Trego,  Wabaunsee,  Wallace,  \\'ashington  and 
Wyandotte. 

The  district  court  is  held  at  Topeka  on  the  second  Monday 
in  April,  at  Leavenworth  on  the  second  Monday  in  October, 
second  Monday  in  May  at  Salina,  and  at  Kansas  City  on  the 
second  Monday  of  January  and  first  ^Monday  of  October. 

The  second  division  includes  the  counties  of  Barber,  Barton, 
Butler,  Clark,  Comanche,  Cowley,  Edwards,  Ellsworth,  Fin- 
ney, Ford,  Grant,  Gray,  Greeley,  Hamilton,  Harper.  Harvey, 
Haskell,  Hodgeman,  Kearny,  Kingman,  Kiowa,  Lane,  j\Ic- 
Pherson,  Meade,  ]\Iorton,  Ness,  Pawnee,  Pratt,  Reno,  Rice, 
Rush,  Scott,  Sedgwick,  Seward,  Stafiford,  Stanton,  Stevens, 
Sumner  and  \A'ichita. 

The  district  courts  of  the  second  division  are  held  on  the 
second  Monday  in  ]\Iarch  and  the  second  Monday  in  Septem- 
ber at  Wichita. 


■48  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

The  third  division  comprises  the  counties  of  Ahen,  Ander- 
son, Bourbon,  Chautauqua,  Cherokee,  Coffey,  Crawford,  Elk, 
Greenwood,  Labette,  Linn,  Miami,  Montgomery,  Neosho, 
\A'ilson  and  Woodson. 

The  district  courts  for  the  third  division  are  held  on  the  first 
Monday  in  May  and  the  second  Monday  in  November,  at  Fort 
Scott. 

Kentucky  (sixth  circuit)  is  divided  into  two  districts, 
called  the  eastern  district  and  the  western  district. 

The  eastern  district  comprises  the  counties  of  Anderson, 
Bath,  Bell,  Boone,  Bourbon,  Boyd,  Boyle,  Bracken,  Breathitt, 
Campbell,  Carroll,  Carter,  Clark,  Clay,  Elliott,  Estill,  Fayette, 
Fleming,  Floyd,  Franklin,  Gallatin,  Garrard,  Grant,  Greenup, 
Harlan,  Harrison,  Henry,  Jackson,  Jessamine,  Johnson,  Ken- 
ton, Knott,  Knox,  Laurel,  Lawrence,  Lee,  Leslie,  Letcher, 
Lewis,  Lincoln,  Madison,  Magoffin,  Martin,  Mason,  Menifee, 
Mercer,  Montgomery,  Morgan,  Nicholas,  Owen,  Owsley, 
Pendleton,  Perry,  Pike,  Powell,  Pulaski,  Robertson,  Rock- 
castle, Rowan,  Scott,  Shelby,  Trimble,  Wayne,  Whitley, 
Wolfe  and  Woodford. 

The  time  and  place  of  holding  district  courts  in  this  district: 
Frankfort,  setond  Monday  in  March  and  fourth  Monday  in 
September ;  Covington,  first  Monday  in  April  and  third  Mon- 
day in  October;  Richmond,  fourth  Monday  in  April  and 
second  Monday  in  November;  London,  second  Monday  in 
May  and  fourth  Monday  in  November;  Catlettsburg,  fourth 
Monday  in  May  and  second  Monday  in  December. 

The  western  district  comprises  the  counties  of  Adair,  Allen, 
Ballard,  Barren,  Breckinridge,  Bullitt,  Butler,  Caldwell,  Callo- 
way, Carlisle,  Casey,  Christian,  Clinton,  Crittenden,  Cumber- 
land, Daviess,  Edmonson,  Fulton,  Graves,  Grayson,  Green, 
Hancock,  Hardin,  Hart,  Henderson,  Hickman,  Hopkins,  Jef- 
ferson, Larue,  Livingston,  Logan,  Lyon,  McCracken,  Mc- 
Lean, ]\Iarion,  Marshall,  Meade,  Metcalfe,  Monroe,  Muhlen- 
berg, Nelson,  Ohio,  Oldham,  Russell,  Simpson,  Spencer,  Tay- 
lor, Todd,  Trigg,  Union,  Warren,  Washington  and  Webster. 


COURTS     AND    THEIR    TERRITORIAL    J  TRISDICTION.  49 

Time  and  place  of  holding  courts :  Louisville,  second  Mon- 
days in  March  and  October ;  Paducah,  third  Monday  in  April 
and  third  Monday  in  November;  Owensboro,  first  Monday  in 
May  and  fourth  Monday  in  November;  Bowling  Green,  third 
Monday  in  May  and  second  Monday  in  December. 

Louisiana  (fifth  circuit)  is  divided  into  two  districts,  called 
the  eastern  and  western  districts. 

The  eastern  district  is  divided  into  two  divisions,  the  New 
Orleans  division  and  the  Baton  Rouge  division. 

The  New  Orleans  division  comprises  the  parishes  of  As- 
sumption, Iberia,  Jefferson,  Lafourche,  Orleans,  Plaquemines, 
St.  Bernard,  St.  Charles,  St.  James,  St.  John  the  Baptist,  St. 
Mary,  St.  Tammany,  Tangipahoa,  Terrebonne  and  W^ashing- 
ton. 

The  district  court  is  held  at  New  Orleans  the  third  Mon- 
days in  February,  May  and  November. 

The  Baton  Rouge  division  includes  the  parishes  of  Ascen- 
sion, East  Baton  Rouge,  East  Feliciana,  Iberville,  Living- 
ston, Pointe  Coupee,  St.  Helena,  West  Baton  Rouge  and  West 
Feliciana. 

The  district  court  is  held  at  Baton  Rouge  on  the  second 
Mondays  in  April  and  November. 

The  western  district  is  divided  into  five  divisions,  the  Alex- 
andria, Monroe,  Opelousas,  Shreveport  and  Lake  Charles 
divisions. 

The  Alexandria  division  comprises  the  parishes  of  Avoy- 
elles, Catahoula,  Grant,  Rapides  and  Winn. 

The  district  court  is  held  at  Alexandria  the  fourth  Mondays 
in  January  and  June. 

The  Monroe  division  comprises  the  parishes  of  Caldwell, 
Concordia,  East  Carroll,  Franklin,  Jackson,  Lincoln,  Madison, 
Morehouse,  Ouachita,  Richland,  Tensas,  Union  and  West 
Carroll. 

The  district  courts  is  held  at  Monroe  the  first  Mondays  in 
April  and  October. 

The  Opelousas  division  comprises  the  parishes  of  Lafayette, 
St.  Landry,  St.  Martin  and  Vermillion. 


50  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

The  district  court  is  held  at  Opelousas  the  first  Mondays  in 
January  and  June. 

The  Shreveport  division  comprises  the  parishes  of  Bossier, 
Bienville,  Caddo,  Claiborne,  De  Soto,  Natchitoches,  Red 
River,  Sabine  and  Webster. 

The  district  court  is  held  at  Shreveport  the  third  Mondays 
in  February  and  October. 

The  Lake  Charles  division  comprises  the  parishes  of 
Acadia,  Calcasieu,  Cameron  and  Vernon. 

The  district  court  is  held  at  Lake  Charles  the  third  Mondays 
in  May  and  December. 

Maine  (first  circuit)  constitutes  one  judicial  district. 

The  district  court  is  held  on  the  first  Tuesdays  in  February 
and  December,  at  Portland ;  first  Tuesday  in  June,  at  Bangor ; 
first  Tuesday  in  September,  at  Bath. 

Maryland  (fourth  circuit)  constitutes  one  judicial  district. 
The  district  court  is  held  on  the  first  Tuesdays  in  March, 
June,  September  and  December,  at  Baltimore. 

Massachusetts  (first  circuit)  constitutes  one  judicial  dis- 
trict. 

The  district  court  is  held  on  the  third  Tuesday  in  March, 
fourth  Tuesday  in  June,  second  Tuesday  in  September  and 
first  Tuesday  in  December,  at  Boston. 

Michigan  (sixth  circuit)  is  divided  into  two  districts, 
called  the  eastern  and  western  districts. 

The  eastern  district  is  divided  into  two  divisions,  called 
the  northern  division  of  the  eastern  district,  and  the  southern 
division  of  the  eastern  district. 

The  northern  division  of  the  eastern  district  comprises  the 
counties  of  Alcona,  Alpena,  Arenac,  Bay,  Cheboygan,  Clare, 
Crawford,  Genesee,  Gladwin,  Gratiot,  Huron,  Iosco,  Isabella, 
Midland,  Montmorency,  Ogemaw,  Oscoda,  Otsego,  Presque 
Isle,  Roscommon,  Saginaw,  Shiawassee  and  Tuscola. 

The  district  courts  for  the  northern  division  are  held  at  Bay 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  51 

City  on  the  first  Tuesdays  in  May  and  October.     Terms  of 
court  at  Port  Huron  are  held  in  the  discretion  of  the  judge. 

The  southern  division  of  the  eastern  district  includes  the 
counties  of  Branch,  Calhoun,  Clinton,  Hillsdale,  Ingham, 
Jackson,  Lapeer,  Lenawee,  Livingston,  Macomb,  Monroe, 
Oakland,  St.  Clair,  Sanilac,  Washtenaw  and  Wayne. 

The  time  and  place  of  holding  district  courts  in  the  southern 
division  of  the  eastern  district  are  at  Detroit  on  the  first 
Tuesdays  in  March,  June  and  November. 

The  western  district  is  divided  into  two  divisions,  called  the 
northern  division  of  the  western  district,  and  the  southern  di- 
vision of  the  western  district. 

The  northern  division  of  the  western  district  includes  the 
counties  of  Alger,  Baraga,  Chippewa,  Delta,  Dickinson,  Goge- 
bic, Houghton,  Iron,  Keweenaw,  Luce,  Mackinac,  Marquette, 
IMenominee,  Ontonagon  and  Schoolcraft. 

The  district  court  is  held  at  Marquette  on  the  first  Tuesdays 
in  May  and  September. 

The  southern  division  of  the  western  district  embraces  the 
counties  of  Allegan,  Antrim,  Barry,  Benzie,  Berrien,  Cass, 
Charlevoix,  Eaton,  Emmet,  Grand  Traverse,  Ionia,  Kalama- 
zoo, Kalkaska,  Kent,  Lake,  Leelanaw.  Manistee,  ]\Iason,  Me- 
costa, Missaukee,  INIontcalm,  IMuskegon,  Newaygo,  Oceana, 
Osceola,  Ottawa,  St.  Joseph,  Van  Buren  and  Wexford. 

The  district  court  is  held  at  Grand  Rapids  on  the  first  Tues- 
days in  March  and  October. 

Minnesota  (eighth  circuit)  constitutes  one  judicial  dis- 
trict, divided  into  six  divisions,  called  the  first,  second,  third, 
fourth,  fifth  and  sixth  divisions. 

The  first  division  comprises  the  counties  of  Winona,  ^^'a- 
basha,  Olmsted,  Dodge.  Steele.  Mower,  Fillmore  and  Houston. 

The  district  courts  are  held  in  the  first  division  on  the 
third  Tuesday  in  May  and  the  third  Tuesday  in  November, 
at  Winona. 

The  counties  which  comprise  the  second  division  are  Free- 
born,  Faribault,   Martin,   Jackson,   Nobles,   Rock,   Pipestone, 


52  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

IMurrav,  Cottonwood,  Watonwan,  Blue  Earth,  Waseca,  Le- 
sueur,  Nicollet,  Brown,  Redwood,  Lyon,  Lincoln,  Yellow 
IMedicine,  Sibley  and  Lac  qui  Parle. 

The  district  court  of  the  second  division  is  held  on  the 
fourth  Tuesday  in  April  and  the  fourth  Tuesday  in  October, 
at  IMankato. 

The  third  divisions  is  composed  of  he  counties  of  Chisago, 
W^ashington,  Ramsey,  Dakota,  Goodhue,  Rice  and  Scott. 

The  district  court  for  the  third  division  is  held  on  the 
first  Tuesdays  in  June  and  December,  at  St.  Paul. 

The  fourth  division  consists  of  the  counties  of  Hennepin, 
Wright,  Meeker,  Kandiyohi,  Swift,  Chippewa,  Renville, 
McLeod,  Carver,  Anoka,  Sherburne  and  Isanti. 

The  district  court  for  the  fourth  division  is  held  on  the 
first  Tuesdays  in  April  and  October,  at  Minneapolis. 

The  fifth  division  comprises  the  counties  of  Cook,  Lake, 
St.  Louis,  Itasca,  Cass,  Crow  Wing,  Aitkin,  Carlton,  Pine, 
Kanabec,  Millelacs,  Morrison  and  Benton. 

The  district  court  for  the  fifth  division  is  held  on  the 
second  Tuesdays  in  January  and  July,  at  Di^tluth. 

The  sixth  division  comprises  the  counties  of  Stearns,  Pope, 
Stevens,  Big  Stone,  Traverse,  Grant,  Douglas,  Todd,  Otter- 
tail,  Wilkins,  Clay,  Becker,  Wadena,  Norman,  Polk,  Marshall, 
Kittson,  Clearw^ater,  Beltrami  and  Hubbard. 

The  district  court  for  the  sixth  division  is  held  on  the  first 
Tuesday  in  May  and  the  second  Tuesday  in  November,  at 
Fergus  Falls. 

IMississiPPi  (fifth  circuit)  has  two  districts,  a  northern  and 
a  southern  district. 

The  northern  district  is  divided  into  two  divisions,  called 
the  eastern  division  of  the  northern  district,  and  the  western 
division  of  the  northern  district. 

The  eastern  division  of  the  northern  district  comprises  the 
counties  of  Alcorn,  Attala,  Chickasaw.  Clay,  Choctaw,  Ita- 
wamba, Lee,  Lowndes,  Monroe,  Oktibbeha,  Pontotoc,  Pren- 
tiss, Tishomingo  and  Winston. 


COURTS    AND    TllElR    TERRITORIAL    JURISDICTION.  53 

The  western  division  of  the  northern  district  comprises  the 
counties  of  Benton,  Calhoun,  Carroll,  Coahoma,  De  Soto, 
Grenada,  Lafayette,  Alarshall,  Montgomery,  Panola,  Quit- 
man, Tallahatchie,  Tate,  Tippah,  Tunica,  Union,  Webster 
and  Yalobusha. 

The  district  courts  of  the  northern  district  are  held  on  the 
first  Mondays  in  June  and  December,  at  Oxford,  and  on  the 
first  Mondays  in  April  and  October,  at  Aberdeen. 

The  counties  of  the  southern  district  of  Mississippi  are : 

(Jackson  division)  Adams,  Amite,  Copiah,  Covington, 
Franklin,  Hinds,  Holmes,  Jefferson,  Lawrence,  Lincoln,  Le- 
flore, Madison,  Pike,  Rankin,  Simpson,  Smith,  Scott,  Wilkin- 
son and  Yazoo. 

(Vicksburg  division)  ^^'arren,  Issaquena,  Sharkey,  Wash- 
ington, Bolivar,  Claiborne  and  Sunflower. 

(Biloxi  division)  Harrison,  Hancock,  Jackson,  Marion, 
Perry,  Greene  and  Pearl  River. 

(Meridian  division)  Kemper,  Noxubee,  Neshoba.  \\'ayne, 
Clarke,  Jasper,  Jones,  Leake,  Lauderdale  and  Newton. 

The  time  and  place  of  holding  district  courts  in  the  south- 
ern district  of  Mississippi  are  at  Jackson,  first  Monda}^s  in 
May  and  November ;  at  V^icksburg,  first  ]Mondays  in  January 
and  July;  at  Biloxi,  third  IMondays  in  February  and  August; 
at  Meridian,  second  IMondays  in  March  and  September. 

Missouri  (eighth  circuit)  has  two  districts,  called  the 
eastern  and  western  districts. 

The  eastern  district  of  Missouri  is  divided  into  three  divi- 
sions, called,  respectively,  the  eastern  division  of  the  eastern 
district,  the  southeastern  division  of  the  eastern  district  and 
the  northern  division  of  the  eastern  district. 

The  eastern  division  of  the  eastern  district  of  ^Missouri 
comprises  the  counties  of  Audrain,  Crawford,  Dent,  Franklin, 
Gasconade,  Iron,  Jefferson,  Lincoln,  Montgomery,  St.  Charles, 
St.  Francois,  Ste.  Genevieve,  St.  Louis,  ^^'arren,  \\\ashing- 
ton  and  St.  Louis  Citv. 


54  LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 

The  district  court  is  held  at  St.  Louis,  on  the  first  Mondays 
in  May  and  November. 

The  southeastern  division  of  the  eastern  district  comprises 
the  counties  of  Bohinger,  Butler,  Cape  Girardeau,  Carter, 
Dunklin,  Madison,  Mississippi,  New  Madrid,  Oregon,  Pemi- 
scot, Perry,  Reynolds,  Ripley,  Scott,  Shannon,  Stoddard  and 
\\'ayne. 

The  district  court  is  held  at  Cape  Girardeau,  on  the  second 
Mondays  in  April  and  October. 

The  northern  division  of  the  eastern  district  of  Missouri 
comprises  the  counties  of  Marion,  Macon,  Randolph,  Mon- 
roe, Lewis,  Schuyler,  Scotland,  Adair,  Pike,  Ralls,  Knox, 
Chariton,  Linn,  Shelby  and  Clark. 

The  district  court  of  the  northern  division  of  the  eastern 
district  is  held  at  Hannibal,  on  the  fourth  Monday  in  May 
and  the  first  Monday  in  December. 

The  western  district  of  Missouri  is  divided  into  five  divi- 
sions, called,  respectively,  the  western  division  of  the  western 
district,  the  St.  Joseph  division  of  the  western  district,  the 
central  division  of  the  w^estern  district,  the  southern  division 
of  the  western  district  and  the  southwestern  division  of  the 
western  district. 

The  western  division  of  the  western  district  contains  the 
counties  of  Bates,  Caldwell,  Carroll,  Cass,  Clay,  Grundy, 
Henry,  Jackson,  Johnson,  Lafayette,  Livingston,  Mercer,  Put- 
nam, Ray,  St.  Clair,  Saline  and  Sullivan. 

The  St.  Joseph  division  of  the  western  division  embraces 
the  counties  of  Andrew,  Atchison,  Buchanan,  Clinton,  Da- 
viess, Dekalb,  Gentry,  Harrison,  Holt,  Nodaway,  Platte  and 
Worth. 

The  central  division  of  the  western  district  comprises  the 
counties  of  Benton,  Boone,  Calloway,  Camden,  Cole,  Cooper, 
Hickory,  Howard,  Maries,  Miller,  Moniteau,  Morgan,  Osage, 
Pettis  and  Phelps. 

The  southern  division  of  the  western  district  comprises 
the  counties  of  Christian,    Cedar,    Dade,    Dallas,    Douglas, 


COURTS     AND    THEIR    TERRITORIAL    JURISDICTION.  .I.T 

Greene,  Howell,  Laclede,  Ozark,  Polk,  Pulaski,  Taney,  Texas, 
Webster  and  Wright. 

The  southwestern  division  of  the  western  district  comprises 
the  counties  of  Barry,  Barton,  Jasper,  Lawrence,  McDonald, 
Newton,  Stone  and  Vernon. 

The  time  and  place  of  holding  district  courts  in  the  western 
district  of  Missouri  are  at  Kansas  City,  fourth  Monday  in 
April  and  first  Monday  in  November ;  at  St.  Joseph,  first  Mon- 
day in  March  and  third  Monday  in  September;  at  Springfield, 
first  Mondays  in  April  and  October;  at  Jefferson  City,  third 
Mondays  in  March  and  October;  Joplin,  second  Mondays  in 
January  and  June. 

Montana  (ninth  circuit)   constitutes  one  judicial  district. 

The  time  and  place  of  holding  courts  are  the  first  Mondays 
in  April  and  November,  at  Helena,  the  first  Tuesdays  in 
February  and  September,  at  Butte,  and  the  first  Mondays  in 
May  and  October,  at  Great  Falls. 

Nebraska  (eighth  circuit)  constitutes  one  judicial  dis- 
trict. 

The  time  and  place  of  holding  courts  are  at  Omaha  on  the 
first  Monday  in  May  and  the  second  Monday  in  November; 
Lincoln,  third  Monday  in  January  and  first  Monday  in 
October;  Hastings,  third  Monday  in  April;  Norfolk,  fourth 
Monday  in  April.  i 

Nevada  (ninth  circuit)  constitutes  one  judicial  district. 
The  district  court  is  held  at  Carson  City  on  the  first  Mon- 
days in  February,  May  and  October. 

New  Hampshire  (first  circuit)  comprises  the  entire  state. 

The  time  and  place  of  holding  court  are  at  Portsmouth  on 
the  third  Tuesdays  in  March  and  September ;  Concord  on  the 
third  Tuesdays  in  June  and  December;  Littleton  on  the  last 
Tuesday  in  August. 

New  Jersey  (third  circuit)  constitutes  one  judicial  dis- 
trict. 


56  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

The  tlistrict  court  is  held  on  the  third  Tuesdays  in  January, 
April,  June  and  Septeniljer,  at  Trenton. 

New  Mexico  (eighth  circuit)  is  divided  into  six  judicial 
districts,  called  the  first,  second,  third,  fourth,  fifth  and  sixth 
districts. 

The  counties  in  the  first  district  are  Santa  Fe,  Taos,  Rio 
Arriba  and  San  Juan. 

The  United  States  court  for  the  first  district  is  held  at  Santa 
Fe  first  Mondays  in  March  and  September. 

The  second  district  comprises  the  counties  of  Bernalillo,  Mc- 
Kinley,  Sandoval  and  Valencia. 

The  United  States  court  for  the  second  district  is  held  at 
Albuquerque  third  Mondays  in  March  and  September. 

The  third  district  includes  the  counties  of  Donna  Ana, 
Grant,  Luna,  Socorro  and  Sierra. 

The  United  States  court  for  the  third  district  is  held  at  Las 
Cruces  first  Mondays  in  April  and  October. 

The  fourth  district  comprises  the  counties  of  San  Miguel, 
Mora,  Colfax  and  Union. 

The  LTnited  States  court  for  the  fourth  district  is  held  at 
Las  Vegas  second  Mondays  in  May  and  November. 

The  fifth  district  comprises  the  counties  of  Roosevelt, 
Chaves  and  Eddy. 

The  United  States  court  for  the  fifth  district  is  held  at  Ros- 
well  third  IVlondays  in  April  and  October. 

The  sixth  district  comprises  the  counties  of  Lincoln,  Guad- 
alupe, Otero,  Quay  and  Torrance. 

The  United  States  court  for  the  sixth  district  is  held  at 
Alamogordo,  the  fourth  Mondays  in  May  and  November. 

New  York  (second  circuit)  is  divided  into  four  districts, 
called  the  northern,  the  eastern,  the  Western  and  the  southern 
districts. 

The  northern  district  of  New  York  comprises  the  counties 
of  Albany,  Broome,  Cayuga,  Chenango,  Clinton,  Cortland, 
Delaware,  Essex,  Franklin,  Fulton,  Hamilton,  Herkimer,  Jef- 
ferson, Lewis,    Madison,    Montgomery,    Oneida,    Onondaga, 


COURTS     AND    THEIR    TERRITORIAL    J  UKiSUlCTlUN.  57 

Oswego,  Otsego,  Rensselaer,  St.  Lawrence,  Saratoga,  Sche- 
nectady, Schoharie,  Tioga,  Tompkins,  Warren  and  Washing- 
ton, with  the  waters  thereof. 

District  courts  for  the  northern  (hstrict  are  held  on  the  sec- 
ond Tuesday  in  February,  at  Albany;  first  Tuesday  in  Decem- 
ber, at  Utica;  second  Tuesday  in  June,  at  Binghamton;  first 
Tuesday  in  October,  at  Auburn;  first  Tuesday  in  April,  at 
Syracuse ;  and,  in  the  discretion  of  the  judge  of  the  court,  one 
term  annually  at  such  time  and  place  within  the  counties  of 
Saratoga,  Onondaga,  St.  Lawrence,  Clinton,  Jefferson,  Os- 
wego and  Franklin  as  he  may  from  time  to  time  appoint. 

The  eastern  district  of  New  York  includes  the  counties  of 
Kings,  Queens,  Richmond,  Nassau  and  Suffolk,  with  the 
waters  thereof. 

The  time  and  place  of  holding  district  ccmrts  for  the  eastern 
district  of  New  York  are  on  the  first  Wednesday  in  every 
month,  at  Brooklyn. 

The  southern  district  of  New  York  comprises  the  counties 
of  Columbia,  Dutchess,  Greene,  New  York,  Orange,  Putnam, 
Rockland,  Sullivan,  Ulster  and  Westchester. 

The  district  court  for  the  southern  district  of  New  York  is 
held  on  the  first  Tuesday  in  each  month,  at  New  York  City. 

The  western  district  of  New  York  comprises  the  counties  of 
Allegany,  Cattaraugus,  Chautauqua,  Chemung,  Erie,  Genesee, 
Livingston,  Monroe,  Niagara,  Ontario,  Orleans,  Schuyler, 
Seneca,  Steuben,  W^ayne.  \\\'oming  and  Yates^  witli  the 
waters  thereof. 

The  time  and  place  of  holding  district  court  for  the  western 
district  of  New  York  are  on  the  second  Tuesday  in  January, 
at  Elmira ;  second  Tuesdays  in  March  and  November,  at  Buf- 
falo ;  second  Tuesday  in  May,  at  Rochester ;  second  Tuesday 
in  July,  at  Jamestown;  second  Tuesday  in  October,  at  Lock- 
port. 

North  Carolina  (fourth  circuit)  has  two  districts,  called 
the  eastern  and  western  districts. 

The  eastern  district  of  North  Carolina  includes  the  counties 


58  LAW     AND    PROCEEDINGS    IN     BANKRUPTCY. 

of  Beaufort,  Bertie,  Bladen,  Brunswick,  Camden,  Carteret, 
Chowan,  Chatham,  Cohimbus,  Craven,  Cumberland,  Curri- 
tuck, Dare,  Duplin,  Durham,  Edgecombe,  Franklin,  Gates, 
Granville,  Greene,  Halifax,  Harnett,  Hertford,  Hyde,  John- 
ston, Jones,  Lenoir,  Martin,  Moore,  Nash,  New  Hanover, 
Northampton,  Onslow,  Pamlico,  Pasquotank,  Pender,  Person, 
Perquimans,  Pitt,  Richmond,  Robeson,  Sampson,  Scotland, 
Tyrrell,  Vance,  Wake,  Warren,  Washington,  Wayne  and 
Wilson. 

The  time  and  place  of  holding  courts  are  Raleigh,  fourth 
Monday  in  May  and  first  Monday  in  December ;  Wilmington, 
first  Monday  after  the  fourth  Mondays  in  April  and  October ; 
Newbern,  fourth  Mondays  in  April  and  October;  Elizabeth 
City,  third  Mondays  in  April  and  October;  Washington, 
second  Mondays  in  April  and  October. 

The  western  district  comprises  the  counties  of  Alamance, 
Alexander,  Alleghany,  Anson,  Ashe,  Buncombe,  Burke,  Cab- 
arrus, Caldwell,  Caswell,  Catawba,  Cherokee,  Clay,  Cleveland, 
Davie,  Davidson,  Forsythe,  Gaston,  Graham,  Guilford,  Hay- 
wood, Henderson,  Iredell,  Jackson,  Lincoln,  Macon,  Madison, 
McDowell,  Mecklenburg,  Mitchell,  Montgomery,  Orange, 
Polk,  Randolph,  Rockingham,  Rowan,  Rutherford,  Stanly, 
Stokes,  Surry,  Swain,  Transylvania,  Union,  Watauga,  Wilkes, 
Yadkin  and  Yancey. 

The  time  and  place  of  holding  district  courts  are  on  the 
first  Mondays  in  April  and  October,  at  Greensboro;  third 
Mondays  in  April  and  October,  at  Statesville;  first  Mondays 
in  May  and  November,  at  Asheville;  first  Mondays  in  June 
and  December,  at  Charlotte ;  and  fourth  Mondays  in  May  and 
November,  at  Wilkesboro. 

North  Dakota  (eighth  circuit)  constitutes  one  judicial 
district. 

The  district  is  divided  into  five  divisions,  called  the  south- 
western, southeastern,  northeastern,  northwestern  and  west- 
ern divisions. 

The  southwestern  division  comprises  the  counties  of  Bur- 


COURTS     AND    THEIR    TERRITORIAL    JURISDICTION.  59 

leigh,  Emmons,  Foster,  Kidder,  Logan,  Mcintosh,  McLean, 
Stutsman  and  Wells,  and  all  territory  in  the  state  lying  west 
of  the  Missouri  River  and  south  of  the  twelfth  standard  par- 
allel. 

The  southeastern  division  comprises  the  counties  of  Barnes, 
Cass,  Dickey,  Griggs  Lamoure,  Ransom,  Richland,  Sargent 
and  Steele. 

The  northeastern  division  comprises  the  counties  of  Cava- 
lier, Grand  Forks,  Nelson,  Pembina,  Traill  and  Walsh. 

The  northwestern  division  comprises  the  counties  of  Benson, 
Bottineau,  Eddy,  McHeniy,  Pierce,  Ramsey,  Rolette  and 
Tower. 

The  western  division  comprises  the  counties  of  Ward  and 
Williams  and  all  the  territory  west  of  the  Missouri  River 
and  north  of  the  twelfth  standard  parallel. 

The  time  and  place  of  holding  district  courts  are  on  the 
first  Tuesday  in  July,  at  Devil's  Lake ;  first  Tuesday  in  March, 
at  Bismarck ;  third  Tuesday  in  May,  at  Fargo ;  second  Tues- 
day in  November,  at  Grand  Forks;  second  Tuesday  in  Octo- 
ber, at  Minot. 

Ohio  (sixth  circuit)  is  divided  into  two  districts,  the  north- 
ern district,  and  the  southern  district. 

The  northern  district  is  divided  into  two  divisions,  called 
the  eastern  division  of  the  northern  district,  and  the  western 
division  of  the  northern  district. 

The  eastern  division  of  the  northern  district  comprises  the 
counties  of  Ashland,  Ashtabula,  Cuyahoga,  Carroll,  Colum- 
biana, Crawford,  Geauga,  Holmes,  Lake,  Lorain,  Medina, 
Mahoning,  Portage,  Richland,  Summit,  Stark,  Tuscarawas, 
Trumbull  and  \A^ayne. 

The  time  and  place  of  holding  district  courts  are  on  the 
first  Tuesdays  in  February,  April  and  October,  at  Cleveland. 

The  western  division  of  the  northern  district  includes  the 
counties  of  Auglaize,  Allen,  Defiance,  Erie,  Fulton,  Flenry, 
Hancock,   Hardin,   Huron,  Lucas,   Mercer,   Marion,   Ottawa, 


60  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

Paulding,  Putnam,  Seneca,  Sandusky,  Van  Wert,  Williams, 
A\'ood  and  Wyandot. 

The  district  court  for  the  western  division  of  the  northern 
district  is  held  at  Toledo  on  the  first  Tuesdays  in  June  and' 
December. 

The  southern  district  is  divided  into  two  divisions,  called 
the  eastern  division  of  the  southern  district,  and  the  western 
division  of  the  southern  district. 

The  eastern  division  of  the  southern  district  includes  the 
counties  of  Athens,  Belmont,  Coshocton,  Delaware,  Fairfield, 
Fayette,  Franklin,  Gallia,  Guernsey,  Harrison,  Hocking, 
Jackson,  Jefferson,  Knox,  Licking,  Logan,  Madison,  Meigs, 
Monroe,  Morgan,  Morrow,  Muskingum,  Noble  Perry,  Pick- 
away, Pike,  Ross,  Union,  Vinton  and  Washington. 

The  district  court  for  the  eastern  division  of  the  southern 
district  is  held  on  the  first  Tuesdays  in  June  and  December,  at 
Columbus. 

The  western  division  of  the  southern  district  includes  the 
counties  of  Adams,  Brown,  Butler,  Champaign,  Clark,  Cler- 
mont, Clinton,  Darke,  Greene,  Hamilton,  Highland,  Law- 
rence, Miami,  Montgomery,  Preble,  Scioto,  Shelby  and 
\\'arren. 

The  time  and  place  of  holding  district  courts  for  the 
western  division  of  the  southern  district  are  on  the  first  Tues- 
days in  February,  April  and  October,  at  Cincinnati. 

Oklahoma  (eighth  circuit).  The  state  (when  admitted 
as  a  state,  pursuant  to  act  of  June  16,  1906)  shall  constitute 
two  judicial  districts,  to  be  known  as  the  eastern  district  of 
Oklahoma,  and  the  western  district  of  Oklahoma. 

The  eastern  district  of  Oklahoma  comprises  the  Indian  Ter- 
ritory. 

The  times  and  places  of  holding  district  courts  in  this  district 
are  at  Muscogee,  on  the  first  Monday  in  January ;  at  Vinita,  on 
the  first  Monday  in  March ;  at  Tulsa,  on  the  first  Monday  in 
April ;  at  South  McAlester,  on  the  first  Monday  in  June ;  at 
Ardmore,  on  the  first  Monday  in  October,  and  at  Chickasha, 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  61 

on  the  first  Monday  in  November.  The  clerk's  office  is  at 
Muscogee. 

The  western  district  comprises  Oklahoma  Territory. 

The  times  and  places  of  holding  district  courts  in  this 
district  are  at  Guthrie,  on  the  first  Monday  in  January;  at 
Oklahoma  City,  on  tlie  first  Monday  in  March;  at  Enid,  on 
the  first  Monday  in  June,  and  at  Lawton,  on  the  first  Monday 
in  October.    The  clerk's  office  is  at  Guthrie. 

Oregon   (nintli  circuit)   constitutes  one  judicial  district. 
The  district  court  is  held  at  Portland  on  the  first  Mondays 
in  March,  July  and  November.^ 

Pennsylvania  (third  district)  is  divided  into  three  dis- 
tricts, the  eastern,  middle  and  western  districts. 

The  eastern  district  comprises  the  counties  of  Berks,  Bucks, 
Chester,  Delaware,  Lancaster,  Lehigh,  Montgomery,  North- 
ampton, Philadelphia  and  Schuylkill. 

The  district  court  is  held  on  the  second  Alondays  in  March 
and  June,  third  Monday  in  September,  and  second  Monday 
in  December  at  Philadelphia. 

The  middle  district  comprises  the  counties  of  Adams,  Brad- 
ford, Cameron,  Carbon.  Center,  Clinton,  Columbia,  Cumber- 
land, Dauphin,  Franklin.  Fulton,  Huntingdon,  Juniata,  Lack- 
awanna, Lebanon,  Luzerne,  Lycoming,  Mifflin.  Monroe,  Mon- 
tour, Northumberland,  Perry,  Pike,  Potter,  Snyder,  Sullivan, 
Susquehanna,  Tioga,  Union,  Wayne,  Wyoming  and  York. 

The  times  and  places  of  holding  district  courts :  Scranton, 
fourth  Monday  in  February  and  third  Monday  in  October; 
Harrisburg,  first  Monday  in  May  and  first  Monday  in  Decem- 
ber;  Williamsport,  second  Monday  in  January  and  second 
Monday  in  June. 

The  western  district  comprises  the  counties  of  Allegheny. 
Armstrong,  Beaver,  Bedford,  Blair,  Butler,  Cambria,  Clarion, 

^Act  of  April  28,  1904,  provides:  judge  of  the  United  States  of  the 
"That  in  case  of  the  absence  of  the  circuk  to  which  such  district  be- 
Unitcd  States  district  judge  for  the  longs  may  hold  the  district  court 
district  of  Oregon  from  said  dis-  and  perform  the  duties  of  the  dis- 
trict, or  of  his   disability,   a   circuit  trict   judge." 


62  LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 

Cleaiiield,  Crawford,  Elk,  Erie,  Eayette,  Forest,  Greene,  In- 
diana, Jefferson,  Lawrence,  McKean,  Mercer,  Somerset,  Ven- 
ang-o,  Warren,  W^ashington  and  Westmoreland. 

The  time  and  place  of  holding  district  courts  are  at  Pitts- 
burg, hrst  Monday  in  May  and  third  Monday  in  October;  at 
Erie,  third  Monday  in  July  and  second  Monday  in  January. 

Porto  Rico  constitutes  one  judicial  district. 

The  district  comprises  the  island  of  Porto  Rico  (seven  elec- 
toral districts  and  seven  local  judicial  districts). 

The  times  and  places  of  holding  courts  are  at  San  Juan, 
April  and  October ;  at  Ponce,  January ;  at  Mayaguez,  special 
term  immediate  following  January  term  at  Ponce. 

Rhode  Island  (first  circuit)  constitutes  one  judicial  dis- 
trict. 

The  district  court  is  held  at  Providence  on  the  first  Tues- 
days in  February  and  August ;  at  Newport  the  second  Tues- 
day in  May  and  the  third  Tuesday  in  October. 

South  Carolina  (fourth  circuit)  constitutes  one  judicial 
district.'" 

The  district  court  is  held  on  the  first  Tuesdays  in  June  and 
December,  at  Charleston ;  third  Tuesdays  in  April  and  Octo- 
ber, at  Greenville ;  fourth  Tuesday  in  November,  at  Columbia ; 
first  Tuesday  in  March,  at  Florence. 

South  Dakota  (eighth  circuit)  constitutes  one  judicial 
district,  divided  into  four  divisions,  called  the  northern,  cen- 
tral, southern  and  western  divisions. 

The  northern  division  (court  at  Alberdeen)  includes  the 
counties  of  Brookings,  Hamlin,  Deuel,  Grant,  Roberts,  Cod- 
ington,   Clark,    Day,    Marshall,    Spink,    Brown,    McPherson, 

1"  There  has  been  much  confusion  stitutes  one  district  divided  into  two 

with   reference   to   the   meaning   of  divisions.      See  26   Stat,   at   L.   71 ; 

R.   S.   Sec.   546,   whether  the   State  Barrett  v.  United  States,  169  U.  S. 

of  South  CaroHna  was  divided  into  218;  Lucker  v.  Phoenix  Co.,  66  Fed. 

two  districts  or  two  divisions;  but  Rep.  161;  Young  v.  Insurance  Co., 

it  is  now  settled  that  the  state  con-  29  Fed.  Rep.  273. 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  63 

Ednuuuls,  Campbell,  Walworth,  and  Sisseton  and  W'ahpeton 
Indian  reservations. 

The  central  division  (court  at  Pierre)  comprises  the  coun- 
ties of  Buffalo,  Faulk,  Jerauld,  Hand,  Hughes,  Hyde,  Potter, 
Stanley,  Sulley ;  also  Cheyenne  and  part  of  Standing  Rock  In- 
dian reservations. 

The  southern  division  (court  at  Sioux  Falls)  includes  the 
counties  of  Aurora,  Beadle,  Bonhomme,  Brule,  Charles  Mix, 
Clay,  Davison,  Douglas,  Gregory,  Hanson,  Hutchinson, 
Kingsbury,  Lake,  Lincoln,  Lyman,  McCook,  Miner,  Minne- 
haha, Moody,  Sanborn,  Turner,  Union,  Yankton ;  also  Crow 
Creek,  Lower  Brule  and  Yankton  Indian  reservations. 

The  western  division  (court  at  Dead  wood)  comprises  the 
counties  of  Butte,  Custer,  Fall  River,  Lawrence,  ]\Ieade,  Pen- 
nington, and  the  Rosebud  and  Pine  Ridge  Indian  reservations. 

The  time  and  place  of  holding  district  courts  in  South  Da- 
kota are  at  Sioux  Falls,  first  Tuesday  in  April  and  third  Tues- 
day in  October ;  at  Aberdeen,  first  Tuesday  in  May  and  second 
Tuesday  in  November;  at  Deadwood,  third  Tuesday  in  Ma}-- 
and  first  Tuesday  in  September ;  at  Pierre,  second  Tuesday  in 
June  and  first  Tuesday  in  October. 

Tennessee  (sixth  circuit)  is  divided  into  three  districts, 
the  eastern,  middle  and  western  districts. 

The  eastern  district  of  Tennessee  is  divided  into  three  di- 
visions called  respectively  the  northern  division  of  the  eastern 
district,  the  southern  division  of  the  eastern  district  and  the 
northeastern  division  of  the  eastern  district. 

The  northern  division  of  the  eastern  district  of  Tennessee 
comprises  the  counties  of  Anderson,  Blount,  Campbell.  Clai- 
borne, Grainger,  Jefferson,  Knox,  Loudon,  Monroe,  Morgan, 
Roane,  Scott,  Sevier  and  Union. 

The  southern  division  of  the  eastern  district  of  Tennessee 
comprises  the  counties  of  Bledsoe,  Bradley,  Cumberland,  Fen- 
tress, Hamilton,  James,  McMinn,  Marion,  ]\Ieigs,  Polk,  Rhea, 
Sequatchie. 

The  northeastern  division  of  the  eastern  district  of  Ten- 
nessee comprises  the  counties  of  Carter,  Cocke,  Greene,  Ham- 


64  LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 

blen,    Hancock,    Hawkins,    Johnson,    Sullivan,    Unicoi    and 
Washington. 

The  time  and  place  of  holding  district  courts  in  the  eastern 
district  are  first  Monday  in  March  and  second  Monday  in 
September,  at  Knoxville ;  first  Mondays  in  April  and  Decem- 
ber, at  Chattanooga ;  second  Mondays  in  June  and  November, 
at  Greenville. 

The  middle  district  comprises  the  counties  of  Bedford,  Can- 
non, Cheatham,  Clay,  Coffee,  Davidson,  Dekalb,  Dickson, 
Franklin,  Giles,  Grundy,  Hickman,  Humphreys,  Houston, 
Jackson,  Lawrence,  Lewis,  Lincoln,  Macon,  Marshall,  Maury, 
Montgomery,  Moore,  Overton,  Pickett,  Putnam,  Robertson, 
Rutherford,  Smith,  Stewart,  Sumner,  Trousdale,  Van  Buren, 
Warren,  Wayne,  White,  Williamson  and  Wilson. 

The  time  and  place  of  holding  district  courts  are  at  Nash- 
ville on  the  first  Mondays  in  JMay  and  October. 

The  western  district  of  Tennessee  is  divided  into  two  divi- 
sions called  respectively  the  eastern  division  of  the  western 
district  and  the  western  division  of  the  western  district. 

The  eastern  division  of  the  western  district  comprises  the 
counties  of  Benton,  Carroll,  Chester,  Crockett,  Decatur,  Gib- 
son, Hardin,  Hardeman,  Henderson,  Henry,  Lake,  Madison, 
McNairy,  Obion,  W'eakley  and  Perry. 

The  western  division  of  the  western  district  comprises  the 
counties  of  Dyer,  Fayette,  Haywood,  Lauderdale,  Shelby  and 
Tipton. 

The  time  and  place  of  holding  district  courts  in  the  western 
district  are  at  Jackson  on  the  fourth  Mondays  in  April  and 
October;  at  Memphis  on  the  fourth  Mondays  in  May  and 
November. 

Texas  (fifth  circuit)  is  divided  into  four  districts,  the 
northern,  eastern,  western  and  southern  districts. 

The  counties  in  the  northern  district  are  returnable  to 
Dallas— Dallas,  Ellis,  Hunt,  Johnson,  Kaufman,  Navarro 
and  Rockwall. 

Returnable  to  Fort  \\'orth — Archer,  Armstrong,  Bailey, 
Baylor,   Briscoe,    Carson.    Castro,    Childress.    Clay,   Cochran, 


COURTS   AND   THEIR   TERRITORIAL   JURISDICTION.  65 

Collingsworth,  Comanche,  Cottle,  Dallam,  Dawson,  Deaf 
Smith,  Donley,  Erath,  Floyd,  Foard,  Gray,  Hale,  Hall,  Hans- 
ford, Hardeman,  Hartley,  Hemphill,  Hockley,  Hood,  Hutch- 
inson, Jack,  Lamb,  Lipscomb,  Moore,  Motley,  Ochiltree,  Old- 
ham, Palo  Pinto,  Parker,  Parmer,  Potter,  Randall,  Roberts, 
Sherman,  Swisher,  Tarrant,  Wheeler,  Wichita,  Wilbarger, 
Wise  and  Young. 

Returnable  to  Abilene — Andrews,  Borden,  Callahan,  Cros- 
by, Dickens,  Eastland,  Fisher,  Gaines,  Garza,  Haskell,  How- 
ard, Jones,  Kent,  King,  Knox,  Lubbock,  Lynn,  Martin,  Mid- 
land, Mitchell,  Nolan,  Scurry,  Shackelford,  Stephens,  Stone- 
wall, Taylor,  Terry,  Throckmorton  and  Yoakum. 

Returnable  to  San  Angelo — Brown,  Coke,  Coleman,  Con- 
cho, Crockett,  Glasscock,  Irion,  Menard,  Mills,  Runnells, 
Schleicher,  Sterling,  Sutton,  Tom  Green  and  Upton. 

The  time  and  place  of  holding  courts  for  the  northern  dis- 
trict are  at  Dallas,  second  Monday  of  January  and  the  first 
Monday  of  May;  at  Forth  Worth,  second  Monday  of  March 
and  the  first  Monday  of  November;  at  Abilene,  second  Mon- 
day of  April  and  the  first  Monday  of  October ;  at  San  Angelo, 
fourth  Monday  of  April  and  the  third  Monday  in  October. 

The  counties  in  the  eastern  district  are :  Returnable  to 
Paris — Delta,  Fannin,  Lamar  and  Red  River. 

Returnable  to  Texarkana — Bowie,  Franklin  and  Titus.  No 
definite  time  for  holding  court. 

Returnable  to  Beaumont — Hardin,  Jasper,  Jefferson.  Lib- 
erty, Newton,  Orange,  Sabine,  San  Augustine  and  Tyler. 

Returnable  to  Tyler — Anderson,  Angelina,  Cherokee, 
Gregg,  Henderson,  Houston,  Nacogdoches,  Panola,  Rains, 
Rusk,  Shelby,  Smith,  Van  Zandt  and  Wood. 

Returnable  to  Jefferson — Camp,  Cass,  Harrison,  Hopkins, 
Marion,  Morris  and  Upshur. 

Returnable  to  Sherman — Collin,  Cooke,  Denton,  Grayson 
and  Montague. 

The  time  and  place  of  holding  court  for  the  eastern  district 
are  Tyler,  fourth  Mondays  in  January  and  April :  Jefferson, 
first  Monday  in  October  and  third  Monday  in  February ;  Paris, 


66  LAW     AND    PROCEEDINGS    IN     BANKRUPTCY. 

fourth  Monday  of  October  and  second  Monday  of  March; 
Beaumont,  third  Monday  in  November  and  first  Monday  in 
April;  Sherman,  first  Monday  in  January  and  third  Monday 
in  May;  Texarkana,  twice  a  year,  at  times  to  be  fixed  by 
judges. 

The  counties  in  the  western  district  are :  Returnable  to 
Austin — Bastrop,  Blanco,  Burleson,  Burnett,  Caldwell,  Fay- 
ette, Gillespie,  Hays,  Kimble,  Lampasas,  Lee,  Llano,  McCul- 
loch.  Mason,  San  Saba,  Travis,  Washington  and  Williamson. 

Returnable  to  Waco — Bell,  Bosque,  Coryell,  Falls,  Free- 
stone, Hamilton,  Hill,  Leon,  Limestone,  McLennan,  Milam, 
Robertson  and  Somervell. 

Returnable  to  San  Antonio — Atascosa,  Bandera,  Bexar, 
Comal,  Dimmit,  Edwards,  F'rio,  Gonzales,  Guadalupe,  Karnes, 
Kendall,  Kerr,  Kinney,  Maverick,  Mendina,  Pecos,  Terrell, 
Uvalde,  Valverde,  Wilson  and  Zavalla. 

Returnable  to  El  Paso — Brewster,  Crane,  Ector,  El  Paso, 
Jeff  Davis,  Loving,  Presidio,  Reeves,  Ward  and  Winkler. 

The  time  and  place  for  holding  district  courts  are  at  Austin, 
fourth  Monday  in  January  and  second  Monday  in  June ;  at 
Waco,  second  Monday  in  November  and  fourth  Monday  in 
February ;  at  San  Antonio,  third  Monday  in  December  and 
first  Monday  in  May ;  at  El  Paso,  first  Monday  in  October  and 
first  Monday  in  April ;  at  Del  Rio,  fourth  Monday  in  October 
and  third  Monday  in  March,  each  year. 

Counties  in  the  southern  district  are :  Returnable  to  Galves- 
ton— Austin,  Brazoria,  Chambers,  Fort  Bend,  Galveston, 
Matagorda  and  Wharton. 

Returnable  to  Houston — Brazos,  Colorado,  Grimes,  Harris, 
Fayette,  Lavaca,  Madison,  Montgomery,  Polk,  San  Jacinto, 
Trinity,  Walker  and  Waller. 

Returnable  to  Laredo — Duval,  Lasalle,  McMullen,  Nueces, 
Webb  and  Zapata. 

Returnable  to  Victoria — Bee,  Calhoun,  Dewitt,  Go,liad, 
Jackson,  Live  Oak,  Refugio,  Aransas,  San  Patricio  and  Vic- 
toria. 


COURTS    AXl)    THEIR    TERRITORIAL    JURISDICTION.  67 

Returnal^le  to  Brownsville — Cameron,  Hidalgo  and  Starr. 

Times  and  places  of  holding  district  courts  are  at  Galveston, 
second  Monday  in  January  and  lirst  INIonday  in  June;  at 
Houston,  fourth  Mondays  in  February  and  September ;  at  La- 
redo, third  Monday  in  April  and  second  Monday  in  Novem- 
ber; at  Brownsville,  second  Monday  in  May  and  first  Monday 
in  December;  at  Victoria,  fourth  Monday  in  November  and 
first  Monday  in  Alay. 

Utah  (eighth  circuit)  constitutes  one  judicial  district. 

The  time  and  place  of  holding  courts  are  on  the  second 
Mondays  in  .Vpril  and  November,  at  Salt  Lake;  second  Mon- 
days in  March  and  September,  at  Ogclen. 

Vermont  (second  circuit)  constitutes  one  judicial  district. 

The  time  and  place  of  holding  district  courts  are  the  fourth 
Tuesday  in  February,  at  Burlington ;  the  third  Tuesday  in 
May,  at  \\''indsor ;  the  first  Tuesday  in  October,  at  Rutland. 

One  of  the  stated  terms  of  the  district  court  may,  when 
adjourned,  be  adjourned  to  meet  at  Newport 

Virginia  (fourth  circuit)  is  divided  into  two  districts,  the 
eastern  and  western  districts. 

The  counties  in  the  eastern  district  are  Accomac,  Alexan- 
dria, Amelia,  Brunswick,  Caroline,  Charles  City,  Chesterfield, 
Culpeper,  Dinwiddle,  Elizabeth  City,  Essex,  Fairfax,  Fau- 
c[uier,  Gloucester,  Goochland,  Greensville,  Hanover,  Henrico, 
Isle  of  \\'ight,  James  City,  King  and  Queen,  King  George, 
King  William,  Lancaster,  Loudoun,  Lousia,  Lunenburg, 
Mathews,  Mecklenburg,  Middlesex,  Nansemond,  New  Kent, 
Norfolk,  Northampton,  Northumberland,  Nottoway,  Orange, 
Powhatan,  Prince  Edward,  Prince  George,  Prince  William, 
Princess  Anne,  Richmond,  Southampton,  Spottsylvania,  Staf- 
ford, Surry,  Sussex,  Warwick,  Westmoreland  and  York. 

The  time  and  place  of  holding  district  courts  for  the  east- 
ern district  are  the  first  Mondays  in  April  and  October, 
at  Richmond :  the  first  ]\Iondavs  in  Mav  and  November,  at 


68  LAW     AND    PROCEEDINGS    IN     BANKRUPTCY. 

Norfolk;  the  first  Mondays  in  January  and  July,  in  Alex- 
andria. 

Counties  in  the  western  district  are  Albemarle,  Alleghany, 
Amherst,  Appomattox,  Augusta,  Bath,  Bedford,  Bland,  Bote- 
tout,  Buchanan,  Buckingham,  Campbell,  Carroll,  Charlotte, 
Clarke,  Craig,  Cumberland,  Dickenson,  Floyd,  Franklin, 
Frederick,  Fluvanna,  Giles,  Grayson,  Greene,  Halifax,  Hen- 
ry, Highland,  Lee,  Madison,  Montgomery,  Nelson,  Patrick, 
Page,  Pulaski,  Pittsylvania,  Rappahannock,  Roanoke,  Rock- 
bridge, Rockingham,  Russell,  Scott,  Shenandoah,  Smyth, 
Tazewell,  Warren,  Washington,  Wise  and  Wythe. 

The  time  and  place  of  holding  district  courts  for  the  west- 
ern district  are  at  Danville,  Tuesdays  after  the  second  Mon- 
days in  April  and  November;  Lynchburg,  Tuesdays  after 
the  second  Mondays  in  March  and  September;  Abingdon, 
Tuesdays  after  the  first  Mondays  in  May  and  October; 
Harrisonburg,  Tuesdays  after  the  first  Mondays  in  June  and 
December;  Charlottesville,  second  Monday  in  January  and 
first  Monday  in  July;  Roanoke,  second  ]\Ionday  in  February 
and  third  Monday  in  June ;  at  Bigstone  Gap,  fourth  Monday 
in  January  and  second  Monday  in  i\ugust. 

Washington  (ninth  circuit)  constitutes  two  judicial  dis- 
tricts, called  the  eastern  and  western  districts. 

The  eastern  district  is  divided  into  two  divisions,  called  the 
eastern  division  of  the  eastern  district  and  the  southern  divi- 
sion of  the  eastern  district. 

The  eastern  division  of  the  eastern  district  comprises  the 
counties  of  Adams,  Spokane,  Lincoln,  Douglas,  Kittitas,  Che- 
lan, Okanogan,  Ferry  and  Stevens. 

The  time  and  place  of  holding  district  courts  for  the  east- 
ern division  is  at  Spokane,  first  Tuesdays  in  April  and  Sep- 
tember. 

The  southern  division  of  the  eastern  district  includes  the 
counties  of  Wallawalla,  Columbia,  Garfield,  Asotin,  A\'hitman, 
Franklin,  Yakima  and  Klickitat. 

The  district  courts   for  the  southern  division  are  held  at 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  69 

Wallawalla,  first  Tuesdays  in  June  and  December;  and  at 
North  Yakima,  first  Tuesdays  in  May  and  October. 

The  western  district  is  divided  into  two  divisions  called  the 
northern  division  of  the  western  district  and  the  western 
division  of  the  western  district. 

The  northern  division  of  the  western  district  comprises  the 
counties  of  King-,  Kitsap,  Island,  Whatcom,  Skagit,  Jeffer- 
son, Clallam,  San  Juan  and  Snohomish. 

The  time  and  ])lace  of  holding  district  courts  for  the  north- 
ern division  are  at  Seattle,  first  Tuesdays  in  May  and  No- 
vember. 

The  western  division  of  the  w^estern  district  embraces  the 
counties  of  Pierce,  Thurston,  Mason,  Chehalis,  Lewis,  Pacific, 
^^'ahkiakum,  Cowlitz,  Clarke  and  Skamania. 

The  district  courts  for  the  western  division  are  held  at  Ta- 
coma,  first  Tuesdays  in  February  and  July. 

^^^EST  Virginia  (fourth  circuit)  is  comprised  of  two  dis- 
tricts, the  northern  and  southern  district. 

The  northern  district  is  composed  of  the  following  counties : 
Barbour,  Berkeley,  Brooke,  Calhoun,  Doddridge,  Gilmer, 
Grant,  Hampshire,  Hancock,  Hardy,  Harrison,  Jefferson, 
Lewds,  ]\Iarion,  ^Marshall,  Mineral,  Monongalia,  Morgan, 
OJiio,  Pendleton,  Pleasants,  Preston,  Randolph,  Ritchie,  Tay- 
lor, Tucker,  Tyler.  Upshur,  Wetzel,  ^^^irt  and  Wood. 

Times  and  places  of  holding  courts :  \Mieeling,  first  Tues- 
day in  April  and  third  Tuesday  in  September;  Clarksburg, 
third  Tuesday  in  April  and  first  Tuesday  in  October ;  Martins- 
burg-,  second  Tuesday  in  Mav  and  third  Tuesday  in  October. 

The  southern  district  is  composed  of  the  following  coun- 
ties :  Boone,  Braxton,  Cabell,  Clay,  Fayette,  Greenbrier,  Jack- 
son, Kanawdia.  Lincoln,  Logan,  ^McDowell,  Mason,  Mercer, 
Mingo,  Monroe,  Nicholas,  Pocahontas,  Putnam,  Raleigh" 
Roane,  Sumniers,  \\"ayne,  Webster  and  W^^oming. 

Time  and  place  of  holding  court  for  the  southern  district: 
At  Acldison,  first  Monday  in  September ;  at  Huntington,  first 
Tuesday  in  April  and  first  Tuesday  after  the  third  Monday 
in  September;  at  Bluefield,  first  Tuesday  in  May  and  third 


70  LAW     AND    PROCEEDINGS    IN     BANKRUPTCY. 

Tuesday  in  October ;  at  Charleston,  first  Tuesday  in  June  and 
third  Tuesday  in  November;  at  Lewisburg,  second  Tuesday 
in  February. 

Wisconsin  (seventh  circuit)  is  divided  into  two  districts, 
the  eastern  and  western  districts. 

The  counties  in  the  eastern  district  are  Brown,  Calumet, 
Dodge,  Door,  Fond  du  Lac,  Florence,  Forest,  Green  Lake, 
Kenosha,  Kewaunee,  Langlade  (except  townships  31,  32,  33, 
and  34  of  ranges  9  and  10  east),  Marquette,  Manitowoc,  Mil- 
waukee, Marinette,  Oconto,  Oneida  (townships  35,  36,  17 ,  38 
and  39  of  range  11  east),  Outagamie,  Ozaukee,  Racine,  Sha- 
wano, Sheboygan,  Vilas  (townships  40,  41  and  42  of  range 
11  east),  Walworth,  Washington,  Waukesha,  Waupaca,  Wau- 
shara and  Winnebago. 

The  time  and  place  of  holding  district  courts  are  on  the  first 
Mondays  of  January  and  October,  at  Milwaukee;  second 
Tuesday  of  June  at  Oshkosh ;  first  Tuesday  in  April  at  Green 

Bay. 

The  western  district  comprises  the  counties  of  Adams,  Ash- 
land, Barron,  Bayfield,  Buffalo,  Burnett,  Chippewa,  Clark, 
Columbia,  Crawford,  Dane,  Douglas,  Fan  Claire,  Grant, 
Green,  Iowa,  Iron.  Jackson,  Jefferson,  Juneau,  LaCrosse,  La- 
fayete,  Lincoln  and  that  part  of  Langlade  lying  and  being  -in 
townships  31,  Zl.  l^Z  and  34,  north  of  ranges  9  and  10.  east 
of  the  fourth  principal  meridian;  also  Marathon,  Monroe, 
Oneida  (except  townships  35,  36,  17,  38  and  39  of  range  11 
east),  Pepin,  Pierce,  Polk,  Portage,  Richland,  Rock,  Rusk, 
St.  Croix,  Sauk,  Sawyer,  Taylor,  Trempealeau,  Vernon,  Vilas 
(except  townships  40,  41  and  42  of  range  11  east),  Washburn 
and  Wood. 

The  time  and  place  of  holding  distirct  courts  of  the  western 
district  are  on  the  first  Tuesday  in  December,  at  Madison ;  first 
Tuesday  in  June,  at  Fan  Claire ;  third  Tuesday  in  September, 
at  La  Crosse ;  and  third  Tuesday  in  lune,  at  Superior.  Special 
terms :  At  Madison,  fourth  Tuesday  in  June  and  first  Tuesday 
in  October.     "The  clerk  residing  at  Madison  shall  attend  all 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  71 

terms  of  said  courts  at  Eau  Claire  and  Superior,   as  clerk 
thereof." 

Wyoming  (eighth  circuit)  constitutes  one  judicial  district, 
which  includes  Yellowstone  National  Park. 

The  time  and  place  of  holding  district  courts  are  at  Chey- 
enne, second  Mondays  in  May  and  November;  at  Evanston. 
second  Tuesday  in  July,  and  at  Sheridan  or  in  National  Park 
at  such  dates  as  the  courts  may  order. 


Appellate  Courts — Territorial  Jurisdiction. 

The  Supreme  Court. — The  territorial  jurisdiction  of  the 
Supreme  Court  of  the  United  States  includes  all  of  the  states 
and  territories. 

One  term  is  held  annually  on  the  second  Alonday  in  October 
and  such  adjourned  or  special  terms  as  it  may  find  necessary 
for  the  dispatch  of  business. 

Circuit  Courts  of  Appe-\ls.— The  territorial  jurisdiction 
and  time  of  holding  court  of  the  several  circuit  courts  of  ap- 
peals is  as  follows : 

The  first  ciixuit  includes  the  states  of  ]\laine,  New  Hamp- 
shire, Massachusetts  and  Rhode  Island. 

Annual  term,  first  Tuesday  in  October ;  stated  sessions,  first 
Tuesday  in  every  month ;  sessions  for  hearing  cases,  first  Tues- 
day in  January  and  October,  and  second  Tuesday  in  April,  at 
Boston.  Mass. 

The  second  circuit  includes  Vermont,  Connecticut  and  New 
York. 

One  term  of  the  circuit  court  of  appeals  for  the  second  cir- 
cuit is  held  annually  at  New  York,  N.  Y.,  on  the  third  Tuesday 
of  October  and  such  adjourned  sessions  as  the  court  ma^-  from 
time  to  time  designate. 

The  third  circuit  includes  the  states  of  New  Jersey,  Pennsyl- 
vania and  Delaware. 

The  circuit  court  of  appeals  for  the  tliird  circuit  holds  two 
terms  in  a  year  at  Philadelphia,  Pa.      The  March  term  com- 


72  LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 

mences  on  the  first  Tuesday  in  March  and  the  October  term 
on  the  first  Tuesday  of  October  in  each  year. 

The  fourth  circuit  includes  the  states  of  North  Carohna, 
South  Carohna,  Maryland,  Virginia  and  West  Virginia. 

The  circuit  court  of  appeals  for  the  fourth  circuit  holds 
three  terms  annually  at  Richmond,  Va.,  beginning  on  the  first 
Tuesday  in  February,  May  and  November  respectively. 

The  fifth  circuit  includes  the  states  of  Georgia,  Florida, 
Alabama,   Mississippi,   Louisiana  and   Texas. 

The  circuit  court  of  appeals  for  the  fifth  circuit  holds  a  term 
of  court  at  Montgomery,  Ala.,  on  the  third  Monday  in  Octo- 
ber; at  Atlanta,  Ga.,  on  the  first  Monday  in  October;  at  Fort 
Worth,  Tex.,  on  the  first  Monday  in  November,  and  at  New 
Orleans,  La.,  on  the  third  Monday  in  November. 

The  sixth  circuit  includes  the  states  of  Ohio,  Michigan, 
Kentucky  and  Tennessee. 

The  circuit  court  of  appeals  for  the  sixth  circuit  holds  one 
term  annually  at  Cincinnati,  Ohio,  beginning  on  the  first  Tues- 
day after  the  first  Monday  in  October  and  adjourned  sessions 
on  the  first  Tuesday  after  the  first  Monday  in  each  month 
except  August  and  September. 

The  seventh  circuit  includes  the  states  of  Lidiana,  Illinois 
and  Wisconsin. 

The  circuit  court  of  appeals  for  the  seventh  circuit  holds 
one  term  annually  at  Chicago,  111.,  beginning  on  the  first 
Tuesday  in  October.  Term  is  divided  into  three  sessions,  be- 
ginning on  the  first  Tuesdays  in  October  and  January,  and  sec- 
ond Tuesday  in  April. 

The  eighth  circuit  includes  the  states  of  Minnesota,  Iowa, 
Missouri,  Arkansas,  Nebraska,  Colorado.  Kansas,  Wyoming, 
North  Dakota,  South  Dakota,  Utah,  Oklahoma  and  the  terri- 
tory of  New  Mexico. 

The  circuit  court  of  appeals  for  the  eighth  circuit  holds 
one  term  annually  at  St.  Paul,  Minn.,  beginning  on  the  first 
Monday  in  May;  one  term  annually  at  Denver,  Colo.,  begin- 
ning the  first  Monday  in  September,  and  one  term  annually  at 
St.  Louis,  Mo.,  beginning  the  first  Monday  in  December, 


COURTS    AND    THEIR    TERRITORIAL    JURISDICTION.  I'h 

The  ninth  circuit  includes  the  states  of  California,  Oregon. 
Nevada,  Washington,  Idaho  and  Montana,  also  includes  the 
territories  of  Alaska,  Arizona- and  Hawaii. 

The  circuit  court  of  appeals  for  the  ninth  circuit  holds  the 
October  term  at  San  Francisco,  beginning  on  the  first  Monda}- 
in  October.  Adjourned  sessions  on  first  Monday  in  each 
month ;  calendar  sessions  for  hearing  of  causes  commence  on 
first  Monday  in  October,  February  and  May,  respectively.  An 
annual  term  at  Seattle.  Wash.,  beginning  on  the  second  Mon- 
day in  September,  for  hearing  of  causes.  An  annual  term  in 
Portland,  Ore.,  beginning  on  the  third  Monday  in  September, 
for  hearing  of  causes. 


74  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


CHAPTER  IV. 

THE  JURISDICTION  OF  COURTS  OF  BANKRUPTCY. 

§i6.     The  statutory  jurisdiction. 

The  jurisdiction  of  a  court  of  bankruptcy  is  purely  statu 
tory.     Congress  has  conferred  power  upon  the  courts  of  bank- 
ruptcy in  the  present  act  as  follows: 

"Sec.  2.  That  the  courts  of  bankruptcy  as  hereinbefore 
defined,  viz.,  the  district  courts  of  the  United  States  in  the 
several  states,  the  supreme  court  of  the  District  of  Columbia, 
the  district  courts  of  the  several  territories,  and  the  United 
States  courts  in  the  Indian  Territory  and  the  District  of 
Alaska,  are  hereby  made  courts  of  bankruptcy,  and  are  hereby 
invested,  within  their  respective  territorial  limits  as  now 
established,  or  as  they  may  be  hereafter  changed,  with  such 
jurisdiction  at  law  and  in  equity  as  will  enable  them  to  exer- 
cise original  jurisdiction  in  bankruptcy  proceedings,  in  vaca- 
tion in  chambers  and  during  their  respective  terms,  as  they 
are  now  or  may  be  hereafter  held,  to 

"(i)  adjudge  persons  bankrupt  who  have  had  their  princi- 
pal place  of  business,  resided,  or  had  their  domicile  within 
their  respective  territorial  jurisdictions  for  the  preceding  six 
months,  or  the  greater  portion  thereof,  or  who  do  not  have 
their  principal  place  of  business,  reside,  or  have  their  domi- 
cile within  the  United  States,  but  have  property  within  their 
jurisdictions,  or  who  have  been  adjudged  bankrupts  by  courts 
of  competent  jurisdiction  without  the  United  States  and  have 
property  within  their  juiisdictions; 

"(2)  allow  claims,  disallow  claims,  reconsider  allowed  or 
disallowed  claims,  and  allow  or  disallow  them  against  bank- 
rupt estates; 

"(3)  appoint  receivers  or  the  marshals,  upon  application  of 
parties  in  interest,  in  case  the  courts  shall  find  it  absolutely 
necessary,  for  the  preservation  of  estates,  to  take  charge  of 
the  property  of  bankrupts  after  the  filing  of  the  petition  and 
until  it  is  dismissed  or  the  trustee  is  qualified ; 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY,  75 

"(4)  arraign,  try,  and  punish  bankrupts,  officers,  and  other 
persons,  and  the  agents,  officers,  members  of  the  board  of 
directors  or  trustees,  or  other  similar  controlling  bodies,  of 
corporations  for  violations  of  this  act,  in  accordance  with  the 
laws  of  procedure  of  the  United  States  now  in  force,  or  such 
as  may  be  hereafter  enacted,  regulating  trials  for  the  alleged 
violation  of  laws  of  the  United  States; 

"(5)  authorize  the  business  of  bankrupts  to  be  conducted 
for  limited  periods  by  receivers,  the  marshals,  or  trustees,  if 
necessary  in  the  best  interests  of  the  estates; 

"(6)  bring  in  and  substitute  additional  persons  or  parties 
in  proceedings  in   bankruptcy  when  necessary  for  the  com-, 
plete  determination  of  a  matter  in  controversy ; 

"(7)  cause  the  estates  of  bankrupts  to  be  collected,  reduced 
to  money  and  distributed,  and  determine  controversies  in 
relation  thereto,  except  as  herein  otherwise  provided ; 

"(8)  close  estates,  whenever  it  appears  that  they  have  been 
fully  administered,  by  approving  the  final  accounts  and  dis- 
charging the  trustees,  and  reopen  them  whenever  it  appears 
they  were  closed  before  being  fully  administered; 

"(9)  confirm  or  reject  compositions  between  debtors  and 
their  creditors,  and  set  aside  compositions  and  reinstate  the 
cases ; 

"(10)  consider  and  confirm,  modify  or  overrule,  or  return, 
with  instructions  for  further  proceedings,  records  and  find- 
ings certified  to  them  by  referees; 

"(11)  determine  all  claims  of  bankrupts  to  their  exemp- 
tions ; 

"(12)  discharge  or  refuse  to  discharge  bankrupts  and  set 
aside  discharges  and  reinstate  the  cases; 

"(13)  enforce  obedience  by  bankrupts,  officers,  and  other 
persons  to  all  lawful  orders,  by  fine  or  imprisonment  or  fine 
and  imprisonment ; 

"(14)  extradite  bankrupts  from  their  respective  districts 
to  other  districts; 

"(15)  make  such  orders,  issue  such  process,  and  enter  such 
judgments  in  addition  to  those  specifically  provided  for  as  may 
be  necessary  for  the  enforcement  of  the  provisions  of  this  act ; 

"(16)  punish  persons  for  contempts  committed  before 
referees ; 


76 


LAW    AND   PROCEEDINGS   IN    BANKRUPTCY. 


"(17)  pursuant  to  the  recommendation  of  creditors,  or 
when  they  neglect  to  recommend  the  appointment  of  trustees, 
appoint  trustees,  and  upon  complaints  of  creditors,  remove 
trustees  for  cause-  upon  hearings  and  after  notices  to  them ; 

"(18)  tax  costs,  whenever  they  are  ahowed  by  law,  and 
render  judgments  therefor  against  the  unsuccessful  party,  or 
the  successful  party  for  cause,  or  in  part  against  each  of  the 
parties,  and  against  estates,  in  proceedings  in  bankruptcy;  and 

"(19)   transfer  cases  to  other  courts  of  bankruptcy. 

"Nothing  in  this  section  contained  shall  be  construed  to 
deprive  a  court  of  bankruptcy  of  any  power  it  would  possess 
were  certain  specific  powers  not  herein  enumerated." 


§  i6a.    The  general  extent  of  the  jurisdiction  of  courts  of 
bankruptcy. 

A  court  of  bankruptcy,  being  created  by  Congress,  depends 
solely  for  its  jurisdiction  and  powers  upon  the  laws  of  the 
United  States.^  It  has  no  powers  except  those  which  are 
expressly  granted  by  Congress,  and  such  implied  powers  as 
must  be  necessary  to  give  full  force  and  effect  to  the  jurisdic- 
tion conferred  upon  it." 

The  jurisdiction  conferred  on  the  courts  of  bankru^ptcy  by 
the  bankrupt  act  includes  two  distinct  classes  of  proceed- 
ings ;  namely,  first,  proceedings  in  bankruptcy  proper  ^  and. 


1  In  re  Williams,  120  Fed.  Rep.  38. 
Consult   In   re   Morris    No.   9825, 

Fed.  Cas.,  s.  c.  Crabbe,  70;  Camp- 
bell's Case,  No.  23.49,  Fed.  Cas.,  i 
N.  B.  R.  165;  Clark  v.  Bimiinger, 
38  Howard's  Prac.  341. 

In  re  Morris,  supra,  Judge  Hop- 
kinson,  in  an  exhaustive  opinion, 
reached  the  conclusion  that  neither 
a  Chancellor  in  England  nor  a 
United  States  judge,  had  any  pow- 
ers in  bankruptcy  matters,  other 
than  those  arising  expressly  or  im- 
pliedly from  the  bankrupt  statute. 

2  Brumby  v.  Jones   (C.   C.  A.  5th 


Cir.\  141  Fed.  Rep.  318,  15  Am.  B. 
R.  57S;  Bardes  v.  Hawarden  Bank, 
178  U.  S.  524,  44  L-  Ed.  1 175.  4 
Am.  B.  R.  163;  Havens  &  Geddes 
Co.  V.  Pierek  (C.  C.  A.  7th  Cir.), 
120  Fed.  Rep.  244.  9  Am.  B.  R.  569; 
Real  Estate  Trust  Co.  v.  Thomp- 
son, 112  Fed.  Rep.  945,  7  Am.  B.  R. 
520;  Henrie  v.  Henderson  (C.  C.  A. 
4th  Cir.),  14s  Fed.  Rep.  316,  15 
Am.  B.  R.  760. 

3  Sec.  17  post.  First  Nat.  Bank  v. 
Title  &  Trust  Co.,  198  U.  S.  280, 
49  L.  Ed.  1051,  14  Am.  B.  R.  102; 
Holden  v.   Slratton,   191   U.  S.  115, 


JURISDICTION     OF     COURTS    OF     BANKRUPTCY.  77 

second,  controversies  at  law  and  in  equity  arising  out  of  pro- 
ceedings in  Ijankruptcy.*  It  is  important  to  observe  the 
distinction  between  these  two  classes,  because  the  ])rocedure 
in  the  trial  court  as  well  as  in  the  appellate  court  is  governed 
by  different  rules.  The  jurisdiction  of  a  court  of  bankruptcy 
over  the  former  class  of  proceedings  is  exclusive  of  all  other 
courts  and  extends  to  all  matters,  acts  and  things  to  be  done 
under  and  in  virtue  of  bankruptcy."  The  jurisdiction  of  a 
court  of  bankruptcy  over  the  second  class  of  proceedings  is 
concurrent  with  state  and  federal  courts,  which  may  ha^•e 
jurisdiction  of  the  parties  and  controversy.** 

Bankruptcy  proceedings  proper  include  the  questions  be- 
tween the  bankrupt  and  his  creditors  as  such,  commencing 
with  the  petition  for  adjudication  and  ending  with  the  admin- 
istration of  the  estate,  the  discharge  or  refusal  to  discharge  the 
bankrupt  and  all  matters  of  administration  generally,  such  as 
the  appointment  of  a  receiver  or  trustee,  sales,  exemptions, 
allowances,  dividends  and  the  like,  to  be  disposed  of  sum- 
marily, all  of  which  naturally  occur  in  the  settlement  of 
estates.  What  constitutes  proceedings  in  bankruptcy  is  con- 
sidered more  fully  in  another  place." 

By  controversies  at  law  and  in  equity  arising  in  bankruptcy 
proceedings  is  meant  those  independent  or  plenary  suits  which 
concern  bankrupts'  estates  and  which  arise  by  intervention  or 
otherwise  between  the  trustee,  representing  the  bankrupt's 
estate,  and  claimants  asserting  some  right  or  interest  adverse 
to  the  bankrupt  or  his  general  creditors.     What  constitutes 

48  L.  Ed.   116,   10  Am.  B.  R.  786;  "33;     Burleigh     v.     Foreman      (C. 

/;;    re  Friend    (C.   C.   A.   7th   Cir.\  C.  A.   ist  Cir.),   125  Fed.  Rep.  217, 

134   Fed.   Rep.   778,    13   Am.    B.    R.  n  Am.  B.  R.  74;  Dorosliow  v.  Ott 

595;   In   re  Mueller    ( C.   C.  A.  6th  (C.  C.  A.  3rd  Cir.),  134  Fed.  Rep. 

Cir.),  135  Fed.  Rep.  711,  14  Am.  B.  740,     14    Am.     B.     R.     34;     In     re 

R-  2sCx  First  Nat.  Bank  (C.  C.  A.  6th  Cir.), 

*  Sees.  20  and  302a  post.     Hewit  135    Fed.    Rep.    62,    14   Am.    B.    R. 

V.  Berlin  Mach.  Wks.,  194  U.  S.  296,  180. 

48  L.  Ed.  986,   II  Am.  B.  R.  709;  "Sec.  Sees.  17  and  18  post 

York.  Mfg.  Co.  V.  Cassell,  201  U.  S.  "  See  Sec.  20  post, 

344 ,  50  L.  Ed.  782,   15  Am.  B.  R.  ^  Sec.  17  post. 


78 


LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 


controversies  arising  at  law  and  in  equity  in  a  proceeding  in 
bankruptcy  is  considered  more  fully  hereafter.^ 

The  jurisdiction  at  law  and  in  equity  conferred  on  the 
courts  of  bankruptcy  by  the  bankrupt  act  is  limited  to  con- 
troversies arising  out  of  the  settlement  of  the  estates  of 
bankrupts.  They  are  not  vested  with  general  equity  juris- 
diction.^ 

Where  property  is  in  the  possession  of  the  trustee  or  re- 
ceiver as  a  part  of  the  bankrupt's  estate,  a  court  of  bankruptcy 
has  jurisdiction  to  settle  all  controversies  and  claims  relating 
to  such  property.  This  is  not  because  of  any  express  pro- 
vision of  the  bankruptcy  act,  but  an  application  of  the  general 
principle  of  law  that  the  possession  of  the  res  draws  to  the 
court  jurisdiction  of  all  questions  in  respect  to  title  or  liens 
irrespective  of  citizenship.^*'  This  principle  is  recognized  in 
the  bankrupt  act  and  has  frequently  been  applied  by  the  courts 
of  bankruptcy.^^     After  reviewing  the  cases  on  the  subject  o£ 


®  Consult  Sec.  20  post,  plenary 
suits  at  law  and  in  equity ;  Sec  203, 
Suits  to  set  aside  fraudulent  con- 
veyances and  preferences;  Sec.  152, 
Reclamation  proceedings ;  Sec.  302a, 
What  constitutes  controversies  aris- 
ing in  bankruptcy  proceedings. 

0  Brumby  v.  Jones  (C.  C.  A.  5th 
Cir.),  141  Fed.  Rep.  318,  15  Am.  B. 
R.  578;  Bardes  v.  Hawarden  Bank, 
178  U.  S.  524,  44  L-  Ed.  1 17s.  4. 
Am.  B.  R.  163;  Havens  &  Geddes 
Co.  V.  Pierek  (C.  C.  A.  7th.  Cir.),  120 
Fed.  Rep.  244,  9  Am.  B.  R.  569 ;  Real 
Estate  Trust  Co.  v.  Thompson,  112 
Fed.  Rep.  945.  7  Am.  B.  R.  520; 
Henrie  v.  Henderson  (C.  C.  A.  4th 
Cir.),  145  Fed.  Rep.  316,  15  Am.  B. 
R.  760. 

10  Morgan's  Co.  v.  Texas  Cent. 
Ry.  Co.,  137  U.  S.  T71,  34  L-  Ed. 
625;  Krippendorf  v.  Hyde,  no  U. 
S.  276,  28  L.  Ed.  145 ;  Toledo,  etc., 
Ry.    Co.    v.    Continental    Trust    Co. 


(C.  C.  A.  6th  Cir.),  95  Fed.  Rep. 
497,  36  C.  C.  A.  195. 

11  B.  A.  1898,  Sec.  2.  Whitney  v. 
Wenman,  198  U.  S.  539,  552,  49  L. 
Ed.  1 157,  14  Am.  45;  Hewit  v. 
Berlin  Mach.  Wks.,  194  U.  S. 
296,  48  L.  Ed.  986,  II  Am.  B.  R. 
709;  York  Mfg.  Co.  v.  Cassell,  201 
U.  S.  344,  50  L.  Ed.  782,  15  Am. 
6s3\  White  v.  Schloerb,  178  U.  S. 
542,  44  L.  Ed.  1183,  4  Am.  B.  R. 
178;  In  re  Whitener  (C.  C.  A. 
Sth  Cir.),  105  Fed.  Rep.  180,  5  Am. 
R.  198;  In  re  Antigo  Screen  Door 
Co.  (C.  C.  A.  7th  Cir.),  123  Fed. 
Rep.  249,  10  Am.  B.  R.  359;  In  re 
Kellogg  (C.  C.  A.  2nd  Cir.),  121 
Fed.  Rep.  Zi2,'  10  Am.  B.  R.  7', 
In  re  McMahon  (C.  C.  A.  6th  Cir.). 
147   Fed.    Rep.   685,    17   Am.   B.   R. 

;  In  re  Haddin-Rodee  Co.,  I35 

Fed.  Rep.  886,  13  Am.  B.  R.  604; 
In  re  Rochford  (C.  C.  A.  8th  Cir.), 
124   Fed.    Rep.    182,    10  Am.   B.    R. 


JURISDICTION     OF     COURTS    OF    BANKRUPTCY.  79 

the  jurisdiction  of  a  court  of  bankruptcy,  Mr.  Justice  Day, 
speaking  for  the  supreme  court,  said:''  "We  think  the  result 
of  these  cases  is,  in  view  of  the  broad  powers  conferred  in 
Section  2  of  the  bankruptcy  act,  authorizing  the  bankruptcy 
court  to  cause  the  estate  of  the  bankrupt  to  be  collected,  re- 
duced to  money  and  distributed,  and  to  determine  controver- 
sies in  relation  thereto,  and  bring  in  and  substitute  additional 
parties  when  necessary  for  the  complete  determination  of  a 
matter  in  controversy,  that  when  the  property  has  become 
subject  to  the  jurisdiction  of  the  bankruptcy  court  as  that  of 
the  bankrupt,  whether  held  by  him  or  for  him,  jurisdiction 
exists  to  determine  the  controversies  in  relation  to  the  disposi- 
tion of  the  same  and  the  extent  and  character  of  the  liens 
thereon  or  rights  therein." 

Whether  propounding  a  claim  against  property  in  the  pos- 
session of  a  trustee  by  a  stranger  constitutes  a  controversy  at 
law  or  in  equity,  or  is  a  proceeding  in  bankruptcy,  is  not 
always  clear.  This  is  well  illustrated  by  two  cases  in  the 
supreme  court.  In  Heiuit  v.  Berlin  Mach.  H7?.y.,'^  the  su- 
preme court  held  that  where  a  stranger  asserts  title  to  prop- 
erty in  the  possession  of  the  trustee  by  an  intervention  raising 

608;  Keegan  v.  King,  96  Fed.  Rep.  not  only  on  general  principles   (see 

758,  3  Am.  B.  R.  79;  In  re  Russell  :\Iorgan's  L.  &  T.  R.  &  S.  S.  Co.  v. 

(C.  C  A.  2d  Cir.),  loi  Fed.  Rep.  Texas  Cent.  Ry.  Co.,  137  U.  S.  171, 

248,  3  Am.  B.  R.  658;  In  re  Cham-  34    L.    Ed.    623),    but    under    the 

bers,    Calder   &   Co.,   98   Fed.    Rep.  specific  provisions  of  Sec.  2  of  the 

865,  3  Am.  B.  R.  537.  2  N.  B.   N.  bankruptcy  act  of  il 


388;    In    re   Einslic    (C.    C.   A.   2d  In  Fisher  v.  Cushman   (C.  C.  A. 

Cir.),  102  Fed.  Rep.  291,  4  Am.  B.  R.  ist  Cir.),  103  Fed.  Rep.  867,  4  Am. 

126,  2  N.  B.  N.  992.  B.  R.  654,  the  court  said : 

In    re    Whitener    (C.    C.    A.    5th  "The    rule    is    settled   beyond   all 

Cir.),  lOS  Fed.  Rep.  180,  5  Am.  B.  doubt  that  any  person  claiming  an 

R.   198,  3  N.   B.   N.  316,  the  court  equitable  or  legal  interest  in  a  fund 

said :  in  the  registry  of  a  court  is  entitled 

"The  property  being  in  the  cus-  to  intervene  in  that  behalf." 

tody  of  the  district  court  sitting  in  i-  Whitney  v.  Wenman,  198  U.  S. 

bankruptcy,  that  court  had  jurisdic-  539.  552,  49  L.  Ed.  1157,  14  Am.  B. 

tion    to    entertain    the    intervention  R.  45. 

filed  by  Ramseur,  claiming  the  prop-  i-  ^g^  u.  S.  296,  48  L.  Ed.  986, 

erty,  and  to  hear  and  determine  the  11  Am.  B.  R.  709. 
issues  presented  by  the  intervention, 


80 


LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 


a  distinct  and  separable  issue,  the  controversy  may  be  treated 
as  a  controversy  arising  in  bankruptcy  proceedings  and  not  a 
proceeding  in  bankruptcy  proper.     In  First  Nat.  Bank  v.  Title 
&  Trust  Co.,^*  the  same  kind  of  an  issue  arose,  but  it  arose 
upon  the  appHcation  of  a  trustee  for  an  order  of  sale  and  as 
an  incident  to  that,  the  determination  of  a  claim  against  the 
property  held  by  one  not  a  party  to  the  proceeding,  who  had 
been  cited  to  come  in  and  propound  his  claim.     This  was  held 
to  be  a  proceedhig  in  bankruptcy.     Where  the  property  is  in 
custodia   Icgis  and  an  adverse   claimant  is   required  to  pro- 
pound his  claim  against  the  property  as  an  incident  to  a  step 
in  the  bankruptcy  proceedings   proper,   the  proceeding  con- 
tinues to  be  in  bankruptcy  as  distinguished  from  a  controversy 
at  law  or  in  equity.^^     The  jurisdiction  of  a  court  of  bank- 
ruptcy extends  to  both  classes  of  proceedings  when  the  prop- 
erty  is    in   custodia   Icgis,   but   the   method    of   reviewing   a 
decision   of   that   court    in   the    appellate    courts    is   not   the 


same.^*^ 

This  jurisdiction  may  be  exercised  in  a  summary  proceed- 
ing or  resort  may  be  had  to  an  action  in  the  nature  of  a 
plenary  suit,  wherein  the  parties  can  be  fully  heard  after  the 
due  course  of  the  equitable  procedure.''  A  trustee  may  sell 
property  in  his  possession  and  require  adverse  claimants  to 
come  in  and  set  up  their  claim  of  interest  or  title  in  the 
property.'-  This  is  a  proceeding  in  bankruptcy.  The  ad- 
verse claimant  may  assert  his  title  to  or  interest  in  the  prop- 

In  re  Rochford  ( C.  C.  A.  8th  Cir.), 
124  Fed.  Rep.  182.  10  Am.  B.  R.  608. 

i"  Sec.  301a  post. 

1"  Whitney  v.  Wenman,  198  U.  S. 
539,  49  L.  Ed.  1 157,  14  Am.  B.  R. 
45;  //;  re  McMahon  (C.  C.  A.  6th 
Cir.).  147  Fed.  Rep.  685,  17  Am.  B. 
R.  . 


14  198  U.  S.  280,  49  L-  Ed.  1051, 
14  Am.   B.  R.   102. 

^-■In  re  McMahon  (C.  C.  A.  6th 
Cir.),  147  Fed.  Rep.  685,  i7  Am.  B. 

R.  ;  In  re  New  England  Piano 

Co.  (C.  C.  A.  I  St  Cir.),  122  Fed. 
Rep.  937,  9  Am.  B.  R.  767:  In  re 
Granite  City  Bank  ( C.  C.  A.  8th 
Cir.),  137  Fed.  Rep.  818,  14  Am.  B. 
R.  404;  In  re  Knopf,  144  Fed  Rep. 
245,  16  Am.  B.  R.  432,  s.  c.  146  Fed. 
Rep.  109;  In  re  Moody,  131  Fed. 
Rep.  525,  12  Am.  B.  R.  718,  s.  c.  134 
Fed.   Rep.  628.   14  Am.   B.   R.  4/2; 


i^/»   re  McMahon   (C.  C.  A.  6th 
Cir.),  147  Fed.  Rep.  685,  17  Am.  B. 

R. ;  In  re  Granite  City  Bank  (C. 

C.  A.  8th  Cir.),  137  Fed.  Rep.  818, 
14  Am.  B.  R.  404. 


JURISDICTION     OF     COURTS    OF     BANKRUPTCY. 


81 


erty  in  possession  of  the  trustee  by  an  intervention  raising  a 
distinct  and  separal)le  issue/"  This  may  he  a  controversy 
arisino-  in  bankruptcy.  In  either  case  the  juriscUction  of  the 
court  of  bankruptcy  depends  upon  the  fact  that  the  property 
in  controversy  is  in  the  custody  of  that  court. 

\Vhere  property  claimed  as  a  part  of  the  bankrupt's  estate 
is  in  the  possession  of  a  person  other  than  the  bankrupt  at 
the  tirie  the  petition  in  bankruptcy  is  filed,  it  may  be  withm 
the  power  of  a  court  of  bankruptcy  to  deal  with  it,  but  not  in 
every  instance,  as  will  be  pointed  out  presently. 

A  court  of  bankruptcy  has  power,  by  means  of  its  receiver 
or  marshal,  to  summarily  take  proi)erty  from  the  possession 
of  an  adverse  claimant  as  well  as  the  bankrupt  or  his  agent 
in  case  it  finds  it  necessary  for  the  preservation  of  the  estate.'" 
This  is  a  proceeding  in  bankruptcy  as  distinguished  from  a 
controversy  arising  in  bankruptcy  and  is  not  limited  by  Sec- 
tion 23,  which  relates  only  to  suits  by  a  trustee.'" 

Where  property  is  held  for  the  bankrupt  by  a  bailee  or 
ae-ent,  who  does  not  claim  title  to  or  an  interest  in  the  prop- 
erty,  the  court  of  bankruptcy  may,  in  a  summary  proceeding, 
order  him  to  deliver  such  property  to  the  trustee.''  An  as- 
signee for  the  benefit  of  creditors  does  not  hold  his  title  for 
value  but  is  simply  an  agent  for  the  distribution  of  the  pro- 
ceeds of  the  debtor's  property  among  his  creditors  and  may  be 
required  by  summary  order  to  transfer  to  the  trustee  in  bank- 
ruptcy all  the  property  which  comes  into  his  hands  under  the 

"  Hewit    V.    Berlin    Mach.    Wks..  525.  12  Am.  B.  R.  718,  s.  c.  134  Fed. 

194  U.   S.  296,   48   L.   Ed.  986,    II  Rep.  628,  14  Am.  B.  R.  472;  In  re 

Am.  B.  R.  709;   York  Mfg.  Co.  v.  Muncie  Pulp  Co.  (C.  C.  A.  2d  Cir.), 

Cassell,  201   U.   S.   344,   5o  L.   Ed.  139  Fed.  Rep.  546.  14  Am.  B.  R.  70. 

782,  IS  Am.  B.  R.  633.  ''  Mueller  v.  Nugent.  184  U.  S.  1  , 

20  B.    A.    1898,    Sec.    2,    clause    3-  46  L.   Ed.   405,   7  Am.   B.   R.   224; 

Brvan  v.  Bernheimer,  181  U.  S.  188,  In  re  Feldser,  134  Fed.  Rep.  307,  i4 

45  "l.   Ed.  814,   5  Am.    B.   R.   523;  Am.   B.   R.  216;   In  re  Moore,   104 

/;,  re  Knopf,  T44  Fed.  Rep.  245.  16  Fed.  Rep.  896,  5  Am.  B.  R.  151  ;  In 

Am.  B.  R.  43.\  s.  c.  146  Fed.  Rep.  re  Stokes,  106  Fed.  Rep.  312,  6  Am. 

109;  In  re  Rochford   (C.  C.  A.  8th  B.  R.  262:  In  re  Muncie  Pulp  Co. 

Cir.).  124  Fed.  Rep.  182.  10  Am.  B.  (C.  C.  A.  2d  Cir.),   1,39  Fed.  Rep. 

R.  608;  In  re  Moody,  131  Fed.  Rep.  546,  14  Am.  B.  R.  70, 


82 


LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 


assignment.^-  A  court  of  bankruptcy  has  no  power  in .  a 
summary  proceeding  to  compel  a  third  person  claiming  title 
to  or  an  interest  in  property  in  his  possession  to  transfer  it  to 
the  trustee."^  The  trustee  can  not  sell  such  property  under 
the  direction  of  the  court,  requiring  the  claimant  to  assert  his 
interest  in  the  property  and  have  it  determined  by  the  court 
of  bankruptcy.-*  A  secured  creditor  or  other  claimant  may 
bring  the  property  in  controversy  into  the  court  of  bankruptcy 
and  submit  to  its  jurisdiction.  In  such  case  the  trustee  has 
power  to  sell  the  property,  preserving  the  rights  .of  the  adverse 
claimant  in  the  fund  resulting  from  the  sale.  But  a  court 
can  not  by  a  summary  proceeding  compel  an  adverse  claimant, 
having  possession  of  the  property,  to  yield  possession  to  the 
trustee. 

In  a  summary  proceeding  by  a  trustee  to  recover  property 
in  the  possession  of  an  adverse  claimant  the  court  of  bank- 
ruptcy may  enter  upon  an  inquiry  as  to  whether  the  claim  is 
real  or  merely  colorable.  If  real,  it  must  decline  to  finally 
adjudicate  on  the  merits  in  a  summary  proceeding.-^  Should 
it  appear  that  the  claim  is  fictitious  or  colorable,  the  court 
may   retain  jurisdiction  on  the  theory  that  the  property   is 


--  Bryan  v.  Bernheimer,  i8i  U.  S. 
i88,  45  L.  Ed.  814,  5  Am.  B.  R. 
523 ;  Leidigh  Carriage  Co.  v.  Sten- 
gel 523 ;  Leidigh  Carriage  Co.  v. 
Stengel  (C.  C.  A.  6th  Cir.),  95  Fed. 
Rep.  637,  2  Am.  B.  R.  383 ;  In  re 
Stokes,  106  Fed.  Rep.  312,  6  Am.  B. 
R.  262 ;  In  re  Smith,  92  Fed.  Rep. 
135,  2  Am.  B.  R.  9;  In  re  Thomp- 
son (C.  C.  A.  2d  Cir.),  128  Fed. 
Rep.  575,  II  Am.  B.  R.  719,  affirm- 
ing 122  Fed.  Rep.  174,  10  Am.  B. 
R.  242. 

-3  See  Sec.  20  post.  Louisville 
Trust  Co.  V.  Comingor,  184  U.  S. 
18,  46  L.  Ed.  413.  7  Am.  B.  R. 
421 ;  Jaquith  v.  Rowley,  188  U.  S. 
620,  47  L.  Ed.  256,  9  Am.  B.  R. 
525 ;    First    Nat.    Bank   v.    Title    & 


Trust  Co.,  198  U.  S.  280,  49  L.  Ed. 
1051,  14  Am.  B.  R.  102;  In  re  New 
York  Car  Wheel  Works,  132  Fed. 
Rep.  203,  13  Am.  B.  R.  60;  In  re 
Adams,  130  Fed.  Rep.  788,  12  Am. 
B.  R.  367. 

2*  First  Nat.  Bank  v.  Title  & 
Trust  Co.,  198  U.  S.  280,  49  L.  Ed. 
105 1,  14  Am.  B.  R.  102. 

-•"'  Schweer  v.  Bi-own.  195  U.  S. 
171 ,  12  Am.  B.  R.  6j2, ;  Mueller 
V.  Nugent,  184  U.  S.  i ,  46  L.  Ed. 
405,  7  Am.  B.  R.  244;  Louisville 
Trust  Co.  V.  Comingor,  184  L^.  S. 
18,  46  L.  Ed.  413.  7  Am.  B  R. 
421 ;  In  re  La  Plume  Condensed 
Milk  Co.,  145  Fed.  Rep.  1013,  15 
Am.  B.  R.  413. 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY. 


83 


then  constructively  in  the  possession  of  the  court.-'''  The 
summary  jurisdiction  of  a  court  of  bankruptcy,  invoked  by  a 
trustee  to  recover  property  in  the  possession  of  a  person  other 
than  the  bankrupt,  is  hmited  to  such  property  as  is  held  by 
the  bankrupt  or  for  him  by  a  bailee  or  agent,  who  does  not 
in  good  faith  claim  title  to  or  interest  in  the  property. 

Where  property  is  in  the  possession  of  a  third  person  claim- 
ing title  to  or  interest  in  it,  the  trustee  must  bring  a  plenary 
suit  at  law  or  in  equity  to  recover  such  property  or  the  value 
of  the  bankrupt's  interest  in  it.  '''     The  original  bankrupt  act 
conferred  jurisdiction  on  the  courts  of  bankruptcy  of  suits 
at  law  and  in  equity  to  collect  debts,  recover  property  on  the 
ground   of   a   voidable   preference   or   a   fraudulent   transfer 
within  four  months  under  Section  67c,  or  to  set  aside  a  fraud- 
ulent conveyance  under  Section  7Q)e  only  "with  the  consent 
of   the   defendant." '^      By   the   amendment   of   February    5, 
1903,  -'  the  jurisdiction  was  extended  to  suits  for  the  recovery 
of  property,   which   is  claimed  to  be   a  voidable  preference 
under  Section  60h  or  a  fraudulent  transfer  under  Section  67 e, 
without  the  consent  of  the  defendant/'"     At  present  suits  by 
the  trustee  to  collect  debts  owing  the  bankrupt  or  to  set  aside 
fraudulent  conveyances  under  Section  7Q>c,  can  be  maintained 
only  with  the  consent  of  the  defendant.''     Suits  of  this  char- 
acter are  controversies  arising  in  bankruptcy  as  distinguished 
from  proceedings  in  bankruptcy. 


-^In  re  Tune,  115  Fed.  Rep.  906, 
8  Am.  B.  R.  285;  In  re  Michie,  116 
Fed.  Rep.  749,  8  Am.  B.  R.  734  5  /» 
re  Kane,  131  Fed.  Rep.  386.  12  Am. 
B.  R.  444;  In  re  Muncie  Pulp  Co. 
(C.  C.  A.  2d  Cir.),  139  Fed.  Rep. 
546,  14  Am.  B.  R.  70. 

--  Louisville  Trust  Co.  v.  Comin- 
gor,  184  U.  S.  18,  46  L.  Ed.  413, 
7  Am.  B.  R.  42t;  Jaquith  v.  Row- 
ley. 188  U.  S.  620,  47  L-  Ed.  256, 
9  Am.  B.  R.  525- 

28  See  .Sec.  20  post.  Bardes  v. 
Hawarden    Bank,    178    U.    S.    524, 


44  L.  Ed.  1175.  4  Am.  B.  R.  163; 
Mitchell  V.  McClure,  178  U.  S.  539- 
44  L.  Ed.  1 182,  4  Am.  B.  R.  177; 
Hicks  V.  Knost,  178  U.  S.  54 1  >  44 
L.  Ed.  1 183,  4  Am.  B.  R.  178. 

-'■'  See  Sees.  22,b,  60b  and  67^?  as 
amended   Feb.   5,    1903,   32   Stat,   at 

L.  797- 

■"'1  See  Sec.  203  post.  B.  A.  1898, 
Sec.  23?',  as  amended  by  the  Act  of 
Feb.  5,  1903,  32  Stat,  at  L.  797. 

■^1  See' Sec.  203  post.  Gregory  v. 
Atkinson.  127  Fed.  Rep.  183,  11  Am. 
B.  R.  495- 


84  LAW   AND   TROCEEDINGS   IN    BANKRUPTCY. 

The  district  courts  have  jurisdiction  of  suits  on  trustees' 
bonds. ^~ 

The  district  courts  as  courts  of  bankruptcy  are  invested 
with  "such  jurisdiction  at  law  and  in  equity  as  will  enable 
them  to  exericse  original  jurisdiction  in  bankruptcy  proceed- 
ings" in  the  particulars  named,  it  being  provided  that  the 
specification  of  certain  powers  should  not  deprive  them  of 
powers  they  would  possess  but  for  the  enumeration.  The  pro- 
ceedings in  administration  of  the  estate  are  equitable  in  their 
nature,  but  the  bankruptcy  courts  act  under  specific  statutory 
authority,  and  when  on  an  issue  of  fact  as  to  the  existence  of 
ground  for  adjudication  a  jury  trial  is  demanded,  it  is  de- 
manded as  of  right,  and  the  trial  is  a  trial  according  to  the 
course  of  the  common  law.^" 

The  jurisdiction  of  the  courts  of  bankruptcy  of  certain 
proceedings  is  the  subject  of  a  separate  section  or  is  con- 
sidered in  connection  with  the  subjects  to  which  they  relate, 
such  as  jurisdiction  of  bankruptcy  proceedings  proper;* 
jurisdiction  of  suits  at  law  and  in  equity,^^  the  power  to  stay 
suits,^^  the  power  of  appointing  receivers,^'  the  power  to  re- 
view orders  made  by  a  referee, •^^''  jurisdiction  over  exempt 
property,^^^  jurisdiction  to  entertain  auxiliary  proceedings 
in  aid  of  the  main  proceeding  in  another  district.*^  and  the 
jurisdiction  of  the  appellate  courts  to  review  and  revise  the 
decisions  of  courts  of  bankruptcy, 


41 


§  17.     Jurisdiction  of  bankruptcy  proceedings  proper. 

The  jurisdiction  of  the  courts  of  bankruptcy  over  proceed- 
ings in  bankruptcy  is  plenary  and  exclusive.  It  extends  to  all 
matters,  acts  and  things  to  be  done  under  and  in  virtue  of 
bankruptcy.     Section  2  enumerates  certain  specific  powers  and 

3-  U.  S.  V.  Union  Surety  &  Guar-  "'■'  Sees  20  and  203  post. 

antee    Co.,    118    Fed.    Rep.    482,    9  ■^''' Sec.  22  post. 

Am.  B.  R.  114.  ""  Sec.  77a  post. 

33  Elliott  V.  Toeppner.   187  U.   S.  ^s  ggc.  32a  post. 

327,  47  L.   Ed.  200,  9  Am.   B.   R.  3n  ggj.    jgg  po^t. 

SO.     See  al?o  R.  S.,  Sec.  566.  '*"  Sec.  21  post. 

3*  Sec.  17  post.  *^  Sec.  301a. 


JURISDICTION     OF     COURTS    OF     BANKRUPTCY. 


85 


concludes,  "Nothing  in  this  section  contained  shall  be  con- 
strued, to  deprive  a  court  of  bankruptcy  of  any  powers  it 
would  possess  were  certain  specific  powers  not  herein  enumer- 
ated." 

Proceedings  in  bankruptcy  are  instituted  by  the  filing  of 
the  petition.'  The  filing  of  the  petition  "is  a  caveat  to 
all  the  world  and  in  effect  an  attachment  and  injunction,"  ' 
and  on  adjudication  title  to  the  bankrupt's  property  becomes 
vested  in  the  trustee  with  actual  or  constructive  possession, 
and  is  in  the  custody  of  the  bankruptcy  court.-  The  proceed- 
ings end  in  the  distribution  of  the  assets  among  the  creditors 
and  the  discharge  or  refusal  to  discharge  the  bankrupt. 

The  jurisdiction  of  a  court  of  bankruptcy  includes  the 
power  to  make  or  refuse  an  adjudication  in  bankruptcy,'  and 
to  administer  the  estate  of  the  debtor  and  to  grant  or  refuse 
to  grant  him  a  discharge.  By  estate  is  meant  the  property 
in  the  possession  of  the  debtor  at  the  time  proceedings  in  bank- 
ruptcy are  commenced  to  ^^■hich  the  trustee  may  fairly  make  a 
pretension  of  claim.^  In  the  exercise  of  its  summary  jurisdic- 
tion a  court  of  bankruptcy  may  order  the  bankrupt  or  his 
ap-ent  to  pav  over  to  the  trustee  such  property  as  he  has  in 
his  possession  and  punish  him  for  contempt  of  court  it^  he 
disobeys,^  or  compel  restitution  by  persons  who  have  forcibly 

1  In  re  Kindt.  98  Fed.  Rep.  867,  3  ^  ^«  ''^  Columbia  Real  Estate  Co., 
Am.  B.  R.  546.  loi  Fed.  Rep.  965.  4  Am.  B.  R.  411- 

2  Mueller'  v.  Nugent,  184  U.  S.  i ,  *  In  re  New  England  Piano  Co., 
46  L.  Ed.  40s,  7  Am.  B.  R.  224;  122  Fed.  Rep.  937,  9  Am.  B.  R.  767; 
In  re  Weinger-Bergman  Co.,  126  White  v.  Schloerb,  178  U.  S.  54^. 
Fed.  Rep.  875,  n  Am.  B.  R.  424;  4  Am.  B.  R.  178,  44  L.  Ed.  1183, 
In  re  Granite  City  Bank  (C.  C.  A.  4  Am.  B.  R.   178. 

8th  Cir.),  137  Fed.  Rep.  818,  14  Am.  "^  Mueller  v.  Nugent,  184  U.  S.  i, 

B.   R.  404;   Bank  v.    Sherman.    loi  46  L.   Ed.  405-   7   Am.   B.   R.  224; 

U    S   403,  25  L.  Ed.  866;  Crosbv  v.  5  Am.  B.  R.  176:  /;;  re  Rnsser  (C. 

Spear,  98   Me.   542.    n    Am.   B.   R.  C.  A.  8th  Cir.),  loi  Fed.  Rep  562, 

613;  In  re  Baughman,  138  Fed.  Rep.  4  Am.  B.  R.  153;  /»  re  Wilson,  116 

742,  15  Am.  B.  R.  23.  Fed.  Rep.  419.  §  .\m.  B.  R.  612. 

As  to  the  meaning  of  the  word  An   assignee    for   creditors    is   an 

"attachment,"  see  York  Mfg.  Co.  v.  agent  of  the  debtor.    Bryan  v.  Bern- 

Cassell,   201   U.   S.  344,   5o  L.   Ed.  heimer,    181    U.   S.    188,   45   L.   Ed. 

78^    IS  Am.  B.  R.  633.  814.  5  Am.  B.  R.  523;  In  re  Stokes, 


86 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


or  unlawfully  seized  and  taken  out  of  the  custody  of  the  court 
property  which  had  lawfully  come  into  its  possession  as  a 
part  of  the  bankrupt's  property,*^  or  determine  claims  against 
the  bankrupt's  property  in  the  possession  of  the  court/  or 
determine  validity  and  the  relative  priority  of  conflicting 
claims  to  a  fund  arising  from  the  sale  of  property,*  or  deter- 
mine whether  particular  property  in  question  is  a  part  of  the 
bankrupt's  estate  and  subject  to  distribution  to  his  creditors,^ 
or  to  order  paid  to  the  trustee  money  in  the  hands  of  a  sheriff 
acquired  by  levy  and  sale  within  four  months  prior  to  the 
filing  of  the  petition  in  bankruptcy,"  but  not  when  the  money 
has  been  paid  over  to  the  judgment  creditor,"  or  to  order 
paid  to  the  trustee  property  in  the  hands  of  a  bailee  or  agent 
who  does  not  claim  title  to  such  property,^"  or  to  enjoin  the 


io6   Fed.   Rep.   312,   6  Am.   B.   R. 
262. 

The  court  has  no  power  to  order 
a  bankrupt  to  pay  over  money, 
which  is  not  imder  his  control. 
American  Trust  Co.  v.  Wallis  (C. 
C.  A.  3d  Cir.),  126  Fed.  Rep.  464, 
II  Am.  B.  R.  360. 

(■'White  V.  Schloerb,  178  U.  S. 
542,  44  L.  Ed.  1 183,  4  Am.  B.  R. 
178;  In  re  Briskman,  132  Fed.  Rep. 
201,  13  Am.  B.  R.  57. 

"  Whitney  v.  Wenman.  198  U.  S. 
539,  49  L.  Ed.  1157,  14  Am.  B.  R. 
45;  White  V.  Schloerb,  178  U.  S. 
542,  44  L.  Ed.  1183.  4  Am.  B.  R. 
178;  Keegan  v.  King,  96  Fed.  Rep. 
758,  3  Am.  B.  R.  79 ;  In  re  Whitener 
(C.  C.  A.  5th  Cir.),  105  Fed.  Rep. 
180,  5  Am.  B.  R.  198;  In  re  Kellogg, 
113  Fed.  Rep.  120,  7  Am.  B.  R. 
623,  affirmed   121    Fed.   Rep.   333. 

s/m  re  McMahon  (C.  C.  A.  6th 
Cir.),    147   Fed.    Rep.   685,    17   Am. 

B.  R. ;  Chauncey  v.  Dyke  Bros. 

(C.  C.  A.  8th  Cir.).  119  Fed.  Rep. 
I,  9  Am.  B.  R.  444;  In  re  McCal- 
lum,  113  Fed.  Rep.  393,  7  Am.  B.  R 
596;  In  re  Rochford   (C.  C.  A.  8th 


Cir.),  124  Fed.  Rep.  182,  ID  Am.  B. 
R.  608. 

^  In  re  Kellogg,  113  Fed.  Rep. 
120,  7  Am.  B.  R.  623;  Antigo  Screen 
Door  Co.  (C.  C.  A.  7th  Cir.),  123 
Fed.  Rep.  249,  10  Am.  B.  R.  359. 

10  Clarke  v.  Larremore,  188  U.  S. 
486,  47  L.  Ed.  555;  9  Am.  B.  R. 
476,  affirming  In  re  Kenney   (C.  C. 

A.  2d  Cir.),  105  Fed.  Rep.  897,  5 
Am.  B.  R.  355 ;  In  re  Baughman, 
138  Fed.  Rep.  742,  15  Am.  B.  R.  27,; 
In  re  Vastbinder,  132  Fed.  Rep. 
718,  13  Am.  B.  R.  148. 

11  In  re  Blair,  102  Fed.  Rep.  987, 

4  Am.  B.  R.  220;  In  re  Knicker- 
bocker, 121  Fed.  Rep.  1004,  10  Am. 

B.  R.  381. 

See  observation  of  Mr.  Justice 
Brewer  in  Clarke  v.  Larremore.  188 
U.  S.  486,  47  L.  Ed.  555,  9  Am.  B. 
R.  476. 

But  see  /;/  re  Breslauer,  121  Fed. 
Rep.  910,   10  Am.  B.  R.  2)3. 

1-'  Mueller  v.  Nugent,  184  U.  S.  i, 
46  L.   Ed.   405.   7  Am.  B.   R.  224; 

5  Am.  B.  R.  176;  In  re  Moore,  104 
Fed.  Rep.  869,  5  Am.  B.  R.  151; 
In    re    Stokes,    106    Fed.    Rep.    312, 


JURISDICTION     OF     COURTS    OF     BANKRUPTCY.  87 

prosecution  of  suits  founded  upon  provable  debts  or  to  prevent 
the  transfer  or  disposition  of  the  debtor's  property  or  any 
interference  with  the  administration  of  the  debtor's  estate,'^ 
or  to  order  an  assessment  upon  the  stockholders  of  a  bankrupt 
corporation  for  unpaid  subscriptions/*  or  to  order  a  trustee 
to  pay  over  to  the  owner  money  or  property  which  has  come 
into  his  possession  by  virtue  of  his  office/^  or  to  appoint 
trustees  when  the  creditors  fail  to  elect,  or  to  punish  for 
failure  to  obey  lawful  orders  and  punish  for  contempts  com- 
mitted before  referees. 

The  court  of  bankruptcy  is  given  authority  to  "appoint  re- 
ceivers or  the  marshals,  upon  applica.tion  of  parties  in  interest, 
in  case  the  court  will  find  it  absolutely  necessary  for  the 
preservation  of  the  estates,  to  take  charge  of  the  property  of 
bankrupts  after  the  filing  of  the  petition  and  until  it  is  dis- 
missed or  the  trustee  is  qualified."  ^'^  This  includes  property 
of  the  bankrupt  in  the  hands  of  a  third  person  and  is  a 
proceeding  in  bankruptcy  wdiich  is  not  affected  by  Section  23, 
which  relates  only  to  suits  by  a  trustee.^"  In  case  property  is 
taken  by  summary  proceeding  opportunity  must  be  given  the 
claimant  to  propound  his  claim  to  the  property.' 


IS 


6  Am.    B.    R.   262 ;    In   re    Feldser,  i"  Bryan  v.  Bernheimer,  181  U.  S. 

134  Fed.  Rep.  307,  14  Am.  B.  R.  216.  188,   45  L.   Ed.  814,   5   Am.   B.   R. 

13  Sec.  22  post.     In  re  Jerse\^  Isl-  523;    In   re   Knopf,    144   Fed.    Rep. 

and    Packing    Co.     ( C.    C.    A.    9th  245,  16  Am.  B.  R.  432,  s.  c.  146  Fed. 

Cir.),  138  Fed.  Rep.  625,  14  Am.  B.  Rep.  109;  In  re  Rochford  (C.  C.  A. 

R.  689.  8th    Cir.),    124    Fed.    Rep.    182,    10 

i*/rt   re   Miller   Electric   Mainte-  Am.  B.  R.  608;  In   re  Moody,   131 

nance  Co.,  11 1  Fed.  Rep.  515,  6  Am.  Fed.  Rep.   525,   12  Am.  B.  R.   718; 

B.  R.  701.  s.  c.   Fed.  Rep.  628,   14  Am.  B.  R. 

'^■' In   re   Howard    (C.    C   A.   9th  472;  In  re  Muncie  Pulp  Co.   (C.  C. 

Cir.),   135   Fed.   Rep.   721,  affirming  A.  2d  Cir.),   139  Fed.   Rep.   546.   14 

130  Fed.  Rep.   1004,   12  Am.  B.  R.  Am.  B.  R.  70. 

462.  is/„    re    Young    (C.    C.    A.    8th 

'•■'B.    A.    1898,    Sec.    2,    clause    3.  Cir.),  in  Fed.  Rep.  158.  7  Am.  B. 

Bryan    v.    Bernheimer,    181    U.    S.  R.   14.     As  was  done  In  re  Knopf 

188,   45   L.   Ed.   814,   5   Am.    B.   R.  144,   Fed.  Rep.  245.   16  Am.  B.  R. 

523;  Boonville  Nat.  Bank  v.  Blakey  432,  s.  c.  146  Fed.  Rep.   109;  In  re 

(C.  C.  A.  7th  Cir.),  107  Fed.  Rep.  ]\Ioody.  131  Fed.  Rep.  525.   12  Am 

891.  6  Am.  B.  R.  13 ;  In  re  Florcken,  B.  R.  718.  s.  c.   134  Fed.  Rep.  628 

107  Fed.  Rep.  241.  5  Am.  B.  R.  S02.  14  .\m.  B.  R.  472. 


88  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

A  sale  of  property  by  a  trustee  under  the  direction  of  the 
court,  requiring  adverse  claimants  to  come  in  and  set  up 
their  claim  is  a  proceeding  in  bankruptcy/**  The  court  of 
bankruptcy  has  jurisdiction  of  such  a  proceeding  when  the 
property  sold  is  in  custodia  legis,~^  and  not  otherwise.-^  The 
fact  that  the  court  acquires  a  fund  arising  from  such  sale 
does  not  give  it  jurisdiction  to  dispose  of  it  unless  it  had 
jurisdiction  of  the  property  sold.--  Where  the  adverse 
claimant  intervenes  in  a  bankruptcy  proceeding  to  assert  his 
claim  against  the  property  in  the  possession  of  the  trustee 
and  thereby  raises  a  distinct  and  separable  issue,  it  is  treated 
as  a  controversy  arising  in  bankruptcy."^ 

In  administering  an  estate  it  is  the  duty  of  a  court  of 
bankruptcy  to  determine  the  proportionate  share  of  each  cred- 
itor, declare  dividends,  order  payment  and  close  the  estate,-* 
and  in  proper  cases  to  reopen  it  for  further  proceedings.-^ 

The  object  and  policy  of  the  bankrupt  law  is  that  proceed- 
ings under  it  shall  be  summary  in  order  to  settle  the  bank- 
rupt's affairs  as  speedily  and  with  as  little  delay  as  may  be 
consistent  with  justice.  The  proceedings  in  bankruptcy  gen- 
erally are    in    the    nature    of    proceedings    in    equity.-**     The 

1"  First    Nat.    Bank    v.    Title    &  Ed.   1051,  14  Am.  B.  R.   102. 

Trust    Co.,    198   U.    S.    280,    49    L.  22  First    Nat.    Bank    v.    Title    & 

Ed.  1051,  14  Am.  B.  R.  102;  In  re  Trust  Co.,  198  U.  S.  280. 

McMahon   (C.  C.  A.  6th  Cir.).  147  '-^  Hewit   v.    Berlin    Mach.    Wks., 

Fed.  Rep.  685,  17  Am.  B.  R.  ;  194  U.   S.   296,   48  L.   Ed.  986,    11 

In  re  Granite  City  Bank  (C.  C.  A.  Am.  B.  R.  709;  York  Mfg.  Co.  v. 

8th    Cir.),    137    Fed.    Rep.    818,    14  Cassell.   201    U.    S.   344,   So  L.   Ed. 

Am.  B.  R.  404;  In  re  New  England  782,  15  Am.  B.  R.  633;  In  re  First 

Piano  Co.   (C.  C.  A.  ist  Cir.),  122  Nat.  Bank  (C.  C.  A.  6th  Cir.),  135 

Fed.  Rep.  937,  9  Am.  B.  R.  767.  Fed.  Rep.  62,  14  Am.  B.  R.  180. 

-"/»  re  McMahon   (C.  C.  A.  6th  ^^  In  re  Carr,  116  Fed.  Rep.  5S6, 

Cir.),    147   Fed.    Rep.   685,    17   Am.  8  Am.  B.  R.  635. 

B.  R. ;  In  re  Granite  City  Bank  -■"'/;?    re    Shaffer,    104    Fed.    Rep. 

(C.  C.  A.  8th  Cir.),  137  Fed.  Rep.  982,  4  Am.  B.  R.  728;  In  re  New- 

818,  14  Am.  B.  R.  404:  III  re  New  ton,    107  Fed.   Rep.  429,  6  Am.   B. 

England    Piano   Co.    (C.    C.   A.'  ist  R.  52.     See  Sec.  271a,  post. 

Cir.),  122  Fed.  Rep.  937,  9  Am.  B.  -0  Bardes  v.  Hawarden  Bank,  178 

R.  767.  U.  S.  524,  535,  44  L-  Ed.   1175.  4 

-1  First    Nat.    Bank    v.    Title    &  Am.  B.  R.  163;  /«  r<?  Rochford  (C. 

Trust    Co..    198    U.    S.    280,    49   L.  C.  A.  8th  Cir,),  124  Fed.  Rep.  182, 


JURISDICTION     OF     COURTS     OF     BANKRUPTCY. 


89 


summary  jurisdiction  of  a  court  of  bankruptcy  is  regularly 
invoked  by  petition,  upon  filing  which  is  issued  a  rule  to  show 
cause  why  the  prayer  of  the  petition  should  not  be  granted. 
In  the  exercise  of  the  summary  jurisdiction  notice  is  required 
to  be  served  upon  the  persons  to  be  affected  by  the  order  oi 
the  court  and  reasonable  time  allowed  within  which  to  make 
a  defense."'  But  resort  may  be  had  to  an  action  in  the  nature 
of  a  plenary  suit,  wherein  the  parties  can  be  fully  heard  after 
the  due  course  of  equitable  procedure."^ 

The  summary  jurisdiction  of  a  court  of  bankruptcy  may  be 
exercised  only  with  reference  to  those  persons  who  are  parties 
to  the  proceedings,  and  such  as  may  be  brought  in  and  made 
parties  under  Sec.  2,  clause  6,  of  the  act.  Such  are  the  bank- 
rupt, the  petitioning  creditors  and  such  other  claimants  as  may 
be  properly  brought  in  or  who  voluntarily  appear  and  become 
parties.-"    It  has  been  held  that  petitioning  creditors,  by  nam- 


10  Am.  B.  R.  6o8;  /;;  re  Union 
Trust  Co.  (C.  C.  A.  ist  Cir.),  I22 
Fed.  Rep.  937,  9  Am.  B.  R.  767. 

-'■  Smith  V.  Belford  (C.  C.  A.  6th 
Cir.),  106  Fed.  Rep.  658.  5  Am.  B. 
R.  291;    Boyd  V.   Ghicklich    (C.   C. 

A.  8th  Cir.),  116  Fed.  Rep.  131,  8 
Am.  B.  R.  393. 

28  Whitney  v.  Wenman,  198  U. 
S.  539,  553,  49  L-  Ed.  1157,  14  Am. 

B.  R.  45 ;  In  re  McMahon  (C.  C. 
A.  6th  Cir.),  147  Fed.  Rep.  685, 
17  Am.  B.  R.  . 

29'In  Fisher  v.  Cushman  (C.  C. 
A.  1st  Cir.),  103  Fed.  Rep.  867, 
4  Am.  B.  R.  654,  the  court  said : 
"So  far  as  Ida  C.  Fisher  is  con- 
cerned, there  can  be  no  question  of 
jurisdiction,  inasmuch  as  the  pro- 
ceedings have  taken  place  in  the 
case  in  which  she  was  adjudged 
bankrupt,  and  the  court  therefore 
clearly  had  the  power  to  proceed 
summarily  for  the  purpose  of  mere- 
ly compelling  her  to  give  her  sig- 
nature  on   the   transfer   of   the   li- 


cense. So  far  as  Rollin  B.  Fisher 
is  concerned,  it  is  maintained  that 
he  was  entitled  to  appropriate  the 
license,  or  an  interest  in  it,  to  his 
court  could  not  in  the  case  of  Ida 
personal  use,  and  that  therefore  th-^ 
C.  Fisher  in  bankruptcy,  proceed 
summarily  against  him  with  refer- 
ence thereto.  This  objection  is  met, 
however,  by  the  fact  that  Rollin 
B.  Fisher  is  himself  in  bankruptcy, 
and  his  assignee  submitted  himself 
to  the  proceedings  in  the  district 
court,  which  disposes  of  all  sub- 
stantial questions  so  far  as  Rollin 
B.  Fisher  is  concerned." 

In  White  V.  Schloerb.  17S  U.  S. 
542,  4  Am.  B.  R.  178  the  supreme 
court  said :  "Not  going  beyond 
what  the  decision  of  the  case  before 
us  requires,  we  are  of  opinion  that 
the  judge  of  the  court  of  bank- 
ruptcy was  authorized  to  compel 
persons,  who  had  forcibly  and  un- 
lawfully seized  and  taken  out  of 
the   judicial   custody   of   that   court 


90 


LAW   AND    PROCEEDINGS   IN    BANKRUPTCY. 


ing  an  assignee  in  a  state  proceeding  as  a  party  to  the  petition 
for  an  adjudication  and  praying  a  subpoena  for  him,  can  not 
thereby  bring  him  into  the  case  for  the  purpose  of  future  in- 
quiries and  determinations  to  be  made  in  the  progress  of  the 
case.^''  It  seems,  however,  that  an  assignee,  not  holding  title 
•  adversely  to  the  trustee,  may  be  compelled  by  order  of  the 
bankruptcy  court  to  deliver  the  property  of  the  bankrupt  in 
his  possession  to  the  trustee  in  bankruptcy."^  Persons  who 
claim  property  in  their  possession  adversely  to  the  trustee  and 
who  are  not  parties  and  who  have  not  voluntarily  appeared 
for  the  purpose  of  becoming  parties  can  not  be  compelled  to 
come  into  court  under  a  rule  to  show  cause  or  other  summary 
process.^- 

When  an  application  is  made  to  the  court  to  make  a  sum- 
mary order  directing  a  respondent  to  surrender  the  possession 
of  certain  property  that  is  alleged  by  a  trustee  to  belong  to  the 
bankrupt's  estate,  the  court  may  examine  the  ground  set  up 


property  which  had  lawfully  come 
into  its  possession  as  part  of  the 
bankrupt's  property,  to  restore  that 
property  to  its  custody;  and  there- 
fore our  answer  to  the  first  ques- 
tion nmst  be :  'The  District  Court 
sitting  in  bankruptcy  had  jurisdic- 
tion by  summary  proceedings  to 
compel  the  return  of  the  property 
seized.' " 

See  also  First  Nat.  Bank  v.  Title 
&  Trust  Co.,  198  U.  S.  280,  49  L. 
Ed.  1051,  14  Am.  B.  R.  102;  and 
Whitney  v.  Wenman,  198  U.  S. 
539,  49  L.  Ed.  it 57,  ,14  Am.  B.  R. 
45- 

3"  £.r  parte  Comingor  (C.  C.  A. 
6th  Cir.),  107  Fed.  Rep.  898,  s.  c. 
5  Am.  B.  R.  537;  Louisville  Trust 
Co.  V.  Comingor,  184  U.  S.  18,  46 
L.  Ed.  413,  7  Am.  B.  R.  721. 

"^  Jn  re  Thompson,  122  Fed.  Rep. 
174,  10  Am.  B.  R.  242,  affirmed  (C. 
C.  A.  2d  Cir.),  128  Fed.  Rep.  575, 
II   Am.   B.   R.   719;   In   re   Knight, 


125  Fed.  Rep.  35-  n  Am.  B.  R.  i; 
Bryan  v.  Bernheimer,  181  U.  S. 
188,  45  L.  Ed.  814,  5  Am.  B.  R. 
523;  Leidigh  Carriage  Co.  v.  Sten- 
gel (C.  C.  A.  6th  Cir.),  95  Fed. 
Rep.  637,  2  Am.  B.  R.  383;  In  re 
Stokes,  106  Fed.  Rep.  312,  6  Am. 
B.  R.  262;  In  re  Smith,  92  Fed. 
Rep.  13s,  2  Am.  B.  R.  9. 

^~  Bardes  v.  Hawarden  Bank,  178 
U.  S.  524,  44  L.  Ed.  1 175,  4  Am. 
B.  R.  163;  Marshall  v.  Knox,  16 
Wall,  551 ,  21  L.  Ed.  481 ;  Ex  parte 
Comingor  (C.  C.  A.  6th  Cir.),  107 
Fed.  Rep.  898,  5  Am.  B.  R.  537; 
Louisville  Trust  Co.  v.  Comingor, 
184  U.  S.  18,  46  L.'Ed.  413,  7  Am. 
B.  R.  421 ;  In  re  Ward,  104  Fed. 
Rep.  985.  s.  c.  5  Am.  B.  R.  215; 
Jaquith  v.  Rowley,  188  U.  S.  620. 
47  L.  Ed.  256,  9  Am.  B.  R.  525; 
In  re  N.  Y.  Carwheel  Works,  132 
Fed.  Rep.  203,  13  Am.  B.  R.  60; 
In  re  .'Kdams.  130  Fed.  Rep.  788. 
^2   Am.   B.   R.   ^6-^. 


JURISDICTION     OF     COURTS    OF     BANKRUPTCY. 


91 


by  the  respondent  for  his  refusal  to  deliver  possession,  and  to 
determine  whether  a  real,  and  not  merely  a  pretended,  contro- 
versy exists  upon  this  subject.^^  If  real,  it  must  dechne  to 
finally  adjudicate  on  the  merits."'*  Should  it  appear  that 
the  claim  is  fictitious  or  colorable  the  court  of  bankruptcy  may 
retain  jurisdiction  on  the  theory  that  the  property  is  then 
constructively  in  the  possession  of  the  court  of  bankruptcy.^* 


§  i8.     Bankruptcy  jurisdiction  exclusive. 

The  original  jurisdiction  in  bankruptcy,  conferred  on  these 
courts,  is  exclusive  of  the  courts  of  the  several  states,^  and 
also  of  the  courts  of  the  United  States,  not  crea'"ed  courts  of 
bankruptcy.  The  circuit  courts  have  no  bankruptcy  juris- 
diction under  the  act  of  1898." 

The  exclusive  jurisdiction,  however,  is  confined  to  matters 
in  bankruptcy,  and  does  not  extend  to  matters  at  law  or  in 
equity  which  may  grow  out  of  bankruptcy  proceedings.' 
This  principle  is  recognized  in  section  23  of  the  act  of  1898, 
which  provides  for  instituting  such  suits  in  the  circuit  courts 


^^  In  re  Baird,  8  Am.  649;  Muel- 
ler V.  Nugent,  184  U.  S.  i,  15,  5 
Am.  B.  R.  176;  In- re  Teschmacher 
and  Mraza}^  127  Fed.  Rep.  728, 
ir  Am.  B.  R.  547;  In  re  Kane,  131 
Fed.   Rep.  386,    12   Am.   B.   R.  444. 

^^  Schweer  v.  Brown,  195  U.  S. 
171 ;  Mueller  v.  Nugent,  184  U.  S. 
I,  46  L.  Ed.  405,  7  Am.  B.  R. 
224;  Louisville  Trust  Co.,  184  U.  S. 
18,  46  L.  Ed.  413,  7  Am.  B.  R. 
421.  • 

^^  In  re  Tune,  115  Fed.  Rep.  906, 
8  Am.  B.  R.  285;  In  re  Michie.  it6 
Fed.  Rep.  749,  8  Am.  B.  R.  734;  In 
re  Kane,  131  Fed.  Rep.  386.  12  Am. 
B.  R.  444;  In  re  Muncie  Pulp  Co. 
fC.  C.  A.,  2d  Cir.),  139  Fed.  Rep. 
546.  14  Am.  B.  R.  70. 

iR.  S.  Sec.  71  r;  In  re  Watts  & 
Sachs,  190  U.  S.  1 ,  47  L.  Ed.  933, 
10  Am.   B.   R.    113;   In  re   Knight, 


125  Fed.  Rep.  35,  11  Am.  B.  R.  i; 
Akins  V.  Stradley,  51  la.  414; 
Broach  v.  Powell,  79  Ga.  79; 
Southern  v.    Fisher,   6   S.    C.   345. 

-  B.  A.  i8g8,  Sec.  23,  where  ju- 
risdiction at  law  and  in  equity,  as 
distinguished  from  proceedings  in 
bankruptcy,  is  conferred  upon  the 
circuit  courts,  and  in  no  place  in 
the  act  is  any  bankruptcy  jurisdic- 
tion conferred  upon  the  circuit 
courts.  As  to  when  bankruptcy 
proceedings  may  be  had  in  a  cir- 
cuit court,  owing  to  the  district 
judge  being  disqualified  to  act,  see 
Sec.  24,  post. 

■■*  Bardes  v.  Ha  warden  Bank,  178 
U.  S.  524,  44  L.  Ed.  117s,  4  Am. 
B.  R.  163;  Small  v.  Muller  (N.  Y. 
Sup.  Ct.  App.  Div.),  8  Am.  B.  R. 
448;  Reed  v.  Equitable  Trust,  115 
Ga.  780,  8  Am.  B.  R.  242. 


92 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


of  the  United  States  and  in  the  state  courts.    The  former  acts 
did  not  expressly  confer  or  recognize  any  jurisdiction  in  the 
state  courts,  but  the  federal  and  state  judges  held  that  R.  S.. 
Sec.  711  did  not  divest  the  state  courts  of  any  jurisdiction  at 
law  or  in  equity.* 

When  jurisdiction  in  bankruptcy  attaches,  which  it  does  as 
soon  as  the  petition  is  filed,^  it  extends  over  the  bankrupt  and 
his  estate.  It  extends  to  all  the  property  of  the  bankrupt 
situate  within  the  United  States  whether  within  or  without 
the  territorial  jurisdiction  of  the  court  of  bankruptcy.*'  The 
filing  of  the  petition  is  a  caveat  to  all  the  world,  and  in  effect 
an  attachment  and  injunction." 

The  trustee  is  vested  with  the  title  of  the  bankrupt's  prop- 
erty as  of  the  date  when  he  is  adjudged  a  bankrupt,  and  it  is 
then  in  the  legal  custody  of  the  court. ^  Property  thus  sur- 
rendered to  a  trustee  can  not  be  affected  by  any  other  court 
attempting  to  interfere  with  or  withdraw  the  property  from 


*  Eyster  v.  Gaff,  91  U.  S.  521 , 
23  L.  Ed.  403;  Burbank  v.  Bige- 
low,  92  U.  S.  179;  23  L.  Ed. 
542 ;  Claflin  v.  Houseman,  93  U.  S. 
130,  23  L.  Ed.  833;  Clark  v.  Ewing, 
3  Fed.  Rep.  83;  Scott  v.  Kelly,  22 
Wall.  57,  22  L.  Ed.  729;  In  re 
i\Tiller,  No.  9551,  Fed.  Cas.,  s.  c.  6 
Biss.  30;  Cook  V.  Whipple,  55  N. 
Y.    150. 

5B.  A.  1898,  Sec.  I,  clause  10; 
In  re  Kindt,  98  Fed.  Rep.  867,  3 
Am.  B.  R.  546;  White  v.  Schloerb, 
178  U.  S.  542;  44  L-  Ed.  1183,  4 
Am.  B.  R.   178. 

In  re  Weinger,  Bergman  &  Co., 
126  Fed.  Rep.  875,  11  Am.  B.  R.  424- 

^In  re  Granite  City  Bank  (C. 
C.  A.  8th  Cir.),  137  Fed.  Rep.  818, 
14  Am.  B.  R.  404;  In  re  Benedict. 
140  Fed.  Rep.  55,  i5  Am.  B.  R.  232. 

But  see  In  re  Schrom,  97  Fed. 
Rep.  760,  3  Am.  B.  R.  352. 


7  Mueller  v.  Nugent,  184  U.  S.  i , 
46  L.  Ed.  405,  7  Am.  B.  R.  224; 
In  re  Weinger,  Bergman  &  Co.,  126 
Fed.  Rep.  875,  11  Am.  B.  R.  424; 
In  re  Reynolds,  127  Fed.  Rep.  760, 
II  Am.  B.  R.  758. 

See  observation  of  Mr.  Justice 
Peckham  in  York  Mfg.  Co.  v.  Cas- 
sell,  201  U.  S.  344,  353,  5o  L.  Ed. 
782,  15  Am.  B.  R.  633,  with  refer- 
ence to  this  phrase. 

8  In  re  Baughman,  138  Fed.  Rep. 
742,  15  Am.  B.  R.  2^;  In  re  Vast- 
binder,  132  Fed.  Rep.  718,  13  Am. 
B.  R.  148;  In  re  Reynolds,  127  Fed. 
Rep.  760,  II  Am.  B.  R.  758. 

See  also  Hewit  v.  Berlin  Mach. 
Wks.,  194  U.  S.  296 ,  48  L.  Ed.  986, 
II  Am.  B.  R.  709;  York  Mfg. 
Co.  V.  Cassell,  201  U.  S.  344,  50 
L.  Ed.  782,  15  Am.  B.  R.  62,y,  First 
Nat.  Bank  v.  Staake,  202  U.  S.  141, 
50  L.  Ed.  967,  15  Am.  B.  R.  639. 


JURISDICTION     OF     COURTS    OF     BANKRUPTCY. 


93 


the  possession  of  the  trustee.''  y\ll  daims  against  the  bank- 
rupt's property  and  all  controversies  concerning  the  same, 
including  title  to  the  property,  which  was  in  his  possession  at 
the  time  of  filing  the  petition,  should  be  presented  and  ad- 
judicated in  the  court  of  bankruptcy.^"  Where  tlie  bankruptcy 
court  in  the  exercise  of  its  customary  jurisdiction  obtains  the 
lawful  custody  of  property  to  which  liens  attach,  it  has  juris- 
diction to  determine  the  relative  priorities  of  conflicting 
claims  to  the  fund  realied  from  the  sale  of  the  property.'^^ 
All  suits  against  the  bankrupt,  founded  upon  a  claim  from 
which  a  discharge  would  be  a  release,  and  pending  at  the 
time  of  the  filing  of  a  petition  against  him,  may  be  stayed 
until  after  an  adjudication  or  dismissal  of  the  petition;  if  such 
person  is  adjudged  a  bankrupt  such  action  may  be  further 
stayed  until  twelve  months  after  the  date  of  such  adjuchca- 
J;ion;  or  if  wdthin  that  time  such  person  applies  for  a  dis- 
charge,, then  until  the  question  of  such  discharge   is  deter- 


9  White  V.  Schloerl),  178  U.  S. 
545,  44  L-  Ed.  1 183,  4  Am.  B.  R. 
178. 

A  referee  or  a  trustee  is  an  oflficer 
of  the  court,  and  his  possession  is 
the  possession  of  the  court,  and  the 
famiHar  cases  turning  upon  the  re- 
lations of  marshals  and  receivers 
are  applicable  with  equal  force  to 
the  protection  of  a  trustee.  Tay- 
lor V.  Carryl,  20  How.  583,  15  L. 
Ed.  1028 ;  Freeman  v. '  Howe,  24 
How.  450,  16  L.  Ed.  749;  Shields 
V.  Coleman,  157  U.  S.  168,  39  L. 
Ed.  660;  Porter  v.  Sabin,  149  U.  S. 
473,  Z1  L.  Ed.  815.     . 

10  White  V.  Schloerb,  178  U.  S. 
542,  44  L.  Ed.  1 183,  4  Am.  B.  R. 
178,  2  N.  B.  N.  721 ;  Whitney  v. 
Wenman,  198  U.*  S.  539,  552,  49 
L.  Ed.  1 157,  14  Am.  B.  R.  45; 
Keegan  v.  King,  96  Fed.  Rep.  758, 
3  Am.  B.  R.  79;  In  re  Russell  (C. 
C.  A.  2d  Cir.),  loi  Fed.  Rep.  248,  3 


Am.  B.  R.  658;  In  re  Chambers 
Calder  Co.,  98  Fed.  Rep.  865,  3  Am. 
B.  R.  537,  2  N.  B.  N.  388;  In  re 
Corbett,  5  Am.  B.  R.  224,  104  Fed. 
Rep.  872;  In  re  Whitener  (C.  C.  A., 
5th  Cir.),  105  Fed.  Rep.  180,  3  Am. 

B.  R.  198,  3  N.  B.  N.  316;  In  re 
Emslie  (C.  C.  A.  2d  Cir.),  102 
Fed.  Rep.  291,  4  Am.  B.  R.  126,  2 
N.  B.  N.  995. 

11  Chauncey    v.    Dyke    Bros.    (C. 

C.  A..  8th  Cir.),  119  Fed.  Rep.  i, 
9  .-\m.  B.  R.  444;  In  re  McMahon 

(C.  C.  A.,  6th  Cir.),  147  Fed.  Rep. 

685,  17  Am.  B.  R.  . 

In  Whitney  v.  Wenman,  198  U. 
S.  539,  49  L.  Ed.  1 157,  14  Am.  B. 
R.  45 ;  the  supreme  court  held  that 
when  property  was  in  the  custody 
of  the  court  "jurisdiction  exists  to 
determine  the  controversies  in  re- 
lation to  the  disposition  of  the  same 
and  the  extent  and  character  of 
liens   thereon   or   rights   therein." 


94 


LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 


mined/"     The  court  may,  however,  direct  the  trustee  to  pros- 
ecute or  defend  a  pending  suit. 

The  fihng  of  a  petition  in  bankruptcy  does  not  propria  vigore 
abate  or  suspend  a  suit  pending  in  a  state  court  at  the  time.^^ 
Although  the  bankrupt  court  has  exclusive  jurisdiction  of  all 
proceedings  in  bankruptcy,  it  does  not,  upon  such  proceedings 
being  instituted,  draw  to  it  all  manner  of  controversies  with 
the  bankrupt."  State  courts  are  entitled  to  notice  of  some 
kind  before  they  are  required  to  yield  jurisdiction  over  a  pend- 
ing case.^"  Some  cases  may  proceed  to  final  settlement  in 
the  state  court;  others  must  be  stayed  if  application  is  made  for 
that  purpose.^*^  Where  a  state  court  loses  its  jurisdiction  of 
the  7T^  by  reason  of  a  lien  being  annulled  by  the  bankruptcy 
of  the  defendant  the  court  of  bankruptcy  may  acquire  juris- 
diction of  it.^^ 


12  B.  A.  1898,  Sec.  II.  See  Sec. 
22,  post. 

13  Taylor  v.  Taylor  (N.  J.  Chan.), 
45  Atlantic  Rep.  440,  4  Am.  B.  R. 
211;  Continental  Nat.  Bank  v.  Katz 
(Sup.    Ct.    Cook    Co.,    111.),    I    Am. 

B.  R.  19;  Reid,  Murdock  &  Co.  v. 
Cross  (Sup.  Ct.  Cook  Co.,  111.),  i 
Am.  B.  R.  34;  Heath  v.  Shaffer, 
93  Fed.  Rep.  647;  2  Am.  B.  R.  98; 
In  re  Gerdes,  102  Fed  Rep.  318, 
4  Am.  B.  R.  346;  In  rs  Horton  (C. 

C.  A.    8th  Cir.),  102  Fed.  Rep.  986, 

4  Am.  B.  R.  486;  In  re  Scholtz,  106 

Fed.    Rep.   834;    Reed   v.    Equitable 

Trust,  115  Ga.  780,  8  Am.  B.  R.  242. 

In  Pickens  v.  Dent  (C.  C.  A. 
4th  Cir.),  106  Fed.  Rep.  653,  5  Am. 
B.  R.  644 ,  the  court  said :  "The 
institution  of  the  proceedings  in 
bankruptcy  did  not  divest  that  [the 
state]  court  of  its  jurisdiction  over 
appellant  and  his  property;  and  it 
was  clearly  not  only  the  right, 
but  the  duty,  of  that  court  to  pro- 
ceed to  final  decree  in  said  cause, 
even   if  it   was  advised   of  the   fact 


that  the  district  court  of  the  United 
States  for  the  district  of  West  Vir- 
ginia had  adjudicated  one  of  the 
defendants  thereto  to  be  a  bank- 
rupt." Affirmed  187  U.  S.  177,  47 
L.  Ed.*  128.  9  Am.  B.  R.  47. 

!■*  Pickens  v.  Roy,  187  U.  S.  177, 
47  L.  Ed.  128,  9  Am.  B.  R.  47; 
In  re  Wells,  8  Am.  B.  R.  75,.  114 
Fed.  Rep.  222;  hi  re  Lesser,  100 
Fed.  Rep.  433,  3  Am.  B.  R.  815; 
Lockwood  v.  Exchange  Bank,  190 
U.  S.  294,  47  L.  Ed.  1061,  ID  Am. 
B.  R.  107. 

^■>  In  re  Watts  &  Sachs,  190  U. 
S.  1 ,  47  L.  Ed.  933.  10  Am.  B.  R. 
113;  In  re  Knight,  125  Fed.  Rep. 
35,  II  Am.  B.  R.  I. 

1"  See  Sec.  22,  post. 

1"  First  National  Bank  v.  Staake, 
202  U.  S.  141,  50  L.  Ed.  967,  15 
Am.  B.  R.  639;  It>re  Tune,  115  Fed. 
Rep.  906.  8  Am.  B.  R.  285;  In  re 
Baughman,  138  Fed.  Rep.  742,  15 
Am.  B.  R.  23;  In  re  Vastbinder, 
132  Fed.  Rep.  718,  13  Am!  B.  R. 
148. 


JURISDICTION     OF     COURTS    OF    BANKRUPTCY. 


95 


Where  the  subject  of  a  suit  relates  to  matter  subsequent  to 
the  commencement  of  bankruptcy  proceechngs,  or  to  property 
not  properly  a  part  of  the  bankrupt's  estate,  the  suit  is  not 
affected  by  the  bankruptcy  proceedings.  Thus,  a  del)t  created 
after  the  institution  of  bankruptcy  proceedings  may  be  col- 
lected out  of  property  subsequently  acquired  by  the  bankrupt. 
Upon  the  same  principle  it  would  seem  that  a  security  on  a 
homestead  may  be  enforced  in  a  state  court  pending  the  bank- 
ruptcy. 

§  19.     Limitations  to  the  exercise  of  jurisdiction. 

Although  full  power  and  authority  is  conferred  upon  courts 
of  bankruptcy,  extending  to  all  matters  of  bankruptcy  without 
limitation,  there  are  two  principal  restrictions  to  the  exercise 
of  this  authority : 

First.  The  power  conferred  extends  only  to  persons,  cor- 
porations, partnerships,  etc.,  who  are  subject  to  be  adjudged 
bankrupts.  These  courts  have  no  authority  over  persons  other 
than  those  specified  in  the  act  to  be  subject  to  its  provisions. 

Second.  The  courts  of  bankruptcy  are  expressly  limited 
to  the  exercise  of  bankruptcy  jurisdiction  within  their  "re- 
spective territorial  limits." 

The  language  of  this  act  in  this  respect  is  similar  to  the 
act  of  1867,  where  the  jurisdiction  of  courts  of  bankruptcy  was 
limited  to  "their  respective  districts."  With  reference  to  the 
meaning  of  this  expression  in  the  act  of  1867,  Mr.  Justice 
Bradley,  in  Lathrop  v.  Drake,'  said:  "\Mien  the  act  says 
that  they  shall  have  jurisdiction  in  their  respective  districts  it 
means  that  the  jurisdiction  is  to  be  exercised  in  their  re- 
spective districts.  Each  court  within  its  own  district  may 
exercise  the  powers  conferred ;  but  those  powers  extend  to  all 
matters  of  bankruptcy  without  limitation." 

A  district  court,  sitting  as  a  court  of  bankruptcy,  has  no 
greater  power  or  authority  outside  of  its  own  district  than  it 
had  before  the  bankrupt  statute  was  enacted.     Thus  it  has 

191  U.  S.  517-  23  L.  Ed.  414. 


96  LAW    AND   PROCEEDINGS   IN    BANKRUPTCY. 

been  held  that  a  writ  of  subpoena  or  other  process  can  not  be' 
served  beyond  the  hmits  of  the  district  of  the  court  issuing 
the  writ.'  An  exception  to  this  rule  exists  in  subpoenas  for 
witnesses  under  a  special  provision  applicable  to  courts  of 
bankruptcy,  being-  courts  of  the  United  States.^ 

There  is  no  objection  to  a  person  living  without  the  district 
entering  his  appearance  voluntarily.  In  such  case  the  court 
has  complete  jurisdiction  over  him  as  though  he  had  been 
legally  served  with  process."*  So  also  if  a  non-resident  of  the 
district  comes  into  the  case  for  the  purpose  of  proving  a  claim 
he  is  subject  to  the  jurisdiction  of  the  court,  irrespective  of 
his  place  of  residence,'  and  is  bound  to  take  notice  of  and 
obey  the  orders  of  the  court  to  the  same  extent  as  any  other 
party  to  the  proceedings.  When  a  voluntary  appearance  h'as 
been  entered  it  can  not  be  withdrawn  without  permission  of 
the  court."  Jurisdiction  can  not  be  conferred  by  consent  or 
voluntary  appearance  when  otherwise  the  court  is  without 
jurisdiction  of  the  subject-matter.'^ 

Clearly  the  words  "in  their  respective  territorial  limits"  do 
not  confine  the  jurisdiction  of  the  court  of  bankruptcy  to  cases 

-In   re   Waukesha    Water   Co.,   8  *  Fisher  v.    Cushman,    (C.    C.   A. 

Am.  B.  R.  715,  116  Fed.  Rep.  1009;  ist    Cir.).    103    Fed.    Rep.   860,   867, 

Jobbins  v.  Montague,  No.  7329,  Fed.  4  Am.  B.  R.  646;  In  re  Smith,  117 

Cas.,    s.    c.    5    Ben.    425;    Paine    v.  Fed.    Rep.    961.   9    Am.    B.    R.   98; 

Caldwell,  No.  10674,  Fed.  Cas.,  s.  c.  /)(  re  Kirtland,  No.  7851.  Fed.  Cas. 

I    Flask.    452;    In    re    Hirsch,    No.  s.  c.   10  Blatch.  515;   In  re  Ulrich, 

6529.  Fed.  Cas.,  s.  c.  2  Ben.  493 ;  In  No.    14327,   Fed.   Cas.,   s.  c.  3   Ben. 

re  Litchfield,  13  Fed.  Rep.  868.  355- 

3  R.    S.    Sec.    876    provides    that  •''  In    re    Kyler.    No.    7956.    Fed. 

"subpoenas    for    witnesses,   who   are  Cas.,  s.  c.  2  Ben.  414;  In  re  Sabm, 

required   to   attend    a   court   of   the  No.  12195,  Fed.  Cas.,  s.  c.  18  N.  B. 

United  States,  in  any  district,  may  R.   151;   In  re   Pease,  29  Fed.   Rep. 

run  into  any  other  district:  Provi-  595;  /"   ''e  Anderson,  23  Fed.   Rep. 

ded,   That   in   civil   causes  the   wit-  482;  Clay  v.  Smith,  3  Pet.  411. 

nesses  living  out  of  the   district   in  '''In    re    Ulrich,    No.    14327.    Fed. 

which  the  court  is  held  do  not  live  Cas.,  s.  c.  3  Ben.  355.     See  also  U. 

at  a  greater  distance  than  one  hun-  S.  v.  Curry,  6  How.  106,  12  L.  Ed. 

dred  miles  from  the  place  of  holding  363  ;  Eldred  v.  Michigan  Ins.  Bank. 

the    same."      See    also    B.    A.    1898,  17  Wall.   545,  21   L.  Ed.  685. 

Sec.  41.  '  Jobbins  v.   Montague,   No.  7329, 

Fed.  Cas.,  s.  c.  5  Ben.  425. 


JURISDICTION     OF     COURTS    OF     BANKRUPTCY.  97 

arising-  within  the  district  of  the  court.**  Ancillary  suits 
growing  out  of  the  original  proceedings  may  be  prosecuted  in 
courts  of  bankruptcy  in  other  districts  unless  restricted  by 
some  other  clause  of  the  bankrupt  act." 

§  20.     Jurisdiction  of  suits  at  law  and  in  equity  as  distin- 
guished from  bankruptcy  proceedings. 

Prior  to  the  decision  of  the  supreme  court  in  Bardes  v. 
Hawarden  Bank,'  the  district  courts  and  the  circuit  courts  of 
appeals  expressed  widely  different  opinions  as  to  the  juris- 
diction of  the  courts  of  bankruptcy  to  entertain  independent 
suits  at  law  or  in  equity  against  third  parties  to  collect  debts 
or  recover  property  belonging  to  the  bankrupt  estate.  Most 
of  these  courts  held  that  they  had  jurisdiction  of  such  suits." 

It  is  now  settled  that  the  bankruptcy  act  of  1898  conferred 
no  jurisdiction  upon  the  courts  of  bankruptcy  of  suits  at  law 
or  in  equity  brought  by  trustees  against  third  parties  to  re- 
cover property  or  collect  debts,  or  to  set  aside  transfers  of 
property  alleged  to  be  fraudulent  under  the  act,  except  by  con- 
sent of  the  defendant.'  But  the  courts  of  bankruptcy  are 
vested  with  jurisdiction  by  the  proposed  defendant's  consent 
to  entertain  such  suits.*  It  is  not  necessary  that  the  proposed 
defendant's  consent  should  be  in  writing  or  upon  the  record  in 

sLathrop  v,  Drake.  91  U.  S.  516,  U.   S.  524,  44  L.  Ed.   1175,  4  Am. 

23  L.  Ed.  414;  Burbank  v.  Bigelow,  B.  R.  163;  Mitchell  v.  McClure,  178 

92  U.  S.  179,  23  L.  Ed.  542;  Mar-  U.  ,S.    539,    44    L-    Ed.     1182;    4 

shall  V.  Knox,   16  Wall.  5.51,  21  L.  Am.  B.  R.  177;  Hicks  v.  Knost,  178 

Ed.  481;  Sherman  v.  Bingham,  No.  U.   S.  541.  4  Am.   B.   R.   178:   Jac- 

12762,  Fed.  Cas.,  s.  c.  3  Cliff.  552;  quith  v.  Rowley,   188  U.  S.  620.  47 

Mason  v.  Hartford  P.  &  F.  R.  Co.,  L.  Ed.  256,  9  Am.  B.  R.  525 :  Wall 

19    Fed.    Rep.    53;     Shainwald    v.  v.   Cox,    181    U.   S.   244,  45   L.    Ed. 

Lewis,  5  Fed.  Rep.  513.  845.  5  Xm.  B.  R.  yij;  Real  Estate 

'^  See     y\4icillary     Proceedings    in  Trnst    Co.    v.   Thompson,    112    Fed. 

other  Districts,  Sec.  21,  post.  Rep.   945,   7   Am.    B.    R.   520. 

1  178  U.  S.  524,  44  L.  Ed.  Ii7b,  *  Bardes  v.  Hawarden  Bank.  17S 
4  Am.  B.  R.  163,  2  N.  B.  N.  725.  U.  S.  524,  44  L.  Ed.   1175,  4  Am. 

2  The  cases  are  collated  in  a  note  B.  R.  163;  /;;  re  Durham,  114  Fed. 
to  Bardes  v.  Hawarden  Bank,  4  Rep.  750,  8  .A.m.  B.  R.  115;  Philips 
Am.   B.   R.    163.  V.  Turner   (C.  C.  A..  5th  Cir.),   114 

3  Bardes  v.   Hawarden   Bank,   178  Fed.   Rep.   726,  8  Am.   B.  R.   171. 


98  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

express  terms.  He  will  be  presumed  to  consent  if  he  appears 
and  pleads  to  the  merits  and  will  not  be  allowed  thereafter  to 
object  to  the  jurisdiction  of  the  court ''  or  withdraw  his  con- 
sent." A  stipulation  to  pay  a  fund  into  the  registry  of  the 
court  to  be  dealt  with  by  that  court,  the  rights  of  the  parties 
to  be  determined  upon  summary  petition,  is  not  a  consent  to 
the  jurisdiction  of  the  court  of  a  plenary  suit.'  A  general 
appearance  to  a  petition  will  not  prevent  the  defendant  from 
objecting  to  the  jurisdiction  of  the  court  to  an  amended  peti- 
tion, which  for  the  first  time  states  a  case  against  him.'  Prov- 
ing a  claim  in  bankruptcy  as  a  secured  debt  is  not  such  a  con- 
sent as  to  give  a  court  of  bankruptcy  jurisdiction  of  a  contro- 
versy by  the  claimant  to  enforce  such  debt  in  a  state  court.^ 

Under  these  decisions,  prior  to  the  amendment  of  February 
5,  1903,"  the  trustee  was  required  to  resort  to  the  state  courts 
to  recover  property  in  the  possession  of  third  parties  or  to 
collect  debts  due  an  estate  by  persons  not  parties  to  the  pro- 
ceedings, "unless  by  consent  of  the  proposed  defendant,"  and 
in  such  cases  as  could  be  prosecuted  in  the  circuit  courts  of 
the  United  States  under  Section  23a  of  the  bankruptcy  act 
of  1898." 

5/n   re   Connolly,    lOO   Fed.    Rep.  "It    should    be    observed    in    this 

620,  3  Am.  B.  R.  842 ;  In  re  Steuer,  connection    that    the    consent    men- 

104    Fed.    Rep.    976,    5    Am.    B.    R.  tioned  in  Sec.  2sb,  means  consent  to 

209;  In  re  Durham,   114  Fed.  Rep.  the    tribunal    in   which   the    contro- 

750,  8  Am.   B.   R.   ns;   Ryttenberg  versy  is  to  be  carried  on,  and  not 

V.    Schefer.    131    Fed.    Rep.   313,    n  to  the  mode  of  procedure,  which  is 

Am.  B.  R.  652.  regulated   by   general   principles   of 

"//t    re    Durham,    114    Fed.    Rep.  law  unless  other  provision  is  made. 

750,  8  Am.  B.  R.  115.  •    •    •   We  are,  therefore,  inclined  to 

■f  Havens  &  Geddes  Co.  v.  Pierek  think   that   this   petitioner   was   not 

(C.  C.  A.  7th  Cir.),  120  Fed.  Rep.  precluded    from    his    right    to    raise 

244,   9    Am.    B.    R.    569.      See    also  the  objection  to  the  mode  of  pro- 

Teschmacher    v.    Mrazay,    127    Fed.  ceeding  at  the  time  he-  did,  which 

Rep.  728,  II  Am.  B.  R.  547.  was  before  the  making  of  the  final 

^  In   re    Hemby-Hutchinson    Pub.  order,  and  that  the  court  erred  in 

Co.,  105  Fed.  Rep.  909,  5  Am.  B.  R.  refusing  to  entertain  it." 
569.      In    Ex    parte    Comingor.    T07  ^  Pickens  v.  Roy,   187  U.  S.  177 , 

Fed.  Rep.  898,  5  Am.  B.  R.  537,  af-  47  L-  Ed.  128,  9  Am.  B.  R.  47. 
iirmed  in    184  U.  S.   18,  46  L.  Ed.  ^''32  Stat,  at  L.  797- 

413,  che  circuit  court  of  appeals  for  ^^  See  Sec.  25,  post. 

the   sixth   circuit   said : 


JURISDICTION     OF     COURTS    OF    BANKRLi'iV-V 


99 


It  should  be  observed  that  the  Hmitations  of  Sec.  22>b  apply 
only  to  suits  instituted  by  trustees  and  do  not-  affect  proceed- 
ings which  may  be  properly  instituted  by  petitioning  creditors 
before  the  appointment  of  a  trustee.'-'  It  does  not  affect  pro- 
ceedings against  trustees. 

By  the  amendment  of  Februar)-  5,  1903,  Congress  con- 
ferred upon  the  bankruptcy  courts  jurisdiction  of  suits  for  the 
recovery  of  property  under  Sec.  60^,  Sec.  67c  and  Sec.  70^.''' 
It  has  been  held  that  the  courts  of  bankruptcy  have  jurisdic- 
tion of  suits  at  law  and  in  equity  by  a  trustee  begun  since 
February  5,  1903,  and  are  not  limited  to  suits  brought  by 
trustees  appointed  in  bankruptcy  proceedings  in  which  the 
adjudication  took  place  after  the  amendment  was  adopted.'* 
The  effect  of  this  amendment  is  unquestionably  to  confer 
sufficient  jurisdiction  at  law  or  in  equity  upon  the  courts  of 
bankruptcy  for  the  purpose  of  recovering  property  in  the  pos- 
session of  third  parties  claimed  as  preferential  or  fraudulent 
transfers."  Congress  evidently  intended  to  confer  on  the 
courts  of  bankruptcy  full  powers  at  law  or  in  equity  in  respect 
to  this  subject-matter.  If  a  suit  in  equity  is  begun,  founded 
upon  the  recovery  of  fraudulent  transfers,  a  court  of  bank- 
ruptcy has  power  to  settle  all  controversies  arising  out  of  this 
subject-matter  and"  for  this  purpose  may  entertain  cross  bills 
and  other  pleadings  usual  in  a  court  of  equity. 


12  Brj^an  v.  Bernheimer,  i8i  U.  S* 
i88,  45  L.  Ed.  814,  5  Am.  B.  R. 
623;  In  re  Knopf,  144  Fed.  Rep. 
245,  16  Am.  B.  R.  432 ;  In  re  Roch- 
ford  (C.  C.  A..  8th  Cir.).  124  Fed. 
Rep.  182,  10  Am,  B.  R.  608;  In  re 
Moody,  131  Fed.  Rep.  525,  1-2  Am. 
B.  R.  718. 

13  Sees.  23&,  60b,  6je  and  70c,  as 
amended  Feb.   5,    1903;   32   Stat,  at 

1'.  797- 

1*  Pond  V.  N.  Y.  Exch.  Bank,  124 

Fed.  Rep.  992,  10  Am.  B.  R.  343- 

1^' Johnston  v.  Fors3-th,  127  Fed. 
Rep.  845,  II  Am.  B.  Rep.  669;  Law- 
rence V.  Lowrie,  133  Fed.  Rep.  995, 


13  Am.  B.  R.  297;  McNulty  v. 
Feingold,  129  Fed.  Rep.  looi,  12 
Am.  B.  R.  338;  Horskins  v.  San- 
derson, 132  P'ed.  Rep.  415;  Off  v. 
Hake  (C.  C.  A.,  7th  Cir.).  142  Fed. 
Rep.  364,  15  Am.  B.  R.  696. 

To  the  effect  that  the  bankruptcy 
court  has  no  jurisdiction  to  set 
aside  a  fraudulent  transfer  under 
Section  70^,  except  by  consent  of 
the  defendant  to  the  jurisdiction 
as  required  by  Section  23^.  See 
Gregory  v.  Atkinson,  127  Fed.  Rep. 
1S3,  II  -Am.  B.  R.  495. 

16  B.  A.  1898,  Sec.  23c  See  also 
Chap.  21. 


100 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


There  is  also  conferred  upon  the  courts  of  bankruptcy  con- 
current with  the  circuit  courts  of  the  United  States  a  limited 
jurisdiction  of  suits  at  law  to  punish  certain  offenses  named 
in  the  act/" 


§  2oa.     Plenary  suits  against  adverse  claimants. 

It  is  well  settled  that  summary  proceedings  on  motion  and 
notice  or  rule  to  show  cause  can  not  be  substituted  for  plenary 
suits  at  law  or  in  equity  to  recover  property  in  the  possession 
of  third  persons  who  claim  to  own  it/  This  applies  with 
equal  force  to  controversies  arising  before  and  since  the 
amendment  of  1903.  The  reason  for  this  rule  is  that  such 
parties  would  be  deprived  of  the  usual  processes  of  law  in 
defense  of  their  rights  in  a  summary  proceeding.  The  de- 
fendant in  such  cases  may  be  entitled  to  a  trial  by  jury,  or  to 
put  in  evidence  upon  an  issue  regularly  made  by  pleadings,  or 
to  have  the  decree  or  judgment  reviewed  upon  appeal  or  writ 
of  error,  or  to  have  the  judgment  or  decree  enforced  by  exe- 
cution and  not  by  process  for  contempt  for  disobeying  a  sum- 
mary order  of  court." 


ijacquith  v.  Rowley,  i88  U.  S. 
620,  47  L.  Ed.  620.  9  Am.  B.  R. 
525 ;  Louisville  Trust  Co.  v.  Com- 
ingor,  184  U.  S.  18,  46  L.  Ed. 
413,  7  Am.  B.  R.  421;  Marshall  v. 
Knox,  16  Wall.  556,  21  L.  Ed.  42; 
Smith  V.  Mason,  14  Wall.  419,  20 
L.    Ed.   748;   In   re   Young,    (C.   C. 

A.  8th  Cir.),  11 1  Fed.  Rep.  158, 
7  Am.  B.  R.  14;  In  re  Adams,  130 
Fed.  Rep.  788,  12  Am.  B.  R.  367; 
/;;  re  Scherber,  131  Fed.  Rep.  121, 
12  Am.  B.  R.  616. 

-  Ex  parte  Comingor  (C.  C.  A. 
6th  Cir.),  107  Fed.  Rep.  898,  5  Am. 

B.  R.  537,  affirmed  184  U.  S.  18, 
46  L.  Ed.  413,  Judge  Severens, 
speaking  for  the  circuit  court  of 
appeals,  said : 

"The  judgment  would  not  be  en- 
forced by  execution,  but  by  process 


for  contempt.  The  proceeding  when 
employed  for  such  a  purpose  is  in 
the  nature  of  a  civil  remedy  for  the 
recovery  of  money.  Quite  general- 
ly, if  not  universally,  state  statutes 
founded  on  public  policy  forbid  im- 
prisonment as  a  remedy  to  compel 
the  satisfaction  of  debts  or  other 
obligations  not  founded  on  wilful 
wrong,  and  this  policy  may  not  be 
countervailed  by  the  consent  of  par- 
ties to  a  proceeding  which  results 
in  defeating  it.  And  such  statutes 
are  given  effect  in  the  courts  of  the 
United  States  by  Rev.  Stat.,  Sees. 
990,  991." 

See  also  Mallory  Mfg.  Co.  v.  Fox, 
20  Fed.  409,  per  Wallace  C.  J. ;  Low 
v.  Durfee,  5  Fed.  Rep.  256,  per 
Lowell,  C.  J.;  Ex  parte  Hooson, 
Law  Rep.  ^  Ch.  App.  251. 


JURISDICTION     OF     COURTS    OF    BANKRUPTCY. 


101 


The  general  rule  is  that  the  trustee  must  bring  an  independ- 
ent suit  at  law  or  in  equity  to  recover  money  or  property  in 
the  possession  of  a  person  who  claims  title  to  it  as  against 
the  trustee  in  bankruptcy.^  It  is  not  necessary  in  order  to 
be  an  adverse  claimant  that  he  should  claim  to  be  the  absolute 
owner  of  the  propert}^  in  his  possession.  It  is  sufficient  if 
money  was  deposited  with  him  to  indemnify  him  for  a  liability 
and  that  liability  has  not  been  determined  and  satisfied.* 
But  a  court  of  bankruptcy  has  full  power  by  summary  pro- 
ceedings to  determine  all  controversies  relating  to  the  title  of 
property  which  is  in  the  custody  of  the  court  or  an  officer 
thereof,"  or  to  compel  a  person  to  deliver  to  the  trustee  prop- 
erty, claimed  as  part  of  the  bankrupt's  estate,  in  his  possession 
to  which  he  has  no  claim  of  title  as  against  the  trustee,  such 
as  a  naked  bailee,"  agent "  or  assignee  for  the  benefit  of  cred- 
itors." 

The  form  of  pleading  is  immaterial  where  the  court  has 
jurisdiction  to  proceed  by  way  of  plenary  suit  and  no  season- 
able objection  is  taken  to  the  form  of  procedure,  and -where 


^  Bardes  v.  Hawarden  Bank.  17S 
V.  S.  524,  44  L.  Ed.  1 175,  4  Am. 
B.  R.  163;  Louisville  Trust  Co.  v. 
Comingor,  184  U.  S.  18,  46  L.  Ed. 
413 ,  7  Am.  B.  R.  421,  affirming 
Ex  parte  Comingor  (C.  C.  A., 
6t]i  Cir.),  107  Fed.  Rep.  898,  5  Am. 
B.   R.  537. 

As  to  the  right  to  trial  b}-  jury, 
see  Jones  v.  MacKenzie  (C.  C.  A. 
8th  Cir.),  122  Fed.  Rep.  390. 

4Jacquith  v.  Rowley,  188  U.  S. 
620,  47  L.   Ed.  256,  9  Am.   B.   R. 

525. 

•"'  Whitney  v.  Wenman.  198  U.  S. 
539,  49  L-  Ed.  1157,  14  Am.  B.  R. 
45;  White  V.  Schloerb,  178  U.  S. 
542,  44  L.  Ed.  1 183,  4  Am.  B.  R. 
178;  /«  re  Rochford  ( C.  C.  A., 
8th  Cir.),  124  Fed.  Rep.  182,  10 
Am.  B.  R.  608;  Keegan  v.  King. 
96  Fed.  Rep.  758,  3  Am.  B.  R.  79; 


In  re  Whitencr  (C.  C.  A.  5th  Cir.), 
105  Fed.  Rep.  180,  5  Am.  B.  R.  198 ; 
/;;  re  Kellogg.  113  Fed.  Rep.  120, 
7  Am.  B.  R.  623  (affirmed  C.  C.  A. 
2d  Cir.),  121  Fed.  Rep.  2>ii^  10 
Am.  B.  R.  7;  In  re  McBride  & 
Co.,  132  Fed.  Rep.  285,  12  Am.  B. 
R.  81. 

"'  Mueller  v.  Nugent,  184  U.  S.  i, 
46  L.  E.  405,  7  Am.  B.  R.  224; 
5  Am.  B.  R.  176;  In  re  Moore,  104 
Fed.    Rep. '869.    5    Am.    B.    R.    151. 

"  /;;  re  Stokes,  106  Fed.  Rep. 
312,  6  Am.  B.  R.  262;  Leidigh  Car- 
riage Co.  V.  Stengel  (C.  C.  A.,  6th 
Cir.),  95  Fed.  Rep.  637,  2  Am.  B. 
R.  383;  Mueller  v.  Nugent,  184  U. 
S.  I,  46  L.  Ed.  405,  5  Am.  B.  R. 
176;  Bryan  v.  Bernheimer,  181  U.  S. 
188,  45  L.  Ed.  814,  5  Am.  B.  R. 
523. 


102 


LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 


under  the  form  of  procedure  adopted  the  rights  of  the  re- 
spondent are  substantially  as  in  a  plenary  suit.^ 

It  has  been  held  that  a  plenary  suit  at  law  or  in  equity  was 
necessary  in  the  following  cases :  i\n  action  of  replevin  to  re- 
cover specific  property,"  or  a  suit  to  set  aside  fraudulent  trans- 
fer of  money  or  property  and  to  recover  the  same  for  the 
estate/**  or  to  restrain  a  third  party  from  dealing  with  prop- 
erty claimed  to  belong  to  the  bankrupt's  estate/"^  or  to  recover 
fees  paid  by  an  assignee  to  himself  and  his  attorney  for  ser- 
vices rendered  in  a  state  court/-  or  to  recover  a  judgment 
which  w^as  collected  by  execution  and  the  money  paid  over  to 
the  judgment  creditor  before  the  petition  in  bankruptcy  was 
filed  against  the  judgment  debtor,"  or  a  proceeding  to  fore- 


^  In  re  Steuer,  104  Fed.  Rep. 
976,  5  Am.  B.  R.  209;  3  N.  B.  N. 
206;  Milner  v.  Meek,  95  U.  S.  252, 
24  L.  Ed.  444;  Stickney  v.  Wilt, 
23  Wall.    150,  23  L.  Ed.  50. 

In  re  Kenney  (C.  C.  A.  2d  Cir.), 
105  Fed.'  Rep.  897,  5  Am.  B.  R.  355, 
this  rule  was  applied,  but  not  di- 
rectly decided. 

In  re  Steuer,  supra,  an  amend- 
ment was  permitted  to  be  made  to  a 
petition  for  an  injunction  and  then 
sustained  to  recover  a  preference  by 
Judge  Lowell,  wha  said : 

"In  order  tjiat  proceedings  to  re- 
cover property  may  be  validly  com- 
menced by  petition  in  bankruptcy, 
the  petition  must  contain  a  complete 
statement  of  the  cause  of  action, 
and  a  sufficient  prayer  'for  relief. 
Upon  -such  a  petition  process  must 
be  issued,  and  the  parties  must  be 
given  full  opportunity  to  present 
evidence  and  arguments  in  their 
own  behalf.  In  other  words,  though 
the  formal  requisites  of  a  bill  in 
equity  may  be  wanting,  yet  the  sub- 
stantial requisites  of  equitable  jus- 
tice must  be  complied  with  as  fully 


in  a  petition  in  bankruptcy  as  in  a 
bill  in  equity." 

•■'  Mitchell  V.  McClure,  178  U.  S. 
539,  44  L.  Ed.  1 182,  4  Am.  B.  R. 
177 ;  Cook  V.  Scovil,  53  Atl.  Rep.  692. 

1°  Bardes  v.  Hawarden  Bank,  178 
U.  S.  524, 44  L.  Ed.  1 175,  4  Am.  B.  R. 
163;  Hicks  V-.  Knost,  178  U.  S.  541, 
44  L.  Ed.  1 183,  4  Am.  B.  R.  178; 
In  re  Michie,  8  Am.  B.  R.  734, 
116  Fed.  Rep.  749. 

11 /,j  ,-^  Ward,  104  Fed.  Rep.  985, 
5  Am.  B.  R.  215. 

1-  Louisville  Trust  Co.  v.  Comin- 
gor,  184  U.  S.  18,  46  L.  Ed.  413,  7 
Am.  B.  R.  421,  affirming  Ex  parte 
Comingor  (C.  C.  A.  6th  Cir.),  107 
Fed.  Rep.  898,  5  Am.  B.  R.  537;  In 
re  Klein  &  Co.,  116  Fed.  Rep.  523, 

8  Am.  B.  R,  559;  In  re  Carver  & 
Co.,    113   Fed.   Rep.    138,  7  Am.  B. 

R.  539- 

'"/«  re  Blair,  102  Fed.  Rep.  987, 
4  Am.  B.  R.  220;  In  re  Knicker- 
bocker, 121  Fed.  Rep.  1004,  10  Am. 
B.  R.  381. 

Consult  observation  of  Mr.  Jus- 
tice Brewer  in  Clark  v.  Larremore, 
188  U,  S.  at  p.  490,  47  L.  Ed.  555, 

9  Am.  B.  R.  476. 


JURISDICTION     OF     COURTS     OF     BANKRUPTCY.  1U3 

close  a  collateral  security  held  by  the  Ijankrupt  to  secure  a 
debt  of  a  third  person/ ■*  or  a  bill  by  creditors  to  reach  and  sub- 
ject to  their  claims  exempt  property  of  a  bankrupt/'  or  a  suit 
to  recover  money  deposited  with  a  surety  to  indemnify  him 
for  his  lialjility  upon  a  l)ai]  bond  where  that  liability  has  not 
been  determined  and  satisfied/" 

It  has  been  held,  on  the  other  hand,  that  the  following 
are  not  adverse  claimants:  An  assignee  for  the  benefit  of 
creditors,''  a  person  who  has  mere  possession  of  the  property 
without  claim  of  title,'"  or  a  mortgagee  who  enters  into  pos- 
session under  a  default  clause  in  the  mortgage  before  the 
expiration  of  the  time  named  in  that  clause/'^ 

§  21      Ancillary  proceedings  in  other  districts. 

As  has  been  stated,  each  court  of  bankruptcy  is  restricted 
HI  the  exercise  of  its  authority  within  its  own  territorial 
hmits.'  It  win,  however,  be  necessary. to  institute  proceed- 
ings ancillary  to  and  in  aid  of  the  proceedings  in  bankrupt- 
cy in  courts  without  the  district  in  which  the  principal  pro- 
ceedings are  had.- 

That  the  courts  of  bankruptcy  for  such  other  districts  have 
jurisdiction  to  entertain  auxiliary  proceedings  to  perfect  and 
accomplish  the  objects  of  the  act  can  hardly  be  considered  an 
open  question  in  \'iew  of  the  decisions  of  the  courts  under 
prior  acts  and  the  reasoning  upon  wdiich  these  decisions  are 

"  McKey  V.  Smith.  105  Fed.  Rep.  i^  I,,    re    Moore,    104    Fed     Rep 

899,   5  Am.   B.  R.  568.  869.  5  Am.  B.  R.  151. 

15  Woodruff    V.    Cheeves    (C.    C.  i'' /«  r^  Waterloo  Organ  Co.,  1 18 

A.  5th  dr.),   105  Fed.   Rep.  601,  5  Fed.  Rep.  904,  9  Am  B   R  4^7 
Am.  B.  R.  296.  1  Sec.  19,  ante. 

i«Jacquith  V.   Rowley,   188  U.   S.  -Lawrence    v.    Lowrie,    133    Fed 

620,  47  L.  Ed.  526,  9  Am.  B.  R.  525.  Rep.  995,  13  Am.  B.  R.  297 ;'  /„   re 

1'  Bryan  v.  Bernheimer,  181  U.  S.  Benedict,  140  Fed.  Rep.  55,  15  Am 

188,  45   L.   Ed.   814,    5   Am.    B.    R.  B.   R.  232;  In   re   Peiser,    115   Fed 

623;  Leidigh  Carriage  Co.  v.  Sten-  Rep.   199,  7  Am.   B.   R.  690-   In  re 

gel    (C.    C.    A.   6th    Cir.),   95    Fed.  Sutter    Bros.,    131    Fed     Rep     654 

Rep.  637.  2  Am.   B.   R.  383:   In  re  ir   Am.   B.   R.  632;   In  re  Schrom,' 

Stokes,   160  Fed.   Rep.  312,  6  Am.  97  Fed.  Rep.  760.  3  Am.  B.  R.  352. 

B.  R.  262. 


104 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


based/"'  That  the  courts  of  such  other  districts  may  exercise 
jurisdiction  in  such  cases  would  seem  to  be  the  necessary  re- 
sult of  the  general  jurisdiction  conferred  upon  them  and  is 
in  harmony  with  the  scope  and  design  of  the  act. 

Where  property  belonging  to  the  bankrupt's  estate  is  with- 
out the  territorial  jurisdiction  of  the  court  of  bankruptcy 
administering  the  estate,  the  court  of  bankruptcy  within 
whose  territorial  jurisdiction  the  property  is  situate  may,  upon 
ancillary  proceedings,  appoint  a  receiver  to  take  charge  of  it 
whenever  it  is  absolutely  necessary  for  the  preservation  of  the 
estate.*  A  court  of  bankruptcy  of  another  district  than  that 
in  which  the  bankruptcy  proceedings  are  pending  may  enter- 
tain a  suit  by  a  trustee  for  the  recovery  of  assets  of  the 
bankrupt,^  and  grant  an  injunction  to  prevent  a  transfer  of 
or  interference  with  such  property.®  A  receiver  generally 
can  not  maintain  an  ancillary  suit  for  such  purpose.'     It  has 


3  Lathrop  v.  Drake.  91  U.  S.  516, 
23  L.  Ed.  414;  Burbank  v.  Bigelow, 
92  U.  S.  179,  23  L.  Ed.  542;  Sher- 
man V.  Bingham,  No.  12762,  Fed. 
Cas.,  s.  c.  3  Cliff.  552;  Moore 
V.  Jones,  No.  9768  Fed.  Cas.,  s.  c. 
23  Vt.  739;  Ex  parte  Martin,  No. 
9149  Fed.  Cas.,  s.  c.  5  Law  Rep.  158; 
Goodall  V.  Tuttle,  No.  5533  Fed. 
Cas.,  s.  c.  3  Biss.  219;  In  re  Tifft, 
No.  14034  Fed.  Cas.,  s.  c.  19  N.  B. 
N.  201  ;  Shainwald  v.  Lewis,  5  Fed. 
Rep.  513;  Mason  v.  Hartford  P.  & 
F.  R.  Co.,  T9  Fed.  Rep.  53. 

■*  In  re  Benedict,  140  Fed.  Rep. 
55,  15  Am.  B.  R.  232;  In  re  Sutter 
Bros.,  131  Fed.  Rep.  654,  11  Am. 
B.  R.  632 ;  /;;  re  Schrom,  97  Fed. 
Rep.  760,  3  Am.  B.  R.  353. 

But  see  Ross-Meeham  Foundry 
Co.  V.  Southern  Car  &  Foundry 
Co.,  124  Fed.  Rep.  403,  10  Am.  B.  R. 
624. 

In  re  Tybo  Mining  Co.,  132  Fed. 
Rep.  697,  13  Am.  B.  R.  62,  a  peti- 
tion for  the  appointment  of  an  an- 
cillary   trustee .  was    denied    on   the 


ground  of  want  of  jurisdiction. 

"  Lawrence  v.  Lowrie,  133  Fed. 
Rep.  995,  13  Am.  B.  R.  297;  In  re 
Reiser,  115  Fed.  Rep.  199,  7  Am. 
B.  R.  690;  Lathrop  v.  Drake,  99 
U.  S.  516,  23  L.  Ed.  414;  Sherman 
V.  Bingham,  No.  12762  Fed.  Cas.,  3 

Cliff.  552. 

*■'  Lawrence  v.  Lowrie,  133  Fed. 
Rep.  995,  13  Am.  B.  R.  297. 

But  .see  In  re  Williams,  120  Fed. 
Rep.  38,  9  Am.  B.  R.  741 ;  In  re 
von  Hartz  (C.  C.  A.  2d  Cir.),  142 
Fed.  Rep.  726,  15  Am.  B.  R.  747. 

^  Great  Western  Mining  Co.  v 
Harris,  198  U.  S.  561,  49  L.  Ed. 
1 163;  Booth  V.  Clark.  17  How.  338, 
IS  L.  Ed.  164;  Guarantee  Title  & 
Trust  Co.  V.  Pearlman,  16  Am. 
B.  R.  461. 

That  a  receiver  in  bankruptcy  is 
a  temporary  custodian  merely,  see 
Whitney  v.  Wenman,  19S  U.  S. 
539.  553,  49  L.  Ed.  1157;  Boonville 
Nat.  Bank  v.  Blakey,  107  Fed.  Rep. 
891,  6  Am.  B.  R.   13, 


JURISDICTION     OF     COURTS    OF     BANKRUPTCY. 


105 


been  held  that  a  court  of  bankruptcy  in  the  exercise  of  an- 
cillary jurisdiction  may  order  the  examination  of  witnesses 
under  Section  21  o^ 

The  courts  of  other  dictricts,  so  far  as  an  ancillary  juris- 
diction exists,  are  auxiliary,  not  in  any  sense  implying  power 
to  carry  out  and  enforce  tlie  judgment  and  orders  of  one 
another,  except  upon  due  process  in  the  particular  district.® 
In  such  cases  it  is  necessary  to  acquire  jurisdiction  of  persons 
and  property  by  the  same  means  employed  in  other  cases.® 

§  22.     Power  to  stay  proceedings  in  other  courts. 

The  same  reason  does  not  exist  for  refusing  to  interfere  by 
injunction  to  stay  proceedings  in  a  federal  court  that  exists 
when  the  case  is  pending  in  a  state  court.  The  courts  of 
bankruptcy  have  enjoined  procedings  in  federal  courts  when 
such  proceedings  interfered  with  the  exercise  of  bankruptcy 
jurisdiction.^ 

All  courts  of  the  United  States  are  forbidden  to  stay  pro- 
ceedings in  any  court  of  a  state,  except  in  cases  where  such 
injunctions  may  be  authorized  by  any  law  relating  to  proceed- 
ings in  bankruptcy."  The  bankruptcy  act  of  1898  expressly 
confers  power  upon  courts  of  bankruptcy  to  issue  injunctions 
to  stay  proceedings  within  this  exception.^ 


^  In  re  Sutter  Bros.,  131  Fed. 
Rep.  654,  II  Am.  B.  R.  632. 

But  see  In  re  Williams,  123  Fed. 
Rep.  321,   10  Am.  B.  R.  538. 

As  to  the  examination  of  wit- 
nesses residing  without  the  dis- 
trict see  Sec.  210a,  post. 

^  Shainwald  v.  Lewis,  5  Fed.  Rep. 

513- 

1  In  re  People's  Alail  Steamship 
Co.,  No.  10970  Fed.  Cas..  s.  c.  3 
Ben.  226,  the  court  of  bankruptcy 
enjoined  proceedings  in  admiralt.v 
upon  a  libel  m  rem.  But  see  The 
Ironsides,  No.  7069  Fed.  Cas.,  s.  c. 
4  Biss.  518. 

-  R.  S.  Sec.  720 ;  Haines  v.  Car- 
penter, 91  U.  S.  254,  23  L.  Ed.  345; 


Dial  V.  Reynolds,  96  U.  S.  340, 
24  L.  Ed.  644 ;  Peck  v.  Jenness, 
7  How.  625 ,  13  L.  Ed.  841. 

3  B.  A.  1898.  Sec.  no  and  Sec.  2, 
clause  15  ;  Clarke  v.  Larremore,  188 
U.  S.  4S6,  47  L.  Ed.  555 .  9  Am.  B. 
R.  476,  affirming  In  re  Kenney,  105 
Fed.  Rep.  897,  5  Am.  B.  R.  355; 
Wagner  v.  U.  S.  (C.  C.  A.  6th  Cir.), 
104  Fed.  Rep.  133,  4  Am.  B.  R.  596; 
In  re  Goldberg,  117  Fed.  Rep.  692,  9 
Am.  B.  R.  156;  In  re  Ball,  118  Fed. 
Rep.  672,  9  Am.  B.  R.  276;  Blake, 
Moffat  &  Towne  v.  Francis  Valen- 
tine Co.,  89  Fed.  Rep.  691 ,  i  Am. 
B.  R.  372;  In  re  Gutwillig,  90  Fed. 
Rep.  475 ,  on  rehearing,  p.  481,  s.  c. 
(C.   C.   A.   2d   Cir.),  92   Fed.   Rep. 


106 


LAW    AND    PROCEEDINGS  IN    BANKRUPTCY. 


The  court  has  power  to  stay  any  suit  which  is  founded  upon 
a  claim  from  which  a  discharge  would  be  a  release  and  which 
is  pending  against  a  person  at  the  time  of  the  filing  of  the  peti- 
tion against  him.'*  It  should  be  observed  that  this  power  is 
limited  to  suits  founded  upon  a  claim  from  which  a  discharge 
would  be  a  release.^  The  word  "suit"  is  broad  enough  in 
its  scope  to  include  all  forms  of  procedure  at  law  or  in  equity, 
or  in  admiralty,  where  the  personal  liability  of  the  debtor  is 
sought  to  be  fixed  or  determined  by  final  judgment.  The  stay 
may  be  had  at  any  stage  in  the  suit  while  it  is  pending  in  the 
state  court,  even  after  execution,*'  and  before  the  sheriff  has 
paid  the  money  to  the  execution  creditor.'^ 

Under  the  act  of  1867  power  to  grant  injunctions  was  ex- 
pressly conferred  for  the  purpose  of  preventing  any  transfer 
or  disposition  of  the  debtor's  property  or  any  interference 
therewith.^      This    power    was    frequently    exercised.''      The 


ZV,  I  Am.  B.  R.  388;  Lea  v. 
West  Co.,  91  Fed.  Rep.  237,  I  Am. 
B.  R.  261,  s.  c.  174  U.  S.  590,  43 
L.  Ed.  1048,  2  Am.  B.  R.  463. 

*  B.  A.  1898,  Sec.  iia;  In  re 
Kenney,  95  Fed.  Rep.  427,  2  Am. 
B.  R.  494,  s.  c.  Clarke  v.  Larre- 
more,  188  U.  S.  486,  47  L.  Ed.  555, 
9  Am.  B.  R.  476;  In  re  Goldberg-, 

117  Fed.  Rep.  692,  g  Am.  B.  R. 
156;  hi  re  Butts,  120  Fed.  Rep. 
966,   10  Am.  B.  R. -16;  In  re  Ball, 

118  Fed.  Rep.  672,  9  Am.  B.  R. 
276;  Bear  v.  Chase  (C  .C.  A.  4th 
Cir.),  99  Fed.  Rep.  920,  3  Am.  B. 
R.  746;  In  re  Lesser  (C.  C.  A.  2d 
3ir.),9g  P'ed.Rep.9i3,3Am.  B.  R.  758. 

In  re  Hilton,  104  Fed.  Rep.  981  , 
4  Am.  B.  R.  774,  a  suit  on  an  un- 
li(|uidated  claim,  which  might  be 
proved  in  bankruptcy,  but  was  vol- 
untarily withheld  for  fifteen  months, 
was   stayed. 

•"'  White  V.  Thompson  ( C.  C.  A. 
5th  Cir.),  119  Fed.  Rep.  868,  9  Am. 
B.  R.  653;  In  re  Butts,  120  Fed. 
Rep.  966,   ID  Am.   B.   R.   16;  In   re 


Cole,  106  Fed.  Rep.  837,  5  Am.  B. 
R.  780;  Continental  National  Bank 
V.  Katz  (Supr.  Ct.  Cook  Co.,  Ill),  i 
Am.  B.  R.  19. 

^  In  re  Kletchka,  92  Fed.  Rep. 
901,  I  Am.  B.  R.  479;  In  re  De 
Lany  &  Co.,  124  Fed  Rep.  280. 

~^  In  re  Kenney,  95  Fed.  Rep. 
427,  s.  c.  snh  nom  Clarke  v.  Larre- 
more,  188  U.  S.  486,  47  L.  Ed.  555, 
9  Am.  B.  R.  476. 

But  see  In  re  Shoemaker,  112 
Fed.  Rep.  648,  7  Am.  B.  R.  437. 

**Act  of  March  2,  1867;  14  Stat. 
at  L.  536;  R.  S.  Sec.  5024. 

"Chapman  v.  Brewer,  114  LT.  S. 
158,  29  L.  Ed.  83;  In  re  Mallory, 
No.  8991  Fed.  Cas.,  s.  c.  i  Saw. 
88,  6  N.  B.  N.  22;  Markson  v. 
V.  Hughes,  No.  7076  Fed.  Cas.,  s.  c. 

1  Dill.  497,  4  N.  B.  N.  510;  Irving 
V.  Htighes,  No.  7076  Fed.  Cas.  s.  c. 

2  N.  B.  N.  61 ;  Jones  v.  Leach, 
No.  7475  Fed.  Cas.,  s.  c.  i  N.  B. 
N.  595;  /;;  re  Wallace,  No.  17094 
Fed.  Cas.,  s.  c.  Deady  433.  2  N.  B. 
N.    134. 


JURISDICTION     OF     COURTS    OF     BANKRUPTCY.  107 

same  power  has  been  exercised  under  the  provisions  of  the 
present  act/" 

The  court  of  bankruptcy  has  also  exercised  jurisdiction  to 
enjoin  suits  against  the  bankrupt  instituted  after  the  com- 
mencement of  the  bankruptcy  proceedings/^  or  against  a 
trustee  for  conversion  of  property  sold  by  order  of  the  bank- 
ruptcy court/" 

An  application  to  stay  suits  may  be  made  to  the  state  court 
in  which  the  suit  is  pending/"  or  to  a  court  of  bankruptcy. 
The  provisions  of  the  bankruptcy  act  relating  to  staying  suits 
is  binding  upon  the  state  courts  and  is  appHed  and  enforced 
by  them  quite  as  much  as  by  tlie  bankruptcy  courts.^* 

The  application  to  the  state  court  is  usually  made  by  peti- 
tion or  motion  supported  by  a  certified  copy  of  the  petition  in 
bankruptcy.  Where  tlie  adjudication  has  been  made  before 
the  application  in  the  state  court  a  certified  copy  of  the  order 
should  also  be  filed  in  the  state  court.  A  copy  of  this  petition 
or  motion  and  exhibits  should  be  served  on  the  plaintiff  and 
brought  to  the  notice  of  the  state  court/'     If  a  proper  case  is 

10 /w  re  Gutnian,    114  Fed.   Rep.  i-/n  re  Mertens,   131   Fed.   Rep. 

1009,  8  Am.  B.  R.  252 ;  Lea  v.  West  507,  12  Am.  B.  R.  698. 

Co.,  91  Fed.  Rep.  237,  i  Am.  B.  R.  ^^  As    was    done    in    Continental 

261,  s.  c.  174  U.  S.  590,  43  L.  Ed.  Nat.  Bk.  v.  Katz    (Supr.   Ct.  Cook 

ioqS,  2  Am.  B.  R.  463;  In  re  Gut-  County,  111.),  i  Am.  B.  R.  19;  Reid 

willig   (C.  C.  A.  2d  Cir.),  92  Fed.  v.  Cross  (Supr.  Ct.  Cook  Co.,  Ill), 

Rep.  337,   I  Am.  B.  R.  388,  affirm-  i   Am.   B.   R.  34;    Victor  v.   Lewis 

ing  90  Fed.  Rep.  475;  In  re  Knight,  (N.  Y.  Supr.  Ct.  App.  Div.),  i  Am. 

125  Fed.  Rep.  35,  n  Am.  B.  R.  i ;  B.  R.  667;  Reed  v.  Equitable  Trust 

In  re  Emslie    (C.  C.  A.  2d.   Cir.),  115  Ga.  780,  8  Am.  B.  R.  242. 

102  Fed.  Rep. -291,  4  Am.  B.  R.  126;  " /«    re    Geister,    97    Fed.    Rep. 

In    re    Jersey    Island    Packing    Co.  322,    3    Am.    B.    R.    228;    Carter   v. 

(C.  C.  A.  9th  Cir.),  138  Fed.  Rep.  People's  Nat.  Bank,  35   S.  E.  Rep. 

62s,  14  Am.  B.  R.  689.  61,  4  Am.  B.  R.  211    (note)  ;  Reed 

11 /n  re  Basch,  97  Fed.  Rep.  761,  v.  Equitable  Trust,  115  Ga.  780, 
3  Am.  B.  R.  236;  In  re  Chambers,  8  Am.  B.  R.  242;  Delavergue  v. 
Calder  &  Co.,  98  Fed.  Rep.  865,  3  Farrand,  i  Mich.  (N.  P.)  90;  Car- 
Am.  B.  R.  537;  In  re  Kleinhans,  penter  Bros.  v.  O'Connor,  16  O.  C. 
113  Fed.  Rep.  107,  7  Am.  B.  R.  C.  526. 
504.  ^"^  ill  >'c  Geister,  97  Fed.  Rep.  322, 

See  also  White  v.   Schloerb,    178  3  Am.  B.  R.  228,  the  court  said: 

U.   S.  542,  44  L.  Ed.   1 183,  4  Am.  "The    bankrupt    who    is    the    de- 

B.  R.  178.  fondant  in  the  state  court  shoidd  file 


108  LAW    AND   PROCEEDINGS   IN    BANKRUPTCY. 

made  the  state  court  will  order  proceedings  stayed  in  ac- 
cordance with  Section  11a  of  the  bankruptcy  act;  that  is,  until 
after  an  adjudication  or  the  dismissal  of  the  petition.  If  the 
debtor  has  been  adjudged  a  bankrupt,  the  stay  may  be  until 
twelve  months  after  the  date  of  such  adjudication,  or  if  with- 
in that  time  such  person  applies  for  a  discharge,  then  until  the 
question  of  such  discharge  is  determined.  If  the  discharge 
has  been  granted  it  should  be  pleaded  in  the  state  court  in  bar 
of  the  suit  instead  of  making  an  application  to  stay  the  suit. 
The  application  to  stay  suits  in  a  state  court  may  be  made 
in  the  court  of  bankruptcy  administering  the  estate.  The 
application  for  an  injunction  should  be  filed  in  the  clerk's 
ofiice  and  not  in  that  of  the  referee."^  The  application  is  reg- 
ularly made  by  the  bankrupt,  the  petitioning  creditors  or  the 
trustee,  if  one  has  been  appointed.  It  is  made  by  petition  or 
motion  supported  by  affidavits.  The  affidavit  may  be  sworn 
to  by  the  attorney  of  the  creditors,  when  they  live  at  a  distance 
and  his  authority  to  make  the  application  will  be  presumed. ^^ 
The  petition  should  state  the  suit,  the  court  in  which  it  is 
pending,  the  cause  of  action,  and  show  that  it  is  founded  upon 
a  debt  provable  in  bankruptcy  and  that  the  suit  is  one  that 
may  be  properly  stayed.^^  The  petition  should  also  state  the 
names  of  the  persons  to  be  enjoined.  If  such  persons  are  not 
already  before  the  court  they  must  be  brought  in  by  sub- 
poena.^"    The  authority  of  a  court  of  bankruptcy  to  enjoin 

in  that  court  a  proper  pleading  set-  692,  9  Am.  B.  R.   156;  In  re  Klein, 

ting  forth  the  pendenc\'  of  the  pro-  97  Fed.  Rep.  31,  3  Am.  B.  R.  174; 

ceedings  in  bankruptcy,  and,  based  In  re  Gerdes,   102  Fed.  Rep.  318,  4 

thereon,  should  ask  a  stay  as  pro-  Am.   B.  R.  346;   In  re  Emslie    (C. 

vided  for  in  Section  11;  and,  upon  C.  A.  2d  Cir.),   102  Fed.  Rep..  291, 

being  thus   informed   of  the   pend-  4   Am.    B.    R.    126;    Bear   v.    Chase 

ency   of   the    proceedings    in   bank-  (C.   C.  A.  4th   Cir.),  99  Fed.  Rep. 

ruptcy,  it  will  become  the  duty  of  920,  3  Am.  B.  R.  746. 
the    state    court   to    grant   the    stay  ^^  See  Bryan  v.   Bernheimer,   181 

prayed  for."  U.   S.    188.  45    L.   Ed.   814,   5  Am. 

i«  In    re    Gerdes,    102    Fed.    Rep.  B.  R.  523. 
318,  4  Am.  B.  R.  346.  Sec.  2,  clause  6,  of  the  act  autlior- 

1' /n  re  Goldberg,   117  Fed.  Rep.  izes    the    court    of    bankruptcy    "to 

692,  9  Am.  B.  R.   156.  bring    in    and    substitute    additional 

1^ /«   re  Goldberg.   117   Fed.   Rep.  persons  or  parties  in  proceedings  in 


JURISDICTION     OF     COURTS     OF     BANKRUPTCY.  109 

proceedings  in  a  state  court  should  be  exercised  through  per- 
sons subject  to  the  jurisdiction  of  the  bankruptcy  court  and 
the  writ  of  injunction  directed  to  them  and  not  to  the  state 
court."" 

The  proceedings  upon  such  an  apph"cation  may  be  ex  parte 
and  stay  ma}'  be  granted  before  the  subpoena  is  served  upon 
the  bankrupt.  The  injunction  and  the  subpoena  to  new 
parties  may  be  served  at  the  same  time."^ 

The  apphcation  for  a  stay  of  proceedings  must  be  heard 
and  decided  l)y  the  judg'e  and  not  by  the  referee.''  The  judge 
may  refer  such  an  apphcation  or  any  specific  issue  arising 
thereon  to  the  referee  to  ascertain  and  report  the  facts,"'  but 
the  judge  must  make  the  order  granting  or  refusing  the  in- 
junction. 

The  court  of  bankruptcy  has  exckisive  power  to  determine 
whether  the  suit  pending  in  the  state  court  is  one  founded 
upon  a  provable  claim  and  whether  it  should  be  stayed  or 
not.-^  Whether  the  court  will  exercise  this  extraordinary 
power  rests  in  the  sound  discretion  of  the  judge.'*     This  dis- 

bankruptcy   when    necessary   in   the  tion  Judge  Thompson  enjoined  the 

complete  determination  of  the  mat-  assignee,    the    sheriff   and    the    pre- 

ter  in  controversy.''  ferred    creditors    from    taking    any 

-"£.1"  parte  Christ}',  3  How.  292,  further    proceedings    in    the     state 

II  L.  Ed.  603;   Samson  v.  Burton,  court.    The  injunction  and  subpoena 

No.    12285   Fed.    Cas.,    s.   c.    5   Ben.  were  served  at  the  same  time. 

343.  --  Gen.    Ord.    12,    par.    3.      In    re 

21  In  Stengel  v.  The  Leidigh  Car-  Siebert,   133  Fed.  Rep.  781,   13  Am. 

riage  Co.,  in  the  district  court  for  B.  R.  348.    See  In  re  Benjamin,  140 

the  southern  district  of  Ohio    (not  Fed.  Rep.  320,  15  Am.  B.  R.  351. 

reported),  the  Leidigh  Carriage  Co.  -^  Wagner  v.  U.  S.   (C.  C.  A.  6th 

of  Dayton,  on  July   13,   1898,  made  Cir.),  104  Fed.  Rep.  133,  4  Am.  B. 

an  assignment   with   preferences   in  R.  596. 

the    form    of    confessed    judgments  -^  In    re    Knight,    125    Fed.    Rep. 

to    the    amount    of    something    like  35,  39,  11  Am.  B.  R.  i ,  Judge  Evans 

$50,000.      Attachments    were    issued  said : 

and  levies  made  under  these  judg-  "Doubtless    the    court,    while    it 

ments  prior  to  the  assignment,  and  may,   under   Sec.    11   of  the   statute, 

some    or    all    of    the    property    had  stay    proceedings    in    actions    in    a 

been    sold,    but    the    funds    arising  state  court  in  certain  cases,  can  de- 

therefrom  had  not  been  distributed.  cline  to  exercise  its  jurisdiction  gnd 

Upon  an  application  for  an  injunc-  power  in  that  respect.     But  this  de- 


no 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


cretion  can  be  reviewed  by  a  circuit  court  of  appeals  on  peti- 
tion for  review, ■■'^  but  will  not  be  interfered  with  by  the 
appellate  court  unless  it  appears  that  it  has  been  abused. 

A  stay  will  be  granted  only  when  some  benefit  to  the  bank- 
rupt's estate  will  be  derived  thereby.  Thus  a  suit  to  foreclose 
a  mortgage  or  other  lien  may  be  stayed  when  the  property  is 
likely  to  be  sold  for  more  than  the  amount  of  the  lien  debt,"'^ 
but  not  when  it  is  insufficient  to  pay  it.-^ 

The  courts  *of  bankruptcy  have  granted  injunctions  to  stay 
proceedings  in  tlie  state  courts  in  the  following  cases :  attach- 
ment suits,"^  an  action  upon  an  unliquidated  claim  which 
might  be  liquidated  and  proved  in  bankruptcy,'^  a  suit  to  en- 
force a  mechanic's  lien,^°  or  a  suit  to  foreclose  a  mortgage,^^ 


pends  entirel}'  upon  its  own  discre- 
tion— a  discretion  which  can  not  be 
controlled  otherwise  than  by  appel- 
late proceedings  in  a  higher  court. 
This  discretion  has  been  exercised 
by  this  court  in  several  instances — 
among  them,  in  the  case  of  Hol- 
loway,  93  Fed.  Rep.  639,  and  in  the 
case  of  Porter,  109  Fed.  Rep.  in. 
Doing  this  did  not  depend  upon  any 
want  of  power  in  such  cases,  but 
because  it  was  discreet  not  to  exer- 
cise the  power,  inasmuch  as  no  ben- 
efit could  come  to  the  general  cred- 
itors by  staying  a  suit  in  the  state 
court,  the  entire  avails  of  which 
must  go  to  the  plaintiff  in  the  action 
there  pending." 

-■'  As  was  done  in  Bear  v.  Chase 
(C.  C.  A.  4th  Cir.),  99  Fed.  Rep. 
920,  3  Am.  B.  R.  746;  In  re  Kenney 
(C.  C.  A.  2d  Cir.),  105  Fed.  Rep. 
897,  5  Am.  B.  R.  355;  White  v. 
Thompson  (C.  C.  A.  5th  Cir.), 
119   Fed.    Rep.   868,    9   Am.    B.    R. 

653- 

-«/»  re  Ball,  118  Fed.  Rep.  672, 
9  Am.  B.  R.  276;  In  re  Booth,  96 
Fed.  Rep.  943,  2  Am.  B.  R.  770; 
In  re   San   Gabriel   Sanitorium   Co. 


(C.  C.  A.  9th  Cir.),  102  Fed.  Rep. 
310,  4  Am.  B.  R.197;  In  re  Pittle- 
kow,  92  Fed.  Rep.  901,  i  Am.  B. 
R.  472;  In  re  Nathan,  92  Fed. 
Rep.    590. 

2"  Heath  v.  Shaffer,  93  Fed.  Rep. 
647,  2  Am.  B.  R.  98;  In  re  Hollo- 
way,  93  Fed.  Rep.  638,  i  Am.  B.  R. 
659;  In  re  Porter,  109  Fed.  Rep. 
Ill,  6  Am.  B.  R.  259;  In  re  Ger- 
des,    102   Fed.   Rep.  318,  4  Am.   B. 

R.  346. 

^sBear  v.  Chase  (C.  C.  A.  4th 
Cir.),  99  Fed.  Rep.  920,  3  Am.  B. 
R.  746;  In  re  Goldberg,  117  Fed. 
Rep.  692,  9  Am.  B.  R.  156;  In  re 
Eastern  Com.  &  Imp.  Co.,  129  Fed. 
Rep.  847,  12  Am.  B.  R.  305. 

-^  In  re  Hilton,  104  Fed.  Rep. 
981,  4  Am.  B.   R.  774. 

30  In  re  Emslie  (C.  C.  A.  2d 
Cir.),  102  Fed.  Rep.  291,  4  Am.  B. 
R.  126. 

But  see  In  re  Grissler  (C.  C.  A. 
2d  Cir.),  136  Fed.  Rep.  754,  13  Am. 
B.  R.  508. 

31 /n,  re  Ball,  118  Fed.  Rep.  672, 
9  Am.  B.  R.  276;  In  re  Booth,  96 
Fed.  Rep.  943,  2  Am.  B.  R.  770; 
In    re   San   Gabriel    Sanitorium   Co. 


JURISDICTION     OF     COURTS    OF     BANKRUPTCY 


HI 


a  sheriff  from  paying  money  collected  upon  execution  to  the 
judgment  creditor,''-  a  trust  company  from  paying  proceeds 
of  a  sale  deposited  with  it  to  abide  a  final  judgment  in  a  state 
court, ^'^  an  action  by  a  plaintiff  against  his  bankrupt  ven- 
dee,^* to  prevent  arrest  and  imprisonment  upon  an  execution 
issued  from  a  state  court/'^  an  action  of  ejectment  by  a  land- 
lord,'**'  or  distress  by  a  landlord  when  tenant  is  afterwards 
adjudicatecL  bankrupt,^'  or  a  bankrupt  fireman's  discharge 
from  service, ^^  a  bank  from  endorsing  a  promissory  note 
given  by  a  debtor  of  the  bankrupt,''^  to  prevent  a  transfer  of 
property  mortgaged  by  the  mortgagee,*"  a  proceeding  in  the 
state  court  which  would  defeat  the  provisions  of  a  bankrupt 
act  or  interfere  with  the  administration  of  the  estate  of  the 
debtor,'*^  and  proceedings  under  a  general  assignment  for  the 
benefit  of  creditors.*" 


(C.  C.  A.  9th  Cir.),  102  Fed.  Rep. 
310,  4  Am.  B.  R.  197;  In  re  Pittle- 
kow,  92  Fed.  Rep.  901,  i  Am.  B. 
R.  472;  In  re  Nathan,  92  Fed.  Rep. 

590. 

But  see  Heath  v.  Shaffer,  93  Fed. 
Rep.  647,  2  Am.  B.  R.  98;  In  re 
HoUoway,  93  Fed.  Rep.  638,  i  Am. 
B.  R.  659;  In  re  Porter,  109  Fed. 
Rep.  Ill,  6  Am.  B.  R.  259;  In  re 
Gerdes,  102  Fed.  Rep.  318,  4  Am. 
B.  R.  346. 

3-  In  re  Kenney,  95  Fed.  Rep. 
427,  s.  c.  Clarke  v..  Larremore,  18S 
U.  S.  486,  47  L.  Ed.  555,  9  Am. 
B.  R.  476;  In  re  Vastbinder,  132 
Fed.  Rep.  718,   13  Am.  B.  R.   148. 

33  In  re  Riker,  107  Fed.  Rep.  96 , 
S  Am.  B.  R.  720. 

3*/m  re  Butts,  120  Fed.  Rep. 
966,  10  Am.  B.  R.  16. 

35  Knott  V.  Putnam,  107  Fed. 
Rep.  907,  6  Am.  B.  R.  80. 

3<5  In  re  Chambers,  Cakler  &  Co., 
98  Fed.  Rep.  865,  3  Am.  B.  R.  537. 

^''  In  re  Lines,  133  Fed.  Rep.  803, 
13  .A.m.   B.   R.  31S. 


38 /m  re  Hicks,  133  Fed.  Rep.  739, 
13  Am.  B.  R.  654. 

'"■*  In  re  Jackson,  94  Fed.  Rep. 
797,  2  Am.  B.  R.  501. 

40  In  re  Nathan,  92  Fed.  Rep.  590. 

*i  In  re  Hornstein.  122  Fed.  Rep. 
266,  10  Am.  B.  R.  309;  In  re 
Knight,  125  Fed.  Rep.  35,  11  Am. 
B.  R.  I;  In  re  Gutman.  114  Fed. 
Rep.  1009,  8  Am.  B.  R.  252 ;  In  re 
Russell  (C.  C.  A.  2d.  Cir.),  101 
Fed.  Rep.  248,  3  Am.  B.  R.  658. 

See  also  White  v.  Schloerb,  178 
U.  S.  542,  44  L.  Ed.  1 183,  4  Am. 
B.  R.  178. 

*-In  re  Krinsky,  112  Fed.  Rep. 
972,  7  Am.  B.  R.  535 ;  In  re  Knight, 
125  Fed.  Rep.  35;  11  Am.  B.  R. 
i;  In  re  Gutwillig  (C  C.  A.  2d 
Cir.),  90  Fed.  Rep.  481.  i  Am.  B. 
R.  338;  92  Fed.  Rep.  ^2,7,  i  Am. 
B.  R.  388;  Lea  v.  West  Co.,  91 
Fed.  Rep.  237,  i  Am.  B.  R.  2bi. 
s.  c.  174  U.  S.  590,  43  L.  Ed.  1098, 
2  Am.  B.  R.  463. 

Consult  Randolph  v.  Scruggs,  190 
U.  S.  533,  47  L.  Ed.  1 165,  TO  Am. 
B.  R.  I. 


112 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


The  courts  of  bankruptcy  have  refused  to  stay  suits  in  the 
following  cases:  a  suit  founded  upon  a  claim  from  which  a 
discharge  would  not  be  a  release,*^  as  a  suit  to  enforce  ali- 
mony," or  an  action  founded  in  fraud/^  or  controversies  re- 
lating to  exempt  property,*'^  or  an  execution  on  judgment  in 
a  suit  upon  a  bail  bond/'  a  creditor's  bill  or  other  suit  to  en- 
force a  valid  lien  or  attachment  begun  more  than  four  months 
prior  to  the  commencement  of  bankruptcy  proceedings/*  a 
replevin  action  where  the  property  is  in  the  possession  of  the 
state  court/-'  or  generally  where  the  property  in  controversy 
is  lawfully  in  the  possession  of  the  state  court  having  juris- 
diction to  administer  the  same/"  an  action  against  a  marshal 
individually  for  trespass,"'^  an  action  to  foreclose  a  lien  and 
for  personal  judgment/^  an   action  to   enjoin  third   parties 


"White  V.  Thompson  (C.  C.  A. 
5th  Cir.),  119  Fed.  Rep.  868,  g 
Am.  B.  R.  653;  Continental  Nat. 
Bank  v.  Katz  ( Supr.  Ct.  Cook  Co., 
111.),  I  Am.  B.  R.  19;  In  re  Cole, 
106  Fed.  Rep.  837,  5  Am.  B.  R. 
780;  In  re  Shepard,  97  Fed.  Rep. 
187,  5  Am.  B.  R.  857;  Mackel 
V.  Rochester,  135  Fed.  Rep.  984, 
14  Am.  B.  R.  429. 

**/«  re  Shepard,  97  Fed.  Rep. 
187,  5  Am.  B.  R.  857. 

See  also  Audnbon  v.  Shufeldt, 
181  U.  S.  575,  45  L.  Ed.  1009,  5  Am. 
B.  R.  829;  Dunbar  v.  Dunbar,  190 
U.  S.  340,  47  L.  Ed.  1084,  10  Am.  B. 

139- 

^'^  In  re  Cole,  106  Fed.  Rep.  837 , 
5  Am.  B.  R.  780. 

40  White  V.  Thompson  (C.  C.  A. 
5th  Cir.),  119  Fed.  Rep.  868,  9  Am. 
B.  R.  653 ;  Roden  Grocerj-  Co.  v. 
Bacon,  133  Fed.  Rep.  515,  13  Am. 
B.  R.  251. 

See  also  Lockwood  v.  Exch.  Bk., 
190  U.  S.  294,  47  L.  Ed.  io6r,  10 
Am.  B.  R.  709. 

'''  In  re  Franklin.  106  Fed.  Rep. 
666;  Jacquith  v.  Rowley,  188  U.  S. 


620,  47  L.  Ed.  256,  9  Am.  B.  R. 
523. 

•isMetcalf  v.  Barker,  187  U.  S. 
165,  47  L.  Ed.  122,  9  Am.  B.  R. 
36 ,  reversing  In  re  Lesser,  100  Fed. 
Rep.  433.  3  Am.  B.  R.  815;  In  re 
Beaver  Coal  Co.  (C.  C.  A.  9th  Cir.), 
113  Fed.  Rep.  889,  7  Am.  B.  R.  542; 
In  re  Snell,  125  Fed.  Rep.  154,  11 
Am.  B.  R.  35 ;  Reed  v.  Equitable 
Trust,  115  Ga.  780,  8  Am.  B.  R. 
242 ;  Keegan  v.  King,  96  Fed.  Rep. 
75S,   3   Am.    B.    R.   79- 

•*9/m  re  Wells,  114  Fed  Rep.  222, 
8  Am.  B.  R.  75.- 

"0  Pickens  v.  Ro.v.  187  U.  S.  177, 
47  L.  Ed.  128,  9  Am.  B.  R. 
47;  Frazier  v.  Southern  Loan  & 
Trust  Co.  (C.  C.  A.  4th  Cir.),  99 
Fed.  Rep.  707,  3  Am.  B.  R.  710; 
Tennessee  Producer  Marble  Co.  v. 
Grant,  135  Fed.  Rep.  322,  14  Am. 
B.  R.  288.     See  also  Sec.  23,  post. 

'^McLean  v-  Mayo,  113  Fed.  Rep. 
106,   7   Am.   E.   R.    115. 

•"'-  In  re  Greater  American  Ex- 
position, 102  Fed.  Rep.  986,  4  Am. 
B.  R.  486;  Reed  y.  Equitable  Trust 
115  Ga.  780,  8  Am.   B.  R.  242. 


JURISDICTION     OF     COURTS    OF    BANKRUPTCY.  113 

from  disposing  of  property  which  the  court  of  bankruptcy 
can  not  order  paid  to  a  trustee,"'*  to  enjoin  creditors  from 
prosecuting-  their  claims  against  a  corporation  to  judgment 
for  the  purpose  of  fixing  the  statutory  habihty  of  its  officers 
and  stockholders.'^*  But  the  execution  of  such  judgment 
against  the  bankrupt  corporation  will  be  enjoined."* 

The  language  of  the  injunction  should  be  in  accordance 
with  the  statute.  If  the  application  is  made  before  an  adjudi- 
cation the  stay  should  be  until  after  the  adjudication  or  dis- 
missal of  the  petition.^"  If  the  debtor  has  been  adjudged  a 
bankrupt  the  suit  may  be  stayed  until  twelve  months  after  the 
date  of  such  adjudication,  and  if  within  that  time  such  person 
applies  for  a  discharge,  then  until  the  question  of  such  dis- 
charge is  determined.'^*'  No  injunction  should  be  granted  to 
stay  a  suit  after  the  discharge  is  granted.'^'  If  an  injunction 
had  been  granted  prior  to  the  discharge  it  should  be  dissolved 
when  the  discharge  is  granted."^ 

When  an  injunction  is  issued  it  should  be  served  upon  the 
parties  personally,  but  it  is  not  necessary  where  the  parties 
have  actual  notice  of  its  issuance."''' 

Staying  a  suit  m  a  state  court  is  not  a  dismissal.  It  does 
not  defeat  the  cause  of  action,  provided  no  discharge  is 
granted.  It  merely  suspends  proceedings  in  the  state  court  so 
long  as  the  injunction  is  in  force.  Future  action  in  the  state 
court  depends  upon  the  action  of  the  court  of  bankruptcy. 
If  a  discharge  is  refused  the  injunction  is  dissolved.  If 
the  discharge  is  granted  the  bankrupt  may  plead  it  in  the 
suit.'° 

^^  In    re    Ward,    104    Fed.    Rep.  ^^  B.  A.   1S98,  Sec.   iia. 

985,    5    Am.    B.    R.    215;     In    re  ^'^  B.  A.   1898,   Sec.   iia. 

Browne,   104  Fed.  Rep.  762,  5  Am.  ^'  B.  A.   1898,  Sec.   i  ro. 

B.  R.  220.  °s  In  re   Flanders,    121    Fed.   Rep. 

But    see    In    re    Smith,    113    Fed.  936;  In  re  Rosenthal,  108  Fed.  Rep. 

Rep.  993,  8  Am.   B.  R.   55.  t^GS.,  5  Am.  B.  R.  799;  In  re  Herz- 

•''*  In  re  Remington  Auto.  &  Mo-  berg,  25   Fed.   Rep.  699. 

tor  Co.,   119   Fed.  Rep_.  441,  9  Am.  •''•*//?    re    Krinsky,    112   Fed.    Rep. 

B.    R.    533;    In    re   Marshall    Paper  972,  7  Am.  B.  R.  535. 

Co.    (C.   C.   A.    1st  Cir.).    102   Fed.  "    '■" /»    re    Wesson,    88    Fed.    Rep. 

Rep.  872,  4  Am.   B.   R.  468.  855;    In    re    Rosenberg,    No.    12054 


114  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

When  the  suit  is  pending  in  another  district  from  that  in 
which  the  original  case  is  pending,  it  would  seem  that  the 
court  of  bankruptcy  for  such  district  might  issue  the  injunc- 
tion in  the  exercise  of  ancillary  jurisdiction."^ 

If  no  steps  are  taken  to  stay  proceedings  in  a  state  court,  or 
a  stay  is  refused,  such  proceedings,  after  the  adjudication  in 
bankruptcy  are  valid  and  binding.*''-  The  fact  that  the  plain- 
tiff in  the  state  court  proves  his  claim  in  bankruptcy  does  not 
operate  to  deprive  the  state  courts  of  jurisdiction,  nor  amount 
to  a  consent  to  the  exercise  of  exclusive  jurisdiction  by  the 
court  of  bankruptcy.""  If  a  case  is  not  stayed  the  trustee  may 
apply  to  the  court  of  bankruptcy  for  leave  to  prosecute  and 
defend  such  pending  suits."* 

Any  party  in  interest  may  move  to  dissolve  the  injunc- 
tion.*'^ If  the  stay  of  proceedings  was  improperly  granted  the 
court  of  bankruptcy  may  set  aside  the  order  upon  motion 
seasonably  filed  for  that  purpose.*'*'  A  restraining  order  is 
binding  and  conclusive  upon  all  parties  until  it  is  set  aside.*'^ 

§  23.    Power  to  obtain  possession  of  property — In  custodia 
legis. 

Where  property,  claimed  to  belong  to  the  estate  of  the  bank- 
rupt, is  voluntarily  surrendered  to  the  trustee  in  bankruptcy 
there  can  be  no  controversy. 

Fed.   Cas.,    s.   c.   3   Ben.    14;    In    re  9  Am.  B.  R.  47;  Metcalf  v.  Ba^-ker, 

Thomas,  No.  13890  Fed.  Cas.,  s.  c.  187    U.    S.    165,   44    L.    Ed.    122,    9 

3    N.    B.    N.    38;    Banque-Franco-  Am.   B.   R.  36;   In  re   Gerdes,    102 

Egyptienne  v.  Brown,  24  Fed.  Rep.  Fed.    Rep.   318,   4   Am.    B.    R.   346; 

106;  Ruiz  V.  Eickerman,  5  Fed.  Rep.  Reed    v.    Equitable    Trust    Co    115 

790.  Ga.  780,  8  Am.  B.  R.  242. 

''1  Sherman      v.      Bingham,      No.  "^Pickens  v.  Roy,  187  U.  S.  177. 

12762  Fed.  Cas.,  s.  c.  3  Chff.  552;  47  L.  Ed.   128,  9  Am.  B.  R.  47. 

Lathrop   v.    Drake,    91    U.    S.    516,  '^*  B.  A.  1898,  Sec.  lib  and  c. 

23  L.  Ed.  414.  See  Ancillary  Juris-  "^  In  re  Rosenthal,  108  Fed.  Rep. 

diction.    Sec.    21.      Contra,    In    re  368,  5  Am.  B.  R.  799. 

Richardson,  No.  11774  Fed.  Cas.,  s.  '^^  In  re  Snell,  125  Fed.  Rep.  154, 

c.  2  Ben.  517;  In  re  Williams,  120  11  Am.  B.  R.  35. 

Fed.  Rep.  38,  9  Am.  B.  R.  741.  "^  Wagner  v.  U.  S.  (C.  C.  A.  6th 

<■■- Boynton    v.    Ball,     121    U.    S.  Cir.\  104  Fed.  Rep.  133,  4  Am.  B. 

466-7,    30   L.    Ed.   985;    Pickens   v.  R.  596. 
Roy,  187  U.  S.  i77>  47  L.  Ed.  128, 


JURISDICTION     OF     COURTS    OF    BANKRUPTCY. 


115 


Where  the  property  is  in  the  possession  of  the  hankrupt  or 
his  agent,  at  tlie  time  the  petition  in  bankruptcy  was  filed,  the 
court  of  bankruptcy  in  which  the  case  is  pending  may  sum- 
marily order  him  to  deliver  to  the  trustee  such  property  and 
commit  him  for  contempt  if  he  fails  to  do  so.^ 

Where  property,  claimed  to  belong  to  the  bankrupt,  is  in 
the  possession  of  a  third  party  at  the  time  of  filing  the  petition 
in  bankruptcy,  who  claims  title  to  it  as  against  the  trustee,  the 
court  of  bankruptcy  can  not  summarily  order  such  property 
delivered  to  the  trustee.  A  plenary  suit  at  law  or  in  equity 
must  be  brought  to  recover  it  either  in  a  court  of  bankruptcy 
or  a  state  court.  This  subject  has  been  considered  else- 
where.' 

Where  property  is  in  the  actual  and  lawful  possession  of  a 
state  court  or  an  officer  thereof  and  such  court  has  jurisdiction 
to  administer  such  property,  its  possession  will  not  ordinarily 
be  disturbed  by  process  issued  by  a  court  of  bankruptcy.^ 
Thus' where  the  possession  of  a  state  court  is  acquired  by  a 
judgment  creditor's  suit  begun  more  than  four  months  prior 
to  bankruptcy,*  or  where  a  receiver  has  taken  possession  of 
property  under  an  order  of  a  state  court,"  or  where  property 
is    in   the   possession   of   administratOHs    and    executors,"    or 


1  Mueller  v.  Nugent,  184  U.  S. 
1,  46  L.  Ed.  405,  5  Am.  B.  R. 
176;  In  re  Rosser  (C.  C.  A.  8th 
Cir.),  loi  Fed.  Rep.  562,  4  Am.  B. 
R.  153;  In  re  Wilson.  116  Fed. 
Rep.  -419,  8  Am.  B.  R.  612;  In  re 
Moore,  104  Fed.  Rep.  869,  5  Am. 
B.  R.  151 ;  In  re  Stokes,  106  Fed. 
Rep.  312,  6  Am.  B.  R.  262. 

-  Sec.  20(7.  ante. 

3  Pickens  v.  Roy,  187  U.  S.  177, 
47  L.  Ed.  128,  9  Am.  B.  R.  47; 
Metcalf  V.  Barker,  187  U.  S.  165, 
47  L.  Ed.  122,  9  Am.  B.  R.  36; 
Frazier  v.  Southern  L.  &  T.  Co. 
(C.  C.  A.  4th  Cir.),  99  Fed.  Rep. 
707,  3  Am.  B.  R.  710;  In  re  Price, 
92    Fed.    Rep.    987,    i    Am.    B.    R. 


606;  In  re  Heckman  (C.  C.  A. 
Qth  Cir.),  140  Fed.  Rep.  859,  15  Am. 
B.  R.  500. 

■*  Metcalf  V.  Barker,  187  U.  S. 
165,  47  L.  Ed.  122,  9  Am.  B.  R. 
36;  Pickens  v.  Roy,  187  U.  S.  177, 
47  L.  Ed.  128,  9  Am.  B.  R.  47; 
Frazier  v.  Southern  L.  &  T.  Co. 
(C.  C.  A.  4th  Cir.).  99  Fed.  Rep.. 
707,  3  Am.  B.  R.  710. 

■'•  /;/.  re  Price,  92  Fed.  Rep.  987, 
T  Am.  B.  R.  606.  . 

"  Byers  v.  ]\IcAuley,  149  U.  S. 
608,  37  L.  Ed.  867;  Wickham  v. 
Hull,  60  Fed.  Rep.  326;  In  re 
Pierce,  102  Fed.  Rep.  977,  4  Am.  B. 
R.  489;  Moses  V.  Pond  (N.  Y.  Sup. 
Ct.),  4  Am.  B.  R.  655. 


116 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


sheriffs  and  marshals,'  a  court  of  bankruptcy  will  not  ordi- 
narily disturb  such  possession.  The  general  rule  of  comity  in 
this  respect  is  recognized  and  applied  by  the  courts  of  bank- 
ruptcy and  the  state  courts  so  far  as  their  jurisdiction  is  con- 
current.^ 

But  where  the  possession  of  the  state  court  would  have  the 
effect  of  defeating  the  operation  of  the  bankruptcy  law,  the 
courts  of  bankruptcy  may  seize  such  property  for  the  purpose 
of  administering  it  in  accordance  with  tliat  law.^  The  reason 
for  this  is  that  the  bankruptcy  law  places  the  administration 
of  the  affairs  of  insolvents  exclusively  under  the  jurisdiction 
of  the  bankruptcy  courts.^"  In  this  respect  the  state  courts 
have  not  concurrent  jurisdiction  with  the  courts  of  bankrupt- 
cy and  the  general  rule  of  comity  has  no  application.  The 
bankruptcy  law  is  paramount  and  should  not  be  defeated  by 
proceedings  in  a  state  court.  A  court  of  bankruptcy  will  not 
interfere  with  property  in  the  possession  of  a  state  court,  ex- 
cept where  that  possession  was  acquired  in  a  proceeding  de- 


■'^  Cove II  V.  Heyman,  iii  U.  S. 
176,  28  L.  Ed.  390;  Krippendorf  v. 
Hyde,  no  U.  S.  276,  28  L.  Ed. 
14s;  Senior  v.  Pierce,  31  Fed.  Rep. 
625;  Gumbel  v.  Pitkin,  124  U.  S. 
131,  31  L.  Ed.  374;  Freeman  v. 
Howe,    24    How.    450,    16    L.    Ed. 

749- 

s  See  Metcalf  v.  Barker,  187  U. 
S.  165,  47  L.  Ed.  122,  9  Am.  B.  R. 
36;  Frazier  v.  Southern  Loan  & 
Trust  Co.-  (C.  C.  A.  4th  Cir.),  99 
Fed.  Rep.  707,  3  Am.  B.  R.  710; 
Peck  V.  Jenness,  7  How.  612,  12 
L.   Ed.   841. 

Speaking  of  the  general  rule  of 
comity  in  this  respect,  in  Compton 
V.  Jesup,  68  Fed.  Rep.  263,  278-9, 
s.  c.  T5  C.  C.  A.  397,  412-3.  Judge 
Taft  said : 

"Necessity  and  comity  both  re- 
quire that  where,  by  its  officers  act- 
ing under  color  of  its  order  or 
process,  a  court   has  taken   into   its 


custody  property  of  any  kind,  an- 
other court,  though  of  equal  and 
co-ordinate  jurisdiction,  should 
not  be  permitted  either  to  oust  the 
possession  of  the  first  court,  or  in 
any  way  to  interfere  with  its  com- 
plete control  and  disposition  of  the 
property  for  the  purpose  of  tli^ 
cause  in  which  its  action  has  been 
invoked.  This  principle  has  been 
laid  down  by  the  supreme  court  of 
the  United  States  in  a  long  line  of 
cases." 

^  In  re  Hornstein,  122  Fed.  Rep. 
266,  10  Am.  B.  R.  309;  In  re 
Knight,  125  Fed.  Rep.  35.  11  Am. 
B.  R.  i;  Hooks  v.  Aldridge  (C. 
C  A.  5th  Cir.),  145  Fed.  Rep. 
865;  In  re  Watts  &  Sachs,  190  U. 
S.  I. 

^"/;!  re  Watts  &  Sachs,  190  U. 
S.  I  ,  47  L.  Ed.  933,  10  Am.  B.  R. 
786. 


JURISDICTION     OF     COURTS    OF     BANKRUPTCY. 


117 


dared  null  and  void  by  the  Bankrupt  iVct.  'Idius  ^n  assignee 
for  the  benefit  of  creditors  in  a  state  court,  where  the  assign- 
ment is  charged  as  an  act  of  bankruptcy  upon  which  an  ad- 
judication was  made,  may  be  compelled  to  deliver  property  in 
his  possession  as  such  assignee,  to  the  trustee  in  bankruptcy,'' 
or  a  sheriff  of  a  state  court  may  be  compelled  to  pay  to  the 
trustee  money  collected  upon  an  execution  on  a  judgment 
void  under  Sec.  67/,  which  he  has  not  paid  to  the  judgment 
creditor,''  but  not  when  the  money  has  been  paid  over  to  the 
judgment  creditor.'^  Where  property  is  in  the  possession  of 
a  receiver  of  a  state  court,  the  appointment  of  which  receiver 
constitutes  an  act  of  bankruptcy  upon  which  an  adjudication 
is  made,  the  receiver  may  be  compelled  to  deliver  assets  of  the 
debtor  in  his  possession  to  a  receiver  or  trustee  in  bankruptcy 
subsequently  appointed." 

The  court  of  bankruptcy  may  take  possession  of  property 
in  the  possession  of  a  garnishee,  because  a  garnishee  is  not 


■■1  Bryan  v.  Bernheimer,  i8l  U. 
S.  i88,  45  L.  Ed.  814,  5  Am.  B.  R. 
623;  In  re  Thompson,  122  Fed. 
Rep.  174,  affirmed  CC.  C.  A.  2d 
Cir.),  128  Fed.  Rep.  575,  n  Am. 
B.  R.  719;  Leidigh  Carriage  Co.  v. 
Stengel  (C.  C.  .V.  6th  Cir.),  95 
Fed.  Rep.  637,  2  Am.  B.  R.  383 ;  In 
re  Stokes,  106  Fed.  Rep.  312,  6 
Am.  B.  R.  262;  In  re  Knight,  125 
Fed.   Rep.  35,    11   Am.   B.   R.    i. 

1-  In  re  Kenney,  95  Fed.  Rep. 
427,  s.  c.  Clarke  v.  Larremore,  188 
U.  S.  486,  47  L-  Ed.  555,  9  Am. 
B.    R.    476. 

13  In  re  Blair,  102  Fed.  Rep.  987, 
4  Am.  B.  R.  220;  In  re  Knicker- 
bocker, 121  Fed.  Rep.  1004,  10  Am. 
B.  R.  381. 

See  observation  of  Mr.  Justice 
Brewer  in  Clarke  v.  Larremore,  188 
U.  S.  486,  47  L.  Ed.  555 ,  9  Am.  B. 
R.  476. 

i*/;i    re    Knight,    125    Fed.    Rep. 


35,  II  Am.  B.  R.  I ;  Hooks  v.  Ald- 
ndge  (C.  C.  A.  5th  Cir.),  145  Fed. 
Rep.  865. 

In  re  Watts  &  Sachs,  190  U.  S.  i, 
47  L.  Ed.  933,  10  Am.  B.  R.  113, 
the  supreme  court  says  at  p.  28 : 
"The  (state)  court  should  have  di- 
rected the  surrender  of  the  property 
to  him  (the  receiver  in  bankruptcy) 
at  once,  or  at  least  after  the  report 
of  its  own  receiver  after  returnmg 
from  Indianapolis."  .And  agam  at 
p.  35 :  "It  has  been  already  as- 
sumed that  the  bankruptcy  proceed- 
ings operated  to  suspend  the  further 
administration  of  the  insolvents'  es- 
tate in  the  state  court,  but  it  re- 
mained for  the  state  court  to  trans- 
fer the  assets,  settle  the  accounts  of 
its  receiver  and  close  its  connection 
with  the  matter.  Errors,  if  any, 
committed  in  so  doing  could  be 
rectified  in  due  course  and  m  the 
designated  wa\ ." 


118 


LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 


the  officer  of  a  court/'  or  in  the  possession  of  an  officer  of  a 
state  court  who  seized  the  property  without  legal  process  or 

warrant.^'' 

Where  the  property  is  in  the  actual  custody  of  a  state  court 
the  better  practice  is  to  apply  to  the  state  court  to  turn  over 
the  property  to  the  trustee  or  receiver  in  bankruptcy,  even  in 
cases  where  the  court  of  bankruptcy  may  order  such  sur- 
render/'    The  court  of  bankruptcy  may  stay  proceedings  to 


15  Chase  v.  Cannon,  47  Fed.  Rep. 
674. 

But  see  Mack  v.  Winslow,  59  Fed. 
Rep.  316;  8  C.  C.  A.  134- 

16/;?  re  Tyler,  104  Fed.  Rep. 
778.  5  Am.  B.  R.  152. 

See  also  Jervey  v.  The  Carolina, 
66  Fed.  Rep.  1013. 

As  to  the  effect  of  collusive  pro- 
ceedings to  get  property  out  of  the 
custody  of  a  court,  see  Daniels  v. 
Lazarus,  65  Fed.  Rep.  718;  Gumbel 
V.  Pitkin,  124  U.  S.  131,  31  L.  Ed. 

374- 

1"  In  re  Watts  &  Sachs,  190  U.  S. 
I,  47  L.  Ed.  933,  10  Am.  B.  R. 
113;  Wilson  V.  Parr,  115  Ga.  629, 
8  Am.  B.   R.  230. 

In  re  Knight,    125   Fed.   Rep.  35. 
Judge    Evans    said:      "It    seems    so 
clear,  from  the  bankruptcy  law,  as 
construed  by  the  highest  courts,  that 
the  rights  of  the  receiver,  acquired 
under  the  circumstances  shown  by 
the    testimony,    are    subordinate    to 
those  of  the  trustee  and  to  those  of 
the  bankruptcy  court,  that  it  is  not 
doubted     that     the     Fulton     circuit 
court   will   acquiesce    in  that   view, 
and,  upon  proper  application  made 
to  it,  will  order  the  receiver  to  turn 
over  to  the  trustee  the  property  in 
his    hands.      To    the    end    that    an 
application  for  that  purpose  may  be 
made,  further  proceedings  upon  the 
rule    will    for   the    present    be    held 


in  abeyance.     It  would  not  only  be 
unseemly,    but   altogether    disagree- 
able  to   this   court,   to    pursue    any 
course  which  would  be  wanting  in 
the  utmost  respect  and  courtesy  to 
the   state  tribunal,   and  orders  will 
be    made    directing    the    trustee   to 
apply  to  that  court  for  leave  to  en- 
ter a  special  appearance  in  the  case 
there    pending,    styled    "First    Na- 
tional   Bank    of    Fulton    v.    Henry 
Knight   and    others,"    for   the   pur- 
pose of  filing  a  copy  of  this  opin- 
ion, the  orders  made  in  pursuance 
thereof,  a  copy  of  the  adjudication 
in  bankruptcy,  and  an  accompany- 
ing application  for  an  order  of  that 
court  directing  its  receiver  to  turn 
over   to   the   trustee    in  bankruptcy 
the  property  of  the  bankrupt  held 
by  the  receiver.    For  the  purpose  of 
giving  ample  opportunity  for  doing 
thi.s,  the  rule  will  be  respited  until 
the    I2th   day   of   October,    1903,   at 
which  time  the  trustee  virill  report 
what  has  been   done   in  the   prem- 
ises." 

(The  state  court  took  the  same 
view  of  the  law,  and  on  October 
1st  ordered  its  receiver  to  turn  over 
to  the  trustee  in  bankruptcy  all  the 
property  in  his  hands.) 

In  Carpenter  Bros.  v.  O'Connor, 
t6  O.  C.  C.  526.  an  application  was 
made  to  the  state  court  for  an  order 
directing    a    receiver    appointed    by 


JURISDICTION     OF     COURTS    OF     15A.\  KRUl'TCY.  119 

permit  an  application  for  this  purpose  to  the  state  court. 
Tlie  appHcation  to  the  state  court  is  regularly  made  by  petition 
or  motion  suported  by  affidavits.  A  certified  copy  of  the 
petition  in  bankruptcy  and  order  of  adjudication,  if  one  has 
been  made,  should  be  exhibited  to  the  state  court.  In  prac- 
tice the  state  courts  have  regularly  passed  an  order  to  turn 
over  tiie  property  to  the  bankruptcy  court  to  be  administered 
without  the  necessity  of  issuing  process  from  the  bankruptcy 
court. 

In  order  to  place  property  in  the  custody  of  a  state  court 
there  must  be  a  seizure  under  process  of  the  court  or  some  act 
equivalent  thereto  to  obtain  actual  possession.  Filing  a  judg- 
ment creditor's  bill  and  service  of  process  is  an  equitable 
attachment,'*  but  the  mere  beginning  of  an  action  does  not 
ordinarily  bring  the  assets  of  the  debtor  into  the  custody  of  a 
state  court.  This  has  been  held  true  of  a  suit  to  foreclose  a 
mortgage.'" 

Where  the  property  has  come  into  the  judicial  custody  of  a 
court  of  br.nkruptcy,  or  an  officer  thereof,  as  referee,  trustee 
or  receiver,  the  state  court  has  no  power  upon  its  process  to 
take  such  property  out  of  the  judicial  custody  of  the  court  of 
bankruptcy."**     This    includes   the   property   of   third   parties 


that  court  after  an  adjudication  in  await  the  decision  of  the  circuit 
a  court  of  bankruptcj-,  to  deliver  court  of  appeals  as  to  who  was  en- 
property  of  the  bankrupt  in  his  pos-  titled  to  the  custody  and  control  of 
session    to    a    trustee,    subsequently  the  property. 

appointed   by    the    creditors    in    the  is  ^Metcalf   v.    Barker,    187    U.    S. 

proceeding    in    bankruptcy,    on    the  165,  47  L.   Ed.    122,   9  Am.   B.   R. 

ground  that  the  trustee's  title  vested  36. 

as  of  the  date  of  adjudication  and  ^^  Carpenter    Bros.    v.    O'Connor, 

prior   to   the   property   coming   into  16  O.  C.  C.  526. 

the  possession  of  the  receiver.    The  ^o  White   v.    Schloerb,    178  U.    S. 

application  was  granted.  542.  44  L.  Ed.   1183,  4  Am.  B.  R. 

In  Hooks  V.  Aldridge   (C.  C.  A.  178,    2    N.    B.    N.    721 ;    Keegan   v. 

5th    Cir.),    14s    Fed.    Rep.   865,    the  King,  96  Fed.   Rep.  758,  3  Am.  B. 

property    in   the   possession   of   the  R.    79".    ^«    '''^    Russell    (C.    C.    A. 

state    receiver    was    sold    pursuant  2d  Cir.),  loi  Fed.  Rep.  248,  3  Am. 

to    an    agreement   between    the    re-  B.    R.   658;    In    re   Chambers.    Cal- 

ceiver  and  the  trustee  that  the  pro-  der    &    Co.,    98    Fed.    Rep.    865,    3 

cceds    be      deposited     in    bank    to  Am.    B.    R.    537,   2   N.   B.    N.   388; 


120 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


claiming-  a  title  adverse  to  the  bankrupt  or  trustee,  where  the 
officer  of  the  court  of  bankruptcy  has  acquired  peaceable  pos- 
session of  the  property."^ 

The  filing  of  a  petition  in  bankruptcy  is  a  caveat  to  all  the 
world  and  in  effect  an  attachment  and  injunction.-^  The 
effect  of  filing  such  a  petition  is  to  place  the  property  of  the 
bankrupt  constructively  in  the  custody  of  the  court  of  bank- 
ruptcy. Especially  if  the  petition  is  subsequently  sustained 
by  the  court.'"^  Where  the  petition  is  dismissed  it  may  be 
doubted  if  the  mere  filing  of  a  petition  will  be  held  such  cus- 
tody as  to  render  void  dealings  with  such  property  pending 
an  adjudication. 

A  claimant  of  such  property  in  the  custody  of  the  bank- 


In  re   Corbett.    104   Fed.   Rep.   872, 

5  ^Am.  B.  R.  244;  In  re  Enislie 
(C.  C.  A.  2d  Cir.),  102  Fed.  Rep. 
291,  4  Am.  B.  R.  126,  2  N.  B.  N. 
992;  In  re  Neely,  108  Fed.  Rep. 
371,  5  Am.  B.  R.  836;  In  re  Kel- 
logg, 121  Fed.  Rep.  2)3i2> ,  10  Am. 
B.  R.  7;  In  re  Weinger,  Bergmann 

6  Co.,  126  Fed.  Rep.  875,  11  Am. 
B.  R.  424;  Crosby  v.  Spear,  98  Me. 
542,  II  Am.  B.  R.  613. 

•■^i/n  re  Rodgers  (C.  C.  A.  7th 
Cir.),  125  Fed.  Rep.  169,  11  Am. 
B.  R.  79;  Haven  &  Geddes  Co. 
V.  Pierek  (C.  C.  A.  7th  Cir.),  120 
Fed.  Rep.  244 ,  9  Am.  B.  R.  569 ; 
Antigo  Screen  Door  Co.,  123  Fed. 
Rep.  249,   10  Am.  B.  R.  359. 

In   O'Dell   V.    Boyden    (C.   C.   A. 

6th   Cir.),    148    Fed."  Rep.  ,    17 

Am.  B.  R. -,  speaking  of  a  seat 

in  the  New  York  Stock  Exchange, 
Judge  Lurton  said :  "It  was  as 
much  in  his  custody  and  possession 
as  such  a  species  of  property  is 
capable  of.  To  deny  the  trustee's 
possession  would  be  to  deny  the 
capability  of  possession  of  a  chose 
in  action  or  other  incorporeal 
right    or    equity.      The    possession 


may  be  constructive  and  not  man- 
ual, but  it  is  only  so  because  such 
property  is  not  capable  of  a  more 
tangible  custody." 

2-'}iIueller  v.  Nugent,  184  U.  S. 
I,  46  L.  Ed.  405,  5  Am.  B.  R.  176; 
In  re  Reynolds,  127  Fed.  Rep.  760, 
II  Am.  B.  R.  758;  In  re  Weinger, 
Bergmann  &  Co.,  126  Fed.  Rep.  875. 
II  Am.  B.  R.  424;  In  re  Shuster 
Co.  (C.  C.  A.  6th  Cir.),  134  Fed. 
Rep.  43,  13  Am.  B.  R.  760;  In  re 
First  Nat.  Bank  (C.  C.  A.  6th  Cir.), 
135  F'ed.  Rep.  62,  14  Am.  B.  R. 
180;  In  re  Mertens,  131  Fed.  Rep. 
507,   12  Am.  B.  R.  698. 

-^  In  re  Schermerhorn  (C.  C.  A. 
8th  Cir.),  145  Fed.  Rep.  341,  16  Am. 
B.  R.  507;  In  re  Granite  City  Bank 
(C.  C.  A.  8th  Cir.),  137  Fed.  Rep. 
818,  14  Am.  B.  R.  404;  In  re  Wein- 
ger, Bergmann  &  Co.,  126  Fed.  Rep. 
875,  II  Am.  B.  R.  424.  Consult 
White  V.  Schloerb,  178  U.  S.  542. 
44  L.  Ed.  1 183,  4  Am.  B.  R.  178; 
In  re  Brooks,  91  Fed.  Rep.  508.  i 
Am.  B.  R.  S31 ;  Wayne  Knitting 
Mills  Co.  v.  Nugent,  104  Fed.  ,Rep. 
530,  4  Am.  B.  R.  747,  s.  c.  184 
U.   S.   I,   46  L.   Ed.  405. 


JURISDICTION     OF     COURTS    OF    BANKRUPTCY 


121 


riiptcy  court  must  apply  to  that  court  to  have  it  restored,  and 
his  right  to  intervene  in  the  bankruptcy  proceedings  is  well 
established.'*  If  property  in  the  lawful  possession  of  the 
court  of  bankruptcy  is  seized  under  process  from  the  state 
court,  the  court  of  bankruptcy  may  by  summary  proceedmgs 
compel  the  return  of  such  property."'  If  a  suit  is  begun  in  a 
state  court  affecting  property-  in  the  custody  of  a  court  of 
bankruptcy,  it  may  stay  such  proceedings.'" 


§  24.  When  a  circuit  court  may  have  jurisdiction  cf  bank- 
ruptcy proceedings. 

The  bankrupt  statute  confers  no  general  power,  either  orig- 
inal or  supervisory,  upon  the  circuit  courts  to  entertain  bank- 
ruptcy proceedings.^ 

Where  there  is  no  jury  in  attendance  upon  the  district  court 
a  case  may  be  certified  for  trial  to  the  circuit  court  sitting  at 
the  same  place,  or,  by  consent  of  parties,  when  sitting  at  any 
other  place  in  the  same  district,  if  such  circuit  court  has  or  is 
to  have  a  jury  first  in  attendance.  Tliis  has  special  reference 
to  a  trial  by  jury  with  respect  to  the  question  of  the  bankrupt's 
insolvency  and  any  act  of  bankruptcy  alleged  to  have  been 
committed  by  him,  upon  an  involuntary  petition." 

A  limited  jurisdiction  of  controversies  at  law  and  in  equity 
is  conferred  upon  the  circuit  courts  by  Section  23.     Such  cases 


24  Sec.  16a  ante.     Hewit  v.  Berliy 
Machine    Works,     194    U.    S.    296, 

48  L.  Ed.  986,  II  Am.  B.  R.  709; 
Whitney  v.  Wenman,  198  U.  S.  539, 

49  L.  Ed.  1157,  14  Am.  B.  R.  45; 
I,j  re  Whitener  (C.  C.  A.  5th  Cir.), 
105  Fed.  Rep.  180,  5  Am.  B.  R.  198, 
3  N.  B.  N.  316;  Fisher  v.  Cushman 
(C.  C.  A.  ist  Cir.),  103  Fed.  Rep. 
867,  4  Am.  B.  R.  646;  In  re  Rodg- 
ers  (C.  C.  A.  7th  Cir.),  125  Fed. 
Rep.  169,  II  Am.  B.  R.  79. 

'■^5  White  V.  Schloerb,  178  U.  S. 
542.  44  L-  Ed.  1183,  4  Am.  B.  R. 
178,  2  N.  B.  N.  721;  In  re  Corbett, 


104  Fed.  Rep.  872,  5  Am.  B.  R. 
224. 

-'•  Keegan  v.  King,  96  Fed.  Rep. 
758,  3  Am.  B.  R.  79;  In  re  Cham- 
bers, Calder  &  Co.,  98  Fed.  Rep. 
865.  3  Am.  B.  R.  537-  2  N.  B.  N. 
388;  In  re  EmsHe  ( C.  C.  A.  2d 
Cir.).  102  Fed.  Rep.  291,  4  Am.  B. 
R.  126,  2  N.  B.  N.  992 ;  In  re  Klein- 
hans,  113  Fed.  Rep.  107,  7  Am.  B. 
R.  604. 

See  also  Sec.  22,  ante.  ' 

1  Hatch  V.  Curtin,  146  Fed.  Rep, 
200. 

2  B.  A.  1898,  Sec.  19. 


122  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

are  incidental  to,  but  are  not  strictly,  proceedings  in  bank- 
ruptcy.^ 

The  bankruptcy  proceedings,  strictly  so  called,  may  be  cer- 
tified to  the  circuit  court  for  the  district  in  case  the  district 
judge  is  discjualified.* 

The  authority  for  such  proceedings  is  found  in  the  Revised 
Statutes. 

Sec.  601.  "Whenever  it  appears  that  the  judge  of  any  dis- 
trict court  is  in  any  way  concerned  in  interest  in  any  suit 
pending  therein,  or  has  been  of  counsel  for  either  party,  or 
is  so  related  to  or  connected  with  either  party  as  to  render  it 
improper,  in  his  opinion,  for  him  to  sit  on  the  trial,  it  shall 
be  his  duty,  on  application  by  either  party,  to  cause  the  fact 
to  be  entered  on  the  records  of  the  court;  and,  also,  an  order 
that  an  authenticated  copy  thereof,  with  all  the  proceedings 
in  the  suit,  shall  be  forthwith  certified  to  the  next  circuit 
court  for  the  district ;  and  if  there  be  no  circuit  court  therein, 
to  the  next  circuit  court  in  the  state;  and  if  there  be  no  cir- 
cuit court  in  the  state,  to  the  next  convenient  circuit  court 
in  an  adjoining  state;  and  the  circuit  court  shall,  upon  the 
filing  of  such  record  with  its  clerk,  take  cognizance  of  and 
proceed  to  hear  the  case,  in  like  manner  as  if  it  had  originally 
and  rightfully  been  commenced  therein." 

Sec.  637.  "When  any  cause,  civil  or  criminal,  of  what- 
ever nature,  is  removed  into  a  circuit  court,  as  provided  by 
law,  from  a  district  court  wherein  the  same  is  cognizable,  on 
account  of  the  disability  of  the  judge  of  such  district  court, 

3  Sec.  25,  post.  should  be  dismissed  or  an  adjudica- 

*  In   Farrund,    Williams   &   Clark  tion    be    made    and    a    trustee    duly 

V.   Milburn  &   Co.    (eastern   district  appointed   and  qualified.     The   case 

of    Michigan,    1899,    not    reported),  thereafter  proceeded   in   the   circuit 

the    district    judge    was    disqualified  court. 

by  reason  of  being  related  to  one  of  But    see   comment   of  the   circuit 

the  parties.     The  case  was  certified  court  of  appeals  for  the  fifth  circuit 

to  the  circuit  court  and  the  circuit  on  this  practice.     /;;.  re  Seebold,  105 

judge,   Taft,   ordered   a   warrant   to  Fed.  Rep.  910,  5  Am.  B.  R.  358. 

seize  the  goods  of  the  alleged  bank-  See  also   Spencer   v.   Lapsley,  20 

rupt   pursuant    10    Sec.    69,    and    to  How.   264,    15    L.    Ed.   902. 
hold    the    same    until    the    petition 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY.  123 

or  by  reason  of  his  being  concerned  in  interest  therein,  or 
having  been  of  counsel  for  either  party,  or  being  so  related 
to  or  connected  with  either  party  to  such  cause  as  to  render 
it  improper,  in  his  opinion,  for  him  to  sit  on  the  trial  thereof, 
such  circuit  court  shall  have  the  same  cognizance  of  such 
cause,  and  in  like  manner,  as  the  said  district  court  might 
have,  or  as  said  circuit  [court]  might  have  if  the  same  had 
been  originally  and  lawfully  commenced  therein,  and  shall 
proceed  to  hear  and  determine  the  same  accordingly."  ^ 

§  25.     Jurisdiction  of  the  circuit  courts  at  lavy  and  in  equity. 

The  bankrupt  statute  confers  no  jurisdiction  in  bankruptcy, 
either  original,  supervisory  or  appellate,  "upon  the  circuit 
courts  of  the  United  States.^  But  they  "have  jurisdiction  of 
all  controversies  at  law  and  in  equity,  as  distinguished  from 
proceedings  in  bankruptcy,  between  trustees  as  such  and  ad- 
verse claimants  concerning  the  property  acquired  or  claimed 
by  the  trustees,  in  the  same  manner  and  to  the  same  extent* 
only  as  though  bankruptcy  proceedings  had  not  been  insti- 
tuted and  such  controversies  had  been  between  the  bankrupts 
and  such  adverse  claimants."  " 

A  controversy,  in  order  that  it  may  be  cognizable,  under 
this  clause,  in  the  circuit  courts  of  the  United  States,  first, 
must  be  a  controversy  at  law  or  in  equity,  as  distinguished 
from  proceedings  in  bankruptcy;  second,  the  pa'rties  must  be 
a  trustee  in  bankruptcy  and  adverse  claimants;  third,  the 
controversy  must  be  concerning  property  acquired  or  claimed 
by  the  trustee;  and,  fourth,  it  must  be  such  a  proceeding  as 
could  have  been  instituted  by  the  bankrupt  had  no  proceedings 

5  Consult  also  R.  S.   Sees.  587  to  -  B.   A.    1898,    Sec.   23a;    Goodier 

590;    Spencer   v.   Lapsley,  20   How.  v.  Barnes.  94  Fed.  Rep.  798.  2  Am. 

264,  15  L.  Ed.  902;  £a- /'o;-;/ United  B.  R.  328;  McFarlan  Carriage  Co. 

States,   No.    14411,   Fed.   Cas.,   s.   c.  v.  Solanas  (C.  C.  A.  5th  Cir.),  106 

I  Gall.  338;  The  Richmond,  9  Fed.  Fed.   Rep.   145,   5  Am.  B.   R.  422; 

Rep.   863;    Wallace    v.    Loomis,    97  Spencer    v.    Duplan    Silk    Co.,    191 

U.  9.  146,  156,  24  L.  Ed.  895-  U.  S.  526;  Hatch  v.  Curtin,  146  Fed. 

1  Hatch  V.  Curtin,   146  Fed.  Rep.  Rep.  200 ;  Bush  v.  Elliott,  202  U.  S. 

200.  477- 


124 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


in  bankruptcy  intervened.  All  four  of  these  conditions  must 
concur  to  give  jurisdiction. 

Controversies  at  Law  and  in  Equity. — This  clause  can 
not  be  construed  as  vesting  in  the  circuit  courts  jurisdiction 
of  controversies  at  law  or  in  ecjuity  of  which  they  have  not 
already  jurisdiction.^  It  is  rather  a  regulation  of  jurisdiction. 
What  are  controversies  at  law  or  in  equity  are  to  be  deter- 
mined by  the  general  rules  of  jurisprudence.  No  fixed  rule 
can  be  stated  defining  precisely  what  are  suits  at  law  or  in 
equity  as  distinguished  from  bankruptcy  proceedings.  The 
question  has  been  frec|uently  considered  by  the  supreme  court, 
and  each  particular  case  was  held  either  to  be  the  one  or 
the  other,  without  attempting  to  lay  down  a  general  rule  of 
distinction.* 

The  district  and  circuit  courts  were  given  concurrent  juris- 
diction of  suits  at  law  and  in  equity,  as  distinguished  from 
bankruptcy  proceedings,  under  the  act  of  1867.'  Actions  at 
law  and  suits  in  equity  were  frecjuently  before  the  court  in 
matters  relating  to  bankruptcy.  Thus  the  parties  sought  the 
aid  of  the   court   in  actions   of   replevin,"   in   assumpsit,'    in 


^  In  VJquesney  v.  Allen  (C.  C.  A. 
4tli  Cir.),  131  Fed.  Rep.  21,  12  Am. 
B.  R.  402,  it  was  held  that  a  circuit 
court  had  no  jurisdiction  of  a  bill 
in  equity  by  a  simple  contract  cred- 
itor to  set  aside  a  fraudulent  con- 
veyance "as  an  ancillary  proceed- 
ing- to  bankruptcy  proceedings." 

See  also  Hatch  v.  Curtin,  146 
Fed.  Rep.  200;  Bush  v.  Elliott,  202 
U.  S.  477,  SO  L.  Ed.  1 1 14,  15  Am. 
B.   R.  656. 

*  Consult  Spencer  v.  Duplan  Silk 
Co.,  191  U.  S.  526;  Bush  V.  Elliott, 
202  U.  S.  477,  50  L.  Ed.  1 1 14,  i5 
Am.  B.  R.  656;  Hatch  v.  Curtin,  146 
Fed.  Rep.  200;  Morgan  v.  Thorn- 
hill,  II  Wall.  6s,  75,  20  L.  Ed. 
60;  Smith  V.  Mason,   14  Wall.  419, 


430,  20  L.  Ed.  748;  Marshall  v. 
Knox,  16  Wall.  551,  21  L.  Ed.  481; 
Burbank  v.  Bigelow,  92  U.  S.  179, 
23  E.  Ed.  542 ;  McFarlan  Carriage 
Co.  V.  Solanas  (C.  C.  A.  5th  Cir.), 
106  Fed.  Rep.  145 ,  S  Am.  B.  R. 
422. 

As  to  the  distinction  between  con- 
troversies at  law  and  equity  and 
proceedings  in  bankruptcy,  see  Sec. 
i6a,  ante. 

^  R.  S.  Sec.  4979. 

•5  Haughey  v.  Albin,  No.  6222 
Fed.  Cas.,  s.  c.  2  Bond  244. 

"  Street  v.  Dawson,  No.  13533 
Fed.  Cas.,  s.  c.  4  N.  B.  R.  207;  Van 
Dyke  v.  Tinker,  No.  16849  Fed.  Cas., 
s.  c.   II   N.  B.  R.  308. 


JURISDICTION    OF    COURTS    OF    HAXKRUPTCV. 


125 


trover  '  and  by  a  bill  in  equity.''  'J'hesc  cases  are  useful  to 
illustrate  the  distinction  between  suits  at  law  or  in  ccjuity  and 
proceedings  in  bankruptcy. 

Parties  and  Adverse  Claims. — It  is  essential  that  one 
party  shall  be  the  trustee  and  the  other  party  an  adverse 
claimant,  or  claimants,  and  that  the  controversy  be  concern- 
ing the  property  acquired  or  claimed  by  the  trustee.^"  This 
provision  is  very  similar  to  that  used  in  the  act  of  1867, 
which  was  "any  person  claiming  an  adverse  interest  .  .  . 
touching  any  property  or  rights  of  the  bankrupt  transferable 
or  vested  in  such  assignee."  ''  This  provision  was  frequently 
construed  by  the  courts. ^- 

If  the  trustee  is  dead  and  no  one  has  been  appointed  in  his 


8  Carr  v.  Gale,  No.  2434  Fed. 
Cas.,  s.  c.  2  Ware  330,  and  No.  2435 
Fed.  Cas.,  s.  c.  3  Woodb.  &  M.  38; 
Mitchell  V.  McKibben,  No.  9666  Fed. 
Cas.,  s.  c.  8  N.  B.  R.  548;  Brooke 
V.  McCraken,  No.  1932  Fed.  Cas.,  s. 
c.  10  N.  B.  R.  461 ;  Babbitt  v.  Wal- 
brun.  No.  695  Fed.  Cas.,  s.  c.  6  N. 
B.  R.  3S9 ;  Wadsworth  v.  Tyler,  No. 
17032  Fed.  Cas.,  s.  c.  2  N.  B.  R. 
316;  Cragen  v.  Carmichael.  No.  3319 
Fed.  Cas.,  s.  c.  2  Dill.  519. 

» In  re  Bowie,  No.  1728  Fed. 
Cas.,  s.  c.  I  N.  B.  R.  628;  March  v. 
Heaton,  No.  9061  Fed.  Cas.,  s.  c.  i 
Low.  278;  Bradshaw  v.  Klein,  No. 
1790  Fed.  Cas.,  s.  c.  2  Biss.  20; 
Shaffer  v.  Fritchery,  No.  12697  Fed. 
Cas.,  s.  c.  4  N.  B.  R.  548 ;  Taylor  v 
Rasch,  No.  13801  Fed.  Cas.,  s.  c.  5 
N.  B.  R.  399;  Wilt  V.  Stickney,  No. 
17854  Fed.  Cas.,  s.  c.  15  N.  B.  R. 
23;  Warren  v.  Nat.  Bank,  No.  17202 
Fed.  Cas.,  s.  c.  10  Blatch.  493 ;  Bank 
V.  Cooper,  20  Wall.  171;  Garrison 
V.  Markley,  No.  5256  Fed.  Cas.,  s.  c. 
7  N.  B.  R.  246;  Sutherland  v.  Lake 
Superior  Canal  Co..  No.  13643  Fed. 
Cas.,  s.  c.  9  N.  B.  R.  298;  Beecher 


V.  Bininger,  No.  1222  Fed.  Cas.,  s.  c. 
7  Blatch.  170;  Kellogg  v.  Russell, 
No.  7666  Fed.  Cas.,  s.  c.  11  Blatch. 

519- 

10  As  to  who  are  adverse  claim- 
ants under  this  act,  see  Sec.  20a, 
ante. 

11  R.  S.  Sec.  4979- 

12  Consult  Morgan  v.  Thornhill, 
II  Wall.  65,  75,  20  L.  Ed.  60; 
Smith  V.  Mason,  14  Wall.  419,  430, 
20  L.  Ed.  748;  Marshall  v.  Knox, 
16  Wall.  551,  21  L.  Ed.  481;  Bur- 
bank  V.  Bigelow,  92  U.  S.  179, 
23  L.  Ed.  542;  Bachman  v.  Pack- 
ard, No.  709  Fed.  Cas.,  s  c.  2 
Saw.  264;  Carr  v.  Gale,  No.  2434 
Fed.  Cas.,  s.  c.  2  Ware,  330,  and  No. 
2435  Fed.  Cas.,  s.  c.  2  Woodb.  &  M. 
38;  Mitchell  V.  McKibben,  No.  9666 
Fed.  Cas.,  s.  c.  8  N.  B.  R.  548; 
Street  v.  Dawson,  No.  13533  Fed. 
Cas.,  s.  c.  4  N.  B.  R.  207;  Haughey 
V.  Albin,  No.  6222  Fed.  Cas.,  s.  c.  2 
Bond  244;  Brooke  v.  McCraken. 
No.  1932  Fed.  Cas.,  s.  c.  10  N.  B. 
R.  461 ;  Spaulding  v.  McGovern, 
No.  13217  Fed.  Cas.,  s.  c.  10  N.  B. 
R.  188. 


126  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

Stead,  a  creditor  may  file  a  bill  to  detain  property  of  a  bank- 
rupt to  be  administered  by  a  trustee  subsequently  appointed.^^ 

\\'ho  are  necessary  parties  to  such  actions  at  law  or  suits 
in  equity  is  determined  by  the  general  rules  governing  such 
proceedings  in  the  circuit  courts. 

The  Status  of  the  Bankrupt  Determines  Jurisdic- 
tion.— The  circuit  courts  have  jurisdiction  only  in  the  same 
manner  and  to  the  same  extent  as  though  bankruptcy  pro- 
ceedings had  not  been  instituted  and  such  a  controversy  had 
been  between  the  bankrupt  and  the  adverse  claimants.  This 
clause  is  a  limitation  upon  the  exercise  of  the  jurisdiction  of 
the  circuit  courts. 

The  judiciary  act  of  1887,  as  amended  August  13,  1888,'* 
conferred  jurisdiction  upon  the  circuit  courts  in  "cases  aris- 
ing under  the  constitution  and  laws  of  the  United  States.  ' 
It  is  well  settled  that  where  the  plaintiff  holds  an  office  like 
that  of  a  receiver  appointed  by  the  court,  or  a  receiver  of  a 
national  bank,  that  the  suit  involves  a  federal  question,  and 
may  be  prosecuted  in  the  circuit  courts  without  regard  to  the 
citizenship  of  the  parties.  This  rule  was  applied  under  the 
act  of  1867  with  reference  to  assignees.^^  A  trustee,,  being- 
an  officer  of  the  court  under  the  present  act,  would  have  un- 
doubtedly been  entitled  to-liave  prosecuted  suits  in  the  circuit 
courts  on  this  ground,  were  it  not  for  the  restriction  contained 
in  section  23a.  As  it  is,  however,  in  order  that  the  circuit 
courts  may  take  cognizance  of  the  controversy,  there  must 
exist  a  diversity  of  citizenship,  as  between  the  bankrupt  and 
the  adverse  claimants,  and  the  amount  involved  must  exceed 
two  thousand  dollars.^''     It  has  been  held  that  a  bankrupt, 

13  Clark  V.   Clark,    17  How.  315,  s.  c.  Crabbe  551;  Wehl  v.  Wald,  No. 

15  L.  Ed.  "/T.  17356    Fed.    Cas.,    s.    c.    17    Blatch. 

1*25  Stat,  at  L.  433.  342;  Connor  v.  Scott,  No.  31 19  Fed. 

1^  Burbank  v.   Bigelow,  92  U.   S.  Cas.,  s.  c.  4  Dill.  242. 

179,    23    L.    Ed.    546;    Claflin    v.  i'^  gush  v.  Elliott,  202  U.  S.  477, 

Houseman,  93  U.  S.  130,  23  L.  Ed.  50  L.  Ed.  1114,  15  Am.  B.  R.  656; 

833 ;  Woolridge  v.  McKenna,  8  Fed.  Swofford  v.  Cornucopia  Mines,  140 

Rep.    650;    Payson    v.    Dietz,    No.  Fed.   Rep.  957;   Spencer  v.   Duplan 

10S61  Fed.  Cas.,  s.  c.  2  Dill.  504;  At-  Silk  Co.,  191  U.  S.  526,  11  Am.  B. 

kinson  v.  Purdy,  No.  616  Fed.  Cas.,  R.   563. 


JURISDICTION    OF    COURTS    OF    BANKRUPTCY.  127 

who  absconds  a  few  days  before  bankruptcy  proceedings  are 
instituted,  does  not  thereby  change  his  citizenship  so  as  to 
deprive  the  circuit  court  for  that  district  of  jurisdiction  of  a 
suit  brought  by  iiis  trustee  to  recover  property  for  the  bank- 
rupt estate/'  The  citizenship  of  the  trustee  is  immateriaL^^ 
The  averments  of  the  first  pleading  must  ?lio\v  that  all  these 
jurisdictional  requisites  exist. 

When  a  suit  is  l^egun  in  a  state  court  in  which  these  juris- 
dictional requisites  exist,  it  may  be  removed  to  a  circuit  court 
and  there  tried  as  if  originally  begun  there. ^"^  A  trustee  or 
receiver  in  bankruptcy  can  remove  a  case  to  a  circuit  court 
only  when  the  amount  in  controversy  exclusive  of  interest 
and  costs  exceeds  $2,000.'°  A  suit  can  not  be  removed  which 
could  not  have  been  begun  in  a  circuit  court. 

1"  Sims  V.  Union  Assur.  Soc,  129  115  Fed.  Rep.  689,  8  Am.  B.  R.  367, 

Fed.  Rep.  804.  reversing  112  Fed.  Rep.  638,  7  Am. 

IS  Bush  V.  Elliott,  202  U.  S.  477 ,  B.  R.  563. 
SO  L.  Ed.  1114,  15  Am.  B.  R.  656.  -'>  Swofford  v.  Cornucop/a  Mines, 

1^  Spencer  v.  Diiplan  Silk  Co.,  191  140   Fed.  Rep.  957,    15  Am.   B.  R. 

U.  S.  526;  s.  c.  (C.  C.  A.  3d  Cir.),  564. 


128  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


CHAPTER   V. 


REFEREES. 


§  26.    The  appointment,  removal  and  districts  of  referees. 

The  office  of  referee  is  created  by  statute.^  Referees  are 
officers  of  the  courts  of  bankruptcy.  They  are  appointed^ 
within  the  territorial  limits  of  each  court  of  bankruptcy  by 
the  judge  of  that  court." 

The  number  of  referees  rests  in  the  discretion  of  the 
judge.''  There  should  be  a  sufficient  number  to  expeditiously 
transact  the  bankruptcy  business  within  each  district.  The 
term  of  office  is  two  years.'*  They  are,  however,  at  all  times 
subject  to  removal  by  the  judge,  because  their  services  are  not 
needed,  or  for  other  cause.*  Whenever  the  office  of  a  referee 
is  vacant,  or  its  occupant  is  absent  or  disqualified  to  act,  the 
judge  may  act  or  may  appoint  another  referee,  or  another 
referee  holding  an  appointment  under  the  same  court  may,  by 
the  order  of  the  judge,  temporarily  fill  the  vacancy.^  A  referee 
ought  not  to  perform  any  official  acts  after  his  term  expires 
and  before  he  has  been  re-appointed  and  qualified.  Any  official 
act  performed  after  the  expiration  of  his  term  would  be  valid 
on  the  theory  that  he  is  a  referee  dc  facto.^ 

1  B.  A.  1898,  Sec.  ;i3.  cial    term    has    expired    are    valid. 

2B.  A.  1898,  Sec.  34-  Read  v.  Bufifalo,  3  Keyes   (N.  Y.), 

3  B.    A.    1898,    Sec.    37;    Bray    v.  447;    Hamlin   t.   Kassafer,    15   Ore. 

Cobb,  I  Am.  B.  R.  153;  91  Fed.  Rep.  456;    Brown   v.   Lunt,  37  Me.  423; 

102.  Petersilea  v.  Stone,  119  Mass.  465; 

*  B.  A.  1898,  Sec.  34.  Hale  v.  Bischoflf,  53  Kan.  301. 

s  B.  A.  1898,  Sec.  43.    See  Bray  v.  The  acts  of  a  de  facto  judge  are 

Cobb,  91      Fed.    Rep.     102;    In    re  valid.     McDowell  v.  United  States, 

Schenectady  Eng.  &  Const.  Co.,  i47  I59  U.  S.  596;  40  L.  Ed.  271;  Ball 

Fed.  Rep.  868.  v.    United    States,    140   U.    S.    118, 

6  The    acts    of    a    justice    of    the  35  L.  Ed.  377;  In  re  Manning,  139 

peace  or  other  officer  after  his  offi-  V.  S.  504,  35  L.  Ed.  264. 


REFEREES.  129 

The  court  is  also  authorized  to  designate  and  from  time  to 
time  change  the  districts  of  referees,  so  that  each  county  where 
the  services  of  a  referee  are  needed  may  constitute  at  least 
one  district.' 

§  27.     Qualifications  of  referees. 

No  person  is  eligible  to  he  a  referee  unless  he  is  competent 
to  perform  the  duties  of  that  office. 

Under  the  act  of  1867  no  person  was  eligible  for  appoint- 
ment as  register  unless  he  was  an  attorney  at  law.^  Although 
no  such  restriction  is  contained  in  the  present  statute,  judges 
of  some  of  the  districts  have  publicly  announced  that  ho  per- 
son would  be  appointed  a  referee  unless  he  is  an  attorney. 
It  may  be  doubted  if  a  person  may  be  considered  competent 
to  perform  the  duties  unless  he  has  pursued  studies  in  law 
and  been  admitted  to  practice  in  a  court  of  record. 

No  person  is  eligible  for  the  appointment  if  he  holds  any 
"office  of  profit  or  emolument  under  the  laws  of  the  United 
States  or  of  any  state,  other  than  commissioners  of  deeds, 
justices  of  the  peace,  masters  in  chancery  or  notaries  public."  - 
By  profit  or  emolument  is  meant  "the  profit  arising  from 
office  or  employment;  that  which  is  received  as  a  compensa- 
tion for  services  or  which  is  annexed  to  the  position  of  office 
as  salary,  fees  and  perquisites."  ^  Such  are  the  office  of  post- 
master,* U.  S.  surveyor  general'  inspector  of  customs,'''  county 
recorder  or  county  commissioner,'  or  a  member  of  a^  state 
legislature.^ 

No  person  is  eligible  for  appointment  who  is  related  by 
consanguinity  or  affinity  within  the  third  degree,  as  deter- 
mined by  the  common  law,  to  any  of  the  judges  of  the  courts 

7  P..  A.  1898,  Sec.  34.  Apple  v.  Crawford  Co.,  105  Pa.  St. 

iR.  S.  Sec.  4994.  300. 

2  B.  A.  1898,  Sec.  35.  *  McGregor  v.   Balch,   14  Vt.  428. 

3  Century  Dictionary,  subject,  ^  People  v.  Whitman,  10  Cal.  38. 
Emolument;  Standard  Dictionary,  '-Crawford  v.  Dunbar,  52  Cal.  36. 
subject.  Emolument;  Webster's  ^  Dailey  v.  State,  8  Blackf.  (Tnd.) 
Dictionary,     subject,     Emolument;  329. 

s  State  V.  Valle,  41   Iowa  jg. 


130  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

of  bankruptcy  or  circuit  courts  of  the  United  States,  or  of 
the  justices  or  judges  of  the  appellate  courts  of  the  districts 
wherein  they  may  be  appointed."  Every  generation  in  lineal 
consanguinity  constitutes  a  different  degree,  reckoning  either 
upwards  or  downwards.  The  method  of  computing  the 
degree  of  cohateral  relationship  at  common  law,  in  the  words 
of  Mr.  Justice  Blackstone,  is  as  follows :  "We  begin  at  the 
common  ancestor,  and  reckon  downwards :  and  in  whatsoever 
degree  the  two  persons,  or  the  most  remote  of  them,  is  distant 
from  the  common  ancestor,  that  is  the  degree  in  which  they 
are  related  to  each  other."  " 

No  person  is  eligible  to  appointment  unless  he  resides  in 
or  has  his  office  in  the  territorial  district  for  which  he  is  to 
be  appointed." 

§  28.    The  oath  and  bond  of  a  referee. 

The  referee  must  take  the  same  oath  of  office  as  that  pre- 
scribed for  the  judges  of  the  United  States  courts.^ 

Before  entering  upon  the  duties  of  his  office  every  referee 
must  enter  into  a  bond  to  the  United  States  in  such  sum  as 
shall  be  fixed  by  the  court,  not  to  exceed  $5,000,  conditioned 
for  the  faithful  performance  of  his  official  duty.-  The  court 
fixes  the  time  within  which  the  bond  is  to  be  given  and  ap- 
proves the  sureties.  If  a  referee  fails  to  give  bond  within 
such  time  he  is  deemed  to  have  declined  the  appointment  and 
there'  is  a  vacancy  in  his  office.^  There  shall  be  at  least  two 
sureties  upon  each  bond,  each  of  whom  must  qualify  in  a  sum 
equal  at  least  to  the  amount  of  the  bond.'*  Corporations  or- 
ganized for  the  purpose  of  becoming  sureties  on  bonds,  or 
authorized  by  law  to  do  so,  may  be  accepted  as  sureties.^  The 
court  shall  require  evidence  as  to  the  actual  value  of  the  prop- 

9  B.  A.  1898,  Sec.  35-  ^  B.  A.   1898,   Sec.  36,  Forir   No. 

102    Black.    Com.    206;    Coke    on  33;    R.   S.   Sec.   712. 
Litt.  23 ;  3  Washburn  on  Real  Prop-  -  B.   A.    1898,    Sec.   50a. 

erty,  star  p.  406;  McDowell  v.  Ad-  ^B.  A.  1898,  Sec.  50/^ 

dams,  45  Penn.  St.  432.  *  B.  A.  1898,  Sec.  5or  and  /. 

11  B.  A.  1898,  Sec.  35-  •''  B-    A.    1898,   Sec.   50^'. 


REFEREES.  131 

erty  of  sureties,  and  all  sureties  must  be  approved  by  the 
court.''  Such  l)onds  are  filed  of  record  in  the  office  of  the 
clerk.'  They  may  be  sued  upon  in  the  name  of  the  United 
States  for  the  use  of  any  person  injured  by  a  breach  of  their 
conditions.'  Such  suits  must  be  brought  within  two  years 
after  the  alleged  breach  of  the  bond.** 

§  29.     General  powers  of  referees. 

The  territorial  jurisdiction  of  a  referee  is  generally  limited 
by  the  county  or  district  for  which  he  is  appointed/  except 
wdien  he  is  specially  designated  by  the  judge  to  temporarily 
fill  a  vacancy  in  another  county  or  district  within  the  jurisdic- 
tion of  the  court." 

Referees  are  appointed  for  the  purpose  of  assisting  the  judge 
of  the  court  of  bankruptcy  in  the  performance  of  his  duties. 
The  referee  has  the  same  power  generally  as  the  judge  has 
in  the  performance  of  his  judicial  duties  under  the  bankrupt 
act,  subject  to  a  few  exceptions  to  be  noted  presently."  After 
a  case  has  been  referred  to  a  referee  all  the  proceedings  there- 
after, except  such  as  are  recjuired  by  the  statute  or  general 
orders  to  be  had  before  the  judge,  are  had  before  the  referee.* 
The  time  wdien  and  the  place  where  the  referees  shall  act  upon 
the  matters  arising  under  the  several  cases  referred  to  them 
shall  be  fixed  by  special  order  of  the  judge,  or  by  the  referee, 
and  at  such  times  and  places  the  referees  may  perform  the 
duties  which  they  are  empowered  by  the  act  to  perform.* 

The  referee  has  power  to  act  only  by  virtue  of  a  reference 
by  the  clerk  or  the  judge  of  a  court  of  bankruptcy. 

The  clerk  is  required  to  refer  a  petition  in  case  the  judge 

CB.  A.  1898,   Sec.  soa.d.  3  B.   A.    1898.    Sec.   3^:    White   v. 

7B.  A.    1898,   Sec.   soil.  Schloerb,   178  U.  S.  542.  44  L-  Ed. 

8B.   A.    1898.    Sec.   50/.  1183,    4   Am.    B.    R.    178;    Mueller 

IB.    A.    1898,    Sec.    38   and    Sec.  v.  Nugent,   184  U.  S.   i,  46  L.  Ed. 

34,  clause  2.  403,  5  Am.  B.  R.  176;  In  re  Tudor, 

-B.    A.    1898,    Sec.    43;    Bray    v.  96    Fed.    Rep.    942,    2    Am.    B.    R. 

Cobb,    I    Am.    B.    R.    153,    91    Fed.  808. 

Rep.    102 ;   In   re   Schenectady  Eng.  *  Gen.    Ords.    12    and    20    B.    A, 

&  Const.  Co..   147  Fed.  Rep.  868.  1898,    Sec.   38,   clause  4. 


132  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

is  absent  from  the  district  or  the  division  of  the  district.''  A 
voluntary  petition  should  be  referred  immediately,  an  involun- 
tary petition  on  the  next  day  after  the  last  day  on  which 
pleadings  may  be  filed."  Such  references  are  general  in  their 
nature. 

The  judge,  after  an  adjudication,  may  refer  the  case  gener- 
afly  to  a  referee  or  specially  with  only  limited  authority  to  act 
in  the  premises  or  to  consider  and  report  upon  specified  issues.*' 
The  power  of  the  referee  in  such  cases  depends  upon  the  order 
of  reference.  The  judge  may  refer  the  case  to  any  referee 
within  the  territorial  jurisdiction  of  the  court  if  the  con- 
venience of  the  parties  in  interest  will  be  served  thereby,  or 
for  cause,  or  if  the  bankrupt  does  not  do  business,  reside  or 
have  his  domicile  in  the  district ;  '^  or  for  the  convenience  of 
parties  or  for  cause  he  may  transfer  a  case  from  one  referee 
to  another  within  the  same  district.^ 

The  statute  provides  that  the  word  "court"  when  used  in 
the  statute  may  include  the  referee  and  that  the  "word  "judge" 
excludes  the  referee.^  Consequently  the  referee  has  no  power 
to  perform  these  duties  which  are  imposed  by  the  act  on  the 
judge  alone;  first,  to  issue  a  warrant  to  the  marshal  against 
the  bankrupt  to  compel  his  immediate  examination  or  deten- 
tion upon  satisfactory  proof  that  the  bankrupt  is  about  to 
leave  the  district;^"  second,  to  confirm  or  set  aside  composi- 
tions and  order  distribution  of  the  consideration ;  ^^  third,  to 
extend  the  time  for  filing  a  petition  for  his  discharge  by  the 
bankrupt,  to  hear  applications  for  a  discharge,  to  refuse  or 
grant  the  same,  and  to  revoke  discharges  once  granted ;  ^^ 
fourth,  to  determine  the  issues  presented  whenever  the  facts 
alleged  in  a  petition  for  involuntary  bankruptcy  are  contro- 

5  B.    A.    1898,    Sec.    18,   f  and   g;  »  B.  A.  1898,  Sec.  i.  cl.  7  and  16. 

Official  Form  No.  15,  Form  No.  32,  1°  B.   A.    1898,   Sec.   9,  cl.   b,   and 

post.  Sec.  38,  cl.  4. 

«  B.  A.  1898,  Sec.  22.  11  B.  A.   1898,   Sec.   i2d  and   Sec. 

■^  B.  A.   1898,  Sec.  22.  13a;  Gen.  Ord.  12,  cl.  3. 

SB.    A.    1898,    Sec.    22b',    In    re  i- B.    A.    1898,    Sees.    14   and    15, 

Schenectady  Eng.  &  Const.  Co.,  147  and    Sec.    38,    cl.   4 ;    Gen.    Ord.    I2, 

Fed.  Rep.  868.  cl.  3. 


REFEREES. 


133 


verted  by  either  the  bankrupt  or  his  creditors;'''  fifth,  to 
punish  or  commit  persons  who  have  disobeyed  the  orders  or 
process  of  courts  of  l)ankruptcy  or  misbehaved  during  a  hear- 
ing, even  though  the  contempt  be  with  reference  to  the  proc- 
ess or  orders  of,  or  in  the  presence  of  the  referee  who  can 
only  certify  the  facts  to  the  judge  for  his  action;'*  sixth,  to 
refer  causes  after  adjudication  either  generally  or  specifically 
to  a  referee,  and  transfer  causes  from  one  referee  to  another ;  " 
and,  seventh,  to  order  notices  to  creditors  to  be  given  other- 
wise than  by  the  referee.'"  T\\q  referee  should  not  collect  the 
estate  of  the  bankrupt  nor  issue  subpoenas;  these  should  be 
done  by  the  trustee  and  clerk  respectively.'^ 

There  are  also  certain  powers  ordinarily  to  be  exercised  by 
the  judge,  but  which  are  to  be  exercised  by  the  referee  only 
when  the  judge  is  absent  from  the  division  of  the  district  in 
which  the  proceedings  are  pending  and  they  are  referred  or 
certified  by  the  clerk  to  the  referee.  These  are :  first,  to  make 
adjudications  on  voluntary  and  on  uncontested  involuntary 
petitions;'*  and,  second,  to  take  possession  of  the  bankrupt's 
property  pending  the  adjudication  and  release  it.'"  This  last 
power  may  be  exercised  by  the  referee  also  on  certification  of 
the  judge's  illness  or  inability  to  act,"*  but  adjudications  can 

The  statute  also  confers  on  the  referee  jurisdiction  to  per- 
form such  part  of  the  duties,  except  as  to  questions  arising  oi.it 
of  the  applications  of  bankrupts  for  compositions  or  dis- 
charges, as  are  by  this  act  conferred  on  "courts"  of  bank- 
ruptcy and  as  shall  be  prescribed  by  rules  or  orders."'^  Accord- 
ingly the  General  Orders  of  the  supreme  court  have  further 
limited  the  powders  of  the  referees  by  providing  that  applica- 

"B.  A.  1898,  Sec.   i8d.  ^'  In    re    Pierce,    in    Fed.    Rep. 
i*B.  A.    1898,   Sec.  41b,  and   see  516,  6  Am.  B.  R.  747. 
post,    "Proceedings    in    Contempt."  ^^  b.  A.   1898,  Sec.   i8(?,  b  and  g, 
Chap.  XXII.;  Smith  v.  Belford  (C.  and   Sec.  38.   cl.   i,  and  "Power  to 
C.  A.  6th  Cir.),  106  Fed.  Rep.  658,  make  an  adjudication"  ;  Sec.  30, /'o.fL 
5  Am.  B.  R.  291.  '^B.   A.    1898,    Sees.   69   and   38, 
15  B.   A.    1898,   Sec.  22.  cl.  3 ;   and  "Power  to  take  posses- 
is  B.  A.   1898,  Sec.  58c.  sion,  etc." ;  Sec.  Z2,  post.      . 

20  B.  A.  1898,  Sec.  38,  cl.  4- 


134 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY, 


tions  for  an  injunction  to  stay  proceedings  of  a  court  or  officer 
of  the  United  States,  or  of  a  state,  shall  be  heard  and  decided 
by  the  "judge."  "^  This  provision  is  new  and  not  modeled 
upon  any  rule  or  order  promulgated  under  any  previous  bank- 
rupt act.  The  power  of  the  supreme  court  to  thus  limit  the 
power  of  a  referee  cannot  be  questioned.""  It  is  only  in  bank- 
ruptcy cases  that  a  federal  court  can  enjoin  a  proceeding  in  a 
state  court.'^  The  propriety  of  confiding  in  the  judge  alone 
the  right  to  exercise  this  extraordinary  power  is  in  accord 
with  the  rule  of  comity  that  should  be  observed  between 
courts  of  bankruptcy  and  the  state  courts.  If  no  general 
order  or  rule  of  court  limited  the  power  of  a  referee  in  this 
respect  he  would  be  authorized,  under  the  general  power  con- 
ferred on  him  by  the  Bankruptcy  Act,  to  issue  injunctions. 
He  still  has  "jurisdiction  to  issue  injunctions  directed  to  any 
party  not  an  officer  of  the  United  States  or  of  a  state,  unless 
the  injunction  stays  the  proceedings  of  the  court."  '"*  In  other 
words,  he  may  exercise  jurisdiction  to  grant  injunctions  ex- 
cept as  limited  by  Gen.  Ord.  12,  clause  3. 

Where  the  bankrupt  has  not  made  a  deposit  for  the  fees 
of  the  clerk,  referee,  and  trustee,  the  judge  may  order  these 
fees  paid  out  of  the  estate ;  or  may.  after  notice  to  the  bank- 
rupt, and  satisfactory  proof  that  he  then  has  or  can  obtain 
the  money  with  which  to  pay  those  fees,  order  him  to  pay  them 
within  a  time  specified,  and  if  he  fails  to  do  so,  may  order  his 
petition  to  he  dismissed.""'  There  is  no  law  or  rule  authoriz- 
ing a  referee  to  make  such  an  order."" 

In  all  orders  made  by  a  referee  it  must  be  recited,  according 


21  Gen.  Ord.  12,  cl.  3;  In  re  Sie- 
bert,  133  Fed.  Rep.  781,  13  Am.  B. 
R.  348;  In  re  Berkowitz,  143  Fed. 
Rep.  598. 

22  B.  A.  1898,  Sec.  30  and  Sec.  38, 
clause  4.  In  re  Siebert,  133  Fed. 
Rep.  781,  13  Am.  B.  R.  348;  In  re 
Berkowitz,  143  Fed.  Rep.  598. 

23  R.  S.  Sec.  720. 

2*  Judge  Lowell  In  re  Steuer, 
104  Fed.  Rep.  976,  980,  5  Am.  B.  R. 


209,  214,  approved  by  Judge  Mc- 
Pherson  In  re  Berkowitz,  143  Fed. 
Rep.  598,   16  Am.  B.  R.  251. 

Injunction  by  referee  sustained 
/;;  re  Benjamin,  140  Fed.  Rep.  320, 
15  Am.  B.  R.  351.       . 

-^  Gen.  Ord.  35,  par.  4 ;  In  re 
Plympton,  103  Fed.  Rep.  775. 

20  In  re  Plimpton,  103  Fed.  Rep. 
775,  4  Am.  B.  R.  614. 


REFEREES. 


135 


as  the  fact  may  be,  that  notice  was  given  and  the  manner 
thereof;  or  that  the  order  was  made  by  consent;  or  that  no 
adverse  interest  was  represented  at  the  hearing;  or  that  the 
order  was  made  after  hearing-  adverse  interests.-' 

The  action  of  referees  is  subject  always  to  review  by  the 
judge  of  the  court  of  bankruptcy. "^  It  w'ould  therefore  appear 
that  in  any  proceeding  before  a  referee  a  party  is  at  hberty 
to  take  the  opinion  of  the  judge  upon  any  point  or  matter 
arising  in  the  course  of  such  proceeding.-** 

The  referee  is  required  to  preside  at  the  first  meeting  of 
the  creditors  in  the  absence  of  the  judge,''"  l)ut  he  shoukl  not 
interfere  with  or  influence  the  choice  of  trustee.'^^  He  can, 
however,  pass  on  the  right  of  a  person  who  claims  to  be  a 
creditor,  to  vote.^-  Where  a  trustee  is  elected  by  creditors  the 
referee  can  not  remove  him  and  appoint  another,  but  should 
report  his  disapproval  to  the  judge,  who  alone  can  remove  the 
trustee  elected.''^  It  is  his  duty  to  prepare  a  list  of  debts 
proved  at  this  meeting,"'*  and  to  notify  the  trustee  of  his  ap- 
pointment and  the  penal  sum  of  his  bond;'"'  In  the  absence  of 
an  appointment  of  a  trustee  by  the  creditors  he  may  appoint 
the  trustee :  ■'"  but  should  only  do  so  where  the  creditors  have 


27  Gen.  Orel  23. 

28  Gen.  Ord.  2-].  B.  A.  1898,  Sec. 
38  and  Sec.  2,  clause   10. 

-^  See  Sec.  Z-^- 

30  B.  A.  1898,  Sec.  55&. 

31  In  re  Smith,  No.  12971  Fed. 
Cas.,  2  Ben.  113. 

32 /u  re  Alalino,  118  Fed.  Rep. 
368,  8  Am.  B.  R.  205;  In  re  Day- 
ville  Woolen  Co.,  114  Fed.  Rep. 
674,  8  Am.  B.  R.  85 ;  In  re  Rekers- 
dres,  108  Fed.  Rep.  206,  5  Am.  B. 
R.  8ir;  In  re  McGiU  (C.  C.  A.  6th 
Cir.),  106  Fed.  Rep.  57.  5  Am.  B. 
R.  155 ;  In  re  Henschel,  109  Fed. 
Rep.  861  at  865 ,  6  Am.  B.  R.  305. 

33  Gen.  Ord.  13;  In  re  Hare,  119 
Fed.  Rep.  246,  9  Am.  B.  R.  520; 
In  re  Mackellar,  116  Fed.  Rep. 
547;  but  see  In  re  Rekersdres,  108 
Fed.  Rep.  206,  5  Am.  B.  R.  811. 


34  Official  Form  No.  19,  see  Form 
No.  38,  post. 

35  Gen.  Ord.  16;  Official  Form 
No.  24,  see  Form  No.  43,  post. 

36  B.  A.  1898,  Sec.  44;  Official 
Form  No.  23,  see  Form  No.  42, 
post;  In  re  Mackellar,  116  Fed. 
Rep.  547 ;  /;;  re  Nice  &  Schreiber, 
123  Fed.  Rep.  987,  10  Am.  B.  R. 
639;  In  re  McGill  (C.  C.  A.  6th 
Cir.),  106  Fed.  Rep.  57,  5  Am.  B. 
R.  158;  In  re  Kuffler,  97  Fed.  Rep. 
187,  3  Am.  B.  R.  162 ;  In  re  Brooke, 
100  Fed.  Rep.  432,  4  Am.  B.  R.  50; 
In  re  Richards,  103  Fed.  Rep.  849, 
4  Am.    B.   R.  631. 

Where  there  are  no  assets  the 
referee  may  in  his  discretion  order 
that  no  trustee  be  appointed.  In  re 
Smith,  93  Fed.  Rep.  791 ,  2  Am.  B. 
R.   190. 


136  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

had  full  opportunity  to  elect  one  and  have  failed.'"  The  ref- 
eree regularly  approves  the  bond  of  the  trustee."**  The  referee 
may  furnish  on  application  a  certified  copy  of  any  proceed- 
ing before  him  to  be  used  as  evidence  in  a  state  or  federal 
court.  Certified  copies  of  proceedings  before  a  referee,  or  of 
papers,  when  issued  by  the  referee,  are  admitted  as  evidence 
with  like  force  and  effect  as  certified  copies  of  the  records  of 
district  courts  of  the  United  States  are  now  or  may  hereafter 
be  admitted  as  evidence.'^** 

Referees  can  not  act  in  cases  in  which  they  are  directly  or 
indirectly  interested/**  practice  as  attorneys  and  counselors  at 
law  in  bankruptcy  proceedings,  or  purchase,  directly  or  indi- 
rectly, any  property  of  an  estate  in  bankruptcy.*^ 


§  30.     Power  to  make  an  adjudication. 

Every  referee  within  his  own  territorial  limits  has  power 
to  consider  all  petitions  referred  to  him  by  the  clerk  and  make 
the  adjudications  or  dismiss  the  petitions.'  This  includes 
petitions  in  involuntary  as  well  as  in  voluntary  bankruptcy. 
It  is  the  duty  of  the  clerk  to  refer  a  petition,  in  either  volun- 
tary or  involuntary  bankruptcy,  to  the  referee  whenever  the 
judge  is  absent  from  the  district  or  the  division  of  the  dis- 
trict." It  is  regularly  the  duty  of  the  judge  to  consider  the 
petition  and  make  the  adjudication  thereon.'"'  A  referee  has 
power  to  consider  the  petition  and  make  the  adjudication  only 
when  the  petition  has  been  specially  referred  to  him  for  that 

3"/n  re  Lewensohn,  98  Fed.  Rep.  *^B.  A.   1898,   Sec.  3gb;   Cobb  v. 

576,  3  Am.  B.  R.  299;  In  re  Nice  &  Bray,  91   Fed.  Rep.   102,   i  Am.  B. 

Schreiber,    123    Fed.    Rep.    987,    10  R.    153. 

Am.    B.    R.   639;    In   re   Mackellar,  ^  B.    A.    1898.    Sec.   38,   clause    i; 

116  Fed.   Rep.   547.  Official  Forms  Nos.   11  and  12,  see 

38  Official  Form  No.  26,  see  Form  Forms  Nos.  28  and  29,  post. 

No.  45,  post.  -  B.    A.    1898,    Sec.  18,    clauses    f 

33  B.  A.  1898,  Sec.  2\d.  and  g. 

40  The  fact  that  a  referee  owes  a  3  b     a.    1898,    Sec.    2,     clause  i ; 

debt    to  the  bankrupt    does  not  dis-  Official  Forms  Nos.  11  and  12,  see 

qualify  him.     Bray  v.  Cobb,  91  Fed.  Forms  Nos.  28  and  29,  post. 
Rep.   102.   I   Am.  R.   153, 


REFEREES.  137 

purpose.     The  action  of  the  referee  in  such  cases  is  subject 
to  review  by  the  judge."* 

When  there  is  a  reference  by  the  clerk  of  a  petition  it  may 
be  considered  in  the  nature  of  a  default.  The  consideration 
necessary  is  probably  the  same  as  that  required  in  taking  a 
decree  pro  confcsso.  The  matter  of  the  petition  ought  to  be 
opened  and  explained  to  the  referee  so  that  he  may  see  that 
a  proper  case  of  bankruptcy  is  made.  It  is  not  necessary 
that  he  should  hear  evidence  in  addition  to  the  affidavit  at- 
tached to  the  petition.  If  such  a  proper  case  is  made  by  the 
petition  it  is  the  duty  of  the  referee  to  adjudge  the  person  a 
bankrupt.  The  case  then  proceeds  as  though  the  adjudica- 
tion had  been  made  by  the  judge. 

§  31.    Power  to  administer  oaths  and  examine  witnesses. 

Referees  are  also  authorized  to  exercise  the  powers  vested 
in  courts  of  bankruptcy  for  the  administration  of  oaths  to 
and  the  examination  of  persons  as  witnesses,  and  for  requir- 
ing the  production  of  documents  in  proceedings  before  them, 
except  the  power  of  commitment.^  The  subpoena  should  be 
issued  bv  the  clerk,  not  bv  tlie  referee." 

The  referee  is  given  power  to  administer  the  oaths  required 
by  the  bankrupt  act  in  all  cases  except  upon  hearings  in  court.^ 

Under  these  provisions  the  referee  is  empowered  to  take 
evidence  with  reference  to  questions  pending  before  him,  and 
to  summon  witnesses  for  the  purpose  of  examining  them.  The 
subpoena  must  be  duly  issued  by  the  clerk  of  the  court  of  bank- 
ruptcy.* Subpoenas  for  witnesses  may  run  into  another  dis- 
trict, provided  no  person  shall  be  required  to  attend  as  a 
witness  before  a  referee  at  a  place  outside  of  the  state  of  his 
residence,  and  more  than  one  hundred  miles  from  such  place 

4B.  A.  1898,  Sec.  38a;  Gen.  Ord.  .^B.  A.   1898,  Sec.  20,  clause  r 

27.  4  Gen.    Ord.    3;    R.    S.    Sees.    911 

iR.  A.  1898,  Sec.  38,  clause  2.  and  912;  In  re  Pierce,  in  Fed.  Rep. 

2/;;    re    Pierce,     iii     Fed.    Rep.  516,  6  Am.  B.  R.  ;-;7 
516,  6  Am.  B.  R.  747- 


138  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

of  residence,  and  only   in  case  his  lawful  mileage  and   fees 
for  one  day's  attendance  shall  be  first  paid  or  tendered  to  him.^ 

Generally  any  witness  competent  to  testify  in  a  court  of 
bankruptcy  may  be  compelled  by  subpoena  to  appear  and  bring 
with  him  documents  and  papers  mentioned  in  the  subpoena. 
It,  however,  may  be  doubted  if  the  referee  has  power  io  compel 
a  trustee  to  appear  as  a  witness  or  to  produce  documents." 
The  court  in  proper  cases  may  call  the  trustee  to  an  account, 
but  whether  the  referee  has  a  supervisory  power  of  this  char- 
acter may  be  questioned. 

The  referee  is  authorized,  upon  the  application  of  the  trus- 
tee, to  employ  a  stenographer  at  the  expense  of  the  estate,  at  a 
compensation  not  to  exceed  ten  cents  per  folio  for  reporting 
and  transcribing  proceedings  before  him."  He  may,  when 
necessary,  employ  a  clerk,  whose  hire  will  be  paid  as  part  of 
the  costs  of  administration.^ 

I1ie  examination  of  witnesses  before  the  referee  "  may  be 
conducted  by  the  party  in  person  or  by  his  counsel  or  attor- 
ney, and  the  witnesses  shall  be  subject  to  examination  and 
cross-examination,  which  shall  be  had  in  conformity  with 
the  mode  now  adopted  in  courts  of  law.  A  deposition  taken 
upon  an  examination  before  a  referee  must  be  taken  down  in 
writing  by  him,  or  under  his  direction,  in  the  form  of  narra- 
tive, unless  he  determines  that  the  examination  shall  be  by 
question  and  answer.  When  completed  it  shall  be  read  over 
to  the  witness  and  signed  by  him  in  the  presence  of  the  ref- 
eree.    The  referee  has  no  power  to  exclude  evidence  offered, 

•''B.  A.   1898,  Sec.  41;  R.   S.  Sec.  Am.  B.  R.  830;   as  to  taxinof  such 

876;    In    re    Hemstreet,     117    Fed.  fees  as  costs  see  In  re  Todd,  6  Am. 

Rep.  568,  8  Am.   B.   R.  760;  In  re  B.  R.  88,  109  Fed.  Rep.  265. 

Cole,  133  Fed.  Rep.  414.  I3  Am.  B.  « /»  re  Pierce,  in  Fed.  Rep.  516. 

R.  300;  In  re  Kerber,  125  Fed   Rep.  5  Am.  B.  R.  747;  In  re  Tebo,   loi 

653,  10  Am.  B.  R.  747;  In  re  "Wood-  Fed.  Rep.  419,  4  Am.  B.  R.  235;  In 

ward,  No.   18000  Fed    Cas.,  s    c.  12  re  Todd,  109  Fed.  Rep.  265,  6  Am. 

N.   B.   R.  297.  B.  R.  88. 

g/h   re    Hicks,   2   Fed.    Rep.     '..Sf;  -'Gen.   Ord.   22;   B.  A.    1898,   Sec. 

but  see  B.  A.  1898,  Sec.  49-  39.    clause    9.      See    also    Examina- 

'  B.  A.  1898,  Sec.  38,  clause  S :  In  tions,  Sec.  208,  post, 
re  Rozinsky,    loi    Fed.   Rep.  229,   3 


REFEREES.  139 

although  he  may  decide  it  to  he  incompetent,  immaterial  and 
irrelevant/"  He  must  note  upcni  the  deposition  any  question 
objected  to,  with  his  decision  thereon,  and  the  court  has  power 
to  deal  with  the  costs  of  incompetent,  immaterial  or  irrelevant 
depositions,  or  parts  of  them,  as  may  l)e  just. 

The  referee  has  no  ])ower  to  punish  for  contempt  committed 
in  proceedings  before  him.^^  Where  a  person,  in  proceedings 
before  a  referee,  disobeys  or  resists  any  lawful  order  or  process 
or  writ,  misbehaves  during  a  hearing  or  so  near  the  place 
thereof  as  to  obstruct  the  same,  or  neglects  to  produce,  after 
having  been  ordered  to  do  so,  any  pertinent  documents,  or 
refuses  to  appear  after  having  been  properly  summoned,  or 
upon  hearing  refuses  to  take  an  oath  as  a  witness,  or,  having 
taken  the  oath,  refuses  to  be  examined  according  to  law," 
proceedings  must  be  taken  in  the  court  of  bankruptcy  for  com- 
mitment. In  such  cases  the  referee  certifies  the  facts  to  the 
judge.  The  judge,  in  a  summary  manner,  hears  the  evidence 
as  to  the  acts  complained  of  and  makes  such  orders,  and  de- 
crees such  punishment  as  he  would  had  the  contempt  been 
committed  in  proceedings  before  the  court.^^ 

§  32.    Power  to  take  possession  and  release  the  bankrupt's 
property. 

It  is  properly  within  the  province  of  the  judge  to  take  pos- 
session and  release  the  property  of  the  bankrupt.  Yet  the 
referee  is  clothed  with  this  power,  provided  the  clerk  issues 
a  certificate  showing  the  absence  of  the  judge  from  the  judi- 
cial district  or  the  division  of  the  district,  or  his  sickness  or 


i'1/n    re    Sturgeon    (C.    C.   A.   2d  Fed.   Rep.   142,    11   Am.   B.   R.   714. 

Cir.),  139  Fed.  Rep.  608,  14  Am.  B.  "  Smith  v.  Belford  (C.  C.  A.  6th 

R.    681;    Bank    of    Ravenswood    v.  Cir.),  106  Fed.  Rep.  658,  5  Am.  B. 

Johnson    (C.    C.   A.   4th   Cir.),    143  R.  291. 

Fed.  Rep.  463,   16  Am.  B.  R.  206;  12  b.  A.  1898,  Sej.  41. 

In  re  Romine,    138   Fed.   Rep.  837,  i^  b    a.  1898,  Sec.  41  and  Sec.  2, 

14   Am.    B.    R.    785;    In    re   Lipset,  clauses    13   and   16.      See  also   Con- 

119  Fed.  Rep.  379,  9  Am.  B.  R.  32.  tempt,  Chap.  XXII,  post. 

But   see  In  re  Wilde's   Sons,   131 


140  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY, 

inability  to  act/  This  language  evidently  means  that  the 
referee  has  the  same  power  to  act  in  cases  properly  referred 
to  him  as  the  judge  has  when  no  reference  is  made.  The 
referee  has  no  authority  to  take  possession  of  or  release  the 
property  under  any  other  circumstances. 

The  referee  may  appoint  a  receiver  or  the  marshal,  upon 
application  of  parties  in  interest,  in  case  it  shall  be  necessary 
for  the  preservation  of  the  estate,  to  take  charge  of  the  prop- 
erty of  the  bankrupt  at  any  time  after  the  filing  of  the  peti- 
tion and  until  it  is  dismissed  or  the  trustee  is  qualified."  If 
necessary  for  the  best  interest  of  the  estates,  the  referee  may 
authorize  the  business  of  the  bankrupt  to  be  conducted  for  a 
limited  period  by  a  receiver,  the  marshal  or  the  trustee.^ 

In  case  it  becomes  necessary  to  take  possession  of  the  prop- 
erty after  the  petition  is  filed  and  before  an  adjudication,  a 
warrant  may  issue  to  the  marshal  to  seize  and  hold  the  prop- 
erty subject  to  further  orders.*  In  such  cases  an  indemnity 
bond,  in  such  an  amount  as  the  referee  shall  fix,  with  such 
sureties  as  he  shall  approve,  is  required.  Such  property  may 
be  released  upon  the  bankrupt  giving  a  bond  in  such  sum 
and  with  such  sureties  as  the  referee  may  approve.  In  case 
the  petition  is  dismissed  the  referee  has  power  to  release  the 
property.  After  the  adjudication  the  referee  may  direct  a 
receiver  appointed  by  him  or  a  marshal  to  take  possession  of 
the  property  before  the  trustee  is  appointed.  In  such  case 
no  bond  is  required. 

It  should  be  observed,  however,  that  the  referee  has  power 
to  act  only  in  the  absence  of  the  judge,  or  his  sickness,  or 
disability  to  act.     If  any  person  refuses  to  obey  a  proper  order 

^  B.    A.    1898,    Sec.    38,    clause    3.  The  receiver  was  in  possession  until 

See  also"B.  A.  1898,  Sec.  69.  a  trustee  was  appointed. 

-  B.  A.  1898,  Sec.  2,  clause  3,  and  Where  the  property  is  of  a  per- 

Sec.  38,  clause  4.  ishable  nature,  see  In  re  Vila,  No. 

In   re   Maher    [not   reportedl,   at  16941   Fed.   Cas.,   s.  c.  5  Law  Rep. 

Cincinnati,      Referee      Waite      ap-  17;  Gen.  Ord.  18. 

pointed   a    receiver   of  a    stable   of  ^  B.  A.  1898,  Sec.  2,  clause  5,  and 

horse  on  the  application  of  a  volun-  Sec.  38,  clause  4. 

tary  bankrupt,  who  was  unable  to  *  B.    A.    1898,    Sec.    38,   clause   3, 

obtain  hay  and  grain  to  feed  them.  and  Sec.  69. 


REFEREES. 


141 


of  the  referee  the  court  may  enforce  it  by  an  order  of  attach- 
ment for  contempt."  The  referee  may  also  have  the  property 
insured  by  the  direction  of  the  judge.'' 

As  soon  as  a  trustee  is  appointed  and  quahfied  he  is  vested 
by  law  with  the  title  to  the  bankrupt's  property  as  of  the 
date  of  the  adjudication,  except  property  exempt  by  law,' 
and  is  entitled  to  the  possession  of  the  property.  The  bank- 
rupt regularly  surrenders  possession  of  his  property  to  the 
trustee.  If  the  bankrupt  does  not  turn  over  his  property  to 
his  trustee  the  referee  has  power  to  order  him  to  do  so.^ 

§  32a.    Review  of  referees'  rulings  by  judge. 

Any  ruling  or  order  of  a  referee  ma}-  be  reviewed  by  the 
judge  of  the  court  of  bankruptcy.^  When  a  bankrupt,  cred- 
itor, trustee  or  other  person  desires  a  review  by  the  judge  of 
any  order  made  by  the  referee,  he  must  file  with  the  referee 
his  petition  therefor,  setting  out  the  errors  complained  of ;  and 
the  referee  shall  certify  to  the  judge  the  questions  presented, 
a  summary  of  the  evidence  relating  thereto,  and  the  finding 
and  order  of  the  referee  thereon.-  It  is  a  specific  order  or 
ruling  which  may  be  reviewed.  A  general  review  of  the  pro- 
ceedings before  the  referee  is  not  contemplated.^ 

A  bankrupt,  creditor,  trustee  or  other  person  may  apply 
for  a  review  of  the  ruling  or  order  of  the  referee.  The  appli- 
cation should  be  niade  b}-  a  person  interested  or  whose  rights 
are  affected  by  the  ruling  or  order  complained  of. 

The  application  should  be  in  the  form  of  a  petition  filed 
with  the  referee.*    The  petition  should  be  filed  after  the  order 

•''•  In    re    Speyer,    42    How.    Prnc.  -  Gen.    Ord.    27.       In    re    Kurtz, 

397;  In  re  Kempner.  No.  7689  Fed.  125  Fed.  Rep.  992.  11  Am.  B.  R.  129. 

Cas.,  s.  c.  6  B.  R.  521.  ^  In  re  Kelly  Dry  Goods  Co.,  102 

6  In    re    Carow,    41    How.    Prac.  Fed.  Rep.  747-  4  Am.  B.  R.  528. 

1 12.  •*  Gen.    Ord.    2y ;    In    re    Rnssell, 

'  B.  A.  1898.  Sec.  70.  105    Fed.    Rep.    501.    5    Am.    B.    R. 

^  In  re  Tudor,  96  Fed.  Rep.  942,  5^i6;    In    re    Schiller,   96    Fed.    Rep. 

2  Am.   B.   R.  808.  400,  2  Am.  B.  R.  704;  /;;  re  Hawley, 

IB.  A.   1898,  Sec.  2,  cl.  10;   Gen.  ri6    Fed.    Rep.    428,    8   Am.    B.    R. 

Ord.  27.  632. 


142 


LAW    AXD    PROCEEDINGS    IN    BANKRUPTCY. 


or  ruling-  sought  to  be  reviewed  has  been  made  by  the  referee  "' 
and  not  before.*'  No  time  is  specified  in  the  statute  or  general 
orders  within  which  this  petition  must  be  filed,  but  the  courts 
have  held  that  it  must  be  within  a  reasonable  time.' 

The  petition  should  clearly  set  forth  the  error  complained 
of  and  pray  that  the  order  or  ruling  of  the  referee  may  be 
reviewed.^ 

The  petition  should  be  signed  by  the  petitioner  or  his  at- 
torney. It  need  not  be  verified  by  an  affidavit  for  the  reason 
that  it  does  not  allege  facts.  The  facts  are  brought  up  by  the 
certificate  or  record  of  the  evidence. 

When  such  a  petition  has  been  filed  with  the  referee  he  must 
forthwith  certify  to  the  judge  the  question  presented,  a  sum- 
mary of  the  evidence  relating  thereto,  and  the  finding  and 
order  of  the  referee  thereon."  The  summary  of  the  evidence 
mentioned  in  General  Order  27 'may  be  all  t]ie  evidence  taken 
stenographically  or  the  substance  thereof  as  agreed  upon  by 
the  parties.  ^*^  The  summary  and  not  the  complete  evidence 
should  be  certified  whenever  the  rules  of  justice  will  permit.^^ 
Where  this  is  done  the  district  court  may  require  original  evi- 
dence or  parts  thereof  certified  to  it.^"    If  exhibits  are  attached 


■'"'  In  re  Russell,  105  Fed.  Rep. 
SOI,  5  Am.  B.  R.  566;  In  re  Scott, 
99  Fed.  Rep.  404,  3  Am.  B.  R.  625 ; 
In  re  Schiller,  96  Fed.  Rep.  400,  2 
Am.  B.  R.  704;  In  re  Reukauff 
Sons  &  Co.,  135  Fed.  Rep.  251 ,  14 
Am.  B.   R.  344. 

^  In  re  Smith,  93  Fed.  Rep.  791 , 

2  Am.   B.   R.    igo. 

'  In   re   Scott,  99   Fed.   Rep.   404, 

3  ,\m.  B.  R.  625  ;  In  re  Chambers, 
Calder  &  Co.,  6  Am.  B.  R.  709; 
//;  re  Reliance  Storage  and  Ware- 
house Co.,  100  Fed.  Rep.  619,  4  Am. 

B.  R.   49;    Crim   v.    Woodford    (C. 

C.  A.  4th  Cir.),  136  Fed.  Rep.  34, 
14  Am.  B.  R.  302 ;  /■;;  re  Milgraum 
&  Ost,  133  Fed.  Rep.  802,  13  Am. 
B.  R.  237;  In  re  Heebner,  132  Fed. 
Rep.  IQ03,  13  Am.  B.  R.  256;  In  re 


Grant,  143  Fed.  Rep.  661 ,  16  .A.m. 
B.  R.  256;  In  re  Koenig  &  Van 
Hoogenhuj'ze,  127  Fed.  Rep.  891 ; 
/;/  re  Scherr,  138  Fed.  Rep.  695, 
14  Am.  B.  R.  794. 

**  For  forms  of  petition,  see 
Forms  Nos.  130  to  134,  post. 

^  Gen.  Ord.  27.  For  form  of 
certificate,  see  Forms  Nos.  135  to 
139,  post.  In  re  Kurtz,  11  Am.  B. 
R.  \2(),  125  Fed.  Rep.  992. 

1"  B.  A.  1898,  Sec.  39fl,,  cl.  5  and  9. 

1^  Cunningham  v.  German  Nat. 
Bank  (C.  C.  A.  6th  Cir.),  103  Fed. 
Rep.  932,  4  Am.  B.  R.  192;  Crim 
V.  Woodford  (C.  C.  A.  4th  Cir.), 
136  Fed.  Rep.  34,  14  Am.  B.  R.  302. 

1-  Cunningham  v.  German  Nat. 
Bank  fC.  C.  A.  6th  Cir.),  103  Fed. 
Rep.   932,  4  Am.   B.   R.   192 ;   Crim 


REFEREES. 


143 


to  the  certificate  they  should  he  referred  to  in  the  certihca'.e 
and  marked  in  some  manner  to  identify  them. 

It  has  heen  held  that  exceptions  may  l)e  taken  to  the  procecd- 
ines  and  contained  in  the  certihcate  and  exhibits  attached  t) 
it/''  Where  a  referee  makes  a  rulini;-  ni)on  the  admissibility 
of  evidence  in  the  course  of  an  examination  the  certificate 
should  show  the  rulini;-  and  the  question  should  be  answered 
in  anv  case  and  the  examination  continued,  and  tlie  question 
decided  by  the  court  after  the  deposition  is  completed.^* 

The  certificate  should  be  prepared  and  signed  by  the  referee 
and  by  him  transmitted  to  the  clerk  of  the  court. 

When  the  certificate  is  filed  in  the  clerk's  office  it  becomes 
the  duty  of  the  judge  to  consider  and  confirm,  modify  or  over- 
rule, or  return  with  instructions  for  further  proceedings  such 
record  and  findings. ^^  If  the  question  be  improperly  certified 
the  court  may  refuse  to  give  an  opinion. ^'^ 

The  case  is  regularly  set  for  hearing  upon  the  petition  and 
exhibits  without  answer  or  pleading  on  the  part  of  the  re- 
spondent.    The  judge  will  usually  hear  arguments  of  counsel. 


V.  Woodford  (C.  C.  A.  4th  Cir.), 
136  Fed.  Rep.  34,  14  Am.  B.  R. 
302. 

13  In  re  Cogle.v,  107  Fed.  Rep.  7^, 
5  Am.  B.  R.  731;  Dressel  v.  North 
State  Lumber  Co.,  119  Fed.  Rep. 
531,  9  Am.  B.  R.  541 ;  In  re  Carver, 
113  Fed.  Rep.  138,  7  Am.  B.  R. 
539 ;  Carolina  Cooperage  Co.,  96 
Fed.  Rep.  604,  3  Am.  B.  R.  154. 

In  re  Swift,  118  Fed.  Rep.  348.  9 
Am.  B.  R.  237;  Judge  Lowell  said: 
"Counsel  for  the  joint  creditors 
raised  certain  formal  objections, 
based  upon  the  state  of  the  record. 
It  is  sufificient  to  say  that  this  court 
has  not  hitherto  required,  and  does 
not  intend  to  require  hereafter,  any 
particular  formalities  to  be  observed 
in  seeking  a  review  by  the  Judge  of 
the  orders  or  other  proceedings  of 
a  referee.     If  the  matter  in  dispute 


is  substantially  set  out,  that  is 
enough.  No  formal  exceptions  to 
the  referee's  findings  or  rulings  need 
be  filed.  If  this  practice  shall  seem 
lax  to  some,  the  answer  is  that  it 
has  hitherto  been  found  convenient 
in  this  district,  both  for  the  judge 
and  for  the  parties,  and  it  has  not 
been  abused.  A  stricter  practice  has 
been  adopted  in  some  other  dis- 
tricts, doubtless  because  it  has  been 
deemed  convenient  there." 

1*  In  re  Lipset,  Levittan  &  Co., 
119  Fed.  Rep.  379,  9  Am.  B.  R.  t,2; 
Dressel  v.  North  State  Lumber  Co., 
119  Fed.  Rep.  531.  9  Am.  B.  R.  54T. 

15  B.   A.    1898,    Sec.   2,   cl.    ID. 

i«  In  re  Smith.  93  Fed.  Rep.  791 , 
2  Am.  B.  R.  190 ;  In  re  Reukauff 
Sons  &  Co.,  135  Fed.  Rep.  251 ,  14 
Am.    B.    R.    344. 


144 


LAW   AND   PROCEEDINGS    IN    BANKRUPTCY. 


If  the  judge  is  not  satisfied  with  the  evidence  certified  by  the 
referee  he  may  allow  further  evidence  to  be  taken  before  him/'^ 
or  refer  the  matter  to  the  referee  for  further  proofs. 

Ordinarily  the  review  by  the  judge  of  an  order  made  by  the 
referee  will  be  confined  to  the  errors  pointed  out  in  the  petition 
for  review,  but  the  judge  may  properly  consider  any  point 
presented  by  the  record  then  before  him  whether  such  point 
was  or  was  not  discussed  before  or  by  the  referee/' 

Tlie  judge  reviews  both  law  and  fact.  No  fixed  rule  can 
be  laid  down  with  reference  to  the  weight  to  be  given  by  the 
judge  to  the  finding  of  fact  by  the  referee  in  making  his 


ruling  or  order 


,-   10 


'^'^  In  re  Stotts,  93  Fed.  Rep.  438, 

1  Am.  B.  R.  641. 

^^  In  re  Samuel  Wilde's  Sons  (C. 
C.  A.  2d  Cir.),  144  Fed.  Rep.  972, 
16  Am.  B.  R.  386;  In  re  Gottardi, 
114    Fed.    Rep.    328,    7   Am.    B.    R. 

722,- 

1^  In  re  Grant  Bros.,  118  Fed.  Rep. 
"JT,,  9  Am.  B.  R.  93 ;  In  re  Carver, 
113  Fed.  Rep.  138,  7  Am.  B.  R. 
539;  In  re  Covington,  no  Fed.  Rep. 
143,  6  Am.  B.  R.  2,73 ',  In  re  Mayer, 
98  Fed.  Rep.  839,  3  Am.  B.  R.  533 ; 
In  re  McCormick,  97  Fed.  Rep.  566, 
3  Am.  B.  R.  340;  In  re  Waxelbaiim, 
loi  Fed.  Rep.  228,  4  Am.  B.  R. 
120;  In  re  Booth,  96  Fed.  Rep.  943, 

2  Am.  B.  R.  770. 

In  re  Swift,  118  Fed.  Rep.  34S,  9 
Am.  B.  R.  22,7,  Judge  Lowell,  speak- 
ing on  this  subject,  said:  "Again, 
no  precise  quantitative  weight  is,  in 
this  district,  assigned  to  the  findings 
of  fact  made  by  a  referee.  If  those 
findings  are  based  largely  upon  the 
good  or  bad  faith  of  witnesses  seen 
and  heard  by  the  referee,  this  court 
will  always  bear  in  mind  that  the 
referee's  means  of  judgment  are,  in 
an  important  respect,  better  than  its 
own.     If,   on   the   other   hand,   the 


findings  depend  upon  inferences  to 
be  drawn  from  admitted  facts,  this 
court's  means  of  judgment  are  near- 
ly as  good  as  the  referee's.  The 
weight  to  be  assigned  to  the  ref- 
eree's findings  in  the  two  cases  sup- 
posed is  by  no  means  the  same.  -No 
labor-saving  formula  will  determine 
the  weight  of  the  finding,  or  show 
just  how  strongly  the  court  must  in- 
cline against  it  in  order  to  reverse  it. 
To  say  that  the  findiing  should  not 
be  set  aside  unless  it  is  'clearly 
erroneous,'  'manifestly  erroneous,' 
'so  manifestly  erroneous  as  to  in- 
voke the  sense  of  justice  of  the 
court,'  or  'unless  it  discloses  preju- 
dicial errors  by  the  referee,  some  of 
which  may,  without  exaggeration, 
be  denominated  gross,'  is  to  darken 
counsel,  if  more  is  meant  than  that 
the  court  will  not  set  aside  the 
finding  unless  it  is  deemed  erro- 
neous, after  due  allowance  for  the 
circumstances  under  which  it  was 
made.  Artificial  and  quantitative 
presumptions  of  fact  are  foreign  to 
the  spirit  of  the  common  law,  and 
the  introduction  of  these  presump- 
tions has  been  rare  and  unfortu- 
nate." 


REFEREES. 


145 


If  the  order  of  the  referee  is  modified  or  reversed  the  judge 
will  usually  direct  the  proper  order  to  be  entered  with  refer- 
ence to  the  further  proceedings.  A  certified  copy  of  this 
order  should  be  furnished  the  referee  for  his  direction  and 
guidance.'*' 

§  32.    The  administrative  duties  of  referees. 

In  addition  to  his  judicial  duties,  the  statute  enumerates 
certain  administrative  duties  of  the  referee. 

It  provides,^  that  referees  shall 

First,  declare  dividends  and  prepare  and  deliver  to  trustees 
dividend  sheets,  showing  the  dividends  declared  and  to  whom 

payable ; 

Second,  examine  all  schedules  of  property  and  lists  of  cred- 
itors filed  by  bankrupts,  and  cause  such  as  are  incomplete  or 
defective  to  be  amended. 

Third,  furnish  such  information  concerning  the  estates  in 
process  of  administration  before  them  as  may  be  requested  by 
the  parties  in  interest.  This  does  not  include  furnishing  cop- 
ies of  proceedings  pending  before  them.- 

Fourth,  give  notices  to  creditors  as  provided  by  the  stat- 
ute ; ' 

Fifth,  make  up  records  embodying  the  evidence,  or  the  sub- 
stance thereof,  as  agreed  upon  by  the  parties  in  all  contested 
matters  arising  before  them,  whenever  requested  to  do  so  by 

20  For  forms  of  orders,  see  Forms  the  bankrupt:  (2)  all  hearings  upon 

Nos.  143  to  145,  post.  applications  for  the  confirmation  of 

1 B.  A.  1898,  Sec.  39a.  compositions    or    the    discharge    of 

2/w    re    Le'win,     103    Fed.    Rep.  bankrupts;  (3)  all  meetings  of  cred- 

850,  4  Am.  B.  R.  632.  itors;     (4)     all    proposed    sales    ot 

3B.    A.    1898,    Sec.    58a,   provides  property;    (5)    the    declaration   and 

that    "creditors    shall   have   at   least  time  of  payment  of  dividends;    (6) 

ten   days'    notice   by   mail,    to   their  the  filing  of  the  final  accounts  of  the 

respective  addresses  as  they  appear  trustee,  and  the  time  when  and  the 

in  the  list  of  creditors  of  the  bank-  place  where  they  will  be  examined 

rupt.    or    as    afterwards    filed    with  and  passed  upon ;    (7)   the  proposed 

the  papers  in  the  case  by  the  cred-  compromise  of  any  controversy,  and 

itors.    unless   they    waive    notice    in  (8)    the   proposed   dismissal   of  the 

writing,  of   fi)   all  examination.,  oi  proceedings." 


146 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


either  of  the  parties  thereto,  together  with  their  findings  there- 
in, and  transmit  them  to  the  judges; 

Sixth,  prepare  and  file  the  schedules  of  property  and  lists 
of  creditors  recjuirecl  to  be  filed  by  the  bankrupts,  or  cause  the 
same  to  be  done,  when  the  bankrupts  fail,  refuse  or  neglect  , 

to  do  so ; * 

Seventh,  safely  keep,  perfect  and  transmit  to  the  clerks  the 
records  herein  required  to  be  kept  by  them,  when  the  cases 
are  concluded ; 

Eighth,  transmit  to  the  clerks  such  papers  as  may  be  on 
file  before  them  whenever  the  same  are  needed  in  any  pro- 
ceedings in  courts,  and  in  like  manner  secure  the  return  of 
such  papers  after  they  have  l)een  used,  or,  if  it  is  impracti- 
cable to  transmit  the  original  papers,  transnnt  certified  copies 
thereof  by  mail ; 

Ninth,  upon  application  of  any  party  in  interest,  preserve 
the  evidence  taken  or  the  substance  thereof  as  agreed  upon 
by  the  parties  before  them  when  a  stenographer  is  not  in 
attendance ;  ^   and 

Tenth,  whenever  their  respective  offices  are  in  the  same 
cities  or  towns  where  the  courts  of  bankruptcy  convene,  call 
upon  and  receive  from  the  clerks,  all  papers  filed  in  courts  of 
bankruptcy  which  have  been  referred  to  them. 

All  notices  are  given  by  the  referee,  unless  otherwise  or- 
dered by  the  judge."  In  sending  notices  the  referee  is  entitled 
to  use. an  official  penalty  envelope,  and  need  not  pay  postage.' 


•  *  See   Gen.   Ord.   9. 

■'■'  In  re  Rozinsky,  10 1  Fed.  Rep. 
229,  3  Am.  B.  R.  830;  In  re  Todd, 
109  Fed.  Rep.  265,  6  Am.  B.  R.  88. 

6B.  A.  1898,  Sec.  58r. 

■^  Post    Office    Department,    First 
Assistant    Postmaster-General,    Di- 
vision of  Correspondence,  Washing- 
ton, August  6,  1898. 
Postmaster,    Cincinnati,    O.,    Sir: — 

Your  letter  of  August  i,  ad- 
dressed to  the  Assistant  Attorney- 


General  for  the  Post  Office  Depart- 
ment, has  been  referred  to  this  office 
for  reply.  Answering  your  inquiry 
you  are  advised  that  a  referee  in 
bankruptcy,  appointed  by  the  Court 
in  Bankruptcy,  is  entitled  to  make 
use  of  the  official  penalty  envelope, 
for  conducting  the  official  business, 
for  which  he  is  appointed. 

Very  respectfully, 
Geo.   M.   Allen,   Acting  First  As- 
sistant Postmaster-General. 


REFEREES. 


147 


A  penalty  envelope  for  conducting  the  official  business  by  a 
referee  may  be  in  the  following  form: 


JOHN  DOE,  DEPARTMENT  OF  JUSTICE. 

Referee  in  BanKruptcy.  OFFICIALBUSINESS. 

CINCINNATI   0.  Penalty  for  Private  Use.  $300. 


§  34.     Records  of  referees. 

A  record  of  proceedings  in  each  case  before  a  referee  is 
required  to  be  kept  as  nearly  as  may  be  in  the  same  manner 
as  records  are  now  kept  in  equity  cases  in  the  circuit  courts 
of  the  United  States.^ 

The  referee  is  required  to  endorse  on  each  paper  filed  with 
him  the  date  and  the  hour  of  filing  and  a  Ijrief  statement  of 
its  character.-  He  must,  upon  application  of  any  party  in 
interest,  preser^-e  the  evidence  taken  or  the  substance  thereof, 
as  agreed  between  the  parties  before  him,  when  a  stenographer 
is  not  in  attendance.^  If  a  stenographer  is  in  attendance  a 
transcript  of  his  notes  is  used.*  These  papers,  together  with 
such  orders  as  the  referees  from  time  to  time  niakes.  such 
notices  as  he  is  required  to  give  and  a  record  of  the  proceed- 
ings in  each  case  required  to  be  kept  in  a  separate  book  or 
books,  constitute  the  record  of  the  case.' 

IB.  A.  1898,  Sec.  42a.  *B.    A.    1898.    Sec.    38,    clause    5- 

2  Gen.  Ord.  2.  Gen.  Ord.  2J. 

•T5.    A.    189"^,    Sec.    39,  clause   9;  =  B.  A.  1898,  Sec.  42^. 

Gen.  Ord.  22. 


148  LAW   AND   PROCEEDINGS    IN    BANKRUPTCY. 

The  record  is  frequently  kept  on  one  or  more  sheets  of 
paper,  npon  which  are  stated  the  proceedings  in  the  same 
form  as  proceedings  are  usually  stated  in  an  appearance 
docket.  These  separate  sheets  form  the  first  pages  of  the 
record.  The  various  sheets  constituting  the  record  should  be 
firmly  and  neatly  bound  together,  when  the  case  is  concluded, 
by  the  referee,  should  be  certified  by  him  and  transmitted  to 
the  clerk  of  the  court  of  bankruptcy,  and  there  remains  as  a 
part  of  the  record  of  the  court.** 

Whenever  a  bankrupt,  creditor,  trustee  or  other  person  shall 
desire  a  review  by  the  judge  of  any  order  made  by  the  referee 
he  applies  to  the  referee  by  petition  that  the  question  may 
be  certified  to  the  judge  for  review.^  He  is  required  there- 
upon to  make  up  a  record  embodying  the  evidence  or  sub- 
stance, thereof,  as  agreed  upon  between  the  parties,  together 
with  his  findings,  certify  to  the  same  and  transmit  the  record 
to  the  judge. ^ 

He  is  also  required  to  transmit  to  the  clerk  such  papers  as 
may  be  on  file  before  him  whenever  the  same  are  needed  in 
any  proceedings  in  courts,  and  in  like  manner  secure  the 
return  of  such  papers  after  they  have  been  used,  or  if  it  be 
impracticable  to  transmit  the  original  papers,  transmit  cer- 
tified copies  thereof  by  mail.''  These  last  two  are  partial  or 
interlocutory  records,  and  do  not  afifect  the  making  of  the 
final  record  above  referred  to  at  the  proper  time. 

§  35.     Offenses  of  referees. 

Referees  are  forbidden  by  the  statute  to  act  in  cases  in 
which  they  are  directly  or  indirectly  interested ;  ^  to  practice 
as  attorneys  and  examiners  at  law  in  any  bankruptcy  pro- 
ceedings ;  or  to  purchase,  directly  or  indirectly,  any  property 
of  an  estate  in  bankruptcy. 

«  B.  A.  T898.  Sec.  42r.  ^  B.  A.   1898,  Sec.  39,  clause  8. 

"  Gen.    Ord.    2y.      See    ante.    Sec.  ^  Cobb  v.  Bra}',  91  Fed.  Rep.  102, 

32a.  T  Am.  B.  R.  153;  B.  A.  1898,  Sec. 

^  B.    A.    1898,    Sec.   39,    clause   5 ;  39^. 
Gen.  Ord.  27. 


REFEREES,  149 

The  statute  provides  -  that 

"A  person  shall  be  punished  by  fine,  not  to  exceed  five 
hundred  dollars,  and  forfeit  his  office,  and  the  same  shall 
thereupon  become  vacant,  upon  conviction  of  the  offense  of 
ha\ing  knowingly 

"first,  acted  as  a  referee  in  a  case  in  which  he  is  directly 
or  indirectly  interested ;  or 

"second,  purchased,  while  a  referee,  directly  or  indirectly, 
any  property  of  the  estate  in  bankruptcy  of  whicli  he  is 
referee ;  or 

"third,  refused,  while  a  referee,  or  trustee,  to  permit  a 
reasonable  opportunity  for  the  inspection  of  the  accounts 
relating-  to  the  affairs  of.  and  the  papers  and  records  of 
estates  in  his  charge  by  parties  in  interest  when  directed  by 
the  court  so  to  do." 


§  36.     Compensation  and  expenses  of  referees. 

The  compensation  is  fixed  Ijy  the  statute  ^  as  follows : 
"Referees  shall  receive  as  full  compensation  for  their  serv- 
ices, payable  after  they  are  rendered,  a  fee  of  fifteen  dollars 
deposited  with  the  clerk  at  the  time  the  petition  is  filed  in 
each  case,  except  when  a  fee  is  not  required  from  a  voluntary 
bankrupt,  and  twenty-five  cents  for  every  proof  of  claim  filed 
for  allow^ance,  to  be  paid  from  the  estate,  if  any,  as  a  part  of 
the  costs  of  administration,  and  from  estates  which  have  been 
administered  before  them  one  percentum  commissions  on  all 
moneys  disbursed  to  creditors  by  the  trustee,  or  one-half  of 
one  percentum  on  the  amount  to  be  paid  to  creditors  upon  the 
confirmation  of  a  composition." 

Sec.  72,  added  by  the  amendment  of  1903.  provides  "That 
neither  the  referee  nor  the  trustee  shall  in  any  form  or  guise 
receive,  nor  shall  the  court  allow  them,  any  other  or  further 

"  B.  A.  1898,  Sec.  2gc.  1898,  Sec.  23c  and  Sec.  2,  clause  4. 

A  circuit  court  or  a  court  of  bank-  1  B.  A.   1898,  Sec.  40.  as  amended 

ruptcy    has    jurisdiction    to    punish  Feb.  5,  1903;  32  Stat,  at  L.  797. 
for   anv    of   these    offenses.      B.    A. 


150 


LAW    AXl)    PROCEEDINGS    IN    BANKRUPTCY, 


compensation  for  tlieir  services  than  that  expressly  authorized 
and  prescribed  in  this  act."  ' 

The  bankruptcy  act  as  originally  passed  allowed  referees 
ten  dollars  instead  of  fifteen  dollars,  and  no  fee  for  filing 
claims.  Commissions  were  allowed  on  "sums  to  be  paid  out 
as  dividends."  This  was  held  not  to  include  commissions  on 
moneys  paid  secured  creditors,  because  they  were  not  divi- 
dends."'* This  rule  applies  to  all  proceedings  begun  prior  to 
February  5,  1903.*  Under  the  provision  of  the  amendment 
referees  are  clearly  entitled  to  commissions  on  moneys  paid 
secured  creditors  as  well  as  on  dividends  to  unsecured  cred- 
itors."'''  But  when  a  secured  creditor  resorts  to  a  state  court 
to  enforce  his  security  and  the  proceeds  do  not  come  into  the 
possession  of  the  bankruptcy  court  the  referee  is  not  entitled  to 
commissions  on  such  sums  as  may  be  paid  the  secured  cred- 
itor.° 

Whenever  a  case  is  transferred  from  one  referee  to  another 
the  judge  shall  determine  the  proportion  in  which  the  fee 
and  the  commissions  therefor  shall  be  divided  between  the  ref- 
erees. 

In  the  event  of  the  reference  of  a  case  being  revoked 
before  it  is  concluded,  and  when  the  case  is  specially  referred, 
the  judge  shall  determine  what  part  of  the  fee  and  commis- 
sions shall  be  paid  to  the  referee. 

The  compensation  of  referees  prescribed  by  the  act  is  in 


232  Stat,  at  L.  797;  Dressel  v. 
North  State  Lumber  Co.,  119  Fed. 
Rep.  S3I ,  9  Am.  B.  R.  541. 

But  see  In  re  Goldville  Mining 
Co.,  123  Fed.  Rep.  579;   10  Am.  B. 

R.  552. 

3/m  re  Utt  (C.  C.  A.  7th  Cir.), 
105  Fed.  Rep.  -j^a^,  5  Am.  B.  R. 
383  ;/u  re  Smith,  108  Fed.  Rep.  39, 
5  Am.  B.  R.  559 ;  In  re  Lumber  Co., 
116  Fed.  Rep.  731;  In  re  Ft.  Wayne 
Flee.  Corp.,  94  Fed.  Rep.  109,  i 
Am.  B.  R.  706;  In  re  Gardner,  103 
Fed.    Rep.   922,   4   Am.    B.    R.   420; 


In  re  Fielding,  96  Fed.  Rep.  800,  3 
Am.  B.  R.  135 ;  In  re  Goldsmith, 
118  Fed.  Rep.  763,  9  Am.  B.  R. 
419;  In  re  Barker,  in  Fed.  Rep. 
501,  7  Am.  B.  R.  132.  But  see  In  re 
Barber,  97  Fed.  Rep.  547,  3  Am.  B. 
R.  306. 

*  Act  of  Feb.  5,  1903,  Sec.  19; 
},2  Stat,  at  L.  797. 

"'  /;;  re  Sanford  Furniture  Mfg. 
Co.,  126  Fed.  Rep.  888,  11  Am. 
B.  R.  414. 

^'  In  re  Iowa  Falls  Mfg.  Co.,  140 
Fed.  Rep.  527,  15  Am.  B.  R.  384. 


REFEREES. 


151 


full  compensation  for  all  ser\'ices  performed  by  them  under 
the  act  or  under  the  general  orders,  l)ut  does  not  include  ex- 
penses necessarily  incurred  by  them  in  the  performance  of  their 
duties  under  the  act  and  allowed  by  special  order  of  the  judge/ 
Thus  a  referee  will  not  l)e  allowed  any  extra  compensation 
for  hearing  specifications  in  opposition  to  a  discharge,'"*  or 
for  preparing  the  dividend  sheet,  or  for  hearing  the  evidence 
during  the  examination,"  or  for  hearing  numerous  claims  for 
specific  liens/"  or  for  services  in  gi\'ing  notice  of  application 
for  discharge.^ ^  No  all()\Nance  will  be  made  for  notices  sent 
to  creditors  other  than  those  retjuired  l)y  Sec.  58  of  the  act, 
or  for  the  employment  of  a  stenographer  in  adjustment  cor- 
respondence or  other  i)usiness  of  the  estate.^'  Clerk  liire 
will  be  allowed  where  the  services  of  a  clerk  are  necessary. ^'^ 
It  has  been  held  that  where  a  trustee  and  adverse  claimant  to 
property  try  the  riglit  to  it  before  the  referee  the  referee  is  do- 
ing" work  in  addition  to  his  duty,  and  a  reasonable  fee  as  w^ell 
as  a  stenogra])her's  fee  slhmld  be  taxed  against  the  unsuccessful 
claimant,^*  but  it  is  doubtful  if  this  would  be  allow'ed  since 
the  passage  of  Sec.  72  of  the  act.^^  The  referee's  claim  for 
commissions  must  be  presented  to  and  passed  upon  b}-  the 
court.^*^  Every  referee  is  required  to  keep  an  accurate  account 
of  his  traveling  and  incidental  expenses,  and  of  those  of  any 


"  Gen.  Ord.  35,  par.  2.  In  re  Dan- 
iels, 130  Fed.  Rep.  597,  12  Am.  B. 
R.  446. 

^In  re  Troth.  104  Fed.  Rep.  291, 
4  Am.  B.  R.  780;  Bragasa  v.  St. 
Louis  Cycle  ( C.  C.  A.  5th  Cir.), 
107  Fed.  Rep.  77,  5  Am.  B.  R.  700; 
contra,  Fellows  v.  Frendenthal  (C. 
C.  A.  7th  Cir.),  102  Fed.  Rep.  731, 
4  Am.  B.  R.  490;  In  re  Grossman, 
III  Fed.  Rep.  507,  6  Am.  B.  R.  510. 

^  In  re  Barker,  iii  Fed.  Rep. 
501,  7  Am.  B.  R.  132. 

10  In  re  Mammoth  Pine  Lumber 
Co.,  116  Fed.  Rep.  731,  8  Am.  B.  R. 
651;  In  re  Barker,  iii  Fed.  Rep. 
501,  7  Am.  B.  R.  132. 


11 /«  re  Dixon,  114  Fed.  Rep. 
675,  8  Am.  B.  R.  145. 

1-  In  re  Mammoth  Pine  Lumber 
Co.,  116  Fed.  Rep.  731,  8  Am.  B.  R. 
651. 

'3  Gen.  Ord.  35;  In  re  Pierce,  in 
Fed.  Rep.  516,  6  Am.  B.  R.  747; 
//;  re  Tebo,  loi  Fed.  Rep.  419,  4 
.Am.  B.  R.  235  ;  hi  re  Todd.  109  Fed. 
Rep.  265 ;  6  \m.  B.  R.  88. 

i-*  In  re  Todd,  109  Fed.  Rep.  265 ; 
6  Am.  B.  R.  88. 

^■'  T,2  Stat,  at  L.  797. 

1*5  In  re  Mammoth  Pine  Lumber 
Co.,  116  Fed.  Rep.  731,  8  Am.  B. 
R.  651. 


152  LAW    AND    PROCEEDINGS    IN    BANKRUPTCV, 

clerk  or  other  officer  attending  him  in  the  perforyiance  of  his 
duties  in  any  case  which  may  be  referred  to  him  and  to  make 
return  of  the  same  under  oath  to  the  judge,  with  proper 
vouchers,  when  vouchers  can  be  procured,  on  the  first  Tuesday 
in  each  month. ^' 

Before  incurring  any  expense  in  pubhshing  or  maihng  no- 
tices, or  in  travehng,  or  in  procuring  the  attendance  of  wit- 
nesses, or  in  perpetuating  testimony,  the  referee  may  require, 
from  the  bankrupt,  or  other  person  in  whose  behalf  the  duty 
is  to  be  performed,  indemnity  for  such  expense. ^'^  Money 
advanced  for  this  purpose  by  the  bankrupt  or  other  person 
shall  be  repaid  him  out  of  the  estate  as  part  of  the  cost  of 
administering  the  same.^^ 

In  any  case  in  which  the  fees  of  the  referee  are  not  required 
by  the  act  to  be  paid  by  a  debtor  before  filing  his  petition  to 
be  adjudged  a  bankrupt,  the  judge,  at  any  tinie  during  the 
pendency  of  the  proceedings  in  bankruptcy,  may  order  those 
fees  to  be  paid  out  of  the  estate,  or  may,  after  notice  to  the 
bankrupt  and  satisfactory  proof  that  he  then  has  or  can  ob- 
tain the  money  with  which  to  pay  those  fees,  order  him  to 
pay  them  within  a  time  specified,  and,  if  he  fails  to  do  so, 
may  order  his  petition  to  be  dismissed.^'' 

1"  Gen.  Ord.  2(i.  i"  Gen.  Ord.  35,  par.  4. 

IS  Gen.  Ord.  10;  B.  A.  1898,  Sec. 
62. 


CLERKS,     MARSHALS    AND    ATTORNEYS.  153 


CHAPTER  VI. 

CLERKS,    MARSHALS    AND    ATTORNEYS. 

§  37.    Duties  of  the  clerk. 

The  word  clerk,  as  used  in  the  bankrupt  act,  means  the 
clerk  of  a  court  of  bankruptcy,  unless  such  a  meaning  is  in- 
consistent with  the  context.^ 

The  clerk  is  re(|uired  to  keep  a  docket,"  in  which  the  cases 
shall  be  entered  and  numbered  in  the  order  in  which  they  are 
commenced.  It  must  contain  a  memorandum  of  the  filing 
of  the  petition  and  of  the  action  of  the  court  thereon,  of  the 
reference  of  the  case  to  the  referee,  and  of  the  transmission 
by  him  to  the  clerk  of  his  certified  record  of  the  proceedings, 
with  the  dates  thereof,  and  a  memorandum  of  all  proceedings 
in  the  case,  except  those  duly  entered  on  the  referee's  certified 
record  aforesaid.  The  docket  must  be  arranged  in  a  manner 
convenient  for  reference,  and  shall  at  all  times  be  open  to 
public  inspection.  The  clerk  is  also  required  to  endorse  on 
each  paper  filed  with  him  the  date  and  hour  of  filing  and  a 
brief  statement  of  its  character.^  He  issues  all  process,  sum- 
mons and  subpoenas  under  the  seal  of  the  court.* 

The  clerks  are  also  required  to  prepare  and  keep  in  their 
respective  offices  complete  and  convenient  indexes  of  all  peti- 
tions and  discharges  in  bankruptcy  heretofore  or  hereafter 
filed  in  the  said  courts,  and  when  requested  so  to  do,  issue 
certificates  of  search  certifying  as  to  wliether  or  not  any  such 
petitions  or  discharges  have  been  filed ;  ^  and  they  are  entitled 
to  receive  for  such  certificates  the  same  fees  as  now  allowed 
by  law  for  certificates  as  to  judgments  in  said  courts ;  *'  pro- 

-  B.  A.   189S,  Sec.   I,  clause  5.  ^  Sec.  71,  added  by  the  amendment 

2  Gen.  Ord.  i.  of  1903  to  the  Bankruptcy   Act,  32 

3  Gen.  Ord.  2.  Stat,  at  L.  797. 

*  Gen.  Ord.  3.  e  R.  S.  Sec.  828, 


154  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

vided,  that  said  bankruptcy  indexes  and  dockets  shall  at  all 
times  be  open  to  inspection  and  examination  by  all  persons  or 
corporations  without  any  fee  or  charge  therefor. 

It  is  the  duty  of  a  clerk  to  refer  a  case  to  a  referee  if  the 
judge  is  absent  from  the  district  or  division  of  the  district  in 
which  the  petition  is  tiled.  In  voluntary  cases  the  reference 
is  made  immediately  upon  the  filing  of  the  petition.^  In 
involuntary  cases  the  reference  is  made  on  the  next  day  after 
the  last  day  on  which  pleadings  may  be  filed,  provided  none 
have  been  filed  by  the  bankrupt  or  any  of  his  creditors.^  For 
the  purpose  of  enabling  the  referee  to  exercise  the  powers  of 
the  judge  for  the  taking  possession  of  and  releasing  the  prop- 
ertv  of  the  bankrupt  the  clerk  may  issue  a  certificate  showing 
the  absence  of  the  judge  from  the  judicial  district  or  division 
of  the  district,  or  his  sickness  or  inability  to  act.*^ 

The  clerks  are  required  to  respectively  ^" 

(1)  account  for,  as  for  other  fees  received  by  them,  the 
clerk's  fee  paid  in  each  case  and  such  other  fees  as  may  be 
received  for  certified  copies  of  records  which  may  be  prepared 
for  persons  other  than  officers ; 

(2)  collect  the  fees  of  the  clerk,  referee  and  trustee  in  each 
case  instituted  before  filing  the  petition,  except  the  petition 
of  a  proposed  volutary  bankrupt  which  is  accompanied  by 
an  affidavit  stating  that  the  petitioner  is  without,  and  can  not 
obtain,  the  money  with  which  to  pay  such  fees; 

(3)  deliver  to  the  referees  upon  application  all  papers  which 
may  be  referred  to  them,  or,  if  the  offices  of  such  referees  are 
not  in  the  same  cities  or  towns  as  the  offices  of  such  clerks, 
transmit  such  papers  liy  mail,  and  in  like  manner  return 
papers  which  were  received  from  such  referees  after  they  have 
been  used ; 

(4)  and  within  ten  days  after  each  case  has  been  closed 


■^  B.    A.    1898,    Sec.    iSg.      Official  That  a  deputy  clerk  can  not  refer 

Form  No.  15,  Form  No.  32,  post.  a  case,  see  Bray  v.  Cobb,  i  Am.  B. 

«  B.    A.    1898,    Sec.    i8f.      Official  R.  153.  Pi  Fed.  Rep.  102. 

Form  No.  15,  Form  No.  32.  post.  i"  B.  A.  1898,  Sec.  51. 

9  B.    A.    1898,    Sec.    38,    clause   3. 


CLERKS,     MARSHALS    AND    ATTORNEYS.  155 

pay  to  the  referee,  if  the  case  was  referred,  the  fee  collected 
for  him,  and  to  the  trustee  the  fee  collected  for  him  at  the  time 
of  filing  the  petition. 

The  clerk  is  entitled  to  one  copy  of  the  petition  ^^  and  to 
a  copy  of  the  schedule.^" 

It  is  not  the  duty  of  a  clerk  of  court  to  furnish  referees  with 
blank  forms. ^^ 

g  38.     Compensation  and  expenses  of  clerks. 

The  clerk  receives  as  full  compensation  for  his  service  to 
each  estate  a  tiling  fee  of  ten  dollars,  except  when  a  fee  is 
nut  required  from  a  voluntary  bankrupt.^ 

Such  fee  is  in  full  compensation  for  all  services  performed 
by  him  in  regard  to  filing  petitions  or  other  papers  required 
by  the  act  to  be  filed  with  him,  or  in  certifying  or  delivering 
papers  or  copies  of  records  to  referees  or  other  officers,  or  in 
receiving  or  paying  out  money;  but  does  not  include  copies 
furnished  to  other  persons,  or  expenses  necessarily  incurred 
in  publishing  or  mailing  notices  or  other  papers."  In  any 
case  in  which  the  fees  of  the  clerk  are  not  required  by  the 
act  to  be  paid  by  a  debtor  before  filing  his  petition  to  be  ad- 
judged a  bankrupt,  the  judge,  at  any  time  during  the  pendency 
of  the  proceedings  in  bankruptcy,  may  order  those  fees  to  be 
paid  out  of  the  estate,  or  may,  after  notice  to  the  bankrupt 
and  satisfactory  proof  that  he  then  has  or  can  obtain  the  money 
with  which  to  pay  those  fees,  order  him  to  pay  them  within  a 
time  specified,  and  if  he  fails  to  do  so,  may  order  his  petition 
to  be  dismissed.^ 

The  actual  and  necessary  expenses  incurred  by  officers  in 
the  administration  of  estates  shall,  except  where  other  pro- 
visions are  made  for  their  payment,  be  reported  in  detail,  under 

"  B.  A.  1898,  Sec.  S9f.  Hardware    &    Furniture    Co.,     134 

"B.  A.   1898,   Sec.  7,  clause  8.  Fed.  Rep.  997,   I4  Am.  B.  R.   186, 

^^  U.  S.  V.  Mason    (C.  C.  A.   ist  it    was    held    that    clerks    are    not 

Cir.),   T29  Fed.  Rep.  742.  entitled  to  a  fee  for  mailing  notice 

1  B.  A.  1898,  Sec.  52.  of  application   for  discharge. 
-  Gen.  Ord.  35,  par.  i  ;  /;;  re  Dunn  ^  Gen.  Ord.  35,  par.  4. 


156  LAW   AND    PROCEEDINGS    IN    BANKRUPTCY. 

oath,  and  examined  and  approved  or  disapproved  by  the  court. 
If  approved  they  shah  be  paid  or  allowed  out  of  the  estates  in 
which  they  were  incurred.*  Before  incurring  any  expense 
in  publishing  or  mailing  notices,  or  in  traveling,  or  in  procur- 
ing the  attendance  of  witnesses,  or  in  perpetuating  testimony, 
the  clerk  may  require,  from  the  bankrupt  or  other  person  in 
whose  behalf  the  duty  is  to  be  performed,  indemnity  for  such 
expense.  Money  advanced  for  this  purpose  by  the  bankrupt 
or  other  person  shall  be  repaid  him  out  of  the  estate  as  part  of 
the  cost  of  administering  the  same.'' 

Clerks  of  courts  of  bankruptcy  are  not  entitled  to  charge  as 
expenses,  money  expended  for  printing  blank  forms  for  the 
use  of  referees." 

§  39.    Marshals. 

The  word  "officer,"  as  used  in  the  act,  including  a  marshal, 
and  the  imposing  of  duty  upon  or  the  forbidding  of  an  act  by 
any  officer  includes  his  successor  and  any  person  authorized 
by  law  to  perform  the  duties  of  such  officer.^ 

It  is  the  duty  of  the  marshal  to  serve  such  writs  and  process 
as  may  be  directed  to  him.  It  is  his  duty  to  serve  the  bank- 
rupt in  involuntary  proceedings  with  the  writ  of  subpoena  and 
a  copy  of  the  petition  filed  against  him.-  The  judge  may  au- 
lliorize  him  to  seize  and  hold  the  property  of  the  bankrupt 
subject  to  further  orders,-  or  to  conduct  the  business  of  the 
bankrupt  for  a  limited  period.*  Notices  are  usually  served 
by  the  referee,  and  not  by  the  marshal.^ 

§  40.     Compensation  and  expenses  of  marshals. 

Marshals  respectively  receive  from  the  estate  where  an  ad- 
judication in  bankruptcy  is  made,  except  as  by  the  act  other- 

4  B.  A.  1898,  Sec.  62.  ■■'  B.   A.    1898,    Sec.  690,  and   Sec. 

^  Gen.  Ord.   10.  2,  clause  3. 

«U.   S.   V.   Mason    (C.   C.   A.    ist  •*  B.    A.    1898,    Sec.    2,    clause    5; 

Cir.),  129  Fed.  Rep.  742.  In  re  Adams  Sartorial  Co.,  loi  Fed. 

IB.  A.   1898,  Sec.  I,  clause  18.  Rep.  215,  4  Am.  B.  R.   107. 

2  B.  A.   1898,  Sec.   i8a;  Eq.  Rule  =  B.  A.  1898,  Sec.  58c-. 

13- 


CLERKS,     MARSHALS    AND    ATTORNEYS. 


157 


wise  provided,  for  the  performance  of  their  services  in  pro- 
ceedings ill  bankruptcy,  the  same  fees,  and  account  for  them  in 
the  same  way,  as  they  are  entitled  to  receive  for  the  perform- 
ance of  the  same  or  similar  services  in  other  cases  in  accordance 
with  laws  now  in  force,  or  such  as  may  be  hereafter  enacted, 
fixing-  the  compensation  of  marshals.'  A  marshal  has  been 
allowed  a  fee  of  $2  for  serving  a  petition  and  affidavits  and  a 
fee  of  $2'  for  an  order  to  show  cause,  both  of  which  were 
served  upon  the  same  person.-  In  one  case  he  was  allowed 
$20  for  seventeen  days'  services ;  ■*  in  another  case  $3  a  day 
for  services  of  a  deputy  marshal,*  and  in  another  case  $2.50 
a  day  for  services  of  a  deputy  marshal  and  $1  a  day  for  the 
services  of  a  watchman."  In  each  case  he  was  allowed  his 
actual  expenses  in  addition  to  .his  compensation.  Actual  ex- 
penses, however,  do  not  include  the  cost  of  board  and  lodg- 
ing.*' The  marshal  must  make  return,  under  oath,  of  his 
actual  and  necessary  expenses  in  the  service  of  every  warrant 
addressed  to  him,  and  for  custody  of  property,  and  other 
services,  and  other  and  actual  and  necessary  expenses  paid  by 
him,  with  vouchers  therefor  whenever  practicable,  and  also 
with  a  statement  that  the  amounts  charged  by  him  are  just 
and  reasonable." 

Before  incurring  any  expense  in  publishing  or  mailing 
notices,  or  in  traveling,  or  in  procuring  the  attendance  of  wit- 
nesses, or  in  perpetuating  testimony,  the  marshal  may  require, 
from  the  bankrupt  or  other  person  in  whose  behalf  the  duty 


IB.  A.  1898,  Sec.  52b:  R.  S.  Sec. 
829,  provides  for  fees  of  marshals. 
The  act  of  May  28,  1896,  Sec.  6, 
29  Stat,  at  L.  179,  provides  that  all 
fees  and  emoluments  of  U.  S.  mar- 
shals shall  be  charged  as  heretofore. 

-  In  re  Damon,  104  Fed.  Rep. 
775,  5  Am.  B.  R.  133,  Judge  Hazel 
said :  "Those  charges,  having  al- 
ways been  made  in  accordance  with 
custom  and  practice  of  United 
States  courts,  must,  therefore,  be 
regarded  as  reasonable.    The  charge 


for  the  one  is  fixed  by  statute,  and 
the  other  by  custom  and  tacit  con- 
currence." 

3  In  re  Adams  Sartorial  Art  Co., 
loi  Fed.  Rep.  215,  4  Am.  B.  R.  107. 

4  In  re  Woodard,  95  Fed.  Rep. 
955,  2  Am.  B.  R.  692. 

■'  In  re  Scott,  99  Fed.  Rep.  404, 
3   Am.    B.    R.   625. 

•5  In  re  Scott,  99  Fed.  Rep.  404, 
3  Am.  B.  R.  625. 

'Gen.  Ord.  19;  In  re  Scott,  99 
Fed.  Rep.  404,  3  Am.  B.  R.  625. 


158  LAW    AXD    PROCEEDINGS    IN    BANKRUPTCY. 

is  to  be  perfonnccl,  indemnity  for  such  expense.'"*  Money  ad- 
vanced for  this  purpose  by  the  bankrupt  or  other  person  shall 
be  repaid  him  out  of  the  estate  as  part  of  the  cost  of  adminis- 
tering the  same.* 


§  41.     Duty  of  the  attorney-general  to  report  annually. 

The  attorney-general  is  required  annually  to  lay  before  Con- 
gress statistical  tables  showing  for  the  whole  country,  and  by 
,  states,  the  number  of  cases  during  the  year  of  voluntary  and 
involuntary  bankruptcy ;  the  amount  of  the  property  in  the 
estates;  the  dividends  paid  and  the  expenses  of  administering 
such  estates ;  and  such  other  like  information  as  he  may  deem 
important.^ 

Officers,  including  clerks,  marshals,  receivers,  referees  and 
trustees,"  are  required  to  furnish  in  writing  and  transmit  by 
mail  such  information  as  is  within  their  knowledge,  and  as 
may  be  shown  by  the  records  and  papers  in  their  possession,  to 
the  attorney-general,  for  statistical  purposes,  within  ten  days 
after  being  requested  by  him  to  do  so.'' 


§  41a.     Attorneys. 

A  court  of  bankruptcy  has  jurisdiction  of  a  voluntary  peti- 
tion, signed  and  sworn  to  by  the  bankrupt,  although  the  attor- 
ney for  the  bankrupt  is  not  authorized  to  practice  "in  the 
circuit  or  district  court."  ^  An  attorney  for  the  bankrupt  may 
act  as  notary  to  take  the  affidavit  of  the  bankrupt  to  a  petition 
and  schedule  prior  to  -instituting  proceedings  in  bankruptcy." 
A  petition  in  involuntary  bankruptcy  should  be  verified  by  the 
petitioner  and  specification  in  opposition  to  the  discharge  by 
objecting  creditors.     An  attorney  may  verify  either  pleading 

8  Gen.  Ord.  10.  1  In  re  Kindt,   3  Am.   B.   R.   443, 

1  B.  A.  1898,  Sec.  53-  98  Fed.  Rep.  403. 

•B.  A.  1898,  Sec.  I,  clause  18.                -In  re  Kindt,  2  Am.  B.  R.  546, 

3  B.  A.  1S98,  Sec.  54-  98  Fed.  Rep.  867. 


CLERKS,     MARSHALS    AND    ATTORNEYS. 


159 


if  he  is  cognizant  of  the  facts  and  can  make  positive  oath  to 

them.^ 

It  has  been  held  that  an  attorney  may  take  the  oath  of  his 
client  to  prove  a  debt,*  but  this  is  not  good  practice.  The 
bankrupt's  attorney  should  not  represent  creditors  proving 
claims  against  the  estate/'  and  it  is  not  good  practice  for  the 
same  attorney  to  represent  the  trustee  and  the  bankrupt."  The 
trustee  may  employ  an  attorney  if  necessary,  but  it  has  been 
held  that  the  court  will  not  make  directions  in  advance  with 
reference  to  such  employment.'  An  attorney  for  creditors 
should  not  be  appointed  attorney  for  the  trustee,  where  there 
are  matters  in  controversy  between  different  classes  of  cred- 
itors.^ When  an  attorney  accepts  the  office  of  trustee  he  can 
not  also  be  attorney  for  creditors.''  The  creditors  may  elect 
an  attorney  for  the  trustee.^" 

An  attorney,  agent  or  proxy  should  be  required  to  produce 
and  file  with  the  referee  written  authority  from  the  creditor 
to  represent  him  and  vote  at  the  creditors'  meeting.''     But  an 


^  In  re  Herzikopf,  ii8  Fed.  Rep. 
loi,  9  Am.  B.  R.  90;  In  re  Hunt, 
118  Fed.  Rep.  282,  9  Am.  B.  R. 
251 ;  In  re  Chequassat  Lumber  Gd., 
112  Fed.  Rep.  56,  7  Am.  B.  R.  S7; 
In  re  Glass,  119  Fed.  Rep.  509,  9 
Am.  B.  R.  391.  But  see  In  re 
Nelson,  98  Fed.  Rep.  76,  i  Am. 
B.   R.   63. 

4  In  re  Kimball,  4  Am.  B.  R.  I44> 
100  Fed.  Rep.  777-  B"t  see  In  re 
Brumelkamp,  2  Am.  B.  R.  318,  95 
Fed.   Rep.   814. 

^  In  re  Kimball,  4  Am.  B.  R.  144, 
100  Fed.  Rep.  777;  In  re  Wooten, 
118  Fed.  Rep.  670,  9  Am.  B.  R.  247. 

In  re  Cooper,  135  Fed.  Rep.  196, 
an  attorney  whose  retainer  from 
bankrupt  covered  the  tiling  of  peti- 
tion only,  was  permitted  subse-- 
quently  to  represent  creditors. 

« Keyes  v.  McKirrow,  180  Mass. 
261,  9  Am.  B.  R.  2,22. 

'  In  re  Abram,  103  Fed.  Rep.  272, 


4  Am.  B.  R.  575;  In  re  Columbia 
Iron  Works,  142  Fed.  Rep.  234,  14 
Am.    B.    R.    526. 

^  In  re  Rusch,  105  Fed.  Rep.  607, 
4  Am.  B.  R.  575;  In  re  Columbia 
Irori  Works,  142  Fed.  Rep.  234,  14 
Am.  B.  R.  526. 

"/«  re  Evans,  116  Fed.  Rep.  909, 
8  Am.  B.  R.  730. 

1"  In  re  Little  Lumber  Co.,  loi 
Fed.  Rep.  558;  3  Am.  B.  R.  682. 

But  see  In  re  Columbia  Iron 
Works,  142  Fed.  Rep.  234,  14  Am. 
B.   R.  526. 

11  In  re  Blankfein  &  Deitz,  2  N. 

B.  N.  49;  In  re  Sugenheimer,  91 
Fed.  Rep.  744.  i  Am.  B.  R.  425; 
In  re  Eagles  &  Crisp,  99  Fed.  Rep. 
695,  3  Am.  B.  R.  72,2>;  In  re  Rich- 
ards, 103  Fed.  Rep.  849-  4  Am.  B. 
R.  631.     But  see  In  re  Gasser    (C. 

C.  A.  8th  Cir.),  104  Fed.  Rep.  537. 
5  Am.  B.  R.  32. 


160  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

attorney  at  law  admitted  to  practice  in  the  district  or  circuit 
court  may  appear  in  bankruptcy  proceedings  generally  in  be- 
half of  his  client  without  written  power  of  attorney  as  in  other 
cases/-  Notices  of  hearing  before  a  referee  may  be  given  by 
mail  to  the  attorneys  interested/^ 

If  an  attorney  acts  in  good  faith  and  in  the  honest  belief  that 
his  advice  is  well  founded  and  in  the  just  interests  of  his 
client,  he  can  not  be  held  in  contempt  for  error  in  judgment/^ 

Fees  of  Attorneys. — The  bankrupt  act  provides  that  the 
costs  of  administration,  to  which  priority  is  given,  shall  in- 
clude one  reasonable  attorney's  fee,  for  professional  services 
actually  rendered,  irrespective  of  the  number  of  attorneys  em- 
ployed, to  the  petitioning  creditors  in  involuntary  cases,  to  the 
bankrupt  in  involuntary  cases  while  performing  the  duties  pre- 
scribed in  the  act,  and  to  the  bankrupt  in  voluntary  cases,  as  the 
court  may  allow/^  This  allowance  may  be  made  by  the  ref- 
eree,^'' and  may  be  made  c.v  parte  without  giving  notice  to 
creditors."  Where  a  partnership  is  adjudged  a  bankrupt,  but 
one  attorney's  fee  can  be  allowed,  though  each  of  the  partners 
appeared  throughout  the  proceedings  by  different  attorneys.^'' 
Where  two  bankruptcy  proceedings  are  filed  by  attorneys 
representing  different  creditors  and  thereafter  consolidated 
by  order  of  court,  a  single  attorney's  fee  will  be  allowed  for 
such  attorneys.^^ 

Before  a  fee  will  be  allowed  to  an  attorney  for  a  voluntary 
bankrupt  he  must  show  that  he  actually  rendered  some  ser- 
vices.-**    Where  the  referee  is  not  satisfied  with  the  evidence 

12 /«    re    Gasser    (C.    C.    A.    8th  Fed.   Rep.   419,  4  Am.   B.    R.   235; 

Cir.),  104  Fed.  Rep.  537,  5  Am.  B.  In  re  Dreeben,   loi  Fed.  Rep.   no, 

R-  32.  4  Am.  B.  R.  146. 

"/m  re  Lewin,  103  Fed.  Rep.  850,  i7 /„  re  Stotts,  93  Fed.  Rep.  43S, 

A  Am.  B.  R.  632.  I  Am.  B.  R.  641. 

i-t/w  re  Watts  &   Sachs,   190  U.  is/,i  re  Eschwege  &  Cohn,  8  Am. 

S.  1 ,  47  L.  Ed.  933,  10  Am.  B.  R.  B.  R.  282. 

113-  !»/«    re   McCracken   &   McLeod, 

1-'  B.  A.  i8g8.  Sec.  64^,  cl.  3.  129   Fed.   Rep.   621,    12  Am.   B.    R. 

i**  In  re  Stotts,  93  Fed.  Rep.  438,  95. 

I   Am.   B.   R.  641;  In  re  Tebo,   loi  20 /„  ,.^  Terril?,  T03  Fed.  Rep.  781, 

4  Am.  B.  R.  625 


CLERKS,    MARSHALS    AND    ATTORNEYS. 


161 


of  services  rendered,  he  may  suspend  the  claim  for  a  time,  but 
must  make  an  allowance  within  a  reasonable  time  on  such  evi- 
dence as  he  may  have.'^ 

It  lias  been  held  that  the  attorney  for  a  voluntary  bankrupt 
is  entitled  to  a  fee  only  for  services  which  are  beneficial  to  the 
estate,  and  that  no  fee  should  be  granted  for  services  rendered 
in  preparing  the  schedules  or  other  services  for  the  benefit 
of  the  bankrupt."  This  doctrine  is  dissented  from  by  Judge 
Brown.-^  Claims  for  such  fees  may  be  proved  against  the 
estate  under  general  order  ten.-*  A  fee  for  such  services  and 
for  all  other  services  in  assisting  the  bankrupt  in  performing 
the  duties  required  of  him  by  the  act  has  been  allowed  the  attor- 
ney of  an  involuntary  bankrupt.-^  Where  a  voluntary  bank- 
rupt before  filing  his  petition  paid  his  attorney  a  fee  fo^  ser- 
vices in  preparing  the  schedules  and  petition  he  can  not  recover 
this  and  the  filing  fee  from  the  estate  under  general  order 
ten.-**  A  fee  has  been  refused  where  the  bankrupt's  at- 
torney received  from  the  bankrupt's  brother  a  larger  fee  than 
would  ordinarily  be  allowed  by  the  court  out  of  the  estate."^ 
An  attorney  for  the  bankrupt  is  not  entitled  to  a  fee  as 
a  matter  of  right.  Its  allowance  is  wuthin  the  sound  discretion 
of  the  court,-^  as  is  also  its  amount.-^  and  this  discretion  may 
be   reviewed   on  appeal.^*'     The   fee   allowed   should  be,   not 


-1  In  re  Dreeben,  loi  Fed.  Rep. 
no,  4  Am.  B.  R.  146. 

-'2  In  re  Beck,  92  Fed.  Rep.  889.  i 
Am.  B.  R.  535 ;  In  re  Stotts,  93  Fed. 
Rep.  438,  I  Am.  B.  R.  641 ;  In  re 
Smith,  108  Fed.  Rep.  39,  5  Am.  B. 

-^  In  re  Kross,  96  Fed.  Rep."  816, 
3  Am.  B.  R.  188. 

2-*  In  re  Beck,  92  Fed.  Rep.  889,  i 
Am.  B.  R.  535. 

25  /^  yg  Michel,  95  Fed.  Rep.  803 , 
I  Am.  B.  R.  665 ;  In  re  Mayer,  loi 
Fed.  Rep.  695,  4  Am.  B.  R.  238; 
In  re  Goldville  Mfg.  Co.,  123  Fed. 
Rep.  579 ,  10  Am.  B.  R.  552. 

-'"'In  re  Matthews.  97  Fed.  Rep. 
772,  3  Am.  B.  R.  265. 


-"  In  re  O'Connell,  98  Fed.  Rep. 
83,  3  Am.  B.  R.  422. 

-s/;2  re  Carr,  117  Fed.  Rep.  572, 
9  Am.  B.  R.  58;  In  re  Morris,  125 
Fed.  Rep.  841 ,  11  Am.  B.  R.  145. 

-9/«  re  Beck,  92  Fed.  Rep.  889, 
I  Am.  B.  R.  535;  In  re  Burrus,  97 
Fed.  Rep.  926,  3  Am.  B.  R.  296; 
In  re  Curtis  (C.  C.  A.  7th  Cir.), 
100  Fed.  Rep.  784,  4  Am.  B.  R.  17; 
In  re  Tebo,  10 1  Fed.  Rep.  419,  4 
Am.  B.  R.  235 ;  In  re  Mayer,  loi 
Fed.  Rep.  695,  4  Am.  B.  R.  238. 

30 /n  re  Roche  (C.  C.  A.  5th 
Cir.),  loi  Fed.  Rep.  956,  4  Am.  B. 
R.  369;  In  re  Curtis  (C.  C.  A.  7th 
Cir.).  100  Fed.  Rep.  784.  4  Am.  B. 
R.  17. 


162  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

what  is  reasonable  for  the  work  done,  but  what  is  reasonable 
for  the  work  necessary.^^  To  justify  an  allowance  of  a  fee, 
the  services  must  have  been  rendered  in  good  faith  and  reason- 
ably necessary  for  the  purpose  of  the  act.'''  Where  the  bank- 
rupt tries  to  defeat  and  delay  the  proceedings  no  fee  should 
be  allowed  to  his  attorney,^^  nor  should  any  fee  be  allowed 
for  defending  him  for  contempt.^*  It  has  been  held  that  a 
fee  should  not  be  allowed  for  assisting  a  bankrupt  in  getting 
his  discharge.^^ 

An  attorney  who  represents  the  creditors  in  voluntary  pro- 
ceedings is  not  entitled  to  fees  out  of  the  estate.^*^  An  attorney 
for  the  creditors  in  involuntary  proceedings  is  entitled  to  a 
reasonable  fee  as  a  matter  of  right. "^  An  attorney  for  the 
petitioning  creditors  is  not  entitled  to  a  fee  for  attending  cred- 
itors' meetings,  or  for  doing  the  work  which  the  bankrupt 
act  requires  the  referee  to  do.^^  Where  a  creditor  employs  an 
attorney  the  attorney  has  a  lien  on  the  amount  secured  for  the 
creditor  which  the  bankruptcy  court  will  enforce.^'' 

A  fee  is  also  allowed  to  the  attorney  of  the  trustee  in  both 
involuntary  and  voluntary  cases  when  his  services  are  reason- 
ably necessary.*"  The  trustee  must  himself  decide  whether 
such  services  are  reasonably  necessary  as  the  court  will  not 
instruct  him  as  to  whether  or  not  he  should  employ  an  attor- 

^^  In  re  Connell  &  Sons,  120  Fed.  Smith    v.    Cooper,    120    Fed.    Rep. 

Rep.  846,  9  Am.  B.  R.  474.  230,   9  Am.  B.   R.  755. 

32  In  re  Rosenthal  &  Lehman,  120  ^^  In  re  Harrison  Mercantile  Co., 
Fed.  Rep.  848,  9  Am.  B.  R.  626.  95  Fed.  Rep.  123,  2  Am.  B.  R.  219. 

33  III   re  Woodard,  95   Fed.   Rep.  ^9  /,j  ;.^  Rude,  loi  Fed.  Rep.  805, 
955,  2  Am.  B.  R.  692.  4  Am.  B.  R.  319. 

3*  In  re  Mayer,  loi  Fed.  Rep.  695,  ''"  In  re  Little  River  Lumber  Co., 

4  .A.m.  B.  R.  238.  But  see  language  loi  Fed.  Rep.  558,  3  Am.  B.  R.  682; 
in  In  re  Rosenthal  &  Lehman,  120  /;;  re  Stotts,  93  Fed.  Rep.  438,  I 
Fed.  Rep.  848,  9  Am.  B.  R.  626.  Am.  B.  R.  641 ;  In  re  Salaberry,  107 

35 /?i  re   Brundin,    112   Fed.    Rep.  Fed.  Rep.  95,  5  Am.  B.  R.  847.     But 

306,    7    Am.    B.    R.    296.      But    sec  see  In  re  Smith,  108  Fed.  Rep.  39, 

In    re    Rosenthal    &    Lehman,    120  5  Am.  B.  R.  559;  In  re  Lang,   127 

Fed.  Rep.  848,  9  Am.  B.  R.  626.  Fed.   Rep.  755,   11   Am.  B.   R.  794; 

3«/n  re  Smith,  108  Fed.  Rep.  39,  In  re  McKenna,  137  Fed.  Rep.  611, 

5  Am.  B.  R.  559.  15  Am.  B.  R.  4. 

•"•'  In  re  Curtis  (C.  C.  A.  7th  Cir.),  *^  In    re    Abram,    103    Fed.    Rep. 

100  Fed.  Rep.  785,  4  Am.  B.  R.  17;      272,  4  Am.  B.  R.  575. 


CLERKS^    MARSHALS    AND    ATTORNEYS. 


163 


ney/^  A  fee  will  not  be  allowed  where  there  was  no  reason- 
able expectation  that  the  work  of  an  attorney  would  gain  any- 
thing for  the  estate/'  A  trustee  who  is  an  attorney  at  law 
will  not  be  allowed  extra  compensation  for  his  professional 
services.^"  The  attorney  for  a  trustee  is  not  entitled  to  a 
fee  for  professional  services  for  attending  examinations  where 
his  services  were  rendered  in  behalf  of  creditors  who  were 
his  real  clients/*  or  in  general  when  the  attorney  for  the 
trustee  is  also  attorney  for  the  creditors/''  An  attorney  must 
disclose  his  dealings  with  his  client  to  enable  the  court  to  fix  the 
amount  of  his  compensation/'^  An  attorney  for  an  assignee 
under  a  general  assignment  for  creditors  in  a  state  court,  where 
the  property  of  tlie  debtor  is  later  administered  in  bankruptcy, 
is  entitled  to  a  reasonable  fee  for  ser\'ices  rendered  such  as- 
signee before  and  after  the  petition  in  bankruptcy  is  filed, 
which  are  beneficial  to  the  estate/^  but  he  is  not  entitled  to  a  fee 
for  resisting  bankruptcy  proceedings/^  Fees  for  services  ren- 
dered the  assignee  which  are  beneficial  to  the  estate  should  be 
given  priority  under  Sec.  64/;.'"*  A  fee  for  services  rendered 
the  debtor  in  preparing  the  deed  of  assignment  may  be  proved 
as  an  unsecured  claim."" 

The  attorney  for  creditors,  who  have  obtained  liens  on 
property  which  the  trustee  could  not  otherwise  reach,  may  be 
allowed  a  reasonable  fee.^^ 


But  see  In  re  Columbia  Iron 
Works,  142  Fed.  Rep.  234,  14  Am. 
B.  R.  526. 

*- /n  re  Rozinsky,  loi  Fed.  Rep. 
229,  3  Am.  B.  R.  830. 

■*■■•  In  re  Byerly,  128  Fed.  Rep. 
637,  12  Am.  B.  R.  186;  In  re 
George  Halbert  Co.  (C.  C.  A.  2d 
Cir.),  134  Fed.  Rep.  236,  13  Am.  B. 
R.  399;  In  re  Felson,  139  Fed. 
Rep.  27s,   IS- Am.  B.  R.   185. 

**  In  re  Rozinsky,  loi  Fed.  Rep. 
229,  3  Am.  B.  R.  830. 

'*•''  In  re  Carolina  Cooperage  Co., 
96  Fed.  Rep.  920,  3  Am.  B.  R.  154. 

■*" /«  re  Carr,  117  Fed.  Rep.  572, 
9  Am.  B.  R.  58. 


■*"  Randolph  v.  Scruggs,  190  U.  S. 
533,  47  L.  Ed.  1 165,  10  Am.  B.  R.  i. 

^■^  Randolph  v.  Scruggs,  190  U.  S. 
533.  47  L.  Ed.  1165,  10  Am.  B.  R.  i. 

■*9  Randolph  v.  Scruggs,  190  U.  S. 
S3,3,.  47  L-  Ed.  1165,  10  Am.  B.  R. 
I.  See  also  In  re  Chase  ( C.  C.  A. 
1st  Cir.),  124  Fed.  Rep.  753,  13 
Am.  B.  R.  677;  Summers  v.  Ab- 
bott (C.  C.  A.  8th  Cir.),  122  Fed. 
Rep.  36,    ID  Am.  B.  R.  254. 

•"''^  Randolph  v.  Scruggs,  190  U.  S. 
533,  47  L.  Ed.  1165,  10  Am.  B.  R.  i. 

•'•1  Tn  Receivers,  etc.,  v.  Staake  (C. 
C.  A.  4th  Cir.),  133  Fed.  Rep.  717, 
13    Am.    B.    R.    281,    affirmed,    202 


164 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


The  aniuunt  of  fees  to  be  allowed  an  attorney  for  services 
in  bankruptcy  rests  in  the  discretion  of  the  court.  The  policy 
of  the  bankrupt  act  is  to  have  the  estate  of  the  bankrupt  ad- 
ministered as  economically  as  possible,  but  this  does  not  im- 
ply that  an  attorney  shall  be  required  to  render  services  in 
bankruptcy  for  less  compensation  than  in  other  cases.  The 
court  should  not  permit  the  estate  to  be  burdened  with  un- 
necessary attorney's  fees,  but  an  attorney  is  entitled  to  a 
reasonable  fee  commensurate  w^ith  the  actual  services  ren- 
dered. An  attorney  for  a  trustee  or  creditors,  who  succeeds 
in  recovering  property  concealed  or  transferred  in  fraud  of 
creditors,  is  entitled  to  the  same  compensation  as  would  be 
allowed  for  like  services  in  other  cases.  The  amount  of  fees 
allowed  attorneys  in  various  cases  are  collated  below.^^ 


U.  S.  141,  50  L.  Ed.  967,  15  Am.  B. 
R.   639. 

"The  other  question  is  as  to  the 
allowance  of  a  reasonable  compen- 
sation to  the  attorneys  who  repre- 
sented the  attaching  creditors,  and 
whose  proceedings  produced  the 
fund  which  now  is  to  pass  to  the 
trustee  of  the  bankrupt.  The  at- 
taching creditors,  in  good  faith,  and 
in  a  justifiable  exercise  of  the  right 
given  to  them  by  the  Virginia  law, 
employed  counsel  to  institute  pro- 
ceedings to  seize  the  property  which 
tlie  bankrupt,  as  it  now  appears, 
had  sold.  By  virtue  of  that  seiz- 
ure, and  solely  by  virtue  of  it,  and 
to  the  extent  of  the  seizure,  the 
proceeds  of  those  proceedings  now 
pass  to  the  trustee.  The  equity 
of  the  claim  for  compensation  to 
be  paid  out  of  the  fund  is  very 
strong.  It  is  clearly  a  case  in  which, 
by  an  appropriation  which  the 
bankrupt  law  makes  of  a  fund  which 
came  into  existence  and  was  pre- 
served by  the  legal  proceedings  in- 
stituted by  the  attaching  creditors, 
all    the   common   creditors,    without 


distinction,  are  benefited.  The  fund 
which  otherwise  the  attaching  cred- 
itors would  have  secured  for  their 
own  benefit  the  bankrupt  law  says 
shall  be  shared  equally  among  all 
the  creditors.  The  fund  was 
brought  into  existence  by  the  ex- 
ertions of  the  attaching  creditors, 
and  should  be  considered  as  in  the 
same  class  as  a  fund  arising  under 
a  creditors'  bill,  because  the  bank- 
rupt act  declares  it  shall  be  so  treat- 
ed. The  fund  comes  into  the  hands 
of  the  trustee  of  the  bankrupt  bur- 
dened with  the  charges  which 
were  necessarily  incurred  to  bring 
it  into  existence.  It  would  appear 
eminently  proper  in  such  a  case  that 
the  bankruptcy  court  should,  in  its 
discretion,  allow  such  reasonable 
counsel  fees  and  expenses  as  were 
necessarily  incurred  in  the  prose- 
cution of  the  suits.  Trustees  v. 
Greenough,  105  U.  S.  527-534,  26  L. 
Ed.   II57-" 

■'■'■-  Under  dififerent  circumstances 
the  following  amounts  have  been  al- 
lowed as  reasonable  fees :  To  at- 
torne\'    for    a    voluntary    bankrupt. 


CLERKS,    MARSHALS    AND    ATTORNEYS. 


165 


A  court  of  bankruptcy  will  not  ordinarily  tax  as  costs  at- 
torneys' fees  upon  the  dismissal  of  a  petition  in  involuntary 
bankruptcy.^"  When,  however,  an  application  to  seize  and 
hold  the  property  of  the  bankrupt  pending  the  hearing  has  been 
granted  and  the  petition  afterwards  dismissed,  the  court  may 
allow  attorneys'  fees  as  costs  of  the  proceeding/''  A  docket 
fee  of  tw-enty  dollars  may  be  taxed  as  costs  in  a  proper  case.'^ 
A  court  of  bankruptcy  has  refused  to  dismiss  a  voluntary  peti- 
tion until  the  attorney  for  the  trustee  has  been  paid.'"  The 
court  will  not  enforce  a  provision  in  a  mortgage  for  the  pay- 
ment "of  an  attorney's  fee  of  ten  per  cent  of  the  amount  of 
the  debt."  " 

Payment  of  Attorneys'  Fees  in  Contemplation  of 
Bankruptcy. — The    statute    provides:    "If    a-  debtor    shall, 


diem,  In  re  Mayer,  loi  Fed.  Rep. 
69.S,  4  Am.  B.  R.  238;  ninety  dollars, 
In  re  Anderson,  103  Fed.  Rep. 
854,  4  Am.  B.  R.  640:  one  hundred 
and  twenty-five  dollars.  In  re  Carr, 
117  Fed.  Rep.  572,  9  Am.  B.  R.  58; 
one  hundred  dollars.  /;/  vc  Connell 
&  Sons,  120  Fed.  Rep.  846,  9  Am. 
B.  R.  474. 

To  the  attorney  for  creditors :  one 
hundred  dollars   (for  preparing  the 
petition,  schedules,  etc.   This  is  gov- 
erned in   some  districts  by   rule   of 
court),  In   re   Harrison   Mercantile 
Co.,  95  Fed.  Rep.  123,  2  Am.  B.  R. 
219;     seventy-five     dollars,     In     re 
Woodard,  95  Fed.  Rep.  955,  2  Am. 
B.    R.    692 ;    two    thousand    dollars. 
In  re   Curtis    (C.   C.   A.   7th   Cir.), 
100  Fed.  Rep.  784,  4  Am.  B.  R.  17; 
seventy-five    dollars,    In    re    Silver- 
man, 97  Fed.  Rep.  323,  3  Am.  B.  R. 
227 ;  In  re  Little  River  Lumber  Co., 
loi  Fed.  Rep.  558,  3  Am.  B.  R.  682 ; 
one  hundred  and  fifty  dollars.  In  re 
Carr,  117  Fed.  Rep.  572,  9  Am.  B. 
R.  58;  one  thousand  dollars,  Smith 
V.    Cooper,    120    Fed.    Rep.    230,    9 
Am.    B.    R.    755.      In    Davidson    v. 
Friedman,    140    Fed.    Rep.    853,    15 


Am.  B.  R.  489,  $2,500  was  allowed 
the  attorney  for  creditors  for  re- 
covering $16,000  for  the  estate; 
and    in    Rogers   v.    Page,    149   Fed. 

Rep. ■,     17    Am.    B.    R.    , 

$15,000  was  allowed  the  attorney 
for  creditors  for  recovering  $70,000 
for  the  estate. 

To  attorney  for  trustee:  one  hun- 
dred and  twenty-five  dollars,  In  re 
Stotts,  93  Fed.  Rep.  438,  i  Am.  B. 
R.  641  ;  twenty  dollars,  In  re  Mitch- 
ell, I  Am.  B.  R.  687 ;  twenty-five 
dollars.  In  re  Salaberry,  107  Fed. 
Rep.  95,  5  Am.  B.  R.  847. 

^•■^  In  re  Ghiglione,  93  Fed.  Rep 
186,  I  Am.  B.  R.  580;  In  re  Phila. 
&  Lewes  Transp.  Co.,  127  Fed. 
Rep.  896,  II  Am.  B.  R.  444;  In  re 
Morris,  115  Fed.  Rep.  591,  7  Am. 
B.   R.   709. 

•'"'*/»  re  Abraham  (C.  C.  A.  5th 
Cir. ) ,  93  Fed.Rep.  767,2  Am.B.R. 266. 

55  In  re  Todd,  109  Fed.  Rep.  263, 
6  Am.  B.  R.  88. 

56 1^  yp  Salaberry,  107  Fed.  Rep. 
95,  5  Am.  B.  R.  847. 

■''In  re  Roche  (C.  C  A.  5th 
Cir.),  10 1  Fed.  Rep.  956,  4  Am.  B. 
R.  369. 


166 


LAW    AND   PROCEEDINGS    IN    BANKRUPTCY. 


directly  or  indirectly,  in  contemplation  of  the  filing  of 
a  petition  by  or  against  him,  pay  money  or  transfer 
property  to  an  attorney  and  counselor  at  law,  solicitor 
in  equity,  or  proctor  in  admiralty  for  services  to  be  ren- 
dered, the  transaction  shall  be  re-examined  by  the  court 
on  petition  of  tlie  trustee  or  any  creditor  and  shall  only 
be  held  valid  to  the  extent  of  a  reasonable  amount  to  be 
determined  by  the  court,  and  the  excess  may  be  recovered  by 
the  trustee  for  the  benefit  of  the  estate."  ^^  This  provision 
relates  to  security  for  or  the  payment  of  attorneys'  fees  for 
services  to  be  performed  before  bankruptcy.^'"  Payment  for 
services  rendered  after  bankruptcy  proceedings  are  commenced 
is  provided  by  Section  64b  of  the  act.  It  has  been  held  that 
the  character  of  services  referred  to  in  Section  60d  are  only 
such  as  tend  to  conserve  and  benefit  the  estate  of  the  bank- 
rupt.*''* The  promise  by  a  debtor  to  transfer  certain  property 
to  his  attorney  in  contemplation  of  bankruptcy  where  there 
was  no  actual  delivery  or  change  of  possession  until  after  ad- 
judication upon  the  petition  does  not  constitute  a  transfer  to 
secure  the  payment  of  attorney's  fees.''^ 

When  an  attorney's  fee  is  scheduled  as  a  debt,  it  will  not 
be  given  priority  of  payment,  but  must  be  proved  like  any  other 
unsecured  debt.""    The  petition  by  the  trustee  to  re-examine  a 


fifty  dollars,  In  re  Beck,  92  Fed. 
Rep.  889,  I  Am.  B.  R.  535 ;  f^fty  dol- 
lars, In  re  Kross,  96  Fed.  Rep.  816, 
3  Am.  B.  R.  188;  two  hundred  dol- 
lars, In  re  Burrus,  97  Fed.  Rep.  926, 
3  Am.  B.  R.  296;  fifty  dollars.  In  re 
Smith,   108  Fed.  Rep.  39,  5  Am.  B. 

R.  559- 

To  attorney  for  involuntary  bank- 
rupt :  twenty-five  dollar.s,  In  re 
Carolina  Cooperage  Co.,  96  Fed. 
Rep.  950,  3  Am.  B.  R.  154;  fifty  dol- 
lars,   and    twenty-five    dollars    per 

•'«  B.  A.  T898,  Sec.  6od.  Pratt  v. 
Bothe  (C.  C.  A.  6th  Cir.),  130  Fed. 
Rep.  670,  12  Am.  B.  R.  529. 

59  Pratt   v.    Bothe    (C.   C.   A.   6th 


Cir.),  130  Fed.  Rep.  670,  12  Am.  B. 
R.  529;  Furth  v.  Stahl,  205  Pa. 
439,  10  Am.  B.  R.  442;  Swartz  v 
Frank,   183   Mo.  438. 

But  see  observation  of  Judge 
Brown  In  re  Kross,  96  Fed.  Rep. 
816,  3  Am.  B.  R.  188,  and  In  re 
Habegger  (C.  C.  A.  8th  Cir.),  139 
Fed.  Rep.  623,  15  Am.  B.  R.  198. 

«"/»  re  Habegger  (C.  C.  A.  8th 
Cir.),  139  Fed.  Rep.  623,  15  Am. 
B.  R.  198. 

'■'1  In  re  Corbett,  104  Fed.  Rep. 
872,  5  Am.  B.  R.  224. 

"-  In  re  Morris,  125  Fed.  Rep.  841, 
II  Am.  B.  R.  145. 


CLERKS^    MARSHALS    AND    ATTORNEYS.  167 

transaction  between  the  bankrupt  and  his  attorney  under  this 
section  is  administrative  in  character,  of  which  the  court  of 
bankruptcy  has  jurisdiction  irrespective  of  Section  23  of  the 
acf 

63  In  re  Lewin,  103  Fed.  Rep.  850,  4  Am.  B.  R.  632. 


168  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


CHAPTER  VII. 

WHO     MAY     BE     BANKRUPTS. 

§  42.     Voluntary  bankrupts. 

Any  person  who  owes  debts,  except  a  corporation,  is  entitled 
to  the  benefits  of  the  act  as  a  voluntary  bankrupt/ 

The  language  of  this  provision  is  very  general  and  compre- 
hensive. A  person  is  defined  by  the  act  itself  to  include  part- 
nerships and  women.-  It  would  therefore  appear  that  any 
natural  person  or  association  of  persons  not  incorporated,  irre- 
spective of  trade,  business  or  profession,  may  become  volun- 
tary bankrupts.  The  only  condition  is  that  such  persons  shall 
owe  debts  which  a  discharge  in  bankruptcy  would  release.  A 
person  whose  only  liability  is  a  judgment  on  which  an  appeal 
is  pending'*  or  a  judgment  for  willful  and  malicious  injury* 
can  not  become  a  voluntary  bankrupt.  A  creditor  can  not  resist 
voluntary  bankruptcy  on  the  ground  that  the  petitioner  is  sol- 
vent.^ No  limit  is  fixed  as  to  the  amount  of  the  indebtedness.® 
The  right  of  an  alien,  an  infant,  a  lunatic  and  a  married 
woman  to  become  voluntary  bankrupts  is  considered  in  another 
place.^ 

§  43.     Involuntary  bankrupts. 

The  act,  as  amended  Feb.  5,  1903,  provides  ^  that  "any 
natural  person,  except  a  wage-earner,  or  a  person  engaged 

^  B.  A.  i?gS,  Sec.  40!.  ^  In   re   Carleton,    115    Fed.    Rep 

2  B.  A.   1898,  Sec.   I,  clause   19.  246,  8  Am.  B.  R.  270. 

^  in  re  Yates,  114  Fed.  Rep.  365,  "Under    the    act    of    1867,    R.    S. 

8  Am.  B.  R.  69.  *  Sec.  5014,  a  person  was  required  to 

*  In  re  Maples,  105  Fed.  Rep.  919,  owe   debts,   provable  in  bankruptcy. 

5  Am.  B.  R.  426.  exceeding  the  sum  of  $300. 

■^  See  Sees.  44  to  47,  post. 


WHO    MAY    BE    BANKRUPTS. 


169 


chiefly  in  farming  or  the  tihage  of  the  soil,  any  unincorporated 
company,  and  any  corporation  engaged  principally  in  manu- 
facturing, trading,  printing,  publishing,  mining,  or  mercantile 
pursuits,  owing  debts  to  the  amount  of  one  thousand  dollars 
or  over,  may  be  adjudged  an  involuntary  bankrupt  upon  de- 
fault or  an  impartial  trial,  and  shall  be  subject  to  the  provisions 
and  entitled  to  the  benefits  of  this  act.  Private  bankers,  but 
not  national  banks  or  banks  incorporated  under  state  or  terri- 
torial laws,  may  be  adjudged  involuntary  bankrupts." 

It  will  be  observed  that  the  provision  with  respect  to  per- 
sons against  whom  a  petition  may  be  filed  is  more  limited  in 
its  scope  than  in  the  case  of  a  person  voluntarily  seeking  the 
benefits  of  the  act.  It  is  limited,  first,  to  natural  persons,  not 
wage-earners  or  persons  engaged  chiefly  in  farming  or  the 
tillage  of  the  soil ;  -  second,  to  unincorporated  companies ;  ^ 
third,  to  corporations  engaged  principally  in  manufacturing, 
trading,  printing,  publishing,  mining  or  mercantile  pursuits, 
and,  fourth,  to  private  bankers.  A  trustee  in  bankruptcy,  like 
any  other  person,  may  be  adjudged  a  bankrupt.*  In  any  case 
there  must  be  an  indebtedness  of  $1,000  or  over  in  order  to 
support  a  petition  in  involuntary  bankruptcy.^ 

The  statute  expressly  excludes,  first,  wage-earners,  and  de- 
fines a  wage-earner  to  niean  "an  individual  who  works  for 
wages,  salary  or  hire  at  a  rate  of  compensation  not  exceeding 
$1,500  per  year."  ^  A  bookkeeper  and  secretary  of  a  corpora- 
tion whose  salary  is  less  than  $1,500  per  year  is  within  this 


1  B.  A.  1898,  Sec.  4/).  32  Stat,  at 
L.  797. 

-  An  involuntary  petition  against 
a  natural  person  is  defective  which 
does  not  aver  that  the  defendant 
is  not  a  wage  earner  or  a  person 
engaged  chiefly  in  farming  or  the 
tillage  of  the  soil.  In  re  Bellah.  116 
Fed.  Rep.  69,  8  Am.  B.  R.  310; 
/;;  re  Taylor  (C.  C.  A.  7th  Cir.), 
102  Fed.  Rep.  728,  4  .*\m.  B.  R. 
515.     Such  defect  may  be  cured  by 


amendment.  Beach  v.  ]\Iacon  Gro- 
cery Co.  (C.  C.  A.  5th  Cir.),  120 
Fed.  Rep.  736,  9  Am.  B.  R.  762; 
and  it  is  waived  by  answering  on  the 
merits,  Green  River  Bank  v.  Craig, 
no  Fed.  Rep.  137,  6  Am.  B.  R.  381. 

3  See  also  B.   A.   1898,   Sec.  5. 

*  See  Merrick's  Estate,  5  Watts 
&  S.   (Penn.)  9. 

•-■  B.  A.   1898,  Sec.  Jh. 

6  B.  A.   1S98,   Sec.   I,  clause  27. 


170 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


clause.^  So  also  a  man.  who  owns  a  team,  wagons  and  plow, 
with  which  he  works  by  the  day  for  different  employers.' 
Second,  persons  engaged  chiefly  in  farming  and  the  tillage  of 
the  soil."  For  a  person's  principal  occupation  to  be  farming 
it  must  be  that  which  is  of  principal  concern  to  him,  which 
he  deems  of  paramount  importance  to  his  welfare  and  on 
which  he  chiefly  relies  for  his  livelihood.^"  The  owner  of 
a  farm  who  has  leased  it  to  another  for  a  year  is  not  a  person 
engaged  chiefly  in  farming  and  can  be  made  an  involuntary 
bankrupt."  Third,  national  banks,  which  are  wound  up  when 
insolvent  by  special  statute  are  not  included  in  the  bankruptcy 
act ;  ^-  fourth,  banks  incorporated  under  state  or  territorial 
laws,  whose  affairs,  if  involved,  may  be  settled  under  the  laws 
of  the  state  or  territory  creating  them."  A  corporation  can 
not  be  a  private  banker  within  the  meaning  of 'the  bankrupt 
act."     The  bankrupt  statute  does  not  authorize  or  justify  an 


' /n  re  Pilger,  ii8  Fed.  Rep.  206, 
9  Am.  B.  R.  244. 

^  In  re  Yoder,  127  Fed.  Rep.  894; 
II  Am.  B.  R.  445. 

^  In  re  Thompson,  102  Fed.  Rep. 
287,  4  Am.  B.  R.  340;  Wulbern  v. 
Drake  (C.  C.  A.  4th  Cir.).  120  Fed. 
Rep.  493,  9  Am.  B.  R.  695  affirming 
114  Fed.  Rep.  229. 

/;;  re  Luckhardt,  loi  Fed.  Rep. 
807,  4  Am.  B.  R.  307 .  a  merchant 
who  had  committed  an  act  of  bank- 
ruptcy and  thereafter  abandoned 
his  business  and  engaged  in  farm- 
ing was  adjudged  an  invokintary 
bankrupt.  '  See  also  Flickinger  v. 
First  Nat.  Bank  (C.  C.  A.  6th  Cir.), 
145    Fed.    Rep.    162. 

1'^ /«  re  Mackey.  no  Fed.  Rep. 
355,  6  Am.  B.  R.  577.  In  re  Drake, 
114  Fed.  Rep.  229,  8  Am.  B.  R.  137, 
affirmed  in  Wulbern  v.  Drake  (C. 
C.  A.  4th  Cir.),  120  Fed.  Rep.  493, 
9  Am.  B.  R.  695 ;  Bank  of  Dear- 
born v.- Matney,  132  Fed.  Rep.  75, 
12  Am.  B.  R.  482 ;  In  re  Brown,  132 


Fed.  Rep.  706,  13  Am.  B.  R.  140; 
Couts  V.  Townsend,  126  Fed.  Rep. 
249,  II  Am.  B.  R.  126;  In  re  Hoy, 
137  Fed.  Rep.  175,  14  Am.  B.  R. 
648. 

11  In  re  Matson,  123  Fed.  Rep. 
743,   10  Am.  B.  R.  473- 

^■'R.  S.  Sees.  5220  to  5243;  see 
In  re  Manufacturer's  National  Bank, 
No.   9051,   Fed.    Cas.,    s.   c.    5    Biss. 

499- 

13  Davis  V.  Stevens,  104  Fed.  235, 
4  Am.  B.  R.  763.  The  rule  seems  to 
have  been  otherwise  under  the  act 
of  1867.  See  Thornhill  v.  Bank 
of  Louisville,  No.  13990,  Fed.  Cas., 
s.  c.  3  N.  B.  R.  435- 

1^  In  re  Surety  Guarantee  &  Trust 
Co.  (C.  C.  A.  7th  Cir.),  121  Fed. 
Rep.  73,  9  Am.  B.  R.  129.  In  Burk- 
hart  V.  German  American  Bank,  137 
Fed.  Rep.  958,  14  Am.  B.  R.  222, 
an  Ohio  joint  stock  banking  as- 
sociation was  held  to  be  a  partner- 
ship and  therefore  subject  to  be 
adjudged  bankrupts.    See  also  same 


WHO     MAY     BE    BANKRUPTS. 


171 


adjudication  in  bankruptcy  against  the  individual  estate  of  a 
deceased  person.^''  The  act  deals  with  living  persons.  A  de- 
ceased person  can  not  be  adj  udged  a  bankrupt. 

It  has  been  held  that  whether  a  person  is  a  farmer  or  a 
wage-earner,  and  therefore  not  subject  to  be  adjudged  an  in- 
voluntary bankrupt,  is  to  be  determined  by  his  vocation  at  the 
date  of  the  act  of  bankruptcy  complained  of  and  not  at  the 
time  of  filing  the  petition.^" 

The  riglit  to  force  an  alien,  an  infant,  a  lunatic  and  a  mar- 
ried woman  into  involuntary  bankruptcy  is  considered  in 
another  place. ^' 

§  44.     Aliens. 

The  act  does  not  limit  the  person  who  may  be  adjudged 
bankrupts  to  citizens  or  even  to  residents  of  the  United 
States.  Hence  an  alien  may  become  either  a  voluntary  or  an 
involuntary  bankrupt.^ 

A  foreigner  must  either  have  had  a  principal  place  of  busi- 
ness or  residence  within  the  United  States  for  six  months,  or 
the  greater  portion  thereof,  or  have  property  within  the  juris- 


case  in  appellate  court,  Dickas  v. 
Barnes  (C.  C.  A.  6th  Cir.),  140 
Fed.  Rep.  849,  15  Am.  B.  R.  566. 

'  5  Adams  v.  Terrell,  4  Fed.  Rep. 
802;  In  re  Stevens,  No.  13393.  Fed? 
Cas.,  s.  c.  I  Low.  397;  In  re  Dag- 
gett, No.  3536,  Fed.  Cas.,  s.  c.  8  N. 
B.  R.  433.  In  these  cases  the  ques- 
tion arose  with  reference  to  reach- 
ing the  assets  of  a  deceased  person. 

^•^  Flickinger  v.  First  Nat.  Bank 
(C.  C.  A.  6th  Cir.),  145  Fed.  Rep. 
162,  (Application  for  writ  of  cer- 
tiorari was  denied  by  the  supreme 
court  of  U.  S.  December  10,  1906,)  ; 
In  re  Luckhardt,  loi  Fed.  Rep.  807, 
4  Am.  B.  R.  307;  /;;  re  Mackey,  no 
Fed.  Rep.  361,  6  Am.  B.  R.  577. 

See  also  Tiffany  v.  LaPlume  Con- 
densed Milk  Co.,  141  Fed.  Rep.  444, 


15  Am.  B.  R.  413.  where  the  Eng- 
lish and  American  cases  on  this 
subject  are  reviewed. 

^'  See  Sees.  44  to  47,  post. 

^  In  re  Goodfellow,  No.  5536, 
Fed.  Cas.,  s.  c.  i  Low.  510;  In  re 
Boynton,  10  Fed.  Rep.  277. 

In  Judd  V.  Lawrence,  i  Cush. 
(Mass.)  531,  it  was  held  that  a  for- 
eigner residing  within  the  common- 
wealth could  take  the  benefit  of  the 
state  insolvent  law. 

In  Cutter  v.  Folsom,  17  N.  H.  139, 
under  the  bankrupt  act  of  August 
19,  1841,  5  Stat,  at  L.  440,  it  was 
held  that  one  residing  within  the 
jurisdiction  of  the  circuit  court, 
who  was  a  member  of  a  foreign 
firm,  was  entitled  to  the  provisions 
of  the  act. 


172 


LAW    AXU    I'ROCEEUINGS    IN    BANKRUPTCY. 


diction  of  the  court  of  bankruptcy.'  "The  governing  prin- 
ciple," said  Judge  Brett,'  "is  that  all  legislation  is  prima  facie 
territorial;  that  is  to  say,  that  the  legislation  of  any  country 
binds  its  own  subjects  and  the  subjects  of  other  countries 
who  for  the  time  being  themselves  within  the  allegiance  of 
the  legislating  power."  Hence  it  may  be  doubted  if  a  for- 
eigner would  be  adjudged  a  bankrupt  unless  he  had  assets  or 
owed  debts  contracted  in  the  United  States.*  Such  would  be 
an  idle  proceeding. 

§  45.     Infants. 

An  infant  is  not  generally  liable  for  debt  contracted  by  him 
during  his  infancy.^  The  word  infant,  or  minor,  is  not  found 
in  the  bankrupt  act.  In  order  to  support  a  bankruptcy  petition 
there  must  be  capacity  in  the  infant  to  owe  the  debt."     But 


2B.  A.   1898,  Sec.  2,  clause  i. 

s  Ex  parte  Blain,  12  Chan.  Div. 
528. 

4  Consult  ex  parte  Blain,  12 
Chan.  Div.  522. 

i/»  re  Derby,  No.  3815,  Fed. 
Cas.,  s.  c.  6  Ben.  232,  in  discussing 
the  rights  of  an  infant  to  be  ad- 
judged a  bankrupt,  Judge  Blatch- 
ford  said :  "The  general  contracts 
of  an  infant  having  no  force,  if 
disaffirmed  by  him  after  attaining 
his  majority,  it  is 'idle  for  him  to 
set  forth,  in  a  voluntary  case,  com- 
menced during  his  infancy,  a  sched- 
ule of  his  creditors,  and  idle  for 
them  to  prove  their  debts  during  his 
infancy,  for  the  whole  proceedings 
must  be  in  vain  "If  the  debts  arc 
disaffirmed  by  him  after  he  attains 
his  majority."      .... 

"But  there  are  other  difficulties 
attendant  on  an  involuntary  case. 
The  debt  of  a  petitioning  creditor 
must  be  a  debt  provable  at  the  time 
the  petition  is  filed."  He  then  pro- 
ceeds to  show  that  such  a  debt  is 
not  provable  under  the  different  sec- 


tions of  the  act  of  1867,  which  rea- 
sons are  applicable  with  equal  force 
to  the  act  of  1898. 

See  also  Belton  v.  Hodges,  9 
Bing.  365,  where  it  was  held  that 
a  commission  of  bankrupt  against 
an  infant  was  void,  not  merely  void- 
able. 

-  /;;  re  Brice,  93  Fed.  Rep.  ^42. 
2  Am.  B.  R.  197;  In  re  Dunnigan, 
^95  Fed.  Rep.  428,  2  Am.  B.  R. 
628;  In  re  Duguid,  100  Fed.  Rep. 
274,  3  Am.  B.  R.  794,  2  N.  B.  N. 
607 ;  In  re  Eidemiller,  105  Fed. 
Rep.   595,  5  Am.   B.   R.   570. 

See  In  re  Derby,  No.  3815.  Fed. 
Cas.,  s.  c.  6  Ben.  232;  In  re  Book, 
No.  1637,  Fed.  Cas.,  s.  c.  3  Mc- 
Lean 317,  where  an  infant  was  al- 
lowed to  claim  the  benefit  of  the 
bankrupt  law  of  1841 ;  In  re  Cotton, 
No.  3269,  Fed.  Cas.,  s.  c.  6  Law. 
Rep.  546,  the  petitioner  who  applied 
for  an  injunction  was  a  minor,  and 
this  was  one  of  the  objections  to  his 
seeking  the  benefit  of  the  act.  The 
court  passed  the  question  without 
deciding  it. 


WHO     MAY     BK     BANKRUPTS.  173 

Avhether  a  debt  for  necessities  would  support  a  bankruptcy  peti- 
tion seems  to  be  an  open  (juestion  in  Englanci.''  After  an 
infant  has  reached  his  majority  he  may  Ijecome  Haljle  for  a  debt 
created  (kn-ing  infancy.  If  he  does  become  so  hable  he  is 
subject  to  be  adjudged  a  bankrupt. 

§  46,     Lunatics. 

Whether  a  hmatic  can  be  adjudged  eitlier  a  voktntary  or  in- 
voluntary bankrupt  is  doubtful  under  the  authorities. 

In  England  the  words  of  the  statute  are  "a  debtor,"  ^  which 
may  be  considered  equivalent  to  "any  person  who  owes  debts" 
or  "owing  debts."  -  Under  the  English  statutes  it  is  an  open 
question,  and  has  been  since  the  time  of  Lord  Eldon.^  It  has 
been  held  that  a  person,  who  is  so  unsound  in  mind  as  to  be 
wholly  incapable  of  managing  his  affairs,  can  not,  in  that  con- 
dition, commit  an  act  for  which  he  can  be  forced  into  bank- 
ruptcy by  his  creditors  against  the  objection  of  his  guardian.* 
It  has  also  been  held  that  an  insane  person  can  not  become  a 
voluntary  bankrupt  because  he  is  not  a  "qualified"  person 
within  the  meaning  of  Sec.  59fl.^  But  if  he  commits  an  act 
of  bankruptcy  while  sane  he  has  been  adjudged  an  involuntary 
bankrupt  against  the  consent  of  his  guardian."  The  fact  that 
a  person  has  been  adjudged  a  lunatic  does  not  imply 
that  he  will  always  remain  so.^  A  guardian  ad  litem  may  be 
appointed  pending  the  determination  of  his  sanity  at  the  time 
the  act  of  bankruptcy  complained  of  was  committed.^ 

^In  re  Soltykoff,  i  Q.  B.   (1891)  -'In  re  Eiscnberg.   117  Fed.  Rep. 

415.  786,  8  Am.  B.  R.  551- 

1  46  and  47  Vic.  chap.  52,  Sec.  4.  « In   re  Weitzel,   No.    17365-   Fed. 

2  B.  A.  1898,  Sec.  4  a  and  h.  Cas.,  s.  c.  7  Biss.  289;  In  re  Pratt, 
^In    re    Farliam,    2    Chan.    Div.  No.   11371.  Fed.  Cas..  s.  c.  2  Low. 

(1895)    805.  96;    Ex    parte    Stamp,    t    De    Gex, 

*  In  re  Funk,   loi  Fed.  Rep.  244.  345 :  Anon.  13  Ves.  590. 

4  Am.  B.  R.  96;  In  re  Marvin,  No.  '^Saunders   v.    Mitchell,   61    Miss. 

9178,   Fed.   Cas.,   s.   c.    i    Dill.    178;  321. 

In  re  Weitzel,  No.  17365,  Fed.  Cas.,  » In  re  Biirka,  107  Fed.  Rep.  674, 

s.  c.  7  Biss.  289;  In  re  Pratt,  No.  »  Am.  B.  R.  843. 
I1371,  Fed.  Cas.,  s.  c.  2  Low.  96. 


174 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


\\'here  a  bankrupt  l^ecomes  insane  after  the  commencement 
of  proceedings  in  bankruptcy  they  are  not  abated  thereby,  but 
may  be  conducted  and  conckided  in  the  same  manner,  so  far 
as  possible,  as  though  he  had  not  become  insane." 

A  partnership  may  be  adjudged  a  bankrupt  after  the  insanity 
of  a  partner  and  the  appointment  of  a  conservator  of  his 
estate."' 


§  47.     Married  women. 

Under  the  former  bankrupt  acts  there  was  some  doubt  as 
to  the  power  of  the  courts  of  bankruptcy  to  adjudge  a  married 
woman  a  bankrupt.^  The  laws  of  the  several  states  have  ex- 
tended a  married  woman's  rights  with  reference  to  property 
within  the  last  quarter  of  the  century. 

In  order  to  come  within  the  provisions  of  the  bankrupt  act 
a  person  must  owe  a  debt.  The  true  rule  with  reference  to 
married  women  is  that  where  a  woman  may  owe  a  debt  she 
may  be  adjudged  a  voluntary  or  involuntary  bankrupt."  Her 
capacity  to  owe  is  determined  by  the  laws  of  the  state  of  her 
domicile,  as  interpreted  by  tlie  highest  court  in  the  state. ' 
She  may  be  able  to  contract  and  owe  debts  and  accordingly  be 
adjudged  a  bankrupt  in  one  state  and  not  in  another  state. 

§  48.     Corporations. 

As  the  bankrupt  act  does  not  restrict  the  classes  of  unin- 
corporated companies  or  partnerships,  it  may  become  important 
to  determine  what  is  a  corporation.     Corporations  are  defined 


» B.  A.  1898,  Sec.  8. 

10 /n  re  Stein  &  Co.  (C.  C.  A. 
7th  Cir.),  127  Fed.  Rep.  547.  n 
Am.  B.  R.  536. 

1  The  cases  a"e  collected  and 
considered  in  an  article  on  mar- 
ried women  as  bankrupts,  13  Ameri- 
can Law  Register,  N.  S.  (March. 
T874)    129. 

2MacDonald  v.  Tefft-VVelter  Co. 
(C.  C.  A.  5th  Cir.),  128  Fed.  Reg. 
381,   n   Am.  B.  R.  800;  In  re  Col- 


lins, No.  3006,  Fed.  Cas..  s.  c.  3 
Biss.  415;  In  re  O'Brien.  No.  10397, 
Fed.  Cas.,  s.  c.  i  N.  B.  R.  176;  In  re 
Lyons,  No.  8649,  Fed.  Cas.,  s.  c.  2 
Saw.  524,  and  note  discussing  the 
subject.  In  re  Kinkead,  No.  7824. 
Fed.  Cas.,  s.  c.  3  Biss.  405  and  note ; 
In  re  Goodman,  No.  5540,  Fed. 
Cas.,  s.  c.  5  Biss.  401 ;  In  re  How- 
land,  No.  6791,  Fed.  Cas.,  s.  c.  2 
N.  B.  R.  357. 


WHO     MAY     BE     BANKRUPTS. 


175 


by  the  act  t()  mean  "all  bodies  having-  any  oi  the  powers  and 
privileges  of  private  corporations  not  possessed  by  individuals 
or  partnerships,  and  shall  include  limited  or  other  partnership 
associations  organized  under  laws  making  the  capital  sub- 
scribed alone  responsible  for  the  debts  of  the  association."  ^ 

The  present  bankrupt  act  is  narrower  in  its  application  to 
corporations  than  the  act  of  1867.  The  older  act  applied  to 
all  "moneyed,  business  or  commercial  corporations."  "  The 
present  act,  as  amended,  limits  the  classes  of  corporations  sub- 
ject to  be  adjudged  bankrupt  upon  a  petition  by  creditors,  to 
those  "principally  engaged  in  manufacturing,  trading,  print- 
ing, publishing,  mining  or  mercantile  pursuits."  ^  It  is  neces- 
sary to  allege  in  the  petition  that  the  corporation  is  engaged  in 
one  of  these  pursuits  or  the  courts  acquires  no  jurisdiction  to 
adjudge  it  a  bankrupt."' 

\A^hen  a  corporation  falls  W'ithin  one  of  the  enumerated 
classes  and  has  committed  an  act  of  bankruptcy,  although  pro- 
ceedings for  dissolution  had  been  begun  before  the  filing  of 
the  pe,tition,"  or  it  had  ceased  to  do  business,^  it  should  be 
adjudicated  a  bankrupt  in  order  that  its  property  may  be 
administered  in  bankruptcy.  A  decree  dissolving  a  corporation 
after  an  adjudication  has  no  effect  on  tlie  bankruptcy  pro- 
ceedings.^ 

Any  corporation  not  falling  within  one  of  the  enumerated 
classes  is  not  subject  to  be  adjudged  a  bankrupt  in  an  involun- 


1  B.  A.  1898,  Sec.  I,  clause  6;  In 
re  Seaboard  Fire  Underwriters,  137 
Fed.  Rep.  987,  13  Am.  B.  R.  722; 
In  re  Hercules  Atkin  Co.,  133  Fed. 
Rep.  813,  13  Am.  B.  R.  369. 

In  Burkhart  v.  German  American 
Bank,  137  Fed.  Rep.  958,  14  Am.  B. 
R.  222,  an  Ohio  joint  stock  banking 
association  was  held  to  be  a  partner- 
ship and  not  a  corporation  within 
the  meaning  of  the  bankrupt  act. 

2  R.  S.  Sec.  5122. 

3  B.  A.  1898,  Sec.  4b,  as  amended 
by  the  act  of  Feb.  5,  1903,  ;i2  Stat, 
at  L.  797. 


*  In  re  Elmira  Steel  Co.,  109  Fed. 
Rep.  456,  5  Am.  B.  R.  484. 

5  Scheurer  v.  Smith,  etc.,  Co.  (C. 
C.  A.  5th  Cir.),  112  Fed.  Rep.  407, 
7  Am.  B.  R.  384. 

•'  Tiffany  v.  LaPlume  Condensed 
Milk  Co.,  141  Fed.  Rep.  444,  15  Am. 
B.  R.  413;  In  re  Moench  (C.  C.  A. 
2d  Cir.),  130  Fed.  Rep.  685,  12  Am. 
B.  R.  240. 

'  /;;  re  White  Mountain  Paper 
Co..  127  Fed.  Rep.  180,  11  Am.  B. 
R.  491- 


176 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


tary  proceeding.  iV  corporation  which  has  not  in  fact  engaged 
in  one  of  these  pursuits,  although  its  charter  authorized  it 
to  do  so,  can  not  be  adjudged  an  involuntary  bankrupt.^  But 
the  fact  that  it  has  ceased  to  do  business  is  not  sufficient  to 
prevent  an  adjudication."  A  corporation  has  been  held  not  to 
be  subject  to  adjudication  which  wrs,  engaged  in  farming,^** 
or  in  furnishing  water  for  irrigation, ^^  or  a  common  carrier 
"extensively  engaged"  in  trading,^^  or  a  mercantile  agency,'^ 
or  a  laundry,"  or  a  social  club,^'^  or  a  public  circulating  li- 
brary.^°  or  a  theatrical  company,"  or  a  building  and  loan 
association.^^ 

Manufacturing  Companies. — As  generally  understood 
and  defined  by  the  lexicographers,  a  manufacturing  company 
is  one  engaged  in  making  goods  or  wares  of  any  kind ;  pro- 
ducing articles  for  use  from  raw  or  prepared  materials  by  giv- 
ing to  these  materials  new  qualities,  properties  or  combinations, 
whether  by  hand  labor  or  by  machinery.^"  This  is  probably 
the  meaning  of  the  word  as  used  in  the  bankrupt  act. 


s  In  re  N.  Y.  &  W.  Water  Co.,  98 
Fed.  Rep.  711,  3  Am.  B.  R.  508,  af- 
firmed In  re  Morris  (C.  C.  A.  2d 
Cir.),  102  Fed.  Rep.  1004;  In  re 
Tontine  Surety  Co.,  116  Fed.  Rep. 
401,  8  Am.  B.  R.  421. 

■'  Tiffany  v.  LaPlume  Condensed 
Milk  Co.,  141  Fed.  Rep.  444,  15  Am. 
B.  R.  413;  In  re  Moench  (C.  C.  A. 
2d  Cir.),  130  Fed.  Rep.  685,  12  Am. 
B.  R.  240. 

If'  In  re  Lake  Jackson  Sugar  Co  , 
129   Fed.    Rep.   640,    11   Am.    B.   R. 

458. 

11  In  re  Bay  City  Irrigation  Co., 
135   Fed.    Rep.  850,    14  Am.   B.   R. 

370. 

1-  Philpot  V.  O'Brion,  126  Fed. 
Rep.  167,  II  Am.  B.  R.  205. 

13  Zugalla  V.  International  Mer- 
cantile Agency  (C.  C.  A.  3d  Cir.), 
142  Fed.  Rep.  927,  16  Am.  B.  R. 
67. 

But  see  In  re  Mercantile  .\gencv, 


III  Fed.  Rep.  132,  6  Am.  B.  R.  607. 

1* /m  re  White  Star  Laundry,  117 
Fed.  Rep.  570,  9  Am.  B.  R.  30. 

i°/m  re  Fulton  Club,  113  Fed. 
Rep.  997,  7  Am.  B.  R.  670. 

'^'^In  re  Parmelee  (C.  C.  A.  7th 
Cir.),  120  Fed.  Rep.  235,  9  Am.  B. 
R.  568. 

1"  In  re  Oriental  Society,  104  Fed. 
Rep.  975,  5  Am.  B.  R.  219. 

18 /«  re  N.  Y.  Building,  Loan 
Banking  Co.,  127  Fed.  Rep.  471,  11 
Am.  B.  R.  51. 

1"  See  In  re  Tecopa  Mining  & 
Smelting  Co.,  no  Fed.  Rep.  120,  6 
Am.  B.  R.  250. 

In  Columbia  Iron  Works  v.  Nat. 
Lead  Co.,  127  Fed.  Rep.  99,  11  Am. 
B.  R.  340,  Judge  Severens,  speaking 
for  the  circuit  court  of  appeals  for 
the  6th  circuit,  said :  "The  business 
in  question  is  the  building  of  arti- 
cles of  commerce,  as  much  as  the 
building    of    locomotives    and    rail- 


WHO     MAY     151-:     BANKRUPTS. 


1// 


A  corporation  has  been  held  to  l^^-  a  nianuLacturing  company 
within  this  provision  which  was  engaged  in  the  construction 
of  bridges  and  buildings  by  contract,""  or  building  ships/^ 
or  buying  and  selling  ice.'"' 

Trading  Companies. — A  trading  company  is  one  whose 
business  is  buying  or  selling  or  barter,  its  object  being  to  buy 
and  sell  again  personal  property  for  gain.  What  constitutes 
a  trader  under  the  bankrupt  law  has  been  the  subject  of  ju- 
dicial interpretation,  both  in  this  country  anrl  in  England. ■"'' 
Thus  the  term  trader  has  been  held  to  include  a  miller,-*  a 
baker,"  a  butcher,-'^  a  stair-builder,-'  a  furniture  dealer,--  a 
grocer,-"  a  merchant  tailor,'^''  a  theatrical  manager, ^^  but  not  a ' 
theatrical  corporation,^-  a  livery-stable  keeper, '^^  a  druggist  or 


way  cars,  or  the  manufacture  of 
their  constituent  parts.  The  distinc- 
tion would  seem  to  run  along  the 
line  of  those  articles  which  arc 
more  or  less  fixed  in  place,  and 
not  ordinarily  the  subjects  of  bar- 
gain and  sales  as  articles  of  com- 
merce, as  contradistinguished  from 
those  which  are  movable  and  or- 
dinarily regarded  as  subjects  of  sale 
and  manual  transfer,  articles  of 
trade  in  the  common  course  of  mer- 
cantile business.  The  associated 
words  seem  to  import  that  Congress 
intended  to  include  all  those  corpo- 
rations which  were,  engaged  in  the 
manufacture  or  sale  of  articles  of 
commerce." 

-"  In  re  Niagara  Contracting  Co., 
127   Fed.    Rep.   782,    11    Am.    B.    R. 

643- 

But  see  In  re  MacNichol  Const. 
Co.,  134  Fed.  Rep.  979,  14  Am.  B. 
R.  188,  affirmed  (C.  C.  A.  4th  Cir.), 
140   Fed.   Rep.   840,    15   Am.    B.    R. 

515- 

-1  In  re  Marine  Const.  &  Dry 
Dock  Co.  (C.  C.  A.  2d  Cir.),  130 
Fed.  Rep.  446,  it  Am.  B.  R.  640; 
Columbia   Iron   Wks.   v.    Nat.   Lead 


Co.  (C.  C.  A.  6th  Cir.),  127  Fed. 
Rep.  99,  II  Am.  B.  R.  340. 

--  First  Nat.  Bank  v.  Wyoming 
Ice  Co.,  136  Fed.  Rep.  466,  14  Am. 
B.   R.  448. 

But  see  In  re  N.  Y.  &  N.  J.  Ice 
Lines  (C.  C.  A.  2d  Cir.),  147  Fed. 
Rep.   214. 

-'^  In  re  Eeles,  No.  4302,  Fed.  Cas., 
s.  c.  5  Law  Rep.  2"/^ ;  Wakeman  v. 
Hoyt,  No.  17051,  Fed.  Cas.,  s.  c.  5 
Law  Rep.  309,  and  cases  cited  in 
notes  below. 

-*  Daniels  v.  Palmer,  35  IVrinn.  347. 

^^  In  re  Cocks,  No.  2933  Fed. 
Cas.,   s.  c.  3   Ben.  260. 

2e  7,1  f-g  Bassett,  8  Fed.  Rep.  266 ; 
Dally  V.  Smith,  4  Burr  2148;  Syl- 
vester V.  Edgecomb,  76  Me.  499. 

-"  In  re  Garrison,  No.  5254,  Fed. 
Cas.,  s.  c.  5  Ben.  430. 

-^In  re  Newman,  No.  10175,  Et-d. 
Cas.,  s.  c.  3  Ben.  20. 

2»  In  re  Good,  78  Cal.  399. 

3"  Archenbrown,  No.  505,  Fed. 
Cas.,  s.  c.  12  N.  B.  R.  17. 

31  In  re  Duff,  4  Fed.  Rep.  519. 

32  In  re  Oriental  Society,  104 
Fed.   Rep.  975,   5   Am.   B.   R.  219. 

■'■■'Groves  v.  Kilgore,  72  Me.  489; 


178 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


a  physician  who  dispenses  and  is  paid  for  medicines  adminis- 
tered to  his  own  patients,'^*  a  smuggler  or  illegal  trader,^^ 
or  an  electric  light  company  whose  principal  business  was 
furnishing  electricity  for  power  and  light.^" 

On  the  other  hand,  the  term  trader  has  been  held  not  to  in- 
clude a  stock  broker."''  or  a  building  association,^^  or  rail- 
road contractor,'"'  or  a  mining  company/"  or  a  superintendent 
of  a  common  carrier,"  or  a  carrier/"  or  a  teamster  who  buys 
and  sells  hay  and  straw  for  the  purpose  of  keeping  his  teanis,*^ 
or  a  fisherman  who  occasionally  buys  fish  to  make  up  for 
market  a  cargo  otherwise  deficient/*  or  a  person  who  from 


In  re  Odell,  No.  10426,  Fed.  Cas., 
s.  c.  9  Ben.  209;  Wright  v.  Bird,  i 
Price  20;  Martin  v.  Nightingale, 
3  Bing.  421 ;  In  re  Morton  Boarding 
Stables,  108  Fed.  Rep.  791,  5  Am.  B. 
R.  763.  This  case  is,  however,  dis- 
approved In  re  Chesapeake  Oyster 
&  Fish  Co.,  112  Fed.  Rep.  960,  7  Am. 
B.  R.  173;  and  In  re  U.  S. '  Hotel 
Co.  (C.  C.  A.  6th  Cir.),  134  Fed. 
Rep.  224,  13  Am.  B.  R.  403. 

^*  Ex  parte  Crabb,  8  De  Gex, 
Mac.  &  G.  277 ;  E.v  parte  Danbenny, 
3  Mont  &  Ayr,  16,  s.  c.  2  Deac.  72. 

35  Cobb  V.  Symonds,  S  B.  &  A. 
516;  Ex  parte  Meyniot,  i  Atk.  196. 

3G  jfi  Yf,  Suburban  Electric  Co. 
(District  of  Kentucky,  1900,  not  re- 
ported.) 

But  see  In  re  New  York  &  W. 
Water  Co.,  98  Fed.  Rep.  711,  3 
Am.  B.  R.  508;  affirmed  in  In  re 
Morris,   102  Fed.   Rep.    1004. 

2^  In  re  Surety,  Guarantee  & 
Trust  Co.  (C.  C.  A.  7th  Cir.),  121 
Fed.  Rep.  7;^,  9  Am.  B.  R.  129;  Ex 
parte  Conant,  77  Me.  275;  In  re 
Woodward,  No.  18001,  Fed.  Cas.,  s. 
c.  8.  Ben.  563;  In  re  Moss,  No. 
9877,   Fed.   Cas.,  s.  c.   19  N.   B.   R. 

132- 

But  see  Leighton  &  Co.,  147  Fed. 
Rep.  311. 


"s/n  re  N.  Y.  Building  Loan 
Banking  Co..  127  Fed.  Rep.  471,  11 
Am.  B.  R.  51. 

■^"  In  re  Smith,  No.  12981,  Fed. 
Cas.,  s.  c.  2  Low.  69. 

4'^  In  re  Woodside  Coal  Co.,  105 
Fed.  Rep.  56,  5  Am.  B.  R.  186 ;  In  re 
Elk  Park  Min.  &  Mill  Co.,  loi  Fed. 
Rep.  422.  4  Am.  B.  R.  131 ;  In  re 
Rollins  Gold  &  Silver  Min.  Co.,  102 
Fed.  Rep.  982,  4  Am.  B.  R.  327; 
In  re  Chicago-Joplin  Lead  &  Zinc 
Co.,  104  Fed.  Rep.  67,  4  Am.  B.  R. 
712 ;  McNamara  v.  Helena  Coal  Co., 
5  Am.  B.  R.  48;  In  re  Keystone 
Coal  Co.,  109  Fed.  Rep.  872,  6  Am. 
B.  R.  2)77-  By  the  amendment  of 
1903  a  mining  company  may  now 
be  made  an  involuntary  bankrupt. 

41  In  re  Merritt,  7  Fed.  Rep.  853. 

*-In  re  Union  Pac.  R.  Co.,  No. 
14376,  Fed.  Cas.,  s.  c.  10  N.  B.  R. 
178;  In  re  Philadelphia  &  Lewes 
Transp.  Co.,  114  Fed.  Rep.  403,  7 
Am.  B.  R.  707;  In  re  Quimby 
Freight  Forwarding  Co.,  121  Fed. 
Rep.  139,   10  Am.  B.  R.  424. 

■*■''  In  re  Kimball,  7  Fed.  Rep.  461 ; 
In  re  Quimby  Freight  Forwarding 
Co.,  T2I  Fed.  Rep.  139,  10  Am.  B. 
R.   424. 

■*■'  Ex  parte  Gallimore,  2  Rose, 
424. 


WHO     MAY     BE    BAXKRUPTS. 


179 


time  to  time  buys  paintings,  but  not  in  the  course  of 
his  regular  business/''  or  a  water  supply  company  en- 
gaged in  the  business  of  obtaining,  transporting  and  sup- 
plying water  for  municipal  and  domestic  use  for  fixed 
rentals,^*^  or  an  inn,  hotel  or  boarding-house  keeper,*'  or 
a  saloon  and  restaurant,*^  or  a  social  club,""*  or  a  laundry,"'' 
or  a  circulating  library,'^  or  a  grain  warehouse.^-  or  a  news- 
paper advertising  company,"'^  or  an  incorporated  mercantile 
agency."* 

Printing  and  Publishing  Companies. — A  printing  or 
publishing  corporation  to  fall  within  the  provisions  of  this  act, 
is  one  principally  engaged  in  printing  or  publishing ;  that  is,  the 
manufacture  and  issue  from  the  press  and  putting  upon  the 
market  for  sale  books  and  pamphlets  as  ordinarily  understood 
by  the  use  of  these  words.  An  incorporated  mercantile  agency, 
although  it  may  print  and  publish  matter  incident  to  its  prin- 


Tf  he  buys  fish  from  other  boats 
at  sea  and  sells  them  on  shore  he 
is  a  trader.  Heaney  v.  Birch,  i 
Rose.  356,  s.  c.  3  Camp.  233. 

*^  In  re  Chapman.  No.  2601,  Fed. 
Cas.,  s.  c.  9  Ben.  311. 

*^  In  re  New  York  &  W.  Water 
Co.,  98   Fed.   Rep.    711,    3   Am.    B. 
R.   508,    affirmed   in   In    re   Morris 
(C.  C.  A.  2d  Cir.),  102  Fed.  Rep. 
1004. 

*~  In  re  United  States  Hotel  Co. 
(C.  C.  A.  6th  Cir.),  134  Fed.  Rep. 
225,  13  Am.  B.  R.  403 ;  In  re  Chesa- 
peake Oyster  &  Fish  Co.,  112  Fed. 
Rep.  960.  7  Am.  B.  R.  173:  Sander- 
son V.  Rowles,  4  Burr.  2064:  Ex 
parte  Bowers,  2  Deac.  99;  Ex  parte 
National  Deposit  Bank,  26  W.  R. 
624. 

In  re  San  Gabriel  Sanitorinm  Co., 
95  Fed.  Rep.  271,  2  Am.  B.  R.  408, 
a  corporation  which  owned  and 
maintained    a    private    hospital    for 


profit  and  not  as  a  charity,  has  been 
adjudged   an   involuntary  bankrupt. 

*^  In  re  Chesapeake  Oyster  & 
Fish  Co.,  112  Fed.  Rep.  960,  7  Am. 
B.  R.  173.  . 

*"/h  re  Fulton  Club,  113  Fed. 
Rep.  997,  7  Am.  B.  R.  670. 

^" /«  re  White  Star  Laundry,  117 
Fed.  Rep.  570,  g  Am.  B.  R.  30. 
But  see  In  re  Troy  Laundering 
Co.,  132  Fed.  Rep.  266,  13  Am.  B. 
R.  97- 

31 /n  re  Parmelee  Librarj^  (C.  C. 
A.  7th  Cir.),  120  Fed.  Rep.  235, 
9  Am.  B.  R.  568. 

■"'-  Pacific  Coast  Warehouse  Co., 
123  Fed.   Rep.  749,    10  Am.   B.   R. 

474- 

53  In  re  Snyder  &  Johnson  Co., 
133    Fed.    Rep.   806,    13   Am.   B.    R. 

325- 

•'''*  Zugalla  V.  International  Mer- 
cantile .A-gcncy,  142  Fed.  Rep.  927, 
16  Am.  B.  R.  67. 


180 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


cipal  business,  is  not  a  printing  or  pn1)lishing  company  within 
the  meaning  of  the  bankrupt  act.^'' 

Mining  Companies. — Prior  to  the  amendment  of  1903 
mining  corporations  were  not  subject  to  be  adjudicated  bank- 
rupts in  involuntary  proceedings. ^^  By  that  amendment 
mining  companies  were  brought  within  the  act  by  the  addition 
of  tlie  word  "mining"  to  the  pursuits  mentioned  in  the  original 
act.'''  It  has  been  held  to  include  quarrying,  as  of  slate  or 
stone  from  a  quarry. ^'^ 

"Mercantile  Pursuits." — ]\Iercantile  pursuits,  as  gener- 
ally understood,  are  those  which  pertain  to  merchants  or  the 
traffic  carried  on  by  merchants,  or  having  to  do  with  trade  or 
commerce. 

The  phrase  "mercantile  pursuits"  may  have  a  little  broader 
signification  than  the  word  "trading."  It  signifies  for  the 
most  part  the  same  thing  as  the  word  "trading."  ^^  In  the 
decisions  it  has  usually  been  associated  with  the  word  "trad- 
ing" in  determining  whether  a  corporation  was  subject  to  be 
adjudicated  a  bankrupt,*"'  and  the  cases  relating  to  trading 
companies  are  in  point  with  reference  to  whether  the  corpora- 
tion is  engaged  in  mercantile  pursuits. 

Common  Carriers  and  Insurance  Companies. — Rail- 
road, steamship,  steamboat  and  canal  companies, ^^  and  insur- 


^'^'  Zugalla  V.  International  ]Mer- 
cantile  Agency,  142  Fed.  Rep.  927, 
16  Am.  B.  R.  67. 

^^  In  re  Woodside  Coal  Co.,  105 
Fed.  Rep.  56.  5  Am.  B.  R.  186.  See 
cases  collected  in  note  40  ante. 

5'  B.  A.  1898,  Sec.  4b,  as  amended 
Feb.  5,  1903,  32  Stat,  at  L.  797. 

58  In  re  Mathews  Consolidated 
Slate  Co.,  T44  Fed.  Rep.  724,  16  Am. 
B.  R.  350;  In  re  Quincy  Granite 
Quarries  Co.,  147  Fed.  Rep.  279. 

59 /«  re  N.  Y.  &  W.  Water  Co., 
98  Fed.  Rep.  711,  3  Am.  B.  R.  508; 
Zugalla  V.  International  Mercantile 
Agency,  142  Fed.  Rep.  927,  16  Am. 
B.  R.  67. 


''■^  In  re  N.  Y.  &  W.  Water  Co.,  98 
Fed.  Rep.  711,  3  Am.  B.  R.  508;  In 
re  Surety,  Guarantee  &  Trust  Co. 
(C.  C.  A.  7th  Cir.),  121  Fed.  Rep. 
yZ-  9  Am.  B.  R.  129 ;  In  re  White 
Star  Laundry  Co.,  117  Fed.  Rep. 
570,  9  Am.  B.  R.  30;  In  re  Oriental 
Co.,  104  Fed.  Rep.  975,  5  Am.  B.  R. 
219;  In  re  Tontine  Surety  Co.,  116 
Fed.  Rep.  401,  8  Am.  B.  R.  421. 

But  see  Troy  Laundering  Co., 
132   Fed.    Rep.   266,    13   Am.   B.   R. 

97- 

'■^  New  Orleans,  &c.,  R.  R.  Co.  v. 

Delamore,  114  \J.  S.  506,  and  cases 

there  collated. 


WHO     MAY     BE    BANKRUPTS.  181 

ance  companies  *'■  were  held  subject  to  be  adjudged  bankrupts 
as  "moneyed,  business  or  commercial  corporations"  under 
the  act  of  1867.**^  The  provisions  of  the  present  act  are  not 
broad  enough  to  include  the  railroad  and  transportation  com- 
panies and  insurance  companies.*^*  The  intent  of  the  framers 
of  this  law  seems  to  have  been  to  leave  such  corporations 
to  be  dealt  with  by  the  laws  of  the  state  creating  them.*^^ 
It  may  be  observed  that  the  law  and  practice  with  reference  to 
winding  up  the  affairs  of  such  insolvent  incorporations  became 
very  largely  settled  under  the  existing  statutes  during  the 
twenty-five  years  previous  to  the  passage  of  the  bankrupt  act. 

§  48a.    Unincorporated  companies. 

Any  unincorporated  company  may  be  adjudged  an  invol- 
untary bankrupt.^  There  is  no  restriction  in  respect  to  such 
companies  as  in  the  case  of  corporations.  This  phrase  in- 
cludes partnerships'  and  also  that  class  of  unincorporated  as- 
sociations, recognized  as  legal,  which  are  neither  corporations 
nor  partnerships.  In  this  last  class  may  be  included  mutual 
insurance  societies,"^  labor  and  employers'  unions,  social  and 
political  clubs,  building  and  loan  associations,  agricultural 
societies,  stock  and  produce  exchanges  and  the  like,  not  in- 
corporated, in  which  the  members  are  not  liable  as  partners. 
A  joint  stock  company  may  be  adjudged  a  bankrupt  under 
this  provision  if  it  is  not  a  corporation.* 

^-In  re  Independent  Ins.  Co.,  Xo.  es  ggg  paragraph  XII  of  the  state- 

7017,  Fed.  Cas.,  s.  c.  i  Holmes  103;  ment   of  the   conference  committee 

In  re  Hercules  Mut.  Ins.  Co.,  Xo.  to    the    House    of  Representatives, 

6402,  Fed.  Cas.,  s.  c.  6  Ben.  35;  In  June  28,   1898,  vol.  31,  Cong.  Rec- 

re   IMerchants'   Ins.    Co.,   Xo.  9441,  ord,  p.  7205. 

Fed.  Cas.,  s.  c.  3  Biss.  162.  1  B.  A.  1898,  Sec.  4. 

63  R.  S.  Sec.  5122.  2  See  Sec.  97,  post. 

^*In    re    Philadelphia    &    Lewes  ^  In  re  Seaboard  Fire  Underwri- 

Transp.    Co.,    114    Fed.    Rep.    403,  ters,  137  Fed.  Rep.  987,  13  Am.  B.' 

7  Am.  B.  R.  707;  Quimby  Freight  R.  722;  In  re  Grand  Lodge  A.  O. 

Forwarding  Co.,  121  Fed.  Rep.  139,  U.     W.     of     Wisconsin     (District 

10  Am.  B.  R.  424,  affirmed   (C.  C.  Court,  West.  Dist.  of  Wis.  1907). 

A.  1st  Cir.),  126  Fed.  Rep.  167,  11  *  In  re  Hercules  Atkins  Co.,  133 

Am.  B.  R.  205 ;  In  re  Cameron,  etc.,  Fed.  Rep.  813,  13  Am.  B.  R.  369. 
Ins.  Co.,  96  Fed.  Rep.  756,  2  Am.  B. 
R-  272. 


182  LAW   AND   PROCEEDINGS    IN    BANKRUPTCY. 


CHAPTER  VIII. 

ACTS    OF    BANKRUPTCY. 

§  49.     Who  may  commit  an  act  01  bankruptcy. 

To  support  an  adjudication  of  bankruptcy  the  debtor  must 
have  committed  an  act  of  bankruptcy  within  four  months  be- 
fore the  filing  of  the  petition.'  Any  person  who  may  be  ad- 
judged a  bankrupt  may  commit  an  act  of  bankruptcy.  But 
the  act  must  be  committed  by  the  person  himself,  or  at  least 
within  his  knowledge  and  consent.  It  is  clear  that  a  person 
can  not  commit  an  act  of  bankruptcy  by  the  conduct  of  his 
agent  without  his  knowledge  or  consent.^ 

To  support  an  adjudication  of  bankruptcy  against  a  part- 
nership it  seems  that  formerly  there  must  have  been  separate 
acts  of  bankruptcy  by  each  partner.^  The  present  act  pro- 
vides that  the  court  of  bankruptcy  which  has  jurisdiction  of 
one  of  the  partners  may  have  jurisdiction  of  all  the  partners 
and  of  the  administration  of  the  partnership  and  individual 
property.^  Under  the  present  act  a  partnership  has  been  ad- 
judged bankrupt  upon  a  petition  charging  an  act  of  bankruptcy 
by  one  or  more  (but  less  than  all)  of  the  partners,  where  such 
act  was  within  the  scope  of  the  partnership  business  so  as  to 

1  B.  A.  1898,  Sec.  3b.  act  of  bankriiptcy  by  three  partners 

2  Cotton  V.  James,  M.  &  M.  273 ;  of  a  banking  concern,  where  one  of 
Ex  parte  Blain,  12  Chan.  Div.  522.  them,    who    resided    at    the    place 

3  Allen  V.  Hartley,  4  Doug.  20;  In  where  the  banking-house  was,  and 
re  Redmond,  No.  11632.  Fed.  Cas.,  was  the  only  partner  who  trans- 
s.  c.  9  N.  B.  R.  408,  and  cases  cited  acted  business,  the  other  two  re- 
in opinion.  In  re  Weaver,  No.  siding  at  a  distance  from  it,  ab- 
17307,  Fed.  Cas.,  s.  c.  9  N.  B.  R.  sented  himself  from  the  banking- 
132;  In  re  Waite,  No.  17044,  Fed.  house,  shut  it  up  and  stopped  pay- 
Cas.,  s.  c.  I  Low.  207;  In  re  Cook,  ment.  Mills  v.  Bennett,  2  M.  &  S. 
No.  3150,  Fed.  Cas.,  s.  c.  3  Biss.  122.  556;  s.  c.  2  Rose,  269. 

It  was  held   not  evidence   of   an  *  B.  A.  1898,  Sec.  5r. 


ACTS    OK    BANKRUPTCY. 


183 


constitute  in  fact  an  act  of  the  firm/'  The  sale  by  one  member 
of  an  insolvent  firm  of  his  interest  to  his  partner  is  an  act 
of  bankruptcy,  and  the  court  will  set  it  aside  as  fraudulent  and 
proceed  to  distribute  the  property  as  firm  property."  But  a 
conveyance  by  a  partner  of  his  individual  property,  although 
with  intent  to  prefer  a  firm  creditor,  does  not  constitute  an 
act  of  bankruptcy  by  the  firm,  and  will  not  sustain  proceedings 
in  bankruptcy  against  the  partnership." 

§  50.    What  are  acts  of  bankruptcy  ? 

The  bankrupt  statute,  as  amended  Feb.  5,  1903,  enumerates 
five  acts  of  bankruptcy  relating  to  the  disposition  of  the  debt- 
or's property  and  to  his  circumstances  and  credit.  Acts  of 
bankruptcy  under  the  statute  ^  by  a  person  "consist  of  his 
having 

First,  "conveyed,  transferred,  concealed,  or  removed,  or 
permitted  to  be  concealed  or  removed,  an}-  part  of  his  prop- 
erty with  intent  to  hinder,  delay,  or  defraud  his  creditors,  or 
any  of  them ;  or 

Second,  "transferred,  while  insolvent,  any  portion  of  hi? 
propertv  to  one  or  more  of  his  creditors  with  intent  to  prefer 
such  creditors  over  his  other  creditors :  or 

Third,  "suffered  or  permitted,  while  insolvent,  any  cred- 
itor to  obtain  a  preference  through  legal  proceedings,  and  not 
having  at  least  five  days  before  a  sale  or  final  disposition  of 


^'  In  re  Kersten.  no  Fed.  Rep.  929, 
6  Am.  B.  R.  516;  In  re  Grant,  106 
Fed.  Rep.  496;  In  re  Shapiro,  106 
Fed.  Rep.  495;  In  re  Duguid,  .100 
Fed.  Rep.  274,  3  Am.  B.  R.  794. 
See  also  Sec.  97,  post. 

''•In  re  Waite,  No.  17044,  Fed. 
Cas.,  s.  c.  I  Low.  207;  In  re  Cook, 
No.  3150,  Fed.  Cas.,  3  Biss.  122; 
In  re  Shapiro,  106  Fed.  Rep.  495. 

■^  TTartman  v.  Peters  &  Co.,  146 
F.-d.   R  p.   S,2. 


1  B.  A.  1898,  Sec.  3ff,  and  32  Stat. 
at  L.  797. 

In  re  Empire  MetalHc  Bedstead 
Co.,  98  Fed.  Rep.  981,  3  Am.  B.  R. 
575,  2  N.  B.  N.  304.  The  circuit 
court  of  appeals  for  the  second  cir- 
cuit, said :  "When  acts  of  bank- 
ruptcy are  classified,  as  they  are  in 
the  statute  of  1898,  it  is  not  the 
province  of  a  court  to  enlarge  the 
classification  because  the  omitted 
class  seems  to  partake  of  the  sin  of 
the  named  class." 


184  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

any  property  affected  by  such  preference  vacated  or  discharged 
such  preference;  or 

Fourth,  "made  a  general  assignment  for  the  benefit  of  his 
creditors,  or,  being  insolvent,  applied  for  a  receiver  or  trustee 
for  his  property  or  because  of  insolvency  a  receiver  or  trustee 
has  been  put  in  charge  of  his  property  under  the  laws  of  a 
state,  of  a  territory,  or  of  the  United  States ;  or 

Fifth,  ''admitted  in  writing  his  inability  to  pay  his  debts 
and  his  wilhngness  to  be  adjudged  a  bankrupt  on  that 
ground." 

It  may  be  observed  that  under  the  former  bankrupt  statutes 
there  were  acts  of  bankruptcy  relating  to  the  person  of  the 
debtor.  Thus  it  constituted  an  act  of  bankruptcy  to  depart 
or  be  absent  from  the  state,  district  or  territory  of  which  the 
debtor  was  an  inhabitant,  with  intent  to  defraud  his  cred- 
itors," or  to  conceal  himself  to  avoid  service  of  legal  process.^ 
There  is  no  such  act  of  bankruptcy  under  the  present  statute. 

In  case  a  debtor  absconds  or  conceals  himself  to  avoid  the 
service  of  process  and  hinder,  delay  or  defraud  his  creditors  by 
so  doing,  the  remedy  under  the  present  act  is  to  commence  a 
suit  against  his  property.  Under  the  laws  of  the  several  states 
this  is  a  ground  for  attaching  the  property  of  the  debtor,  which 
may  be  sold  to  pay  the  debt.  Hence  a  creditor  may  begin  legal 
proceedings  under  the  state  law.  In  case  the  debtor  is  solvent, 
creditors  will  secure  their  debts  under  such  proceedings  with- 
out resorting  to  bankruptcy.  In  case  the  property  is  insuffi- 
cient to  cover  all  claims  made  and  satisfy  all  attachments 
issued,  or  one  creditor  is  gaining  a  preference  over  another  by 
such  proceedings,  if  such  attachments,  or  any  one  of  them,  are 
not  released  five  days  before  the  saje  of  the  property  attached, 
an  act  of  bankruptcy  is  committed.  The  creditors  may  file  a 
petition  to  have  the  debtor  adjudged  a  bankrupt.  All  attach- 
ments so  levied,  or  liens  of  any  nature  gained  by  legal  pro- 
ceedings within  four  months  before  the  filing  of  the  petition, 

-For  acts  of  bankruptcy  under  For  the  acts  of  bankruptcy  under 
the  acts  of  1800  and  1841  see  his-  the  act  of  1867,  see  R.  S.  Sec.  50.31. 
torical  sketch,  pages  7  and  10,  ante. 


ACTS    OF     BANKRUPTCY.  185 

arc  null  and  void.''  Thus  creditors  of  every  degree  will  come 
in  equally  for  proportionate  shares  of  the  bankrupt's  estate. 
If,  however,  an  insolvent  debtor  absconds  and  takes  property 
with  him  he  commits  an  act  of  bankruptcy,  as  he  conceals  and 
removes  his  property.'' 

If  a  debtor  has  committed  an  act  of  bankruptcy  he  can  not 
avoid  the  consequences  of  it  by  a  subsequent  rescission  or 
undoing  thereof.^  A  creditor  can  not  complain  of  an  act  com- 
mitted before  he  was  a  creditor.'* 

§  50a.     Insolvency  as  an  element  of  an  act  of  bankruptcy. 

It  should  be  observed  that  insolvency  of  the  debtor  is  an 
essential  element  of  some  acts  of  bankruptcy  and  is  not  a  req- 
uisite element  of  other  acts  of  bankruptcy. 

It  is  not  necessary  that  a  person  who  transfers,  conveys, 
etc.,  property  should  be  insolvent  at  the  time  to  constitute  an 
act  of  bankruptcy  under  the  first  clause.  He  must  be  insolvent 
at  the  time  the  petition  is  filed.  Actual  solvency  at  the  time 
of  liling  the  petition  is  a  complete  defense  to  a  petition  charg- 
ing an  act  of  bankruptcy  under  the  first  clause  and  the  burden 
of  proving  his  solvency  is  on  the  alleged  bankrupt.^ 

A  person  can  not  commit  an  act  of  bankruptcy  under  the  sec- 
ond and  third  clauses  while  he  is  solvent.  He  must  be  insol- 
vent at  the  time  of  the  transfer  or  of  pern.iitting  a  preference 
through  legal  proceedings.-  If  the  debtor  takes  issue  on  the 
question  of  his  solvency  at  that  time,  the  burden  of  pro\'in^- 
insolvency  is  on  the  petitioning  creditors,  except  in  case  of  his 
actual  failure  to  attend  with  his  books,  papers  and  accounts 
and  submit  to  an  examination,  as  provided  in  Sec.  3d,  in  which 

^  B.  A.   1898,  Sec.  6yf.     See  Sec.  mann,  T03  Fed.  Rep.  65 ,  4  Am.  B. 

192  et  seq.  post.  R.  551. 

*  In  re  Filer,   108  Fed.  Rep.  209,  1  B.    A.     1898.    Sec.    2,C-      In    re 

5  Am.  B.  R.  332.  Schenkein,  113  Fed.  Rep.  421,  7  Am. 

^  In    re    Rys.\x    No.    12183,    Fed.  B.    R.    162. 

Cas..  s.  c.  2  Saw.  41T.  -In  re  Hines,  144  Fed.  Rep.   T-12. 

"Beers   v.    TTanlin,   3    Am.    B.    R.  16    \m.    B.    R.    295;    Chicago   Title 

745.  99  Fed.  Rep.  695 ;  In  re  Brinck-  ^  Trust  Co.  v.  Roebling's  Sons  Co., 

107  Fed.  Rep.  71,  5  Am.  B.   R.  36S, 


186  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

case  tlie  burden  of  proving  his  solvency  rests  upon  the 
debtor/'  Under  Sec.  3a,  clauses  2  and  3,  the  solvency  of  the 
debtor  at  the  time  the  petition  in  bankruptcy  is  filed  is  im- 
material.^ 

Under  clauses  4  and  5  as  originahy  enacted  the  solvency  or 
insoh'ency  of  the  debtor  either  at  the  time  of  committing  the 
act  of  bankruptcy  or  at  the  time  of  fifing  the  petition  is  imma- 
terial.'^ By  the  amendment  of  1903  ^  it  is  provided  that  in 
the  case  a  receiver  or  trustee  has  been  appointed  to  take  charge 
of  the  property  of  a  person,  such  person  must  be  insolvent  at 
the  time  he  applied  for  the  receiver  or  when  the  appointment 
was  made  upon  the  application  of  another  then  at  the  time  the 
receiver  or  trustee  took  charge  of  his  property."  Insolvency, 
of  the  debtor  at  the  time  the  petition  in  bankruptcy  is  filed  is 
immaterial.^ 

A  person  is  deemed  insolvent  whenever  the  aggregate  of  his 
property  exclusive  of  any  property  which  may  be  conveyed, 
transferred,  concealed,  or  removed,  or  permitted  to  be  con- 
cealed or  removed,  with  intent  to  defraud,  hinder  or  delay  his 
creditors,  shall  not,  at  a  fair  valuation,  be  sufficient  in  amount 
to  pay  his  debts. ^ 

In  determining  whether  a  person  is  solvent  or  insolvent  at  a 
particular  time  the  value  of  the  assets  at  that  time  should  be 
taken  at  a  fair  valuation."  A  fair  valuation  means  the  actual 
value — its  real  or  market  value— and  not  the  face  value  of 
commercial  paper.^^  It  is  what  property  would  sell  for  in  the 
regular  course  of  business,  but  not  what  the  property  would 

3  B.  A.   1898,  Sec.  3d.     West  Co.  c  32  Stat,  at  L.  797. 

V.    Lea,    174   U.    S.    590,  43   L.    Ed.  "  B.    A.    1898,    Sec.    3a.    cl.   4,    as 

1098;   2  Am.   B.   R.  463;    Elliott  v.  amended   Feb.   5,    1903;   32   Stat,   at 

Toeppner,  187  U.  S.  327,  47  L.  Ed.  L.   797. 

200,    9    Am.    B.    R.    50;    Bogen    &  » West  Co.  v.  Lea.  174  U.  S.  590, 

Trammel  v.  Protter,  129  Fed.  Rep.  43  L.  Ed.  1098,  2  Am.  B.  R.  463. 

533.  T2  Am.  B.  R.  288.  9B.  A.  1898,  Sec.  i,  cl.  15. 

s  West  Co.  V.  Lea,  174  U.  S.  590,  ^" /«     re    Coddington,     118    Fed. 

43  L.  Ed.  1098,  2  Am.  B.  R.  463.  Rep.  281,  9  Am.  B.  R.  243. 

5  West  Co.  V.  Lea,  174  U.  S.  590,  "  In  re  Bloch  (C.  C.  A.  2d  Cir.), 

43  L.  Ed.  1098,  2  Am.  B.  R.  463.  109  Fed.  Rep.  790,  6  Am.  B.  R.  300. 


ACTS    OF    BANKRUPTCY. 


187 


sell  for  at  a  forced  sale/-  Where  the  levy  on  the  property  of  a 
debtor  depreciates  its  value  so  that  the  debtor's  assets  are  then 
less  than  his  liabilities,  he  was  not  insolvent  at  the  time  of  the 
judgment  on  which  execution  issued  and  no  preference  re- 
sulted. ^^  The  valuation  for  the  test  of  solvency  or  insolvency 
in  case  of  a  preferential  mortgage  must  relate  to  the  conditions 
as  a  going  concern  when  the  alleged  preference  was  given  and 
not  to  the  mere  dead  matter  of  a  plant  after  bankruptcy 
intervenes." 

In  computing  the  assets  of  the  debtor  to  determine  his  sol- 
vency or  insolvency  all  his  property  which  has  value  should  i)e 
included.  It  has  been  held  that  in  determining  the  question 
of  solvency  there  should  be  included  property  exempt  under  the 
state  law,^^  and  property  transferred  in  payment  of  or  as  se- 
curity for  a  just  debt  irrespective  of  whether  it  constitutes  a 
preference  or  not.^''  But  where  property  is  transferred  in 
fraud  of  creditors  the  statute  conteniplates  that  the  bankrupt 
shall  not  have  the  benefit  of  its  valuation  in  determining 
whether  he  is  solvent.^'  Presumptive  profits  on  goods  which 
have  been  ordered,  but  not  received,  are  not  considered  as 
assets.^^  A  note  given  by  a  bankrupt  secured  by  a  mortgage 
on  the  property  of  another,  should  be  included  as  a  liability.'''' 

In  determining  the  solvency  or  insolvency  of  a  partnership 
it  must  appear  that  not  only  the  firm  is  insolvent,  but  that  each 
partner  is  individually  insolvent. 


20 


1-  Duncan  v.  Landis  (C.  C.  A. 
3(1  Cir.),  io6  Fed.  Rep.  839,  5  Am. 
B.  R.  649;  In  re  Hines,  144  Fed. 
Rep.  143,  16  Am.  B.  R.  295. 

13  Chicago,  etc.,  Co.  v.  Roebling, 
107  Fed.  Rep.  71,  5  .^m.  B.  R.  368 

1*  Butler  Paper  Co.  v.  Goembel 
(C.  C.  A.  7th  Cir.).  143  Fed.  Rep. 
295,  16  Am.  B.  R.  26. 

1^  In  re  Baumann,  96  Fed.  Rep. 
946,  3  Am.  B.  R.  196. 

I*'  In  re  Doscher,  120  Fed.  Rep. 
408,  9  Am.  B.  R.  547. 

1^  In  re  Doscher,  120  Fed.  Rep. 
408,  9  Am.  B.  R.  547 ;  In  re  Shoe- 


smith  (C.  C.  i\.  Jih  Cir.),  135  I'ed. 
Rep.  684,  13  Am.  B.  R.  645. 
Lansing  Boiler  and  Engine  Co.  v. 
Ryerson  {C.  C.  A.  6th  Cir.),  128 
Fed.  Rep.  701,  n  Am.  B.  R.  558. 

IS  In  re  Bloch  (C.  C.  A.  2d  Cir.). 
109  Fed.  Rep.  790,  6  Am.  B.  R.  300. 

'■*/n  re  Shoesmith  (C.  C.  A. 
7th  Cir.),  135  Fed.  Rep.  684,  13 
Am.  B.  R.  645. 

-"/n  re  Shoesmith  (C.  C.  A.  7th 
Cir.),  135  Fed.  Rep.  684.  13  Am.  B. 
R.  645;  Vaccaro  v.  Bank  (C.  C.  A. 
6th  Cir.),  103  Fed.  Rep.  436,  4  Am. 
B.    R.   474;    In    re    Perley   &    Hays, 


188 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


In  determining-  the  solvency  or  insolvency  of  a  corporation 
its  bonded  indebtedness  should  l)e  included  as  a  liability, 
although  the  bonds  are  claimed  to  be  invalid."'  The  liability 
of  stockholders  is  not  an  asset." 

The  statute  provides  that  "a  person  against  whom  an 
involuntary  petition  has  been  filed  shall  be  entitled  to 
ha\e  a  trial  by  jury,  in  respect  to  the  question  of  his 
insoh-ency,  except  as  herein  otherwise  provided,  and  any 
act  of  bankruptcy  alleged  in  such  petition  to  have  been 
committed,  upon  filing  a  written  application  therefor  at 
or  before  the  time  within  which  an  answer  may  be  filed. 
If  such  application  is  not  filed  within  such  time,  a  trial  by 
jury  shall  be  deemed  to  have  been  waived."" 

'Tf  a  jury  is  not  in  attendance  upon  the  court,  one  may  be 
specially  summoned  for  the  trial,  or  the  case  may  be  postponed, 
or,  if  the  case  is  pending  in  one  of  the  district  courts  within 
the  jurisdiction  of  a  circuit  court  of  the  United  States,  it  may 
be  certified  for  trial  to  the  circuit  court  sitting  at  the  same 
place,  or  by  consent  of  parties  when  sitting  at  any  other  place 
in  the  same  district,  if  such  circuit  court  has  or  is  to  have  a  jury 
first  in  attendance."  '^ 

This  right  of  jury  trial  is  confined  to  the  debtor.  Creditors 
are  not  entitled  to  demand  a  jury  trial  on  the  question  of  the 
bankrupt's  solvency,'*  nor  of  the  allowance  of  their  claims."'"' 
The  right  to  a  trial  by  jury  on  v\^ritten  application  of  the  alleged 
bankrupt  is  absolute  and  can  not  l)e  withheld  at  tlie  discretion 
of  the  court.-"     In  that  respect  it  differs  from  tlie  trial  of  an 


T38  Fed.  Rep.  927,  15  Am.  B.  R.  54; 
Davis  V.  Stevens,  104  Fed.  Rep. 
235,  4  Am.  B.  R.  763 ;  In  re  Blair, 
99  Fed.  Rep.  76,  3  Am.  B.  R.  588. 
See  also  In  re  Miller,  104  Fed.  Rep. 
7G4,  5  Am.  B.  R.  140. 

21  First  National  Bank  v.  Ice  Co., 
136  Fed.  Rep.  466,  14  Am.  B.  R.  448. 

22  First  National  Bank  v.  Ice  Co., 
136  Fed.  Rep.  466.  14  Am.  B.  R.  448. 

23  B.  A.  1898,  Sec.  iga  and  h.    See 
also  R.  S.  Sec.  566. 


As  to  the  effect  of  a  jury  trial 
after  being  waived  by  bankrupt,  see 
In  re  Neasmith  (C.  C.  A.  6th  Cir.), 
147  Fed.  Rep.  160. 

2*/n  re  Herzikopf  (C.  C.  A.  9th 
Cir.),   121   Fed.  Rep.  544,  9  Am.  B. 

R.  745- 

-^  In  re  Christensen,  loi  Fed. 
Rep.  243,  4  Am.  B.  R.  99. 

2<-' Elliott  V.  Toeppner,  187  U.  S. 
T,2y,  47  L.  Ed.  200,  9  Am.  B.  R. 
.so 


ACTS     OF     BANKRUPTCY. 


189 


issue  out  of  chancery,  which  tlic  court  of  equity  is  not  bound 
to  grant,  nor  bound  Ijy  tlic  verdict  if  such  trial  be  granted. 
The  court  cannot,  as  the  chancellor  may,  enter  judgment  con- 
trary to  the  verdict,  but  the  verchct  may  be  set  aside  or  tlie 
judgment  may  be  reversed  for  error  of  law  as  in  common  law 
cases.""  The  judge  and  not  the  referee  should  preside  at  a 
jury  trial. 

The  books  of  a  bankrupt  are  evidence  on  the  question  of  his 
insolvency  wdthin  four  months  of  the  date  of  filing  the  peti- 
tion, but  are  not  conclusive  on  this  subject."^  The  schedules 
and  the  inventories  and  appraisements  are  also  evidence  upon 
the  same  question.-^  Actual  sales  of  property  by  a  receiver  is 
evidence  of  the  market  value  of  the  property."^  Giving  a  post- 
dated check  or  note  is  not  evidence  of  insolvency.^*^ 

The  adjudication  of  bankruptcy  raises  no  presumption  of 
insolvency  at  a  previous  date,  unless  founded  upon  an  act  of 
bankruptcy  involving  insolvency  as  an  element.  In  such  a  case 
the  adjudication  is  conclusive  of  insolvency  at  the  date  the 
act  of  bankruptcy  was  committed.^"  A  debtor  is  presumed  to 
know  his  financial  condition  and  he  will  be  presumed  to  intend 
to  prefer  if  in  effect  he  was  insolvent  at  the  time  he  created 
the  preference,  but  he  may  rebut  this  presumption  with  evi- 
denced^ 

Where  a  referee  has  twice  made  a  report  on  the  solvency  of 
the  debtor  the  court  will  refuse  to  disturb  his  decision.'^*  The 
judgment  of  a  court  on  a  jury  trial  may  be  reviewed  in  a  cir- 
cuit court  of  appeals  on  writ  of  error.^''' 


2'^  In  re  Docker,  Foster  &  Co., 
123  Fed.  R'ep.  190;  10  Am.  B.  R. 
584. 

-■'*  In  re  Docker-Foster  Co.,  123 
Fed.  Rep.  190,  10  .Am.  B.  R.  584. 

-'»/k  re  Bloch  (C.  C.  A.  2d  Cir.), 
T09  Fed.  Rep.  790,  6  Am.  B.  R.  300. 
But  see  Duncan  v.  Landis  (C.  C.  A. 
3d  Cir.),  106  Fed.  Rep.  839,  5  /\m. 
B.  R.  649. 

''•>/m  re  Chappcll,  113  Fed.  Rep. 
545,  7' Am.  B.  R.  60S. 


.',1  /,j  ,.^  Rome  Planing  Mills,  96 
Fed.  Rep.  812.  3  Am.  B.  R.  123; 
In  re  Chappell,  713  Fed.  Rep.  545, 
7  Am.  B.  R.  60S. 

■■'-•De  Graff  v.  Lang,  87  N.  Y. 
Supp.  78,  92  N.  Y.  Sup.  Ct.  App. 
Div.   564. 

-^  In  re  Gilbert,  112  Fed.  Rep. 
951,  8  Am.  B.  R.   loi. 

"■*  In  re  Rf)me  Planing  Mills.  99 
Fed.  Rep.  937.  3    ^'H-  P>.  R-  7^6. 

•■■■'  Fllintt   V.   Toeppner,   187  U.   S, 


190 


LAW    AND    PROCEEDINGS    IN     ISANKKUl'TCY. 


§  51.     First :  Fraudulent  transfers. 

The  first  act  of  bankruptcy  mentioned  consists  of  the  debtor 
having  conveyed,  transferred,  concealed  or  removed,  or  per- 
mitted to  be  concealed  or  removed,  any  part  of  his  property, 
with  intent  to  hinder,  delay  or  defraud  his  creditors,  or  any  of 
them.^  A  conveyance  or  transfer  made  with  intent  to  hinder, 
delay  or  defraud  creditors,  or  any  of  them,  is  fraudulent 
and  may  be  avoided  by  the  trustee  of  the  grantor." 
What  are  fraudulent  conveyances  is  considered  in  another 
place.^  The  making  of  a  transfer  or  conveyance  of  property, 
with  intent  to  hinder,  delay  or  defraud  creditors,  or  any  of 
them,  is  made  by  this  provision  an  act  of  bankruptcy.*  It  has 
been  held  that  this  clause  of  the  act  applies  only  to  transfers 
which  are  fraudulent  at  common  law.*^ 

A  transfer  to  a  bona  fide  purchaser  for  a  present  fair  consid- 
eration is  not  ordinarily  such  a  transfer  as  to  make  the  sale 
an  act  of  bankruptcy.®  But  it  may  be  conceived  that  if  the 
sale  were  made  with  intent  on  the  part  of  the  debtor  to  hinder, 
delay  or  defraud  his  creditors  it  might  be  an  act  of  bankruptcy, 
although  the  sale  could  not  be  set  aside  and  the  bona  fide  pur- 
chaser would  be  protected.'^  It  has  been  held  an  act  of  bank- 
ruptcy where  an  insolvent  debtor  conveyed  all  his  property  to 
a  trustee  with  directions  as  to  the  payment  to  his  creditors  with- 
out preference  and  the  deed  contained  a  condition  of  de- 
feasance and  equity  reserved  in  the  property  to  the  grantor 


327,  47  L.  Ed.  200,  9  Am.  B.  R. 
50;  Duncan  v.  Landis  (C.  C.  A. 
3d  Cir.),  106  Fed.  Rep.  839,  5  Am. 
B.  R.  649;  Ins.  Co.  V.  Comstock, 
16  Wall.  258,  21  L.  Ed.  493. 

1  B.  A.  1898.   Sec.  :^a,  clause  i. 

2  B.  A.  1898,  Sec.  67e. 
2  Sec.   194,  past. 

4  B.  A.  1898,  Sec.  3a. 

^  Githens  v.  Shiffler,  112  Fed.  Rep. 
50s,  7  Am.  B.-  R.  453.  Lansing  En- 
gine, etc.,  Co.  V.  Ryerson  (C.  C.  A. 
6th  Cir.),  128  Fed.  Rep.  701,  11  Am. 
B.  R.  558;  In  re  Belknap,   129  Fed. 


Rep.  646,  12  Am.  B.  R.  326. 

'■'  Tiffany  v.  Lucas,  15  Wall.  421 , 
21  L.  Ed.  198;  Stewart  v.  Piatt, 
loi  U.  S.  731,  25  L.  Ed.  816;  In 
re  Franklin,  No.  5053  Fed.  Cas., 
s.  c.  8  Ben.  233 ;  In  re  Pusey,  No. 
1 1478  Fed.  Cas.,  s.  c.  7  B.  R.  45. 

'^  See  Githens  v.  Shiffler,  112  Fed. 
Rep.  505,  7  Am.  B.  R.  453;  Boyd  v. 
Lemon  &  Gale  Co.  (C.  C.  A.  5th 
Cir.),  114  Fed.  Rep.  647,  8  Am.  B. 
R.  81  ;  In  re  Franklin,  No.  5053 
P'ed.  Cas.,  s.  c.  8  Ben.  233. 


ACTS     OF     BANKRUPTCY. 


191 


after  the  satisfaction  of  the  claims  of  the  beneficiaries,  in  that 
such  transfer  was  made  to  hinder,  delay  and  defraud  his  cred- 
itors and  not  a  transfer  to  prefer  creditors. *"  A  voluntary  pro- 
curing of  the  appointment  of  a  receiver  in  proceedings  for  the 
dissolution  of  an  insolvent  corporation  has  been  held  not  to 
be  a  transfer  with  intent  to  hinder,  delay,  etc.''  But  under  the 
amendment  to  3a,  cl.  4,  this  is  made  an  act  of  bankruptcy.  It 
is  not  an  act  of  bankruptcy  to  transfer  property  where  the  only 
creditor  is  one  holding  an  unliquidated  claim  for  damages  for 
a  tort.^"  It  should  be  borne  in  mind  that  it  is  the  fraudulent 
intent  of  the  debtor  alone  that  determines  whether  the  act 
complained  of  is  an  act  of  bankruptcy  or  not.^^  In  determin- 
ing the  question  of  intent  the  court  or  jury  should  consider  the 
necessary  result  of  the  acts  done  by  the  debtor,  for  every  one 
is  presumed  to  contemplate  the  necessary  consequences  of  his 
conduct.^"  It  is  immaterial  whether  the  purchaser  acts  in 
good  faith  or  not. 

In  addition  to  making  fraudulent  tran'sfers,  the  concealing 
or  removing  of  property  with  the  same  intent  and  purpose 
constitutes  an  act  of  bankruptcy.^"'     It  seems  that  it  is  not 


^  Rumsc}'  &  Sikemier  v.  Novelty 
and  Machine  JNIfg.  Co.,  99  Fed.  Rep. 
699,  3  Am.  B.  R.  704.  2  X.  B.  N.  128. 

^  In  re  Harper  Bros..  100  Fed. 
Rep.  266,  3  Am.  B.  R.  804,  2  N.  B. 
N.  60s ;  In  re  Baker-Ricketson  Co., 
97  Fed.  Rep.  489,  4  Am.  B.  R.  605; 
Vacarro  v.  Security  Bank  (C.  C.  A. 
6th  Cir.),  103  Fed.  Rep.  436,  4  Am. 
B.  R.  474,  2  X.  B.  N.  103;  In  re 
IT.  Zeltner  Brewing  Co.,  117  Fed. 
Rep.  799,  9  Am.  B.  R.  63. 

1"  Beers  v.  Hanlin,  99  Fed.  Rep. 
C()S.  3  Am.  B.  R.  745. 

'^  In  re  Wilmington  Hosiery  Co., 
120  Fed.  Rep.  179,  9  Am.  B.  R.  581 ; 
Lansing  Boiler  and  Engine  Works 
V.  Ryerson  &  Sons  (C.  C.  A.  6th 
Cir.),  T28  Fed.  Rep.  701,  11  Am.  B. 
R.  558;  In  re  McKibben,  No,  8859 
Fed.  Cas.,  s.  c.  12  N.  B.  R.  97;  In 
re  Drummond,  No.  4093  Fed.  Cas., 


s.  c.  I  N.  B.  R.  231,  the  court  said 
Drummond  positiveh'  swears  that 
he  had  no  such  intent.  And  there 
is  nothing  in  the  evidence  that  leads 
me  to  conclude  that  he  swears  false- 
ly. See  also  In  re  Franklin,  No. 
5053  Fed.  Cas.,  s.  c.  8  Ben.  2t,2i. 

1-  Bean-Chamberlain  IMfg.  Co.  v. 
Standard  Spoke  &  Nipple  Co.  (C. 
C.  A.  6th  Cir.),  131  Fed.  Rep.  215, 
12  Am.  B.  R.  610. 

1"  Anonymous,  No.  466  Fed.  Cas., 
SCI  Pac.  Law,  Rep.  173;  Liver- 
more  V.  Bagley,  3  Mass.  487;  Fox 
V.  Eckstein,  5009  Fed.  Cas.,  s.  c. 
4  N.  B.  R.  2,73  '•  In  re  Filer,  108  Fed. 
Rep.  209,  5  Am.  B.  R.  332;  Citi- 
zens Nat.  Bank  v.  De  Pauw  Co.  (C. 
C.  A.  7th  Cir.),  105  Fed.  Rep.  926; 
/;/  re  Shapiro,  io6  Fed.  Rep.  495, 
3   X.   B.  N.  385. 


192  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

necessary  to  physically  remove  or  conceal  the  property,  but 
tliat  the  concealment  of  the  actual  title  to  the  property  by 
fictitious  legal  proceedings  or  otherwise  is  considered  a  con- 
cealment or  removal  of  property  within  this  provision."  It  is 
not  concealing  property  within  the  meaning  of  this  provision 
not  to  disclose  property  which  is  not  properly  assets  of  the 
bankrupt.^^  It  is  not  a  removal  where  a  receiver  takes  posses- 
sion of  a  debtor's  property.^" 

Actual  solvency  at  the  time  of  filing  the  petition  is  a  com- 
plete defense  to  proceedings  instituted  under  this  clause  and 
the  burden  of  proving  solvency  is  on  the  alleged  bankrupt." 
Insolvency  at  the  time  of  the  conveyance,  transfer,  etc.,  is  not 
essential  to  constitute  an  act  of  bankruptcy  under  this  clause. 

§  52.    Second  :  Preference  created  by  the  debtor. 

An  act  of  bankruptcy  by  a  person  may  consist  of  his  havinj 
transferred,  while  insolvent,  any  portion  of  his  property  to 
one  or  more  of  his  creditors,  with  intent  to  prefer  such  credi- 
tors over  his  other  creditors.^  To  constitute  an  act  of  bank- 
ruptcy within  this  provision  three  things  must  occur  r 

First,  The  debtor  must  have  transferred  property  of  his  own 
to  a  creditor.^     By  transfer  is  included  the  sale  and  every 

i*/m  re  Shoesmith  (C.  C.  A.  7th  Schenkein,  113  Fed.  Rep.  421,  7  Am. 

Cir.),  135  Fed.  Rep.  684,  13  Am.  B.  B.  R.  162;  In  re  West  (C.  C.  A.  2d 

R.  645;   In  re  Hussman,   No.  6951  Cir.),  108  Fed.  Rep.  940,  5  Am.  B. 

Fed.  Cas.,  s.  c.  2  N.  B.  R.  437;  In  R.  734- 

re   Williams,   No.    17703   Fed.   Cas.,  1  B.  A.  1898,  Sec.  3,  clause  2. 

s    c.  3  N.  B.  R.  286;  O'Neil  v.  Glo-  "^  In   re   Rome    Planing   Mill   Co., 

ver,  5   Gray   159;   Anonymous,   No.  96  Fed.  Rep.  812,  3  Am.  B.  R.  123, 

466  Fed.  Cas.,  s.  c.  i  Pac.  Law.  Rep.  2  N.  B.  N.  531,  Judge  Coxe  said: 

173.  "In    order    to    succeed    under    this 

"Conceal"    shall    include    secrete,  subdivision     the     petitioners     must 

falsify    and    mutilate;    B.    A.    1898,  prove:      First:      A   transfer   of  the 

Sec.   I,  clause  22.  debtor's  property  to  a  creditor.  Sec- 

13 /w  re  Scott,   II   Fed.  Rep.   133;  ond   The   debtor's   intent   to   prefer 

/w  r^  Shoesmith  (C.  C.  A.  7th  Cir.),  such  creditor.    Third:    The  insolv- 

135    Fed.    Rep.   684,    13   Am.    B.    R.  ency   of  the   debtor  at  the   date   of 

645.  the  transfer." 

16  /,j  yg  Wilmington  Hosiery  Co.,  ^-  In    re    Foster,     126    Fed.     Rep. 

120  Fed.  Rep.  179,  9  Am.  B.  R.  581.  1014,  n  Am.  B.  R.  131. 

"B.  A.   1898,   Sec.  3r.  and  In  re 


ACTS    OF    BANKRUPTCY,  193 

Other  and  different  mode  of  disposing  of  or  parting  with  prop- 
erty, or  the  possession  of  property,  absolutely  or  conditionally, 
as  a  pa3aiient,  pledge,  mortgage,  gift  or  security.* 

Second,  The  debtor  must  have  been  insolvent  at  the  time  of 
the  transfer.  A  person  is  deemed  insolvent  whenever  the  ag- 
gregate of  his  property,  exclusive  of  any  property  which  he 
may  have  conveyed,  transferred,  concealed  or  removed,  or 
permitted  to  be  concealed  or  removed,  wdth  intent  to  defraud, 
hinder  or  delay  his  creditors,  shall  not,  at  a  fair  valuation,  be 
sufficient  in  amount  to  pay  his  debts. ^ 

Third,  The  debtor  must  have  intended  to  prefer  such  cred- 
itors over  his  other  creditors." 

What  constitutes  a  fraudulent  preference  under  the  bank- 
rupt act,  and  when  it  may  be  avoided,  is  defined  by  the  stat- 
ute,^ and  is  the  subject  of  consideration  elsewdiere.®  The 
present  provision  makes  preferences  as  such  acts  of  bank- 
ruptcy. 

It  should  be  observed  that  giving  a  preference  mav  be  an 
act  of  bankruptcy,  although  the  trustee  may  not  be  able  to 
avoid  the  preference.'*  The  debtor  may  intend  to  prefer  the 
creditor,  although  no.  fraudulent  intent  is  known  to  or  par- 
ticipated in  by  the  creditor.  The  statute  expressly  provides 
that  the  trustee  may  avoid  a  preference  only  when  the  person 
to  be  benefited  "shall  have  had  reasonable  cause  to  believe  that 
it  was  intended  thereby  to  give  a  preference."  ^'^  But  the 
intent  of  the  debtor  onlv  is  to  be  considered  in  determinine 
whether  he  has  committed  an  act  of  bankruptcy  within  this 
provision.  His  intent  is  to  be  presumed  from  the  nature  of 
the  transaction  and  his  acts  in  connection  therewith."     If  he 

4  B.  A.  1898,  Sec.  I,  clause  25.  «  Preferences.   Chap.  XVIII. 

•"'  B.    A.    1898,    Sec.    I,    clause    15.  ^  In  re  DrummoncI,  No.  4093  Fed. 

.See  Sec.  50a,  ante.  Cas.,  s.  c.  i  N.  B.  R.  231. 

''In  re  Ewing  (C.  C.  A.  2d  Cir.),  10  B.  A.  1898,  Sec.  60. 

115  Fed.  Rep.  707,  8  Am.  B.  R.  269;  "  Johnson  v.  Wald  (C.  C.  A.  5th 

In  re  Gilbert,   112  Fed.  Rep.  951,  8  Cir.),  93  Fed.   Rep.  640,  2  Am.   B. 

Am.  B.  R.  loi;  In  re  Bloch   (C.  C.  R.  84;  In  re  McGee,  105  Fed.  Rep. 

A.  2d  Cir.),   109   Fed.   Rep.   790,   6  895,  5  Am.  B.  R.  262;  In  re  Gillicrt. 

.'\m.  B.  R.  300.  112    Fed.    Rep.    951,    8    Am.    R.    R. 

"  B.  A.  1898,  Sec.  60.  loi  ;    In    re    Douglas    Coal    &    C<':e 


194 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY.. 


has  knowledge  of  his  insoKcnc}  such  an  intent  is  conckisively 
presumed.'-' 

Thus  it  has  been  held  sufficient  to  constitute  an  act  of  bank- 
ruptcy for  a. person  to  transfer  all  of  his  property  to  a  part  of 
his  creditors/"'  or  to  his  wife/*  or  to  mortgage  all  of  his  prop- 
erty to  a  creditor/"'  or  to  effect  a  composition  with  all  of  his 
creditors  but  one  and  pay  him  in  full/''  or  to  pay  any  creditor 
in  full  while  insolvent/'  or  to  pay  wages/*^  or  to  pay  a  private 


Co..  131  Fed.  Rep.  769,  12  Am.  B.  R. 

539- 

In   Toof  V.   Martin,   13   Wall.   4^. 

20  L.  Ed.  481,  Mr.  Justice  Field 
said  :  "It  is  a  general  principle  that 
every  one  must  be  presumed  to 
intend  the  necessary  consequences 
of  his  acts.  The  transfer  in  any 
case,  by  a  debtor,  of  a  large  portion 
of  his  property,  while  he  is  insol- 
vent, to  one  creditor,  vv^ithout 
making  provision  for  an  equal 
distribution  of  its  proceeds  to  all 
his  creditors,  necessarily  operates 
as  a  preference  to  him,  and  must 
be  taken  as  conclusive  evidence 
that  a  preference  was  intended,  un- 
less the  debtor  can  show  that  he 
was  at  the  time  ignorant  of  his 
insolvency,  and  that  his  affairs 
were  such  that  he  could  reasonably 
expect  to  pay  all  his  debts.  The 
burden  of  proof  is  upon  him  in 
such  case,  and  not  upon  the  as- 
signee or  contestant  in  bankruptcy." 

See  also  Miller  v.  Keys,  No.  9578 
Fed.  Cas.,  s.  c.  3  N.  B.  R.  224;  In 
re  Oregon  Bulletin  Print,  and  Pub. 
Co.,  No.  10559  Fed.  Cas.,  s.  c.  13 
N.  B.  R.  503. 

^-In  re  Ed.  W.  Wright  Lumber 
Co.,  114  Fed.  Rep.  ion,  8  Am.  B. 
R.  345;  /;;  re  Gilbert,  112  Fed. 
Rep.  951,  8  Am.  B.  R.  loi. 

^3  Johnson  v.  Wald  (C.  C.  A.  5th 
Cir.),  93  Fed.  Rep.  640,  2  Am.  B. 
R.  S4;   Goldman  v.   Smith,  93  Fed. 


Rep.  182,  I  Am.  B.  R.  266;  In  re 
Grant,  106  Fed.  Rep.  496;  In  re 
Drummond,  No.  4094  Fed.  Cas.,  s.  c. 
4  Biss.  149;  In  re  House,  No.  6735 
Fed.  Cas.,  s.  c.  i  N.  Y.  Leg.  Obs. 
3-l8;  In  re  Foster,  No.  4964  Fed. 
Cas.,  s.  c.  18  N.  B.  R.  64. 

^*/n  re  Alexander,  No.  161  Fed. 
Cas.,   s.  c.   I   Low.  470. 

1" /h  re  Edelman  { C.  C.  h.  2d 
Cir.),  130  Fed.  Rep.  700,  12  Am.  B. 
R.  238;  In  re  Riggs  Restaurant  Co., 
130  Fed.  Rep.  691,  11  Am.  B.  R. 
508 ;  In  re  Ed.  W.  Wright  Lum- 
ber Co.,  114  Fed.  Rep.  ion,  8 
Am.  B.  R.  345;  Baldwin  v.  Rosseau, 
No.  803  Fed  Cas.,  s.  c.  i  N.  Y.  Leg. 
Obs.  391 ;  In  re  Waite,  No.  17044 
Fed.  Cas.,  s.  c.  i  Low.  207 ;  In  re 
Dunham,  No.  4143  Fed.  Cas.,  s.  c. 
2  Ben.  488;  In  re  Rogers,  No.  12002 
Fed.  Cas.,  s.  c.  2  N.  B.  R.  397. 

1"^  Curran  v.  ]\Iunger,  No.  34S7 
Fed.  Cas.,  s.  c.  6  N.  B.  R.  22,- 

1'  Rex  Buggy  Co.  v.  Hearick  (C. 
C.  A.  8th  Cir.),  132  Fed.  Rep.  310, 
12  Am.  B.  R.  726;  In  re  Oregon 
Bulletin  Printing  and  Publishing 
Co.,  No.  10559  Fed.  Cas.,  s.  c.  13 
N.  B.  R.  503 ;  Silverman's  Case,  No. 
12855  Fed.  Cas.,  s.  c.  i  Saw.  410; 
In  re  Dibblee,  No.  3884  Fed.  Cas., 
s.  c.  3  Ben.  283;  s.  c.  Subnom.  Clark 
V.  Iselin,  21  Wall.  360. 

isKenj'on  v.  Fenton,  6  N.  B.  R. 
238.  Note  to  case  No.  17780  Fed. 
Cas. 


ACTS    OF    BANKRUPTCY. 


195 


debt  out  of  partnership  property/^  or  to  transfer  a  note  to  a 
creditor  as  security  for  a  pre-existing  debt,""  or  to  transfer 
property  for  present  and  future  advances,'^  or  to  pay  an  over- 
draft on  a  bank,"  or  to  sell  one's  property  to  a  person  not  a 
creditor  and  apply  the  proceeds  in  full  payment  of  some  cred- 
itors leaving  others  unpaid,-^  or  to  assign  earnings  to  become 
due  under  a  building  contract."* 

On  the  other  hand,  it  has  been  held  not  to  constitute  an  act 
of  bankruptcy  where  a  payment  is  made  under  the  belief  that 
the  debtor  is  solvent,-^  or  where,  at  the  time  of  payment,  he 
had  no  other  creditors,"*^  or  to  make  a  change  of  securities,"^  or 
the  payment  of  unearned  premiums  on  policies  of  insurance,^^ 
or  an  executory  agreement  by  a  railway  company  to  transfer 
certificates  of  stock  to  a  creditor, -°  or  to  pay  a  percentage  on 
claims  of  a  part  of  his  creditors  when  the  others  will  receive 
the  same  percentage,""  or  the  return  of  a  piano  ordered  for  a 
customer  who  refused  to  receive  it,^^  or  the  payment  of  rent 
to  preserve  a  valuable  lease.^- 


^"/n  re  Grant,  io6  Fed.  Rep.  496; 
In  re  Mattot,  No.  9282  Fed.  Cas., 
.<=.  c.  16  N.  B.  R.  485. 

-"  Ex  parte  Shouse,  No.  12815 
Fed.  Cas.,  s.  c.  Crabbe,  482. 

-^  Ex  parte  Potts,  No.  11344  Fed. 
Cas.,  s.  c.  Crabbe  469. 

22  Payne  v.  Soloman,  No.  10856 
Fed.  Cas.,  s.  c.  14  N.  B.  R.  162. 

-3  Boj-d  V.  Lemon  &  Gale  Co.  (C. 
C.  A.  5th  Cir.),  114  Fed.  Rep.  647, 
8  Am.  B.  R.  81.  See  also  Githens 
V.  Shiffler,  112  Fed.  Rep.  505,  7  Am. 
B.  R.  453. 

-*  In  re  O'Donnell,  131  Fed.  Rep. 
150,  12  Am.  B.  R.  621. 

23 /n  re  Bloch  (C.  C.  A.  2d  Cir.), 
109  Fed.  Rep.  790,  6  Am.  B.  R. 
300;  Morgan  v.  Mastick,  No.  9803 
Fed.  Cas.,  s.  c.  2  N.  B.  R.  521 ;  In 
re  Munn,  No.  9925  Fed.  Cas.,  s.  c. 
3  Biss.  442. 

2«  Brake  v.  Callison  (C.  C.  A.  5th 
Cir.),  129  Fed.  Rep.  196,  11  Am.  6. 

R.  797. 


2"  Clark  V.  Iselin,  21  Wall.  360, 
22  L.  Ed.  568;  In  re  Cutting,  145 
Fed.  Rep.  388;  In  re  Weaver,  No. 
17307  Fed.  Cas.,  s.  c.  9  N.  B.  R. 
132;  In  re  Union  Pac.  R.  Co.,  No. 
14376  Fed.  Cas.,  s.  c.  10  N.  B.  R.  178. 
But  see  Anniston  Iron  &  Supply  Co. 
V.  Rolling  ^Nlill  Co.,  125  Fed.  Rep. 
974,  II  Am.  B.  R.  200,  where  it  was 
held  that  the  transaction  amounted 
to  more  than  a  mere  change  of  se- 
curities. 

2s  Knickerbocker  v.  Comstock, 
No.  7879  Fed.  Cas.,  s.  c.  9  N.  B.  R. 
484. 

20  Winter  v.  Railway  Co.,  No. 
17890  Fed.  Cas.,  s.  c.  2  Dill.  487. 

30  In  re  Hapgood,  No.  6044  Fed. 
Cas.,  s.  c.  2  Low.  200;  Jones  v. 
Sleeper,  No.  7496  Fed.  Cas.,  s.  c.  2 
N.  Y.  Leg.  Obs.  131. 

^'^  Doan  V.  Compton,  No.  3940 
Cas.,  s.  c.  2  N.  B.  R.  607. 

'■'■-  In  re  Pearson,  95  Fed.  Rep. 
425,  2  Am.  B.  R.  282;  In  re  Mer- 


196 


LAW   AND   PROCEEDINGS   IN    BANKRUPTCY. 


§  53.     Third  :  Preferences  created  by  legal  proceedings. 

An  act  of  bankruptcy  by  a  person  may  consist  of  his  having 
suliered  or  permitted,  wliile  insolvent,  any  creditor  to  obtain 
a  preference  through  legal  proceedings,  and  not  having  at 
least  five  days  before  a  sale  or  final  disposition  of  any  property 
afifected  by  such  preference  vacated  or  discharged  such  pret- 
erence.^ 

Two  elements  are  necessary  to  constitute  an  act  of  bank- 
ruptcy under  this  provision."  Firsts  the  debtor  must  have  been 
insolvent  at  the  time  the  preference  was  created,  and,  second, 
he  must  have  suffered  or  permitted  it  without  having  vacated 
or  discharged  it  within  five  days  before  the  sale  or  disposition 
of  the  property. 

No  intent  on  the  part  of  the  debtor  to  create  a  preference -is 
required,"  as  there  was  under  the  act  of  1867,^  which  provided 
that  a  person  commits  an  act  of  bankruptcy  who  "procures  or 
suffers  his  property  to  be  taken  on  legal  process,  with  intent 
to  give  a  preference  to  one  or  more  of  his  creditors." 

An  act  of  bankruptcy  under  this  clause  ordinarily  cannot 
be  completed  until  within  five  days  before  the  sale  or  final  dis- 
position of  the  property  taken  on  legal  process,  for  the  debtor 
may  at  any  time  prior  to  that  date  vacate  or  discharge  the 
preference.  Noii  constat  he  will  do  so.  In  such  case  no  act  of 
bankruptcy   is   committed.      But   when   the   insolvent   puts   it 


chants  Insurance  Co.,  No.  9441  Fed. 
Cas.,  s.  c.  3  Biss.  162;  Contra,  Smith 
V.  Teutonia  Ins.  Co.,  No.  131 15  Fed. 
Cas.,  s.  c.  6  Am.  Law  Rev.  584. 

In  re  Lange,  97  Fed.  Rep.  197,  2 
N.  B.  N.  85,  3  Am.  B.  R.  232,  Judge 
Brown  said  :  "Payment  of  rent  by 
an  insolvent  is  not  necessarily  a 
preference.  But  when  it  is  done  as 
a  means  and  for  the  purpose  of 
carrying  on  a  business  in  fraud  of 
creditors  it  should  be  so  regarded," 
and  held  it  an  act  of  bankruptcy  in 
that  case. 

1  B.  A.  1898,  Sec.  3,  clause  3.    In 


re  Reichman,  191  Fed.  Rep.  624, 
I  Am.  B.  R.  17;  In  re  Elmira 
Steel  Co.,  109  Fed.  Rep.  456,  5  Am. 

B.  R.  484. 

-  In  re  Rome  Planing  Mill,  96 
Fed.  Rep.  812,  3  Am.  B.  R.  123,  2 
N.  B.  N.  531;  Bogen  v.  Protter  (C. 

C.  A.  6th  Cir.),  129  Fed.  Rep.  533, 
12  Am.  B.  R.  288. 

^  R.  S.  Sec.  5021,  par.  7th,  em- 
bracing a  part  of  Sec.  39  of  the  act 
of  March  2,  1867,  14  Stat,  at  L. 
536,  as  amended  June  22,  1874,  18 
Stat,  at  L.  180. 


ACTS    OF     BANKRUPTCY.  '  197 

out  of  his  power  to  vacate  the  preference  he  then  commits  an 
act  of  bankruptcy.'* 

Insolvency  of  the  Debtor. — The  debtor  must  have  been 
insolvent  at  the  time  the  preference  was  created  by  the  legal 
proceedings.  A  person  is  deemed  insolvent  whenever  the  ag- 
gregate of  his  property,  exclusive  of  any  property  which  he 
may  have  conveyed,  transferred,  concealed  or  removed,  or 
permitted  to  be  concealed  or  removed,  with  intent  to  defraud, 
hinder  or  delay  his  creditors,  shall  not,  at  a  fair  valuation,  be 
sufficient  in  amount  to  pay  his  debts.''^ 

It  is  not  an  act  of  bankruptcy  for  a  solvent  debtor  to  suffer 
or  permit  an  execution,  levy  and  sale  of  his  property  under 
legal  proceedings.  Where  a  judgment  is  obtained  against  a 
person  while  he  is  solvent  it  has  been  held  that  an  execution 
may  be  subsequently  issued  when  the  person  is  insolvent."  The 
preference  is  obtained  when  the  lien  of  judgment  attaches, 
not  when  execution  is  issued."  Where  a  levy  on  property  of 
the  debtor  depreciates  its  value  so  that  his  assets  are  then 
less  than  his  liabilities  he  is  not  insolvent  within  the  meanitig 
of  the  statute.* 

"Suffered  or  Permitted,"  etc. — By  the  phrase  "suffered 
or  permitted"  Congress  manifestly  intended  that  a  preference 
might  be  created  by  legal  proceedings  sufficient  to  constitute 
an  act  of  bankruptcy,  although  the  debtor  did  nothing  tending 
to  aid  in  procuring  the  preference  or  to  show  an  affirmative 
desire,  and  although  lie  resisted  the  obtaining  of  the  prefer- 
ence. This  construction  has  been  placed  upon  this  phrase  by 
the  supreme  court." 

*  Scheuer  v.   Smith  &  Montgom-  '^  Chica.sfo.    etc.,    Co.    v.    Roebling, 

cry,  etc.,  Co.  (C.  C.  A.  2d  Cir.),  112  107  Fed.  Rep.  71,  5  Am.  B.  R.  368. 

Fed.  Rep.  407,  7  Am.  B.  R.  384.  » Wilson    v.    Nelson,    183    U.    S. 

•'"' B.    A.    1898,    Sec.    I.    clause    15.  19T,  46  L.  Ed.   147.     See  also  Brad- 

As  to   solvency,   see   Sec.  50a,  ante.  ley     Timber     Co.     v.     White      (C. 

"Field   v.   Baker,    No.   4762   Fed.  C.  A.  5th  Cir.),  121  Fed.  Rep.  779, 

Cas.,  s.  c.  12  Blatch.  438.  to    Am.    B.    R.    329,    affirming    119 

"Owen  V.   Brown    (C.   C.  A.  8th  Fed.    Rep.   989,   9   Am.    B.    R.   441; 

Cir.),   120  Fed.  Rep.  812,  9  .Xm.  B.  Parmenter     Mfg.     Co.     v.     Stoever 

R.   717-  (C.   C.  A.    Tst   Cir.),  97  Fed.   Rep. 

330,  3  Am.  B.  R.  220;  In  re  Reich- 


198 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


If  a  preference  is  created  by  the  legal  proceedings  within 
the  meaning  of  section  60  of  the  act,  such  preference  may  be 
set  aside.  If  no  preference  within  the  meaning  of  this  section 
is  created,  the  proceedings  will  be  valid  and  the  creditor  pro- 
tected. But  whether  it  is  a  valid  preference  under  that  section 
has  nothing  to  do  with  determining  whether  an  act  of  bank- 
ruptcy has  been  committed  or  not. 

Legal  Proceedings. — The  phrase  legal  proceedings,  as 
used  in  the  bankrupt  law,  undoubtedly  refers  to  any  proceed- 
ings had  in  a  court  of  justice,  either  state  or  federal.  It  is 
equivalent  to  the  words  "legal  process"  used  in  the  act  of 
1867  ^"  as  construed  by  the  courts."  It  is  not  confined  to  any 
particular  form  of  writ,  execution  or  attachment.  It  is  rather 
a  writ,  mandate  or  order  of  the  court  taking  hold  of  the  prop- 
erty and  withdrawing  it  from  the  possession  and  control  of 
the  debtor  and  from  the  ordinary  reach  of  creditors  for  the 
payment  of  what  is  due  to  them.  Each  and  any  such  proceed- 
ing is  within  the  intent  and  true  meaning  of  the  term  "legal 
proceedings"  as  used  in  this  provision.^"  Thus  it  may  be  by 
an  attachment  proceeding, ^^  or  by  an  execution  upon  judg- 
ment," or  by  levying  execution  on  judgment  upon  a  note  con- 
taining a  warrant  of  attorney  to  confess  judgment.^^     It  does 


man,  gi  Fed.  Rep.  624,  i  Am.  B.  R. 
17;  In  re  Moyer,  93  Fed.  Rep.  188, 
I  Am.  B.  R.  577 ;  In  re  Thomas,  103 
Fed.  Rep.  272,  4  Am.  B.  R.  571; 
Bogen  &  Trammel  v.  Protter  (C.  C. 
A.  6th  Cir.),  129  Fed.  Rep.  533,  12 
Am.  B.  R.  288;  In  re  Rung  Fur- 
niture Co.  (C.  C.  A.  2d  Cir.),  139 
Fed.  Rep.  526,  14  Am.  B.  R.  12. 

10  R.  S.  Sec.  5021. 

11  In  re  Merchants'  Insurance 
Co.,  No.  9441  Fed.  Cas.,  s.  c.  3  Biss. 
162;  In  re  New  Amsterdam  Fire 
Ins.  Co.,  No.  10140  Fed.  Cas.,  s.  c. 
6  Ben.  368;  In  re  Bininger,  No. 
1420  Fed.  Cas.,  s.  c.  7  Blatch.  270; 
In  re  Washington  Marine  Ins.  Co., 
No.  17246  Fed.  Cas.,  s.  c.  2  Ben.  292. 


12 /n  re  Rome  Planing  Mill,  96 
Fed.  Rep.  812,  3  Am.  B.  R.  123,  2 
N.  B.  N.  531. 

13  Parmenter  Mfg.  Co.  v.  Stoever 
(C.  C.  A.  1st  Cir.),  97  Fed.  Rep. 
330,  3  Am.  B.  R.  220,  2  N.  B.  N. 
134;  In  re  Reichman,  91  P"ed.  Rep.. 
624,  I  Am.  B.  R.  17;  In  re  Harper, 
105    Fed.    Rep.   900,    5   Am.    B.    R. 

567. 

1*  In  re  Ferguson,  95  Fed.  Rep. 
429,  2  Am.  B.  R.  586;  In  ne  Storm, 
103  Fed.  Rep.  618,  4  Am.  B.  R.  6or. 

1^'  In  re  Moyer,  93  Fed.  Rep.  188, 
T  Am.  B.  R.  577.  But  see  In  re 
Nelson,  i  Am.  B.  R.  63,  98  Fed. 
Rep.  76;  Wilson  v.  Nelson,  183  U. 
S.    191  ,   46  L.  Ed.   147. 


ACTS    OF    BANKRUPTCY. 


199 


not,  however,  include  a  levy  upon  a  judgment  of  foreclosure 
of  a  lien  which  affects  only  the  property  bound  by  the  lien,^*^ 
or  a  landlord's  levy  under  a  distress  warrant/^  or  proceedings 
under  a  state  statute  for  the  dissolution  of  a  corporation  or 
partnership  and  the  appointment  of  a  receiver  to  wind  up  its 
affairs  and  distribute  its  assets/^  It  will  be  observed  in  these 
last  two  proceedings  no  preference  is  given  to  any  one  cred- 
itor over  the  others.  If  such  proceedings  should  create  a  pref- 
erence an  act  of  bankruptcy  is  committed.^'* 

The  preference  must  have  been  acquired  within  four 
months.-"  The  four  months'  period  begins  to  run  from  five 
days  before  the  date  of  sale  if  at  the  time  the  bankrupt  had 
failed  to  dissolve  the  levy.-^ 


§  54.     Fourth  :  Assignments  for  the  benefit  of  creditors  and 
receiverships. 

An  act  of  bankruptcy  by  a  person  may  consist  of  his  having 
made  a  general  assignment  for  the  benefit  of  creditors/  or 


16  In  re  Chapman,  99  Fed.  Rep. 
395.  3  Am.  B.  R.  607;  Owen  v. 
Brown  (C.  C.  A.  8th  Cir.).  120  Fed. 
Rep.  812,  9  Am.  B.  R.  717;  In  re 
Mero,  128  Fed.  Rep.  630,  12  Am. 
B.   R.   171. 

1^  In  re  Belknap,  129  Fed.  Rep. 
646,  12  Am.  B.  R.  2>^6. 

'^^  In  re  Empire  Metallic  Bedstead 
Co.  (C.  C.  A.  2d  Cir.),  98  Fed.  Rep. 
981,  3  Am.  B.  R.  575,  2  N.  B.  N. 
304;  In  re  Harper  Bros.,  100  Fed. 
Rep.  266,  2  N.  B.  N.  60s,  3  Am. 
B.  R.  804;  Vacarro  v.  Security 
Bank  (C.  C.  A.  6th  Cir.),  103  Fed. 
Rep.  436,  2  N.  B.  N.  1037,  4  Am. 
B.  R.  474.  Receivership  proceed- 
ings are  now  made  an  act  of  bank- 
ruptcy under  Sec.  2>i^,  cl.  4.  z^ 
Stat,  at  L.  797. 

i''/»  re  Kersten,  no  Fed.  Rep. 
929,  6  Am.  B.  R.  516. 

20  In  re  Ferguson,  95  Fed.  Rep. 
429,   2   Am.    R.    R.   586;    Parmcntcr 


Mfg.  Co.  V.  Stoever  (C.  C.  A.  ist 
Cir.),  97  Fed.  Rep.  330;  3  Am.  B. 
R.  220;  Owen  V.  Brown  (C.  C.  A. 
8th  Cir.),  120  Fed.  Rep.  812,  9  Am. 
B.  R.  717;  Bradley  Timber  Co.  v. 
White  (C.  C.  A.  5th  Cir.),  121  Fed. 
Rep.  779 ,  10  Am.  B.  R.  329 ;  Wilson 
V.  Nelson,  183  U.  S.  191 ,  46  L. 
Ed.   147. 

-1  Parmcnter  Mfg.  Co.  v.  Stoever 
(C.  C.  A.  1st  Cir.),  97  Fed.  Rep. 
330,  3  Am.  B.  R.  220;  In  re  Na- 
tional Hotel  and  Cafe  Co.,  138  Fed. 
Rep.  947,  15  Am.  B.  R.  69;  In  re 
Rome  Planing  Mills,  96  Fed.  Rep. 
812,  3  Am.  B.  R.  123. 

IB.  A.  1898,  Sec.  3,  cl.  4,  as 
amended  Feb.  5,  1903 ;  32  Stat,  a* 
L.  797;  West  Co.  V.  Lea,  174  U.  S. 
590,  43  L.  Ed.  1098.  2  Am>  B.  R. 
463 ;  In  re  Gutwillig,  90  Fed.  Rep. 
475,  s.  c.  92  Fed.  Rep.  2:^7,  i  Am. 
B.  R.  388. 


200 


LAW   AND   PROCEEDINGS   IN   BANKRUPTCY. 


being  insolvent,  applied  for  a  receiver  or  trustee  for  his  prop- 
erty, or  because  of  insolvency  the  receiver  or  trustee  has  been 
placed  in  charge  of  his  property  under  the  laws  of  a  state,  of  a 
territory,  or  of  the  United  States." 

Whether  an  assignment  for  the  equal  benefit  of  all 
creditors  constituted  in  itself  an  act  of  bankruptcy  under  the 
act  of  1867  was  the  cause  of  much  discussion.  There  is  great 
conflict  in  the  reported  opinions  of  the  district  and  circuit 
courts  on  this  subject.  Some  of  them  held  that  it  was  a 
transfer  with  intent  to  hinder,  delay  or  defraud  creditors. 
Others  held  otherwise.  Undoubtedly  such  an  assignment 
was  made  an  act  of  bankruptcy  in  the  present  statute  for  the 
purpose  of  definitely  settling  the  question. 

Such  assignments  are  not  in  themselves  objectionable,  and 
can  be  set  aside  only  when  they  fall  within  the  provisions  of 
the  act.^  Whether  fraudulent  under  the  act  or  not,  it  is  in 
itself  an  act  of  bankruptcy  which  will  support  an  adjudica- 
tion, and  this  is  true  whether  the  assignor  is  solvent  or  insol- 
vent.* An  assignment  which  is  void  under  the  state  law  so 
that  it  cannot  be  enforced  is  an  act  of  bankruptcy.^  So  also 
a  deed  of  assignment  which  is  defectively  executed  may  con- 
stitute an  act  of  bankruptcy.*'  It  has  been  held  that  a  deed 
of  assignment  which  is  not  stamped  in  accordance  with  the 
revenue  law  cannot  be  offered  in  evidence.^  It  has  been  held 
that  a  confession  of  judgment  by  a  debtor  to  a  trustee  for 
all   his  creditors   amounts  to  a  general  assignment   for  the 


2B.  A.  1898,  Sec.  3a,  d.  4.  as 
amended  Feb.  5,  1903 ;  32  Stat,  at  L. 

797- 

3  See  Fraudulent  Conveyances, 
Chap.  XVII ;  Mayer  v.  Hellman,  91 
U.  S.  496 ,  23  L.  Ed.  zn ;  Randolph 
V.  Scrugg,  190  U.  S.  533,  47  L.  Ed. 
1 165,    ID  Am.  B.   R.   I. 

*  West  Co.  V.  Lea,  174  U.  S.  S90, 
43  L.  Ed.  1098,  2  Am.  B.  R.  463; 
Day  V.  Beck  &  Gregg  Hardw.  Co. 
rC.  C.  A.  5th  Cir.),  114  Fed.  Rep. 
834,  8  Am.  B.  R.  175;  Green  River 


Bank  v.  Craig,  no  Fed.  Rep.  137, 
6  Am.  B.  R.  381.  See  also  Ran- 
dolph V.  Scruggs,  190.  U.  S.  533, 
47  L.  Ed.   1 165,  10  Am.  B.  R.  i. 

^  In  re  Mendelsohn,  No.  9420  Fed. 
Cas.,  s.  c.  3  Saw.  342. 

<*  In  re  Lawrence,  No.  8133  Fed. 
Cas.,  s.  c.  10  Ben.  4.  But  see  But- 
ton V.  Morrison,  17  Ves.  193. 

■^  In  re  Dunham,  No.  4143  Fed. 
Cas.,  s.  c.  2  Ben.  488.  But  see 
Ponsford  v.  Walton,  3  L.  J.  C.  P, 
Cas.,  167. 


ACTS    OF     r.AXKRUPTCY, 


201 


benefit  of  creditors,  under  the  law  of  Pennsylvania,  and  con- 
stitutes an  act  of  l^ankruptcy.**  Where  the  property  of  a  pri- 
vate banking  partnership  is  in  charge  of  a  special  agent  in  a 
state  proceeding  to  wind  up  its  affairs,  and  the  insolvent  part- 
ners transfer  their  individual  property  in  trust  for  the  pay- 
ment of  firm  debts,  the  legal  effect  is  a  general  assignment 
for  the  benefit  of  creditors  and  constitutes  an  act  of  bank- 
ruptcy.'* 

A  direct  transfer  to  creditors  without  the  intervention  of  a 
trustee  has  been  held  not  to  be  an  assignment  for  the  benefit 
of  creditors/" 

Appointment  of  a  Receiver  as  an  Act  of  Bank- 
ruptcy.— The  fact  that  a  receiver  had  been  put  in  charge 
of  a  debtor's  property  does  not  constitute  an  assignment  for 
the  benefit  of  creditors  and  was  not  an  act  of  bankruptcy 
under  the  original  act.^^  The  amendment  of  1903  added  to 
the  fourth  act  of  bankruptcy,  relating  to  assignments  for  the 
benefit  of  creditors,  two  new  grounds  or  acts  of  bankruptcy : 
first,  where  an  insolvent  applied  for  a  receiver  or  trustee  for 
his  property;  or.  second,  because  of  insolvency  a  receiver  or 
trustee  has  been  placed  in  charge  of  his  property,^" 

The  fact  that  a  receiver  or  trustee  has  been  appointed  and 
put  in  charge  of  the  property  is  not  in  itself  an  act  of  bank- 
ruptcy. Insolvency  -of  the  debtor  at  the  time  is  essential. 
The  receiver  or  trustee  must  have  been  appointed  at  the  re- 
quest of  an  insolvent,^'  or  have  been  appointed  because  of  the 
insolvency  of  the  person,  corporation  or  partnership  of  whose 
property  the  receiver  or  trustee  is  put  in  charge.^*     It  is  not 


■^  In  re  Green,  io6  Fed.  Rep.  313, 
5  Am.  B.  R.  848. 

^  In  re  Salmon  &  Salmon,  143 
Fed.  Rep.  395,  16  Am.  B.  R.  T22. 

1*'  Anniston  Iron  &  Supply  Co.  v. 
Rolling  Mill  Co.,  125  Fed.  Rep.  974, 
II   Am.   B.   R.   200. 

"/m  re  Burrell  (C.  C.  A.  2d 
Cir.),  123  Fed.  Rep.  414,  9  Am.  B. 
R.  625 ;  Vaccaro  v.  Security  Bank 
(C.  C.  A.  6lh  Cir.),  103  Fed.  Rep. 


436,  4  Am.  B.  R.  474;  In  re  Em- 
pire, etc.,  Co.  (C.  C.  A.  2d  Cir.), 
98  Fed.  Rep.  981,  3  Am.  B.  R. 
575;  In  re  Harper  Bros.,  100  Fed. 
Rep.  266.  3  Am.   B.   R.  804. 

12  B.  A.  1898,  Sec.  3,  clause  4,  as 
amended  Feb.  5,  1903,  32  Stat,  at 
L.  797- 

13  Moss  Nat.  Bank  v.  Arend  (C. 
C.  A.  6th  Cir.).  146  Fed.  Rep.  351. 

!*/«    re    Spalding    (C.    C.    A.    2d 


202  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 

sufficient  that  a  receiver  was  appointed  on  account  of  breaches 
of  covenants  ''■  or  because  the  debtor  was  threatening  to  dis- 
pose of  his  property  with  intent  to  defraud  the  plaintiff  in 
the  action  and  other  creditors/"  It  has  been  held  that  to 
continue  a  receiver  in  charge  after  the  amendment  was  not 
an  act  of  bankruptcy,  where  he  was  appointed  before  the 
amendment/'  It  is  immaterial  whether  the  receiver  is  a  tem- 
porary or  permanent  receiver/^'  It  is  not  necessary  that  the 
trustee  should  be  appointed  by  a  court." 

If  the  order  appointing  the  receiver  or  trustee  recites  the 
grounds  for  putting  a  receiver  or  trustee  in  charge  of  the 
property  the  recital  cannot  be  contradicted  without  impeach- 
ine  the  record,  and  this  is  not  admissible. '*"  If  the  court  ap- 
pointed  the  receiver  without  reciting  the  grounds  of  its  judg- 
ment, the  record  may  be  referred  to  or  grounds  shown  by 
evidence  aliunde. ~^ 

§  55.     Fifth  :  Voluntary  petition. 

An  act  of  bankruptcy  by  a  person  may  consist  of  his  having 
admitted  in  writing  his  inability  to  pay  his  debts  and  his  will- 
ingness to  be  adjudged  a  bankrupt  on  that  ground.^ 

Cir.),  139  Fed.  Rep.  244,  14  Am.  B.  is  Blue  Mt.   Iron  &   Steel  Co.  v. 

R.   129;  Blue  Mt.  ron  &  Steel  Co.  Portner,  131   Fed.  Rep.  57,   12  Am. 

V.    Portner,    131    Fed.    Rep.    57,    12  B.  R.  559. 

Am.  B.  R.  559;  In  re  Douglass  Coal  But   see   Zugalla  v.   International 

&  Coke  Co.,  131   Fed.  Rep.  769,  12  Mercantile   Agency,    142  Fed.    Rep. 

Am.  B.  R.  539;  Hooks  v.  Aldridge  927,   16  Am.   B.   R.  67. 

(C.  C.  A.  5th  Cir.),  145  Fed.  Rep.  ^^  In  re  Hercules  Atkin  Co.,   133 

865;  Zugalla  V.  International  Mer-  Fed.  Rep.  813,   13  Am.  B.  R.  369; 

cantile  Agency,   142  Fed.  Rep.  927,  In  re   Bennett   Shoe   Co.,    140   Fed. 

16    Am.    B.    R.    67;    In    re    Inter-  Rep.  687,  15  Am.  B.  R.  497. 

national  Coal  Mining  Co.,  143  Fed.  -^  In   re   Spalding    (C.    C.   A.   2d 

Rep.  665,   16  Am.  B.  R.  309.  Cir.),  139  Fed.  Rep.  244,  14  Am.  B. 

is/n   re   Douglass    Coal   &    Coke  R.   129;  /;;  re  Watts,   190  U.  S.   i, 

Co.,  131  Fed.  Rep.  769,  12  Am.  B.  35,  47  L.  Ed.  933,  10  Am.  B.  R.  113. 

R    53g.  21  Blue   Mt.    Iron  &   Coal   Co.   v. 

i'>/7t   re   Spalding    (C.   C.   A.   2d  Portner,  131   Fed.  Rep.  57,  12  Am. 

Cir.),  139  Fed.  Rep.  244,  14  Am.  B.  B.  R.  557;   Hooks  v.  Aldridge    (C. 

R.   126.  C.  A.  5th  Cir.),  145  Fed.  Rep.  865. 

1^  Seaboard  Steel  Casting  Co.  v.  ^  B.  A.  1898,  Sec.  3,  clause  5 ;  In 

Trigg,   124   Fed.   Rep.  75,   10  Am.  re   Kersten,    no   Fed.   Rep.   929,   6 

B.  R.  594.             '  Am.  B.  R.  516. 


ACTS    OF     BANKRUPTCY. 


203 


This  is  the  act  of  bankruptcy  upon  whicli  an  adjuchcation 
in  vokmtary  bankruptcy  is  founded.  It  is  not  necessary  that 
the  petition  be  filed  in  court.  All  that  is  required  is  that  it  be 
written  and  signed  by  the  bankrupt.  The  admission  in  a 
letter  by  a  debtor  that  he  cannot  pay  his  debts  and  is  willing 
to  be  declared  a  bankrupt  would  undoubtedly  be  sufficient  to 
•  constitute  an  act  of  bankruptcy  under  this  provision.  Whether 
a  debtor  can  make  a  legal  contract  not  to  make  such  a  declara- 
tion in  writing  may  be  doubted,"  In  cases  of  involuntary 
proceedings  under  this  section  the  actual  solvency  of  the 
defendant  is  no  defense.' 

A  corporation  can  be  adjudged  a  bankrupt  upon  a  petition 
filed  by  its  creditors,  and  founded  upon  an  admission  in  writ- 
ing to  creditors  of  its  insolvency  and  willingness  to  be  ad- 
judge a  bankrupt.*  This  cannot  be  done  w^here  the  admis- 
sion is  made  by  the  directors,  who,  by  the  state  corporation 
laws,  have  no  authority  to  make  such  an  admission. •'"  Such  a 
statement  can  not  be  made  after  the  petition  is  filed."  The 
petition  will  not  be  heard  until  the  other  creditors  have  been 
notified,'^  and  if  there  is  such  collusion  as  to  amount  to  a 
fraud  on  the  act  it  will  be  denied.^ 


§  56.     Computing  time. 

Proceedings  must  be  instituted  within   four  months  after 
an  act  of  bankruptcy  is  committed.^ 


2  See  Hill  v.  Cowery,  25  L.  J. 
Ex.  285. 

^  In  re  C.  ^loench  &  Sons  Co., 
130  Fed.  Rep.  6S5.  10  Am.  B.  R. 
656;  West  Co.  I  Lea,  174  U.  S. 
590,  43  L.  Ed.  1098,  2  Am.  B.  R.  463. 

*  In  re  C.  Moench  &  Sons  Co. 
(C.  C.  A.  2d  Cir.).  130  Fed.  Rep. 
685,  12  Am.  B.  R.  240,  Affirming  123 
Fed.  Rep.  965,  10  Am.  B.  R.  656; 
In  re  Mutual  Mercantile  Agency, 
III  Fed.  Rep.  152,  6  Am.  B.  R. 
607 ;  In  re  Kelly  Dry  Goods  Co., 
102  Fed.  Rep.  747,  4  Am.  B.  R. 
528;  In  re  Marine  Machine  and 
Convey mg  Co.,  91  Fed.  Rep.  630,  I 


Am.  B.  R.  421 ;  In  re  Peter  Paul 
Book  Co.,  104  Fed.  Rep.  786 ,  5 
Am.  B.  R.  105;  In  re  International 
Coal  Mining  Co.,  143  Fed.  Rep. 
665,  16  Am.  B.  R.  309;  In  re 
Duplex  Radiator  Co.,  142  Fed.  Rep. 
906,    15   Am.   B.   R.   324. 

°  In  re  Bates  Machine  Co.,  91 
Fed.  Rep.  625,  i  Am.  B.  R.  129. 

6  In  re  Baker-Ricketson  Co.,  97 
Fed.  Rep.  489,  4  Am.  B.  R.  605. 

"^  In  re  Humbert,  100  Fed.  Rep. 
439,  4  Am.  B.  R.  76. 

^  In  re  Independent  Thread  Co., 
113  Fed.  Rep.  998,  7  Am.  B.  R.  704. 

IB.  A.  1898,  Sec.  3&. 


204  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 

Such  time  does  not  expire  until  four  months  after  the  date 
of  the  recording-  or  registering  of  the  transfer  or  assignment 
when  the  act  consists  in  ha\ing  made  a  transfer  of  any  of  his 
property  with  intent  to  hinder,  delay  or  defraud  his  creditors, 
or  for  the  purpose  of  giving  a  preference,  or  a  general  assign- 
ment for  the  benefit  of  his  creditors,  if  by  law  such  recording 
or  registering  is  required  or  permitted.'  If  the  state  statute 
provides  for  recording  or  registering  the  four  months  period 
will  not  begin  to  run  until  the  paper  is  actually  filed  for  record. 
The  words  "or  permitted"  are  omitted  in  the  section  60b  relat- 
ing to  voidable  preferences."  If  registering  or  recording  is  not 
required  or  permitted,  the  four  months'  period  begins  to  run 
from  the  date  when  the  beneficiary  takes  notorious,  exclusive 
or  continuous  possession  of  the  property,  unless  the  petition- 
ing creditors  have  received  actual  notice  of  such  transfer  or 
assignment.* 

Where  the  act  of  bankruptcy  is  created  by  legal  proceed- 
ings the  four  months'  period  begins  to  run  from  five  days 
before  the  date  of  sale  if  at  that  time  the  bankrupt  had  failed 
to  dissolve  it.^ 

In  computing  the  four  months  the  first  day  is  excluded  and 
the  last  included,  unless  the  last  day  falls  on  a   Sunday  or 
holiday,  in  which  event  the  day  last  included  shall  be  the  next 
day  thereafter  which   is  not  a  Sunday  or  a  legal  holiday. °* 
Holidays  are  defined  by  the  act  to   include   Christmas,   the 

2B.    A.     1898,    Sec.    3b.      In    re  330,  3  Am.   B.  R,  220.  2  N.  B.   N. 

IVIingo    Valley    Creamery    Ass.,    100  174;    Owen    v.    Brown     (C.    C.    A 

Fed.  Rep.  282,  4  Am.  B.  R.  67.  8th  Cir.),  120  Fed.  Rep.  812,  9  Am. 

3  For  a  history  of  the  amendment  B.  R.  717;  In  re  National  Hotel  & 

of    1903    and    its    effect,    see   In    re  Cafe  Co.,  138  Fed.  Rep.  947,  15  Am. 

Hunt,  139  Fed.  Rep.  283,  14  Am.  B.  B.  R.  69;/n  re  Rome  Planing  Mills, 

R.  416,  and  Loeser  v.  Bank  (C.  C.  96  Fed.  Rep.  812,  3  Am.  B.  R.  123. 

A.   6th   Cir.),    148   Fed.    Rep.  .  "  B.  A.  1898,  Sec.  31;  Dutcher  v. 

See    Sec.    194^,   post.  Wright,   94   U.    S.    553,   24   L.    Ed. 

•* /m  re  Bogen,  134  Fed.  Rep.  loio,  130;  In  re  Hill,  140  Fed.  Rep.  984, 

13  Am.  B.  R.  529.     B.  A.  1898,  Sec.  15     Am.     B.     R.     499;     Jones     v, 

3&.  Stephens,    94    Me.    582,    5    Am.    B. 

^  Parmenter  Mfg.  Co.  v.  Stoever  R.  571 ;  In  re  Lang,  No.  8056  Fed. 

(C.   C.  A.    I  St  Cir.),  97   Fed.   Rep.  Cas.,   s.   c.   2    N.    B.    R.   480. 


ACTS    OF    BANKRUPTCY.  205 

fourth  of  July,  the  twenty-second  of  February,  and  any  day 
appointed  by  the  president  of  the  United  States  or  the  Congress 
of  the  United  States  as  a  hoHday  or  as  a  day  of  pubhc  fasting 
or  thanksgiving/ 

■^  B.  A.  1898,  Sec.  1,  clause  14. 


206  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 


CHAPTER    IX. 

PROCEEDINGS    IN    VOLUNTARY    BANKRUPTCY. 

§  57-    Who  may  file  a  voluntary  petition. 

The  statute  declares  that  any  qualified  person  may  file  a 
petition  to  be  adjudged  a  voluntary  bankrupt.^  Any  person 
who  owes  debts,  except  a  corporation,  is  entitled  to  the  bene- 
fits of  the  statute  as  a  voluntary  bankrupt.-  A  person  is 
defined  by  the  act  itself  to  include  partnerships  and  women.^ 
It  would  therefore  appear  that  any  natural  person  or  asso- 
ciation of  persons,  not  incorporated,  irrespective  of  trade, 
business  or  profession,  may  file  a  petition  to  be  adjudged  a 
voluntary  bankrupt.* 

A  person,  however,  who  wishes  to  file  a  petition  must  have 
certain  qualifications  before  he  can  do  so.  He  must  owe  debts, 
but  no  limit  is-  fixed  to  the  amount  of  the  debts.^  It  has  been 
held  that  a  person  owing  one  debt  only  and  having  no  assets 
may  file  a  petition, °  unless  that  debt  be  one  not  provable  or 
not  released  by  a  discharge."  He  must  also  have  had  his 
principal  place  of  business,  resided  or  had  his  domicile  within 
the  United  States  for  the  period  of  six  months,  or  the  greater 
portion  thereof,  or  if  he  has  not  had  his  principal  place  of 

1 B.  A.   1898,  Sec.  59a.     Compare  ^  b     \    1898.   Sec.  4-     Under  the 

R.  S.  Sec.  5014.  act  of  1867,  R.  S.  Sec.  5014,  a  per- 

2  B.  A.  1898,  Sec.  4.  See  Who  son  was  required  to  owe  debts, 
may  be  voluntary  bankrupts,  Sec.  provable  in  bankruptcy,  exceeding 
41,   ante.     As   to    corporations,    see  the  sum  of     $300. 

Sec.  48,  ante.  ^  In    re    Schwaninger,    144    Fed. 

3  B.  A.  1898,  Sec.  I,  clause  19.  Rep.  555,  16  Am.  B.  R.  427. 

■*  As  to  the  right  of  an  alien,  an  '^  In  re  Maples,  105  Fed.  Rep.  919, 

infant,  a  lunatic  and  a  married  wo-  5  Am.  B.  R.  426;  In  re  Colaluca, 
man  to  be  adjudged  bankrupts,  see  133  Fed.  Rep.  255.  13  Am.  B.  R. 
Sees.  44  to  47,  ante.  292;  In  re  YateS;  114  Fed.  Rep.  365. 

8  Am.  B.  R.  69. 


PROCEEDINGS    IN    VOLUNTARY    BANKRUPTCY.  207 

business,  resided  or  had  his  domicile  within  the  United  States, 
he  must  haxe  had  property  within  the  jurisdiction  of  a  court 
of  bankruptcy,  or  liave  l)een  adjudged  a  l^ankrupt  by  a  court 
of  competent  jurisdiction  without  the  United  States  and  have 
property  within  jurisdiction  of  a  court  of  bankruptcy.*  A 
state  court  has  no  power  to  enjoin  a  debtor  from  applying 
to  a  court  of  bankruptcy  to  be  adjudged  a  voluntary  bankrupt, 
and  to  obtain  the  benefit  of  the  statute.^ 

There  was  a  difference  of  opinion  under  the  former  bank- 
rupt acts  with  reference  to  the  right  of  a  person  to  file -a 
voluntary  petition  after  an  involuntary  petition  had  been  filed 
against  him.  It  was  held  that  the  pendency  of  a  creditors' 
petition,  on  which  no  decree  of  bankruptcy  had  been  granted, 
was  not  a  bar  to  the  right  of  voluntary  petition.^"  It  was  also 
held  that  in  such  cases  the  voluntary  petition  was  nugatory 
and  void,  and  would  be  set  aside  on  motion."  Under  the 
present  act  where  a  voluntary  petition  is  filed  after  involun- 
tary proceedings  are  begun  it  should  not  in  all  cases  be  either 
granted  or  stayed  until  the  involuntary  proceedings  are  dis- 
posed of,  but  notice  should  be  given  to  the  creditors  who 
filed  the  involuntary  petition  and  such  action  taken  as  is  for 
the  best  interest  of  the  estate.^-  If  the  voluntary  proceedings 
are  not  stayed  the  rights  of  the  creditors  should  be  protected. ^'^ 
The  court  may  consolidate  the  two  proceedings.^*  The  statute 
does  not  forbid  a  debtor  who  has  made  an  assignment  for  the 
benefit  of  his  creditors  in  the  state  court  to  subsequently  file  a 
petition  to  be  adjudged  a  voluntary  bankrupt. ^^     If  one  peti- 

''B.  A.  1898,  Sef.  2,  clause  i.  See  " /n  re  Stewart,  No.   13419  Fed. 

Sec.  58,  post.  Cas.,  s.  c.  3  N.  B.  R.  108. 

» Fillingin    v.    Thornton,    49    Ga.  ^- In    re    Dwyer,    112    Fed.    Rep. 

384.  777,  7  Am.  B.  R.  532;  In  re  Wax- 

10 /m  re  Flanagan,  No.  4850  Fed.  elbaum,  98  Fed.  Rep.  589.  3  Am.  B. 

Cas.,  s.  c.  5  Saw.  312;  In  re  Can-  R.  392;  In  re  Stegar,  113  Fed.  Rep. 

field.    No.   2380    Fed.    Cas.,    s.    c.    5  9/8,  7  Am.  B.  R.  665. 

Law  Rep.  415.  ^^/n    re    Stegar,    113    Fed.    Rep. 

The  same  rule  was  recognized  in  978,  7  Am.  B.  R.  665. 

In  re  Davidson,  No.  3599  Fed.  Cas.,  i*/«  re  Kniglit,  125  Fed.  Rep.  35 

s.  c.  4  Ben.   10,  although  the  ques-  at  ^y,   ri  Am.  B.   R.   i. 

tion    does   not    seem   to    have    been  ^•''  This  was  done  In   re   Dunbar, 

raised  in  that  case.  in  the  district  court  for  the  south- 


208  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 

tion  has  been  filed  and  proceedings  had  thereon,  the  petitioner 
may  subseuently  file  a  second  petition,^"  irrespective  of  whether 
he  obtained  or  was  refused  a  discharge  in  the  former  pro- 
ceedings. But  it  has  been  held  that  a  person  is  not  entitled  to 
file  a  second  petition  for  the  sole  purpose  of  obtaining  a  dis- 
charge, when  he  has  failed  to  apply  for  one  in  season  or  has 
been  refused  a  discharge  in  a  former  proceeding/^ 

§  58.    In  what  courb  the  petition  is  to  be  filed. 

The  debtor  may  file  his  petition  in  the  court  of  bankruptcy 
for  the  district  in  which  he  has  had  his  principal  place  of 
business,  resided  or  had  his  domicile  for  the  greater  portion 
of  the  preceding  six  months/ 

Where  the  debtor  has  had  his  domicile,  resided  and  had 
his  principal  place  of  business  in  the  same  district  there  is  but 
one  court  in  which  he  can  file  his  application.  Where  he  has 
resided  or  had  his  domicile  in  one  district  and  his  principal 
place  of  business  in  another  he  has  an  election,  and  may  make 
his  application  in  either  district.  If  it  is  conceived  that  a 
debtor  may  have  a  domicile  in  one  district  and  reside  in  an- 
other," he  may  have  an  election  of  three  districts  within 
which  to  institute  voluntary  proceedings,  namely,  the  district 
of  his  residence,  the  district  of  his  domicile  or  the  district 
in  which  he  has  had  his  principal  place  of  business. 

ern  district  of  Ohio,  1899  (not  re-  creditors  consented  to  it.  No  such 
ported).  The  question  of  his  right  provision  is  contained  in  the  pres- 
to do  so  was  not  raised.     Both  the  ent  act. 

court   and   counsel   appear  to   have  i"  Kuntz  v.  Young  (C.  C.  A.  8th 

assumed  that  such  a  right  existed.  Cir.),  131  Fed.  Rep.  719,  12  Am.  B. 

16 /,j  fe  Little  (C.  C.  A.  7th  Cir.),  R.  506;  In  re  Fiegenbaum  (C.  C.  A. 

137   Fed.   Rep.    521,    13   Am.    B.    R.  2d  Cir.),  121  Fed.  Rep.  69,  9  Am.  B. 

640;    In    re   Drisko,    No.   4090   Fed.  R.   595. 

Cas.,    s.    c.   2   Low.  430;    Fisher  v.  ^  B.  A.  1898,  Sec.  2. 

Currier,  7  Met.    (Mass.)   424.  -hi    re    Williams,    99    Fed.    Rep. 

See  also   R.   S.    Sec.   5 116,  vs/hich  544.  3  Am.  B.  R.  677;  the  bankrupt 

provided  that  under  the  act  of  1867  had  resided  abroad  for  many  years, 

a    second    discharge    should   not   be  Judge  Hanfords  said :    "Under  the 

granted  a  bankrupt  unless  his  estate  law,    as    I    find    it   declared  by   the 

should  be   sufficient   to  pay   70   per-  highest    court   of   this    country,   the 

centum,     or     three-fourths     of    his  petitioner  did  not  change  his  domi- 


PROCEEDINGS    IN    VOLUNTARY    BANKRUPTCY. 


209 


Where  a  debtor  has  several  places  of  business  in  different 
districts  he  must  tile  his  petition  in  tlie  district  in  which  he 
has  his  principal  place  of  business.  Tiiis  limits  liis  rigiit  to 
file  a  petition  on  this  ground  of  jurisdiction  to  one  district. 
1'he  phrase  "principal  place  of  business"  implies  that  the 
debtor  is  carrying  on  v^diat  is  commonly  known  as  business, 
as  distinguished  from  other  vocations  or  employment.  He 
must  provide  the  money  that  is  needed  or  have  an  interest  in 
the  business  by  contributing  his  labor,  or,  if  the  capital  is 
borrowed,  the  business  must  be  done  in  the  debtor's  name. 
Thus  it  may  be  doubted  if  a  debtor  is  entitled  to  claim  a  place 
of  business  where  he  merely  superintends  the  business  of  an- 
other or  is  employed  as  a  clerk, '^  or  where  he  is  engaged  in 
winding  up  the  affairs  of  an  insolvent  concern  to  which  he 
belonged,'*  or  where  he  is  engaged  in  any  vocation  not  prop- 
erly included  in  the  word  business.  Where  tlie  bankrupt 
claims  to  have  changed  his  place  of  business  a  short  time 
before  filing  a  voluntary  petition  the  burden  is  on  him  to 
prove  it.° 

The  time  during  which  the  debtor  has  had  his  principal 
place  of  business,  resided  or  had  his  domicile  in  the  district 
must  also  be  considered.     Where  he  has  had  his  principal 


cile  when  he  went  to  British  Co- 
lumbia in  1893,  nor  afterwards  be- 
cause he  did  not  have  the  intention 
to  remain  there,  and  he  did  have  a 
definite  intention  to  return  to  this 
state.  The  order  made  by  the  ref- 
eree that  the  petition  be  dismissed 
will  be  vacated,  and  the  case  will 
proceed  in  the  usual  course." 

Consult  in  re  Watson,  No.  17272 
Fed.  Cas.,  s.  c.  4  N.  B.  R.  613 ;  /;;  re 
Walker,  No.  17061  Fed.  Cas.,  s.  c. 
I  Low.  237 ;  In  re  Kinsman,  No. 
7832  Fed.  Cas.,  s.  c.  i  N.  Y.  Leg. 
Obs.  309;  Stiles  V.  Lay,  9  Ala.  795; 
Penfield  v.  C.  &  O.  R.  Co.,  29  Fed. 
Rep.  494;  Chambers  v.  Prince.  75 
Fed.    Rep.    176;    Krone    v.    Cooper, 


43  Ark.  547;  Tipton  v.  Tipton,  87 
Ky.  243;  Rhodes  v.  Farish,  16  ]\lo. 
App.  434;  Tazewell  County  v.  Da- 
venport, 40  111.  197;  Dorsey  v.  Kyle, 
30  Md.  512;  Wheeler  v.  Cobb,  75 
N.  C.  21. 

As  to  what  is  a  domicile,  see  Sec. 
177,   "Domicile  of  Bankrupt,"  post. 

^  In  re  Brice,  93  Fed.  Rep.  942, 
2  Am.  B.  R.  197;  In  re  Magie,  No. 
8951  Fed.  Cas.,  s.  c.  2  Ben.  369; 
In  re  Kinsman,  No.  7832  Fed.  Cas., 
s.  c.  I  N.  Y.  Leg.  Obs.  309. 

■*  In  re  Little,  No.  8391  Fed.  Cas  , 
s.  c.  3  Ben.  25. 

•'  In  re  Waxelbaum,  2  N.  B.  N. 
103,  3  Am.  B.  R.  267,  97  Fed.  Rep. 
562.     , 


210  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 

place  of  business,  resided  or  had  his  domicile  within  the  dis- 
trict during  the  whole  period  of  the  six  months  immediately 
preceding"  his  application  no  question  can  arise.  Where  he 
has  had  his  principal  place  of  business,  resided  or  had  his 
domicile  (according  to  the  ground  of  jurisdiction  on  which 
he  claims)  in  different  districts  during  such  six  months,  then 
the  petition  must  be  filed  in  the  district  in  which  he  has  had 
his  principal  place  of  business,  resided  or  had  his  domicile  for 
the  greater  portion  of  six  months,  or  for  more  than  three 
months.  If  he  has  not  had  a  principal  place  of  business,  re- 
sided or  had  a  domicile  for  more  than  three  months  in  any  dis- 
trict, he  is  not  ordinarily  entitled  to  file  a  petition  to  be  ad- 
judged a  voluntary  bankrupt. 

In  case  the  debtor  has  not  had  a  principal  place  of  business, 
resided  or  had  a  domicile  within  the  United  States,  but  is 
entitled  to  the  benefits  of  the  statute  under  section  2,  he  must 
file  his  petition  in  the  district  within  which  he  has  property. 
If  he  has  property  in  more  than  one  district,  he  may  elect  in 
which  of  such  districts  to  institute  proceedings  in  voluntary 
bankruptcy. 

The  questions  relating  to  who  may  file  a  voluntary  petition 
and  in  what  court  he  is  entitled  to  make  his  application  to  be 
adjudged  a  voluntary  bankrupt  are  jurisdictional.  If  the 
court  does  not  obtain  jurisdiction  over  the  person  of  the  debtor 
in  the  manner  prescribed  by  the  statute  the  proceednigs  are 
void.  A  creditor  may  have  such  proceedings  discontinued  at 
anv  time  upon  petition  filed  for  that  purpose."  or  may  defeat 
an  application  for  discharge  by  showing  that  court  has  no 
jurisdiction  of  the  case.'  If  the  petition  shows  jurisdiction, 
creditors  will  be  held  to  waive  this  objection  unless  it  is  taken 

^' In  re  Waxelbaum,  98  Fed.  Rep.  Walker,    No.     17061     Fed.    Cas.,     i 

589,  3  Am.   B.  R.  392,  2   N.  B.   N.  Low.  237. 

228 ;   s.  c.  97  Fed.  Rep.  562 ;  In  re  '  In    re    Penn,    No.     10926    Fed. 

Brice,  93  Fed.  Rep.  942,  2  Am.  B.  Cas.,  s.  c.  4  Ben.  99;  In  re  Little, 

R.  197;  In  re  Mason,  99  Fed.  Rep.  No.  8391  Fed.  Cas.,  s.  c.  3  Ben.  25; 

256.  2  N.   B.   N.  425.  3  Am.    B.   R.  Jobbins  v.  Montague,  No.  7330  Fed. 

599;    In    re    Goodfellow,    No.    5536  Cas.,    5.   c.   6   N.    B.   R.   509;    Stiles 

Fed.  Cas.,  s.  c.   i   Low.  510;  In  re  v.  Lay,  9  Ala.  795. 


PROCEEDINGS    IX    VOLUNTARY    BANKRUPTCY.  211 

promptly.^  If  the  jurisdictional  requisites  existed  at  the  time 
the  petition  is  filed  the  petitioner  will  ordinarily  be  permitted 
to  amend  his  petition  to  show  them. 

When  proceedings  have  been  commenced  by  a  debtor  in 
one  district  he  is  not  entitled  to  institute  similar  proceedings 
in  other  districts.  The  jurisdiction  is  exclusive  in  the  court 
where  it  first  attaches.^ 

§  59.    The  petition. 

The  application  for  the  benefit  of  the  bankrupt  statute  is 
made  by  petition.^  A  schedule  of  the  debtor's  property,  list 
of  his  creditors  and  claim  for  exemptions  are  required  to  be 
filed  with  the  petition. - 

The  petition  should  be  entitled  in  the  court  for  the  proper 
district.  It  is  regularly  addressed  to  the  judge  of  the  district 
by  name,  as  "To  the  Hon.  A..  B.,  judge  of  the  district  court 
of  the  United  States  for  the district  of ."' 

The  petition  should  set  forth  the  petitioner's  name  in  full 
and  his  place  of  residence.  It  should  allege  that  he  has  had 
his  principal  place  of  business,  resided  or  had  his  domicile  (as 
may  be)  within  the  district  for  the  preceding  six  months  or 
the  greater  portion  thereof.  This  averment  is  jurisdictional 
and  necessary.  It  should  also  aver  that  he  is  unable  to  pay  all 
of  his  debts;  that  he  is  willing  to  be  adjudged  a  bankrupt,  to 
surrender  all  his  estate  and  effects  for  the  benefit  of  his  cred- 
itors, and  desires  to  obtain  the  benefit  of  the  statute. 

The  petition  should  be  signed  by  the  petitioner,  and  be  veri- 
fied under  oath."*  which  includes  an  affirmation.^  The  oath 
or  affirmation  may  be  administered  by  a  referee,  an  officer 

8/w  re  ]\tason,  99  Fed.  Rep.  256,  ^  b.    A.    189S.    Sec.    i8r.      Official 

2  N.  B.   N.  425,  3  Am.  B.  R.  599.  Form    No.    i,    Form    No.    i,    post. 

Consult    Allen    v.     Thompson,     10  In   re  Nelson,  98  Fed.   Rep.  76,    i 

Fed.  Rep.  116.                  '  Am.  B.  R.  63;  Leidigh  Carriage  Co. 

^Ex  parte    Hall,    No.    5919    Fed.  v.    Stengel     (C.    C.    A.    6th    Cir.), 

Cas.,  s.  c.  5  Law  Rejp.  269.  95    Fed.    Rep.    637,    2    Am.    B.    R. 

IB.   A.    1898,   Sec.    59a.     Official  3^,  i  N.  B.  :^.  387. 

Form  No.  i.  Form  No.  i.  post.  *  B.    A.    1898,    Sec.    r,   clause    17, 

2  B.  A.   1898,  Sec.  7,  clause  8.  and  Sec.  20b. 

See  also  "Schedules,"  Sec.  60  post. 


212 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 


authorized  to  administer  oaths  in  proceedings  before  the  courts 
of  the  United  States  or  under  the  laws  of  the  state  where 
the  same  are  to  be  taken,  or  a  diplomatic  or  consular  officer  of 
the  United  States  in  any  foreign  country.^ 

The  supreme  court  has  provided  a  form  for  petitions  which 
should  be  observed  and  used  with  such  alterations  as  may  be 
necessary  to  suit  the  circumstances  of  any  particular  case.*' 
Printed  blanks  may  usually  be  had  from  dealers  in  law  sta- 
tionery. All  the  petitions  and  schedules  filed  therewith  must 
be  printed  or  written  out  plainly  without  abbreviation  or  inter- 
lineation, except  where  an  abbreviation  or  interlineation  may 
be  for  the  purpose  of  reference.'  Under  the  act  of  1867  it 
was  held  that  dots  could  not  be  used  to  indicate  anything 
which  was  necessary  to  be  stated.® 

The  petition  should  be  endorsed  with  the  style  of  the  court, 
the  name  of  the  petitioner,  and  a  brief  statement  of  the  char- 
acter of  the  petition,  as  ''Debtor's  petition." 


§  60.    Schedules. 

It  is  the  duty  of  the  bankrupt  to  prepare,  make  oath  to  and 
file  in  court  a  schedule  of  his  property,  showing  the  amount 
and  kind  of  property,  the  location  thereof,  its  money  value  in 
detail  and  a  list  of  his  creditors,  showing  their  residences,  if 
.  known,  if  unknown,  that  fact  to  be  stated,  the  amounts  due 
each  of  them,  the  consideration  thereof,  the  security  held  by 


5B.  A.  1898,  Sec.  20.  The  veri- 
fication may  be  taken  before  the  at- 
torney for  the  bankrupt  as  notary 
pubHc.  In  re  Kindt,  98  Fed.  Rep. 
403,  3  Am.  B.  R.  443. 

^'  Gen.  Ord.  38.  See  Official  Form 
No.  I,  Form  No.  i,  post. 

"  Gen.  Ord.  5.  Sutherland  v. 
Lasher  (N.  Y.  Sup.  Ct),  ti  Am. 
B.  R.  780.  See  also  In  re  Malcolm, 
No.  8986  Fed.  Gas.,  s.  c.  4  Law 
Rep.  488;  Anon.  No.  458  Fed.  Gas., 
s.  c.  I  N.  B.  R.  216. 

In   Mahoney   v.   Ward,    100   Fed. 


Rep.  278,  3  Am.  B.  R.  770,  Judge 
Pnrnell  said:  "Several  proceed- 
ings of  late  have  made  necessary 
the  adoption  of  a  rule,  which  will 
be  enforced,  that  petitions  in  bank- 
ruptcy will  not  be  filed  or  consid- 
ered unless  they  are  on  the  pre- 
scribed printed  forms.  Written  or 
typewritten  petitions  and  schedules 
will  be  returned  to  parties  without 
action." 

^  In    re    Orne,    No.    10582    Fed. 
Gas.,  s.  c.  I  Ben.  420. 


PROCEEDINGS    IX    VOLUNTARY    BANKRUPTCY.  213 

them,  if  any,  and  a  claim  for  sucli  exemptions  as  he  may  be 
entitled  to/  The  object  of  such  schedule  is  to  show  the  true 
condition  of  the  bankrupt's  affairs  as  clearly  and  lucidly  as 
possible.  Each  debtor  should  prepare  his  schedule  with  this 
end  in  view.  A  voluntary  bankrupt  must  file  a  schedule  of 
this  -nature  wdth  his  petition,"  and  an  involuntary  bankrupt 
must  file  such  a  schedule  within  ten  days  after  the  adjudica- 
tion, unless  further  time  is  granted  by  the  court. ■  The  sched- 
ule in  either  case  must  be  filed  in  triplicate,  one  copy  for  tlie 
clerk,  one  for  the  referee  and  one  for  the  trustee." 

The  supreme  coiu-t  of  the  United  States  has  provided  forms 
of  schedules  wdiich  should  be  observed  and  used  with  such 
alterations  as  may  be  necessary  to  suit  the  circumstances  of 
each  particular  case.^  The  same  form  of  schedule  is  used  in 
voluntary  and  involuntary  proceedings,  and  in  proceedings  to 
have  a  partnership  declared  bankrupt.* 

The  schedule  required  by  the  statute  to  be  filed  in  court 
and  the  form  provided  by -the  supreme  coiu^t  are  divided  into 
two  general  parts.  The  first  part,  schedule  A,  is  a  list  of 
creditors  of  the  bankrupt,  with  the  amount  due  each  of  them. 
The  second  part,  schedule  B,  is  a  statement  of  all  tlie  property 
of  the  bankrupt.  Each  part  is  divided  into  separate  classes. 
as  set  forth  below^  Each  class  is  stated  in  detail  in  a  separate 
paper  prepared  for  that  purpose.  In  classifying  the  creditors 
and  the  property  the  notes  and  instructions  placed  on  eacli 
division  of  the  forms  should  be  carefully  noted.  All  the  sepa- 
rate forms  prepared  by  the  supreme  court  should  be  used  in 
each  case.  If  a  flebtor  has  no  creditor  or  no  property  properly 
classified  in  a  particular  form  he  should  so  state  the  fact  in 
that  form ;  but  he  should  not  omit  the  form  for  the  reason  that 
he  has  no  creditor  or  property  properly  classified  under  that 

1  B.  A.  1898,  Sec.  7,  clause  8.  See  also  In  re  Sallee,  No.   12256 

2  B.  A.   1898,-  Sec.  7,  clause  8.  Fed.  Cas.,  s.  c.  2  N.  B.  R.  228. 

^' Gen.  Ord.  38.     Official  Form   r,  ■*  Consult    Official     Form    No.     t, 

schedules  A  and  B;  see  Forms  Nos.  schedules  A  and  B,  and  note  at  the 
2  and  3,  post.  Mahoney  v.  Ward,  ends  of  Official  Forms  Nos.  2  and 
100  Fed.  Rep.  278,  3  Am.  B.  R.  770.       3.     See  Forms  Nos.  2,  3,  4  and  5, 

post. 


214  LAW    AND    I'ROCEEDINGS    IN    BANKRUPTCY 

head.  Each  sheet  or  form  should  be  signed  by  the  debtor. 
At  the  end  of  schedule  A  and  again  at  the  end  of  schedule  B 
the  debtor  must  make  oath  in  the  form  prescribed.  When 
the  parts  of  the  schedule  are  completed  they  should  be  fastened 
neatly  and  firmly  together  and  filed  as  one  paper.  This  is 
"the  schedule"  of  the  statute.  It  consists  of  schedule  A, 
schedule  B  and  a  summary  of  debts  and  assets  taken  from  the 
statements  of  the  debtor  in  these  two  parts  of  his  schedule. 

One  copy  of  the  schedule  is  referred  to  the  referee  as  soon 
as  may  be  after  it  is  filed.  It  is  the  duty  of  the  referee  to 
examine  all  schedules  of  property  and  lists  of  creditors  filed 
by  bankrupts  and  cause  such  as  are  incomplete  or  defective 
to  be  amended.^  The  referee's  finding  is  not  conclusive  so 
as  to  preclude  inquiry  at  the  proper  time  and  in  a  proper  man- 
ner as  to  the  sufficiency  of  the  schedule.*' 

Schedule  A.  A  Statement  of  All  Debts  of  Bank- 
rupt.— Schedule  A  consists  of  five  separate  divisions,  by 
means  of  which  the  creditors  are  divided  into  as  many  distinct 
classes.  The  ilrst  division  is  a  list  of  all  creditors  who  are  to 
be  paid  in  full,  or  to  whom  priority  is  secured  by  law.  The 
second  division  is  a  list  of  creditors  holding  securities.  The 
third  division  is  a  list  of  creditors  whose  claims  are  unsecured. 
The  fourth  division  is  a  statement  of  the  debtor's  liabilities  on 
notes  or  bills  discounted,  which  ought  to  be  paid  by  the  draw- 
ers, makers,  acceptors  or  endorsers.  The  fifth  division  is  a 
statement  of  the  bankrupt's  liability  on  accommodation  paper. 
In  classifying  the  debts  the  notes  and  instructions  placed  on 
each  division  of  the  forms  should  be  carefully  noted.         , 

In  schedule  A  the  debtor  should  set  forth  a  full  and  true 
list  of  his  creditors,  showing  their  residences,  if  known,  if 
unknown,  that  fact  should  be  stated,  the  amount  due  each  of 
them,  the  consideration  therefor,  and  the  security  held  by 
them,  if  aiiy.^     The  statement  of  the  debts  should  be  full  and 

^  B.  A.  i8g8,  Sec.  39,  clause  2.  That    abbreviations   must   not   be 

^  In  re  Hill,   No.  6481   Fed.  Cas.,  used,  see  Sutherland  v.  Lasher  (N. 

s.  c.  I  Ben.  321.  Y.    Sup.   Ct.),    11    Am.    B.    R.   780; 

7B.    A.    1898,    Sec.    7,    clause    8;  Haack  v.   Theise  51   N.  Y.  Mis.  3, 

Official   Form    No.    t,    schedule    A;  16  Am.  B.  R.  699. 

see  Form  No.  2,  t^nst. 


PROCEEDINGS    IN    VOEUNTARV     BANKRUPTCY, 


21: 


accurate,  as  the  debtor  may  not  otherwise  be  able  to  obtain  a 
discharge.'  It  is  better  practice  to  include  deljts,  although 
barred  by  the  statute  of  limitations.''  The  amount  and  date 
of  the  debt  is  sufficient  without  the  computation  of  interest, 
for  the  exact  amount  can  be  ascertained  at  any  stage  of  the 
proceedings.'''  Where  a  note  has  been  given  or  judgment 
rendered  on  the  note,  or  in  case  there  is  a  person  jointly  liable 
for  the  debt,  this  fact  should  be  stated."  AMiere  the  creditor 
is  a  copartnership  the  name  of  the  firm  and  not  of  the  indi- 
vidual partners  is  proper.'-  \Miere  the  debt  is  due  a  news- 
paper the  names  of  the  proprietors  should  be  given  and  not 
the  name  of  the  newspaper  only.'^ 

Schedule  B.  Statement  of  All  Property  of  Bank- 
rupt.— Schedule  B  consists  of  six  separate  divisions.  The 
first  division  is  a  statement  of  all  the  real  estate  of  the  bank- 
rupt, together  with  its  location,  description,  encumbrances  and 
value.'*  The  second  diz'isio>i  is  an  itemized  statement  of  the 
personal  property  of  the  bankrupt,  together  with  the  \alue 
thereof.'^  The  ////;-(/  division  is  a  statement  of  all  choses  in 
action  in  which  the  bankrupt  has  an  interest.  The  fourth 
division  is  a  statement  of  all  property  in  reversion,  remainder 


^  In  re  Kalish,  No.  7599  Fed. 
Cas.,  s.  c.  Deady  575;  In  re  Whet- 
more,  No.  17508  Fed.  Cas.,  s.  c. 
Deady  585;  In  re  Redfield,  No. 
1 1624  Fed.  Cas.,  s.  c.  2  Ben.  71;  In 
re  Cushman,  No.  3512  Fed.  Cas., 
s.  c.  7  Ben.  482. 

^  In  re  Kingsley,  No.  7819  Fed. 
Cas.,  s.  c.  I  Low.  216;  In  re  Ray, 
No.  1 1589  Fed.  Cas.,  s.  c.  2  Ben.  23'-> 
In  re  Cushman,  No.  3512  Fed.  Cas., 
s.  c.  7  Ben.  482;  In  re  Harddin, 
No.  6048  Fed.  Cas.,  s.  c.  i  N.  B.  R. 
395- 

^«/«  re  Hill,  No.  6481  Fed.  Cas., 
s.  c.  I   Ben.  321. 

^^  In  re  Orne,  No.  10582  Fed. 
Cas.,  s.  c.  I  Ben.  420. 

12  Anon.,  457  Fed.  Cas.,  s.  c.  i  N. 
B.  R.  122. 


'^^  Anon.,  462  Fed.  Cas.,  s.  c.  2  N. 
B.  R.  141. 

!■*  The  name  of  the  town,  county 
and  state  and  the  grantor  were  held 
sufficiently  accurate  in  re  Dodge, 
No.  3946a  Fed.  Cas.,  but  a  descrip- 
tion as  "an  interest  in  half  a  lot  in 
Buffalo."  is  not.  /;;  re  Frisbee,  No. 
5130  Fed.  Cas.,  s.  c.  4  Law  Rep. 
483. 

I'^See  In  re  Hill,  No.  6481  Fed. 
Cas.,  s.  c.  I  Ben.  321 ;  /;;  re  Mal- 
com.  No.  8986  Fed.  Cas.,  s.  c.  4 
Law  Rep.  488. 

An  interest  in  the  net  profits  of 
a  business  as  additional  compensa- 
tion need  not  be  scheduled.  In  re 
Brown,  No.  1978  Fed.  Cas.,  s.  c.  5 
Law  Rep.   121. 


216  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 

or  expectancy,  including  property  held  in  trust  for  the  debtor 
or  subject  to  any  power  or  rights  to  dispose  of  or  charge  it. 
In  this  form  is  included  also  property  theretofore  conveyed 
for  the  benefit  of  creditors  and  money  paid  counsel  for  serv- 
ices rendered  or  to  be  rendered  in  bankruptcy.  The  fifth  divi- 
sion is  a  particular  statement  of  the  property  claimed  as  ex- 
empted from  the  operation  of  the  acts  of  Congress  relating  to 
bankruptcy,  giving  each  item  of  property  and  its  valuation, 
and  if  any  portion  of  it  is  real  estate,  its  location,  description 
and  present  use  should  be  stated.^*^  The  sixth  division  is  a 
complete  list  of  all  books,  papers,  deeds,  rights,  etc.,  relating 
to  the  business  dealings,  estate  and  effects  of  the  bankrupt. 

The  object  of  schedule  B  is  to  set  forth  a  complete  state- 
ment of  all  the  property  of  the  debtor,  including  such  property 
as  he  claims  to  be  exempted  under  the  laws  of  the  state  of 
his  domicile.  All  his  property  not  exempted  by  statute  passes 
to  the  trustee  for  the  benefit  of  his  creditors.^"  All  such  prop- 
erty must  be  set  forth  in  the  schedule.  It  is  not  necessary 
to  repeat  at  length  what  property  so  passes  to  the  trustee,  for 
this  is  the  subject  of  a  separate  chapter. 


18 


I  6i.     Of  filing  the  petition  and  schedules. 

The  petition  and  schedule  must  be  filed  in  the  office  of  the 
clerk  of  a  court  of  bankruptcy,  and  not  with  a  referee  or 
judge.' 

The  statute  provides  that  the  petition  shall  be  in  duplicate, 
one  copy  for  the  clerk  and  one  for  service  on  the  bankrupt." 
In  voluntary  bankruptcy  it  would  seem  that  one  copy  of  the 
petition  is  all  that  is  required.  It  is  not  necessary  to  serve  on 
the  bankrupt  a  copy  of  his  own  petition.  Three  copies  of  the 
schedule  are  required  to  be  filed,  one  copy  for  the  clerk,  one 
for  the  referee,  and  one  for  the  trustee.^ 

16  See  exceptions,  Chap.  XVII.  ^^  Chap.  XVI. 

MiHtary      uniforms,      arms      and  ^  See  In  re  Sykes,   io6  Fed.  Rep. 

equipments  are  exempted  by  R.   S.  669 ,  6  Am.  B.  R.  264. 

Sec.  T628.  2  B.  A.  1898,  Sec.  sgc. 

17  B.  A.  1898,  Sec.  70.  3  B.  A.  1898,  Sec.  7,  clause  8. 


PROCEEDINGS    IX    VOLUNTARY    BANKRUPTCY.  217 

As  soon  as  the  petition  and  schedules  are  deposited  with 
the  clerk,  he  endorses  on  each  paper  the  day  and  hour  of 
fihng.''  He  thereupon  enters  the  case  upon  a  docket  which  is 
kept  for  that  purpose,  together , with  a  memorandum  of  the 
fihng  of  the  petition.^  The  cases  are  entered  and  numbered 
in  the  order  in  which  they  are  commenced.^  He  also  makes  a 
similar  endorsement  upon  any  subsequent  paper  filed  with 
him,  except  such  papers  as  have  been  previously  filed  with 
the  referee,^  The  papers  in  each  case  should  be  kept  in  a  file 
by  themselves. 

At  the  time  of  filing  the  petition  the  petitioner  must  deposit 
$30  with  the  clerk  as  costs  in  the  case.  Of  this  amount  the 
clerk  is  to  receive  $10,  the  referee  $15,  and  the  trustee  $5. 
Where  a  partnership  files  a  voluntary  petition  in  which  the 
individual  partners  join,  it  is  a  single  proceeding  and  only  one 
deposit  fee  of  thirty  dollars  is  required.'  Before  incurring 
any  expense  in  publishing"  or  mailing  notices,  or  in  traveling, 
or  in  procuring  the  attendance  of  witnesses,  or  in  perpetuating 
testimony,  the  clerk,  marshal  or  referee  may  require,  from 
bankrupt  or  other  person  in  whose  behalf  the  duty  is  to  be 
performed,  indemnity  for  such  expense.*  Money  advanced 
for  this  purpose  by  liie  bankrupt  or  other  person  shall  be  re- 
paid him  out  of  the  estate  as  part  of  the  cost  of  administering 
the  same.*  • 

No  deposit  is  required  upon  the  filing  of  a  petition  by  a 
voluntary  bankrupt  which  is  accompanied  by  an  affidavit  stat- 
ing that  the  petitioner  is  without,  and  can  not  obtain,  money 
with  which  to  pay  such  fees."  In  such  cases  the  bankrupt  is 
permitted  to  proceed  in  forma  pauperis.     But  the  judge,  at 


*  Gen.  Ord.  2.  'In  re  Gay,  98  Fed.  Rep.  870,  3 

This  is  conclusive  of  the  partic-  Am.  B.  R.  529;  In  re  Langslow,  98 

ular  time  at  which  the  papers  were  Fed.   Rep.  869,  3  Am.   B.   R.   529M; 

filed.     Ala.   &   C.   R.   Co.   v.  Jones,  but  see  /ra  re  Barden,  loi  Fed.  Rep. 

No.  127  Fed.  Gas.,  s.  c.  7  N.  B.  R.  553,  4  Am.  B.  R.  31. 

145-  ^  Gen.  Ord.   10. 

^  Gen.  Ord.  i.  ^^  B.   A.    1898,    Sec.   51,   clause   2; 

^  Gen.   Ords.    i   and   2.  In   re  Levy,    lor    Fed.   Rep.   247,  4 

Am.  B.  R.  108. 


218  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 

any  time  during  the  pendency  of  the  proceedings  in  bank- 
ruptcy, may  order  the  regular  fees  to  be  paid  out  of  the  estate ; 
or  may,  after  notice  to  the  bankrupt  and  satisfactory  proof 
that  he  then  has  or  can  obtain  the  money  with  which  to  pay 
those  fees,  order  him  to  pay  them  within  a  time  specified,  and 
if  he  fails  to  do  so,  may  order  his  petition  to  be  dismissed/** 

The  practice  with  reference  to  procedure  in  forma  pauperis 
is  not  uniform  in  the  several  districts.  In  some  districts  rule-, 
have  been  promulgated  by  the  court.  It  has  been  held  that  a 
petitioner  receiving  thirty  dollars  per  month  was  not  entitled 
to  proceed  as  a  poor  person."  A  voluntary  bankrupt  is  not 
required  to  make  a  deposit  of  his  filing  fee  out  of  his  exempt 
property  and  is  not  required  to  solicit  gifts  or  loans  from  his 
friends  for  that  purpose.''  A  bankrupt  proceeding  as  a  poor 
person  is  required  in  one  district,  at  least,  to  make  the  deposit 
before  he  receives  his  discharge  Or  show  that  "by  reason  of  ill- 
health  or  circumstances  of  peculiar  misfortune  he  is  a  worthy 
object  of  charity."  "  The  statutory  affidavit  is  prima  facie 
evidence  of  the  bankrupt's  inability  to  make  the  deposit.'* 
This  may  be  contested  and  the  bankrupt  examined  with  refer- 
ence to  his  individual  means,  earnings  and  circumstances. 

The  petition  may  be  filed  by  the  bankrupt  in  person  in  his 
own  behalf,  or  he  may  appear  and  conduct  the  proceedings  by 
attorney*  who  must  be  an  attorney  or  counsel  or  authorized  to 
practice  in  the  circuit  or  district  court.'^  The  name  of  the 
attorney  or  counselor,  with  his  place  of  business,  should  be 
entered  upon  the  docket  with  the  date  of  the  entry. 


15 


§  62.     The  order  of  adjudication  and  reference. 

llie  judge  of  the  court  of  bankruptcy  regularly  hears  a  vol- 
untary petition  and  makes  the  adjudication  or  dismisses  the 

10  Gen.  Ord.  35.  ^"  !n  re  Fees  Payable  by  Volun- 

11  In  re  Collier,  93  Fed.  Rep.  191,  tary    Bankrupt,    95    Fed.    Rep.    120. 
I  Am.  B.  R.  182.  But   see  In  re   Plimpton,    103   Fed. 

12  Sellers  v.    Bell    (C.    C.   A.    5tb  Rep.  775.  4  Am.  B.  R.  614. 

Cir.),  94  Fed.  Rep.  801,  2  Am.  B.  R.  '^^  In  re  Levy,  loi  Fed.  Rep.  247, 

529.     But  see  In  re  Levy,  loi  Fed.       4  Am.  B.  R.  108. 
Rep.  247,  4  Am.  B.  R.   108.  ^-^  Gen.  Ord.  4. 


PROCEEDINGS    IN    VOLUNTARY    HANKRUPTCY.  219 

petition/  No  answer  by  the  creditors  will  be  permitted. - 
Where,  one  partner  files  a  voluntary  petition  to  have  the*  part- 
nership adjudged  a  bankrupt,  another  partner  can  resist  it  the 
same  as  if  it  were  involuntary,^  but  a  creditor  can  not.* 

When  the  petition  does  not  show  jurisdiction,  or  is  not 
regularly  filed,  or  is  materially  defective,  the  court  may  dismiss 
it  or  permit  an  amendment  thereto."'  No  notice  is  required 
to  creditors  before  making  the  order  adjudicating  the  peti- 
tioner a  bankrupt.  It  is  an  ex  parte  proceeding.  This  order 
is  merely  a  judicial  finding  that  the  petitioner  has  become  a 
bankrupt;  that  is,  that  he  has  previously  committed  an  act 
of  bankruptcy.  The  filing  of  the  petition  by  a  debtor  is  such 
an  act  of  bankruptcy.*^  The  order  of  adjudication,  unless  set 
aside  by  a  judge  or  by  an  appellate  court,  is  conclusive  upon  the 
insolvency  of  the  debtor,  his  willingness  to  surrender  his  prop- 
erty and  his  desire  to  take  the  benefit  of  the  statute.^  But  it 
may  be  contested  upon  any  other  fact  which  goes  to  defeat  the 
jurisdiction  of  the  court.® 

At  the  time  of  making  the  order  adjudging  the  petitioner 
a  bankrupt  the  court  regularly  refers  "  the  case  for  subsequent 
proceedings  to  a  referee  within  the  county  of  which  the  debtor 

IB.    A.    1898,    Sec.    i^g:    Official  *  In    re    Carleton,    115    Fed.    Rep. 

Forms  Nos.  11  and  12,  Forms  Nos.  246,  8  Am.  B.  R.  270. 

28  and  29,  post.  ■"'Gen.  Ord.  11. 

2  In  re  Jehu,  94  Fed.  Rep.  63S,  2  c  B.  A.  1898,  Sec.  3.  clause  5. 

Am.  B.  R.  498;  in  re  Ives   (C.  C.  ' /«    re    Fowler,    No.    4998    Fed. 

A.  6th  Cir.),   113  Fed.  Rep.  911.  7  Cas.,  s.  c.  i  Low.  161. 

Am.  B.  R.  692;  In  re  Carleton,  115  ^  In  re  Goodfellow,  No.  5536  Fed. 

Fed.  Rep.  246,  8  Am.  B.  R.  270.  Cas.,  s.  c.  i  Low.  510;  In  re  Yates, 

It    has   been   held    that    where    a  114  Fed.  Rep.  365,  8  Am.  B.  R.  69; 

person   manifestl.v   able   to   pay   his  In  re   Scott,    in    Fed.   Rep.    144,   7 

debts,   files   a   voluntary   petition   in  Am.    B.    R.    39;    In    re    Mason,    99 

order    to    embarrass    a    particular  Fed.  Rep.  256,  3  Am.  B.  R.  599;  In 

creditor    adjudication    on    such    a  re  Waxelbaum,  97  Fed.  Rep.  562.  3 

petition    may    be    set    aside    by    the  Am.  B.  R.  267.     See  In  re  Ives  (C. 

creditor  as  being  a  fraud  on  the  act.  C.  A.  6th  Cir.),  113  Fed.  Rep.  911, 

In  re  Carleton,   115  Fed.   Rep.  246  7  Am.  B.  R.  692. 

at  250,  8  Am.  B.  R.  270  at  274.  »  Official  F'orm  No.  14,  Form  No. 

3  Gen.    Ord.    8;    In    re    Carleton,  ,v,  post. 
115    Fed.    Rep.   246,    8    Am.    B.    R. 
270. 


220  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 

is  a  resident.  He  ma}'  refer  the  case  to  any  referee  within  the 
territorial  jurisdiction  of  the  court,  if  the  convenience  of  par- 
ties in  interest  will  be  served  thereby,  or  for  cause,  or  if  the 
bankrupt  does  not  do  business,  reside  or  have  his  domicile  in 
the  district.'" 

All  the  proceedings  thereafter,  except  such  as  are  "required 
by  the  statute  or  by  the  general  orders  to  be  had  before  the 
judge,  are  had  before  the  referee.'^ 

Applications  for  a  discharge,  or  for  the  approval  of  a  com- 
position, or  for  an  injunction  to  stay  proceedings  of  a  court  or 
officer  of  the  United  States  or  of  a  state,  must  be  heard  and 
decided  by  the  judge.  But  he  may  refer  such  an  application, 
or  any  specified  issue  arising  thereon,  to  the  referee  to  ascer- 
tain and  report  the  facts.'" 

The  order  referring  a  case  to  a  referee  should  name  a  day 
upon  which  the  bankrupt  shall  attend  before  the  referee ;  and 
from  that  day  the  bankrupt  is  subject  to  the  orders  of  tht 
court  in  matters  relating  to  his  bankruptcy,  and  may  receive 
from  the  referee  a  protection  against  arrest,  to  continue  until 
the  final  adjudication  on  his  application  for  a  discharge,  unless 
suspended  or  vacated  by  order  of  the  court.  A  copy  of  the 
order  must  forthwith  be  sent  by  mail  to  the  referee,  or  be 
delivered  to  him  personally  by  the  clerk  or  other  officer  of 
the  court.'"  The  time  when  and  the  place  where  the  referee 
shall  act  upon  the  matters  arising  under  the  several  cases 
referred  to  him  shall  be  fixed  by  special  order  of  tlie  judge, 
or  by  the  referee,  and  at  such  times  and  places  the  referee  may 
perform  the  duties  which  he  is  empowered  by  the  act  to  per- 
form.^^ 

If  the  judge  is  absent  from  the  district,  or  ithe  division  of 
the  district  in  which  the  petition  is  filed  at  the  time  of  the 
filing-,  the  clerk  forthwith  refers  the  case  to  the  referee.^*  In 
such  cases  the  referee  is  authorized  to  consider  the  petition 

10  B.    A.    i8q8,    Sec.    22 ;    In    re  ^-  Gen.  Orel.  12.    B.  A.  1898,  Sec. 
Schenectady  Eng.  &  Const.  Co.,  147       3^.  clause  4,   and   Sec.  41. 

Fed.  Rep.  868.  i"  Gen.  Ord.  12. 

11  Gen.  Ord.  12.    Gen.  Ord.  27.  ^^B.   A.    1898,   Sec.    18^?.     Official 

Form   No.    15,   Form   No.   z^,   post. 


PROCEEDINGS    IN    VOLUNTARY    BANKRUPTCY.  221 

and  make  the  adjudication  or  dismiss  the  petition  '"'  with  the 
same  effect  as  if  it  has  been  made  by  the  jndge.  The  referee 
is  not  authorized  to  make  an  adjudication  in  other  cases. 

§  63.    Amendments  to  petition  and  schedules. 

The  petitioner  may  conclude  after  his  petition  and  schedules 
have  been  filed  that  they  are  defective,  or  may  find  that  he 
has  omitted  something  by  mistake  or  inadvertence.  In  such 
case  he  may  apply  to  the  court  for  leave  to  amend.  The  court 
is  expressly  authorized  to  allow  amendments  to  the  petition 
and  schedules  upon  the  application  of  the  petitioner.' 

In  his  application  for  leave  to  amend  the  petitioner  must 
state  the  cause  of  error  in  the  paper  originally  filed.'  The 
application  may  be  by  motion  or  petition.  It  should  be  ac- 
companied with  a  copy  of  the  amendment  or  amendments  to 
be  made.  These  amendments  should  be  printed  or  written, 
signed  and  verified  like  original  petitions  and  schedules."  The 
verification  should  be  according  to  the  circumstances  of  the 
amendment.  The  form  will  not  be  precisely  the  same  as 
an  oath  to  an  original  petition.  If  the  amendments  are  made 
to  separate  schedules,  the  same  must  be  made  separately  with 
proper  references."  The  amendment  should  state  no  more  of 
the  original  paper  than  may  be  necessary  to  introduce  and  to 
make  intelligible  the  new  matter,  which  should  alone  consti- 
tute the  chief  subject  of  the  amendment.  The  proceeding  is 
ex  parte,  and  no  notice  need  be  given  to  creditors,  nor  has 
any  creditor  the  right  to  oppose  it.^  The  granting  or  refus- 
ing to  grant  leave  to  amend  the  petition  or  schedules  rests  in 
the  sound  discretion  of  the  court.  It  is  not  a  matter  of  riHit. 
The  courts  are  liberal  in  allowing  amendments  so  long  as  the 
ends  of  justice  are  not  sacrificed. 

Where  the  petition  is  referred  to  a  referee  to  make  the 
adjudication  he  may  allow  amendments  to  the  petition.     He 

^^B.  A.   i89<S,  Sec.  38,  clause  I.            ^  In    re    Watts,    No.    17293    Fed. 

iGen.  Ord.  11.  ,   Cas.,  s.  c.  3  Ben.  166;  In  re  Heller, 

2  Gen.  Ord.  11.  41  Howard  Prac.  213. 
2  Gen.  Ord.   11. 


222  LAW    AND    PROCEEDINGS    IN    BANKRUrTCY 

is  expressly  authorized,  and  it  is  liis  duty,  to  examine  all 
schedules  of  property  and  lists  of  creditors  filed  by  bankrupts, 
and  to  cause  such  as  are  incomplete  or  defective  to  be 
amended/  The  referee  may  also  refuse  to  allow  an  amend- 
ment. Whether  he  grants  or  refuses  to  permit  an  amendment 
to  be  made,  the  question  is  subject  to  be  reviewed  by  the 
judge.' 

§  64.    Dismissing  a  petition. 

After  a  voluntary  petition  has  been  filed  in  court  it  can  not 
be  dismissed  by  the  petitioner  or  petitioners  for  want  of  pros- 
ecution, or  by  the  consent  of  parties  until  after  notice  to  cred- 
itors.^ The  rule  under  the  former  acts  seems  to  have  been 
otherwise.-  A  voluntary  bankrupt  has  been  permitted  to  with- 
draw his  petition  on  motion,  where  no  creditors  had  proved 
claims  or  objected  thereto.^  Subsequent  creditors,  who  have 
liens  on  after  acquired  property,  can  not  be  heard  to  object 
to  such  a  dismissal.^ 

An  adjudication  of  bankruptcy  made  ex  parte  on  a  volun- 
tary petition  is  not  conclusive  on  creditors,  and  they  may,  by 
petition,  ask  a  dismissal  of  the  proceedings.*  A  voluntary 
petition  should  be  dismissed,  when  the  debtor  schedules  no 
debt,  which  would  be  barred  by  a  discharge,^  or  where  the 
debtor  changed  his  residence  for  the  express  purpose  of  filing 
a  petition  and  with  the  intention  of  leaving  the  district  as 

4  B.  A.  1898,  Sec.  39,  clause  2;  In  ^  In  re  Hebbart,  104  Fed.  Rep. 
ve  Brumelkamp,  95  Fed.  Rep.  814,  322,  5  Am.  B.  R.  8;  but  see  In  re 
2  Am.  B.  R.  318.  balaberry,     107    Fed.    Rep.    95,    5 

5  Gen.  Ord.  27.  Am.  B.  R.  847. 

IB.  A.  1898,  Sec.  59g.  * /h   re    Garneau    (C.    C.    A.    7th 

2  See   In    re    Randall,    No.    11550  Cir.),    127   Fed.    Rep.   677,    11    Am. 

Fed.    Gas.,    s.    c.    5    Law   Rep.    115;  B.  R.  679. 

'In  re   Harris,   No.  61 10  Fed.   Gas.,  ^ /w    re    Maples,    105    Fed.    Rep. 

s.  c.  3  N.  Y.  Leg.  Obs.   152;  Dud-  919,  5  Am.  B.  R.  426;  In  re  Gola- 

ley's  case,  No.  41 14  Fed.  Gas.,  s.  c.  luca,  133  Fed.  Rep.  255,  13  Am.  B. 

I  Pa.  Law  Jour.  302;  Ex  parte  Ben-  R.  292;  In  re  Yates,  114  Fed.  Rep. 

nett,  No.  1309  Fed.  Gas.,  s.  c.  i  Pa.  365,  8  Am.  B.  R.  69. 

Law  Jour.  145 ;  In  re  Gile,  No.  5423 

Fed.  Gas.,  s.  c.  Law  Rep.  224. 


PROCEEDINGS    IN    VOLUNTARY    BANKRUPTCY.  222i 

soon  as  he  had  obtained  a  chscharge,  because  tlie  court  has  no 
jurisdiction  of  the  proceedings  in  such  a  case,"  or  where  the 
sole  purpose  is  to  enable  the  debtor  to  obtain  a  discharge, 
when  he  has  failed  to  apply  for  one  in  season  or  has  Ijcen 
refused  a  discharge  in  a  former  proceeding.' 

It  has  been  held  that  where  a  voluntary  partnership  petition 
has  been  filed  by  the  firm  and  subsequently  withdrawn  in  part 
and  a  new^  petition  made  including  the  individual  schedules 
of  the  partners,  the  date  of  the  filing  was  the  date  the  later 
or  amended  petition  was  filed. ^ 

§  65.     Proceedings  subsequent  to  the  adjudication. 

Proceedings  in  voluntary  bankruptcy  subsequent  to  the 
order  of  adjudication  and  reference  are  not  essentially  dif- 
ferent from  the  proceedings  had  upon  an  involuntary  petition, 
or  a  petition  for  the  purpose  of  having  a  partnership,  or  the 
members  thereof,  adjudged  bankrupts.  The  examination  of 
the  bankrupt,  the  first  creditors'  meeting,  the  election  of  a 
trustee,  the  collection  of  tlie  assets  of  the  bankrupt,  the  dis- 
tribution of  the  estate  and  other  matters  pertaining  to  the 
proper  admmistration  of  the  estate  will  be  considered  here- 
after under  appropriate  heads. 

«/w    re    Garneau    (C.    C.    A.    7th  B.   R.   505;  In   re  Fiegenbaum    (C. 

Cir.).    127   Fed.    Rep.   677,    11    Am.  C.   A.   2d   Cir.),    121    Fed.   Rep.   69, 

B.  R.  679.  0  Am.  B.  R.  595. 

"Knntz  V.   Young    (C.   C.   A.  8th  « /«,   re   Washburn,   99   Fed.    Rep. 

Cir.),    131    Fed.    Rep.   719,    12   Am.  84.  3  Am.  B.  R.  585. 


224  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 


CHAPTER    X. 

PROCEEDINGS   IN    INVOLUNTARY    BANKRUPTCY. 

§  66.     Who  may  institute  involuntary  proceedings. 

Proceedings  in  involuntary  bankruptcy  are  instituted  by  a 
creditor  or  creditors  filing  a  petition,  praying  that  the  debtor 
may  be  declared  a  bankrupt,  and  that  his  property  may  be 
distributed  according  to  law.  By  creditor  is  meant  anyone 
who  owns  a  demand  or  claim  provable  in  bankruptcy,  and 
may  include  his  duly  authorized  agent,  attorney  or  proxy. ^ 

Whether  a  person  may  be  a  petitioning  creditor  or  not  de- 
pends upon  whether  he  has  a  claim  provable  in  bankruptcy 
against  the  estate  of  the  debtor.-  If  he  has  a  provable  claim, 
he  may  be  a  petitioning  creditor."  If  he  has  not  a  provable 
claim  he  can  not  properly  join  in  bringing  the  petition.'* 
Whether  a  claim  is  provable  is  determined  by  section  63a. ^ 
The  debt  of  a  petitioning  creditor  must  have  been  created 
at  the  time  the  act  of  bankruptcy  complained  of  was  com- 
mitted.'' 

The  wife  of  the  alleged  bankrupt  may  be  a  petitioning  cred- 
itor and  may  file  a  petition  against  her  husband  where  there 
are  less  than  twelve  creditors.'  Firm  creditors  may  as  such 
join  in  a  petition  against  an  individual  member  of  the  firm.® 

1  B.  A.  1898,  Sec.  I,  clause  9.  ^  ggg  gg^.  109,  ct  scq..  post. 

^B.  A.  1S98,  Sec.  59&.  ^  In    re    Callison    (C.    C.    A.    5th 

•^  In  re  Rothenberg,  140  Fed.  Rep.  Cir.),  129  Fed.  Rep.  201,  11  Am.  B. 

798,  15  Am.  B.  R.  485;  In  re  Grant  R.  797. 

Shoe  Co.    (C.   C.  A.   2d  Cir.),    130  'In  re  Novak,  loi  Fed.  Rep.  800, 

Fed.  Rep.  881,   12  Am.  B.  R.  349.  4  Am.  B.  R.  311. 

*/n  re  Ellis   (C.  C.  A.  6th  Cir.),  « /n  re  Mercur.  95  Fed.  Rep.  634, 

143   Fed.   Rep.    103,    16  Am.   B.    R.  2  Am.  B.  R.  626. 
221 ;  Beers  v.  Hamlin,  99  Fed.  Rep. 
695,  3  Am.  B.  R.  745. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 


225 


A  person  is  entitled  to  be  a  petitioning  creditor  where  he 
owns  an  nnhquidated  claim  against  the  debtor  which  may 
be  proved  and  liquidated  under  section  63^."  The  owner  of 
an  unliquidated  claim  arising  in  tort  can  not  be  a  petitioning 
creditor  for  the  reason  that  a  claim  for  damages  in  tort  is 
not  provable  in  bankruptcy/"  A  mere  contingent  liability  is 
not  such  a  claim  as  will  entitle  the  owner  to  join  in  a  peti- 
tion.'' If  the  obligation  of  the  debtor  is  fixed,  although  not 
payable  until  some  time  in  the  future,  the  creditor  may  join 
in  the  petition  to  have  the  debtor  adjudged  a  bankrupt.'" 

It  has  been  held  tliat  a  person  who  has  received  a  preference 
voidable  under  section  60b,  or  to  whom  conveyances,  trans- 
fers, assignments  or  encumbrances,  void  or  voidable  under 
section  67c,  have  been  made  or  given  cannot  join  in  filing 
the  petition.'^  The  better  rule  is  that  such  a  creditor  may 
be  a  petitioning  creditor.'*  The  reason  is  that  section  59g 
prohibits  the  allowance  of  such  claims  until  the  creditor  sur- 
renders his  preference  or  other  advantage,  which  he  lias 
unlawfully  obtained  over  the  other  creditors.  It  does  not 
affect  the  probability  of  his  claim,  merely  the  allowance.  He 
therefore  falls  within  section  5%,  which  provides  that  "cred- 
itors who  have  provable  claims"  may  be  petitioning  cred- 
itors.^^ 


o/w  re  Manhattan  Tee  Co.  (C. 
C.  A.  2d  Cir.),  ii6  Fed.  Rep.  604, 
8  Am.  B.  R.  569 ;  In  re  Grant  Shoe 
Co.  (C.  C.  A.  2d  Cir.),  130  Fed. 
Rep.  881,  12  Am.  B.  R,  349. 

^0  In  re  Brinckman,  103  Fed.  Rep. 
65,  4  Am.  B.  R.  551 ;  Beers  v.  Han- 
hn,  99  Fed.  Rep.  695.  3  Am.  B.  R. 
745 ;  In  re  Morales,  105  Fed.  Rep. 
761,  5  Am.  B.  R.  425. 

"/w  re  ElHs  (C.  C.  A.  6th  Cir.), 
143  Fed.  Rep.  103,  16  Am.  B.  R.  221. 

As  to  Contingent  Debts,  see  Sec. 
112,  post. 

'^^  In  re  Rothenberg,  140  Fed. 
Rep.  798,  15  .^m.  B.  R.  485. 

^^  In  re  Rogers  MilHng  Co.,   102 


Fed.  Rep.  6S7,  4  Am.  B.  R.  540; 
1)1  re  Burhngton  Malting  Co.,  109 
Fed.  Rep.  777,  6  Am.  B.  R.  369 ;  In 
re  Schenkein,  113  Fed.  Rep.  421,  7 
Am.  B.  R.  162;  In  re  Fishblate 
Clothing  •  Co.,  125  Fed.  Rep.  986, 
II  Am.  B.  R.  204. 

1^  In  re  Hornstein,  122  Fed.  Rep. 
266,  10  Am.  B.  R.  309;  In  re 
Gillette,  104  Fed.  Rep.  769,  5  Am. 
B.  R.  119;  In  re  Miller,  104  Fed. 
Rep.  764,  5  Am.  B.  R.  140;  In  re 
Herzikopf,  118  Fed.  Rep.  loi,  9 
Am.  B.  R.  90;  In  re  Vastbinder, 
126  Fed.  Rep.  417,  11  Am.  B.  R.  118. 

"/w  re  Girard  Glazed  Kid  Co., 
129  Fed.   Rep.   841,    12  Am.   B.   R. 


226 


LAW     AXl) 


JOCEEDINGS    IN     BANKRUPTCY 


A  petition  in  involuntary  bankruptcy  is  regularly  filed  by 
three  or  more  creditors  who  ha\e  provable  claims  against 
any  person  (including  a  corporation,  partnership  or  a 
woman  ^'')  which  amount  in  the  aggregate,  in  excess  of  the 
value  of  securities  held  by  them,  if  any,  to  five  hundred  dol- 
lars or  over/'  In  case  all  of  the  creditors  of  such  person, 
corporation  or  partnership  are  less  than  twelve  in  number, 
then  one  of  such  creditors  whose  unsecured  claim  equals  five 
hundred  dollars  may  file  a  petition  to  have  him  adjudged  a 
bankrupt/^  Where  there  are  more  than  twelve  creditors 
three  must  join  in  filing  the  petition,  although  most  of  the 
twelve  are  creditors  for  nominal  sums  onlv  and  are  induced 
not  to  join  in  the  petition  by  the  solicitation  of  the  bankrupt.^'' 
This  must  be  honestly  done.  The  courts  have  refused  to 
sanction  a  collusive  scheme  for  the  purpose  of  keeping  alive 
the  claims  of  twelve  creditors  so  as  to  prevent  proceedings  in 
involuntary  bankruptcy  being  instituted  by  one  creditor,"^  or 
splitting  up  a  claim,  by  assigning  part  of  it,  to  make  a  suffi- 
cient number  of  petitioning  creditors.'^ 

In  computing  the  number  of  creditors  of  a  bankrupt  for 
the  purpose  of  determining  how  many  creditors  must  join  in 
the  petition,  only  the  general  or  unsecured  creditors  are 
counted.  Creditors  holding  claims  which  are  secured  or  have 
priority  are  not  counted  in  computing  the  number  of  creditors 
or  the  amount  of  their  claims,  unless  the  amotmt  of  such 
claims  exceed  the  values  of  such  securities  or  priorities,  and 
then  only  for  such  excess.""     Where  a  creditor  has  security 


295 ,  the  payment  was  made  to  a 
petitioning  creditor  more  than  four 
months  before  petition  was  filed; 
B.  A.  1898,  Sec.  I,  clause  19.  Con- 
sult cases  cited  in  last  note  above. 

i«B.  A.  1898,  Sec.  I,  cl.  19. 

i"B.  A.   1898,  Sec.  Sgb. 

18  B.  A.   1898,  Sec.  S9d. 

^^  hi  re  Brown,  iii  Fed.  Rep. 
979,  7  Am.  B.  R.  102 ;  but  see  Gage 
&  Co.  V.  Bell,  124  Fed.  Rep.  371, 
10  Am.    B.   R.   696. 


-<*  Leighton  v.  Kennedy  (C.  C.  A. 
1st  Cir.),  129  Fed.  Rep.  "7:^7,  12 
Am.  B.  R.  229;  In  re  Blount,  142 
Fed.  Rep.  263,  16  Am.  B.  R.  97; 
In  re  Independent  Thread  Co., 
113  Fed.  Rep.  998.  7  Am.  B.  R.  704. 

21 /m  re  Tribelhorn  (C.  C.  A.  2d 
Cir.),  137  Fed.  Rep.  3,  14  Am.  B. 
R.  491. 

-■-B.  A.  1898,  Sec.  56&,  and  Sec. 
sgb. 


PROCEEDIKGS    IN    IXVOIAJXTARV    IJANKRUPTCY.  227 

or  lias  received  a  preference  he  may  make  a  voluntary  sur- 
render of  it  and  prosecute  a  petition  on  the  original  debt.'"^ 

It  has  been  held  that  creditors  who  have  assented  to  a  gen- 
eral assignment  made  by  their  debtor,  and  who  therefore 
can  not  join  in  a  petition  in  bankruptcy  against  him,  are  not 
to  be  counted,  in  determining  the  number  of  his  creditors,  and, 
if  the  creditors  who  have  not  assented  are  less  than  12  in 
number,  one  of  such  creditors  may  file  the  petition.-*  It  is 
the  number  of  creditors  at  the  date  the  petition  is  filed  that 
determines  wdiether  one  or  three  petitioning  creditors  are 
necessary.-^  If  it  appears  from  the  answer  that  there  are 
more  than  12  creditors,  the  petition  may  be  amended  to  allow 
other  creditors  to  join  in  a  petition  by  one  to  make  the  number 
suflicient."^ 

Creditors  may  be  estopped  by  their  own  consent  to  an  act 
from  alleging  it  against  their  debtor  as  proof  of  an  act  of 
bankruptcy.  A  creditor,  who  assents  to  the  making  of  an 
assignment  or  other  conveyance,  wdiich,  but  for  such  consent, 
would  be  an  act  of  bankruptcy,  can  not  allege  the  same  against 
his  debtor  to  procure  an  adjudication.  The  ground  of  the 
rule  is,  that  to  allow  him  to  do  so  would  be  inconsistent  with 
good  faith  and  fair  dealing,  encourage  deceit  and  put  it  within 
the  power  of  creditors  to  entrap  the  debtor  by  inducing  him 
to  commit  acts  apparently  fraudulent  as  to  them,  wdiich  they 
.  intend  afterwards  to  repudiate  to  his  disadvantage.  A  person 
will  not  therefore  be  allowed  to  complain  of  an  act  .of  bank- 
ruptcy where  he  induced  the  act,  or  after  its  commission  has 
so  acted  with  degard  to  it  that  others  have  the  right  to  act  on 
the  faith  of  its  validitv  so  far  as  his  subseuent  conduct  can 


23  B.    A.    1898,    Sec.    S9g;    ^»    ''^  •'^''ti-    B.   R.   553;   Leighton  v.   Ken- 

Marcer,    No.   9060   Fed    Cas.,    s.    c.  nedy   (C.  C.  A.  ist  Cir.),  129  Fed. 

6  N.  B.  R.  351;   In  re   Hunt,   No.  Rep.  237,  12  Am.  B.  R.  229;  In  re 

6882  Fed.  Cas.,  s.  c.  5  N.  B.  R.  433.  Blount,  142  Fed.  Rep.  263 ,   16  Am. 

-^  In    re    Miner,    104    Fed.    Rep.  B.  R.  696. 

520;  4  Am.  B.  R.  710;  2  N.  B.  N.  -" /»    re    Plymouth    Cordage    Co. 

1073.  (C.  C.  A.  8th  dr.),  135  Fed.  Rep. 

25Moulton  V.   Coburn    (C.   C.   A.  1000,  13  Am.  B.  R.  665. 
1st    Cir.),    131    Fed.    Rep.    201,    12 


228 


LAW    AND    I'ROCEEDINGS    IN     BANKRUPTCY 


effect  it."'  The  mere  fact  of  proving  a  claim  in  a  state  assign- 
ment proceedings  is  not  of  itself  sufficient  to  estop  a  creditor 
from  maintaining  a  petition  against  the  debtor,-^  nor  will  the 
acceptance  of  the  position  of  assignee  by  a  person  who  is 
secretary  of  a  corporation  estop  the  corporation.-''*  There  is 
an  exception  where  the  act  of  bankruptcy  committed  is  that 
covered  by  Sec.  3a,  cl.  5  of  the  Bankrupt  Act.  In  such  a  case 
the  creditor  is  not  trying  to  repudiate  or  set  aside  the  act 


2'^  Simonson  v.  Sinsheimer  (C.  C. 
A.  6th  Cir.),  95  Fed.  Rep.  948;  In 
re  Romanow,  92  Fed.  Rep.  510,  i 
Am.  B.  R.  461 ;  In  re  Miner,  104 
Fed.  Rep.  520,  4  Am.  B.  R.  710;  2 
N.  B.  N.  T073 ;  Durham  Paper  Co. 
V.  Seaboard  Knitting  Mills,  121 
Fed.  Rep.  179,   10  Am.  B.  R.  29. 

In  Simonson  v.  Sinsheimer,  su- 
pra, after  reviewing  the  cases,  the 
court  said :  "Coming  to  apply  our 
conclusions  to  the  case  at  bar,  we 
can  not  doubt  that  the  answer  ten- 
dered made  a  case  of  estoppel 
against  the  petitioners.  They  are 
alleged  to  have  become  parties  to 
the  assignment  proceedings,  to  have 
filed  their  claims  under  the  assign- 
ment, to  have  requested  a  reference 
to  pass  upon  the  claims,  the  ac- 
counts of  the  assignee,  and  the 
questions  of  distribution.  They 
waited  three  months  and  a  half 
before  filing  their  petition.  By  their 
acquiescence  they  certainly  induced 
the  assignors,  the  assignee,  and  the 
purchasers  of  the  assets  from  the 
assignee  to  believe  that  they  would 
not  seek  to  set  aside  the  assign- 
ment." 

The  case  was  reversed  and  re- 
manded to  the  district  court,  where 
answer  was  filed  and  evidence 
taken.  The  court  held  that  the  evi- 
dence did  not  establish  an  estoppel 
and    adjudged    the    respondents    to 


be  bankrupts  (96  Fed.  Rep.  579). 
This  decree  was  affirmed  on  appeal 
by  the  circuit  court  of  appeals  for 
the  sixth  circuit  (100  Fed.  Rep. 
426,  3  Am.  B.  R.  824). 

See  also  on  question  of  estoppel 
of  petitioning  creditors  Leidigh 
Carriage  Co.  v.  Stengel  (C.  C.  A. 
6tli  Cir.),  95  Fed.  Rep.  637,  2  Am. 
B.  R.  383,  I  N.  B.  N.  387;  In  re 
Curtis  (C.  C.  A.  7th  Cir.),  94  Fed. 
Rep.  630,  2  Am.  B.  R.  226;  af- 
firming 91    Fed.    Rep.    739,   4  Am. 

B.  R.  17;  In  re  C.  Moench  &  Sons 
Co.,  123  Fed.  Rep.  965 ,  10  Am.  B. 
R.  656,  affirmed  (C.  C.  A.  2d 
Cir.),  12  Am.  B.  R.  240,  130  Fed. 
Rep.   685;    Moulton  v.   Coburn    (C. 

C.  A.  1st  Cir.),  131  Fed.  Rep.  201, 
12  Am.  B.  R.  553;  Clark  v.  Henne 
&  Meyer  (C.  C.  A.  5th  Cir.),  127 
Fed.  Rep.  288,  11  Am.  B.  R.  583; 
Lowenstein  v.  McShane  Mfg.  Co., 
130  Fed.  Rep.  1007,  12  Am.  B.  R. 
601 ;  Woolford  v.  Diamond  State 
Steel  Co.,  138  Fed.  Rep.  582,  15 
Am.  B.  R.  31. 

-®  Leidigh  Carriage  Co.  v.  Sten- 
gel (C.  C.  A.  6th  Cir.),  95  Fed. 
Rep.  637r  2  Am.  B.  R.  383,  i  N.  B. 
N.  387;  In  re  Curtis  (C.  C.  A.  7th 
Cir.),  94  Fed.  Rep.  630,  2  Am.  B. 
R.  226. 

-■'  In  re  Winston,  122  Fed.  Rep. 
187.  10  Am.  B.  R.  171. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  229 

done  and  therefore  is  not  estopped  though  it  was  done  at  his 
solicitation."'^ 

Creditors  who  were  employed  by  the  debtor  at  the  time  of 
the  filing  of  the  petition,  or  are  related  to  him  by  consan- 
guinity or  affinity  within  the  third  degree,  as  determined  by 
the  common  law,  and  have  not  joined  in  the  petition,  are  not 
to  be  counted."'*^  Every  generation  in  lineal  consanguinity 
constitutes  a  different  degree,  reckoning  either  upwards  or 
do^vnwards.  The  method  of  computing  the  degree  of  col- 
lateral relationship  at  common  law,  in  the  words  of  Mr.  Jus- 
tice Blackstone,  is  as  follows :  "We  begin  at  the  common 
ancestor  and  run  downwards,  and  in  whatever  degree  the  two 
persons,  or  the  most  remote  of  them,  is  distant  from  the 
common  ancestor,  that  is  the  degree  in  which  they  are  related 
to  each  other."  "- 

In  order  to  institute  proceedings  in  involuntary  bankruptcy 
a  petitioning  creditor  or  creditors  must  have  claims  against 
the  debtor,  first,  wliich  are  provable  against  his  estate  and 
unsecured,  and,  second,  they  must  amount  in  the  aggregate  to 
five  hundred  dollars  or  over.  \\'hen  the  proceedings  are 
against  a  partnership  these  debts  clearly  must  be  partnership 
debts.  Under  all  circumstances  the  debts  must  be  provable 
against  the  estate  of  the  bankrupt. 

The  amount  of  the  claims  of  the  petitioning  creditors  must 
amount  in  the  aggregate  to  five  hundred  dollars  or  over.''' 
Interest  may  be  added  in  computing  any  of  these  amounts. •''^ 
The  creditor  may  purchase  claims  against  the  debtor  in  good 
faith  for  the  purpose  of  enabling  him  to  unite  in  the  petition."^ 
Creditors  who  have  been  paid  by  another  creditor   for  the 


^'^  In   re  C.  Moench  &  Sons  Co.,  crty,  star  p.  406;  McDowell  v.  Ad- 

132  Fed.   Rep.  965,    10  Am.   B.   R.  dams,  45  Penn.  St.  432. 

656,   affirmed    (C.   C.   A.  2d   Cir.),  33  b.  A.   1898,  Sec.  59&. 

130   Fed.   Rep.  685,   12   Am.   B.    R.  34  sioan  v.  Lewis,  22  Wall.   150, 

240.  22  L.  Ed.  832. 

-' B.  A.  1898,  Sec.  59^.  ^^  In    re    Woodford,    No.    17972 

"-  2    Black.    Com.    206 ;    Coke   on  Fed.  Cas.,  s.  c.  i  Cin.  Law  Bui.  27  '■> 

Litt.  23 ;  3  Washburn  on  Real  Prop-  Rx   parte    Shouse,    No.    12815    Fed. 

Cas.,  s.  c.  Crabbe  482, 


230  LAW    AND    PROCEEDLNGS    IN    BANKRUPTCY 

purpose  of  inducing  them  to  join  in  the  petition  and  who  no 
longer  have  any  interest  will  not  be  allowed  to  join  in  tlie 
petition."'*  The  amount  at  which  the  claim  of  the  secured 
creditor  is  to  be  reckoned  is  for  the  amount  the  claim  exceeds 
the  value  of  the  security  or  priority.^^ 

Creditors  of  a  bankrupt,  who  have  proved  claims  against 
his  estate,  may  file  a  second  petition  to  have  him  again  ad- 
judicated a  bankrupt  to  reach  after  acc[uired  property,  where 
a  discharge  was  refused  him  in  the  first  pi'oceeding,  if  he  has 
committed  an  act  of  bankruptcy  within  four  months  of  the 
filing  of  the  second  petition.  A  second  adjudication  can  not 
be  had  where  the  act  complained  of  occurred  more  than  four 
months  before  filing  the  second  petition."* 

§  67.     Against  whom  a  petition  may  be  filed. 

To  warrant  or  justify  the  institution  of  involuntary  pro- 
ceedings against  a  debtor,  individual  corporation  or  partner- 
ship, two  things  must  concur  with  reference  to  such  debtor : 
First,  such  debtor  must  be  one  who  may  be  adjudged  an  in- 
voluntary bankrupt  and  be  subject  to  the  provisions  and  enti- 
tled to  the  benefits  of  the  statute;  second,  he  must  have  com- 
mitted an  act  of  bankruptcy  within  four  months  prior  to  the 
filing  of  the  petition.  If  the  act  of  bankruptcy  alleged  is  that 
set  forth  in  Sec.  3a,  cl.  1  of  the  bankrupt  act  he  must  be 
insolvent  at  the  time  of  filing  the  petition.^ 

The  Debtor  must  be  one  who  may  be  Adjudged  an 
Involuntary  Bankrupt. — It  is  evident  that  unless  the 
debtor  may  be  adjudged  a  bankrupt  and  his  property  distrib- 
uted in  accordance  with  the  bankrupt  statute  the  proceeding 
against  him  would  be  futile. 

The  statute   declares   that   "any   natural   person,   except   a 

^^  In  re  Burlington   Malting  Co.,  Rep.  201,  12  Am.  B.  R.  553. 
109  Fed.  Rep.  777,  6  Am.  B.  R.  369.  S'  B.  A.  1898,  Sec.  56^. 

See  also  Leighton  v.  Kennedy    (C.  ^^  In  re  Barton's  Estate,  144  Fed. 

C.  A.  ist  Cir.),  129  Fed.  Rep.  737,  Rep.   540,   16  Am.   B.   R.   569. 
12  Am.  B.  R.  229 ;  Moulton  v.  Co-  ^  B.  A.   1898,  Sec.  3c. 

burn   (C.  C.  A.  ist  Cir.),  131  Fed. 


PROCEEDINGS    IN    IXVOLUXTARV    I'.AXKRUPTCY.  231 

wage-earner  or  a  person  engaged  chiefly  in  farming  or  the 
tillage  of  the  soil,  any  nnincorporated  company,  and  an}'  cor- 
poration engaged  principally  in  manufacturing,  trading,  print- 
ing, publishing,  mining,  or  mercantile  pursuits,  owing  debts 
to  the  amount  of  one  thousand  dollars  or  o\-er,  may  be  ad- 
judged an  involuntary  bankrupt  upon  default  or  an  impartial 
trial,  and  shall  be  subject  to  the  provisions  and  entitled  to 
the  benefits  of  this  act.  Private  bankers,  but  not  national 
banks  or  banks  incorporated  under  state  or  territorial  laws, 
may  be  adjudged   involuntary  bankrupts."  " 

It  is  essential  that  he  owes  debts  to  the  amount  of  $1,000 
or  over  to  bring  him  within  the  class  of  debtors  subject  to  the 
provisions  of  the  act." 

The  actual  owner  is  subject  to  be  adjudged  a  bankrupt  and 
it  is  niot  necessary  to  join  with  him  a  person  who  has  loaned 
him  the  capital  with  which  to  do  business.^  Although  a  cor- 
poration has  been  dissolved  by  receivership  proceedings  it 
may  be  adjudged  a  bankrupt  in  order  that  preferences  made 
fraudulent  by  the  bankrupt  act  may  be  set  aside.^  The  in- 
sanity of  a  partner  will  not  prevent  an  adjudication  against 
the  partnership." 

Acts  of  Bankruptcy. — A  petition  can  not  be  filed  against 
a  debtor  until  he  has  done  or  allowed  to  be  done  something 
which  the  statute  defines  to  be  an  act  of  bankruptcy.  The 
act  of  bankruptcy  must  have  been  committed  within  four 
months  prior  to  the  filing  of  the  petition.^ 

The  statute  declares  that  "acts  of  bankruptcy  by  a  person 
shall  consist  of  his  having    (1)    conveyed,   transferred,   con- 

-  B.  A.    1898,    Sec.   4,   32    Stat,   at  5  Scheuer  v.   Smith   &   :\Iontgom- 

L.  797.    For  a  further  consideration  ery,   etc.,   Co.    (C.   C.   A.   5th   Cir.), 

of  who  may  be  adjudged  bankrupts,  112    Fed.    Rep.    407,    7    Am.    B.    R. 

see  Chap.  VII.  384;   In  re  White   ^Mountain   Paper 

^  Taft    Co.    V.     Century    Savings  Co.,   127  Fed.   Rep.   180,    11   Am.   B. 

Bank  (C.  C.  A.  8th  Cir.),  141  Fed.  R.    491;    affirmed     (C.    C.    A.     ist 

Rep.  369,  15  Am.  B.  R.  594;  B.  A.  Cir.),  127  Fed.  Rep.  643,  11  Am.  B. 

1898,    Sec.  46.  R.  633. 

■*  In    re    Kenney,    97    Fed.    Rep.  c  /„  ;.^  Stein  &  Co.,  127  Fed.  Rep. 

554.  2  N.  B.   N.   140,  3  Am.  B.  R.  547,   11  Am.  B.  R.  536. 

353-  '^  B.  A.  1898,  Sec.  3&. 


232  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 

cealed.  or  removed,  or  permitted  to  be  concealed  or  removed, 
any  part  of  his  property  with  intent  to  hinder,  delay,  or  de- 
fraud his  creditors,  or  any  of  them;  or  (2)  transferred,  while 
insolvent,  any  portion  of  his  property  to  one  or  more  of  his 
creditors  with  intent  to  prefer  such  creditors  over  his  other 
creditors;  or  (3)  suffered  or  permitted,  while  insolvent,  any 
creditor  to  obtain  a  preference  through  legal  proceedings,  and 
not  having  at  least  five  days  before  a  sale  or  final  disposition 
of  any  property  affected  by  such  preference  vacated  or  dis- 
charged such  preference;  or  (4)  made  a  general  assignment 
for  the  benefit  of  his  creditors,  or,  being  insolvent,  applied  for 
a  receiver  or  trustee  for  his  property  or  because  of  insolvency 
a  receiver  or  trustee  has  been  put  in  charge  of  his  property 
under  the  laws  of  a  state,  of  a  territory,  or  of  the  United 
States;  or  (5)  admitted  in  writing  his  inability  to  pay  his 
debts  and  his  willingness  to  be  adjudged  a  bankrupt  on  that 
ground."  ^ 

These  are  the  only  acts  committed  by  a  debtor  which  are 
acts  of  bankruptcy.  Unless  the  acts  complained  of  by  the 
creditor  or  creditors  come  within  this  enumeration  it  is  not 
an  act  of  bankruptcy,  and  can  not  be  made  a  ground  for  insti- 
tuting involuntary  proceedings.  Where,  however,  the  act  is 
one  of  those  named  in  the  statute,  and  the  debtor  subject  to 
be  adjudged  a  bankrupt,  then  one  creditor,  if  the  creditors 
are  less  than  twelve  in  number,  otherwise  three  or  more  cred- 
itors, may  apply  to  have  him  declared  a  bankrupt,  provided  the 
application  is  made  within  four  months  after  the  commission 
of  the  act  of  bankruptcy,  and  such  creditor  or  creditors  have 
provable  claims  amounting  to  five  hundred  dollars. 

Insolvency  at  the  Time  of  Filing  the  Petition. — The 
statute  provides  that  a  petition  may  be  filed  against  a  person 
who  is  insolvent.^  In  construing  this  clause  the  supreme 
court  has  held  that  solvency  at  the  time  the  petition  was  filed 
is  a  defence  only  when  an  act  of  bankruptcy  under  cl.   1.  of 

s  B.  A.   1898,   Sec.  3a,  32  Stat,  at       of   what   constitutes   acts    of   bank- 
L.  797.     For  a  further  consideration       ruptcy,  see  Chap.  VTII. 

9  B.  A.  1898,  Sec.  35. 


'     PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  233 

Sec.  3a  is  charged  in  tlie  petition.'-  Though  the  rules  and 
forms  in  bankruptcy  provide  for  an  issue  as  to  solvency  in 
cases  of  involuntary  bankruptcy  such  an  issue  becomes  super- 
fluous where  other  acts  of  bankruptcy  are  charged. '°  Where 
the  issue  is  material  the  bankrupt  is  entitled  to  have  a  trial 
by  jury  in  respect  to  the  question  of  his  insolvency  upon  filing 
a  written  application  therefor  at  or  before  the  time  within 
which  an  answer  may  be  filed."  If  such  application  is  not 
filed  within  such  time  a  trial  by  jury  is  deeme'd  to  be  waived.' ' 
In  such  case  the  cjuestion  is  tried  before  the  court  without 
a  jury. 

Under  the  present  statute  a  person  is  deemed  insolvent 
whenever  the  aggregate  of  his  property,  exclusive  of  any 
property  which  he  may  have  conveyed,  transferred,  concealed 
or  removed,  or  permitted  to  be  concealed  or  removed,  with 
intent  to  defraud,  hinder  or  delay  his  creditors,  shall  not,  at  a 
fair  valuation,  be  sufficient  in  amount  to  pay  his  debts. '- 

It  should  be  observed  that  the  term  insolvent,  as  used  iil 
the  present  act,  has  quite  a  different  meaning  from  the  same 
term  as  used  in  the  former  acts.  Under  the  act  of  1867  the 
term  insolvency  was  held  not  to  mean  the  absolute  inability  to 
pay  one's  debts  at  a  future  time  upon  a  settlement  or  winding 
up  of  all  the  debtor's  concerns;  but  a  trader  was  held  to  be 
insolvent  when  he  was  not  in  a  condition  to  pay  his  debts  in 
the  ordinary  course  of  business,  as  persons  carrying  on  trade 
usually  do." 


invest   V.   Lea,    174   U.    S.    590,  i- B.   A.    1898,   Sec.    I,   clause    15. 

43  L.   Ed.   1098,  2  Am.  B.  R.  463.  See  Sec.  Soa,  ante. 
See   also    Da}^   v.    Beck    Hardware  i"  Wager  v.   Hall,   16  Wall.   599 , 

Co.    (C.  C.  A.  5th  Cir.),   114  Fed.  21  L.  Ed.  504;  Toof  v.  Martin.   13 

Rep.   834,   8   Am.    B.    R.    175.  Wall.   40,   20    L.    Ed.   481;    Saw.vcr 

11  B.   A.    1898,    Sec.    ig;    Bray  v.  v.  Turpin,  91  U.  S.  114,  23  L.  Ed. 

Cobb,  91  Fed.  Rep.  102,  T  Am.  B.  R.  235;  Wilson  v.  City  Bank,  17  Wall. 

153.     See  also  Elliott  v.  Toeppner,  473,  21  L.  Ed.  72^. 
187   U.    S.    327,    47   L.    Ed.    200,   9 
Am.  B.  R.  50. 


234 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 


§  68.     In  what  court  an  involuntary  petition  is  filed. 

The  court  in  wliich  involuntary  proceedings  may  l)e  insti- 
tuted depends  upon  where  the  debtor  has  had  his  domicile, 
resided  or  had  his  principal  place  of  business  for  the  greater 
portion  of  the  preceding  six  months/  irrespective  of  the  resi- 
dence of  the  creditors.  A  creditors'  petition  must  be  hied  in 
a  court  of  bankruptcy  in  which  the  debtor  could  have  filed  a 
voluntary  petition.  The  remarks  that  have  already  been  made 
in  regard  to  the  court  in  which  a  voluntary  petition  may  be 
hied  apply  equally  to  where  proceedings  in  involuntary  bank- 
ruptcy may  be  instituted.' 

The  domicile  of  a  corporation  is  the  state  in  which  it  was 
originally  created  and  it  can  not  change  its  domicile  by  filing 
its  charter  or  being  incorporated  in  another  state."  Where 
tliere  is  more  than  one  district  in  a  state,  the  domicile  of  the 
corporation  is  that  district  within  which  the  general  business 
of  the  corporation  is  done  and  where  it  has  its  headquarters 
and  general  offices.*  An  involuntary  proceeding  in  bank- 
ruptcv  may  be  instituted  against  a  domestic  corporation  in 
the  district  in  which  it  has  its  principal  business  office.' 

It  is  w-ell  settled  that  a  petition  may  be  filed  against  a  cor- 
poration, incorporated  in  another  state,  in  the  district  where 
it  has  its  principal  place  of  business,  as  distinct  from  its  resi- 
dence or  domicile,  for  the  greater  portion  of  the  preceding 
six  months.*^     It  is  not  necessary  that  the  foreign  corporation 


^B.  A.  1898,  Sec.  2,  clause  i  ;  In 
re  Plotke  (C.  C.  A.  7th  Cir.),  5 
Am.  B.  R.  171,  104  Fed.  Rep.  964; 
In  re  Filer,  108  Fed.  Rep.  209,  5 
Am.  B.  R.  2,2,2 ;  In  re  Mackey, 
no    Fed.    Rep.    355,    6   Am.    B.    R. 

577- 

-  See  Sec.  58,  a}itc. 

"  St.  Louis  &  San  Francisco  R.  R. 
Co.  V.  James,  161  U.  S.  545,  40 
L.  Ed.  802;  Southern  Railway  Co. 
V.  Allison,  190  U.  S.  326;  White 
^Mountain  Paper  Co.  v.  Morse  (C. 
C.  A.   ist  Cir.),  127  Fed.  Rep.  643, 


II  Am.  B.  R.  djiZ',  /"  ''^  United 
Button  Co.,  137  Fed.  Rep.  668,  13 
Am.    B.    R.   454. 

4  Galveston,  etc.,  R.  R.  Co.  v. 
Gonzales,  151  U.  S.  496,  38  L.  Ed. 
248 ;  Harve}^  v.  Richmond,  etc.,  R. 
Co.  64   Fed.   Rep.    19. 

5  In  re  Elmira  Steel  Co.,  109 
Fed.  Rep.  456,  S  Am.   B.  R.  484. 

'^  Dressel  v.  North  State  Lumber 
Co.,  107  Fed.  Rep.  255,  S  Am.  B. 
R.  744;  In  re  Magid-Hope  Silk 
INJfg.  Co.,  no  Fed.  Rep.  352,  6 
Am.  B.  R.  610;  In   re  j\Iarine  Ma- 


PROCEEDINGS    IX    INVOLUNTARY    BANKRUPTCY.  235 

has  complied  with  the  state  law  requiring  a  certificate  or 
charter  to  be  filed  before  doing  business  in  the  state. ^ 

The  principal  place  of  business,  generally  speaking,  is 
where  the  plant,  factory  or  assets  of  the  corporation  is 
located.  If  the  corporation  has  several  places  of  business,  the 
principal  place  is  usually  wdiere  the  general  ofiices  or  head- 
quarters of  the  concern  is  located.**  It  has  been  held  the 
principal  place  of  business  of  a  manufacturing  corporation, 
which  had  shut  down  its  works,  was  where  it  maintained  its 
office  for  the  transaction  of  its  executive  and  banking  busi- 
ness.^ Where  the  principal  place  of  business  is  located  is  a 
question  of  fact  to  be  determined  by  the  circumstances  in  each 
particular  case. 

It  is  obvious  that  involuntary  petitions  may  be  filed  against 
the  same  debtor  in  two  or  more  districts ;  or  that  two  or  more 
petitions  may  be  filed  against  the  same  debtor  by  different 
creditors  in  the  same  district.  The  order  of  proceedings  in 
such  cases  is  regulated  by  the  general  orders.^" 

§  69.    The  petition. 

The  application  to  have  a  debtor  adjudged  a  bankrupt  and 
his  property  distributed  according  to  the  bankrupt  law  is 
made  by  petition.  The  Supreme  Court  of  the  United  States 
has  prescribed  forms  which  should  be  observed  and  used  with 
such  alterations  as  may  be  necessary  to  suit  the  circumstances 
in  any  particular  case.'^     The  petition  must  be  printed  or 

chine  &  Conveyor  Co.,  91  Fed.  Rep.  «  See    In    re    Mathews    Consoli- 
630,    I   Am.   B.   R.  421;    Tiffany   v.  dated  Slate  Co.,  144  Fed.  Rep.  724, 
LaPlume  Condensed  Milk  Co.,   141  16  Am.  B.  R.  407. 
Fed.  Rep.  444,   15  Am.  B.  R.  4x3;           " /«   re   Marine  Machine  &  Con- 
In    re    Duplex    Radiator    Co.,    142  veyor  Co.,  91  Fed.  Rep.  630,  i  Am. 
Fed.  Rep.  906,   15  Am.   B.  R.  324;  B.  R.  421;   see  also  Tiffany  v.  La- 
White     Mountain     Paper     Co.     v.  Plume    Condensed    Milk    Co.,     141 
Morse  &  Co.    (C.  C.  A.   ist  Cir.),  Fed.  Rep.  444,  I5  Am.  B.  R.  413. 
127  Fed.    Rep.  643,    11    Am.   B.   R.          10  Gen.  Ords.  6  and  7.     See  Sees. 
6353;    In   re    Mathews    Consolidated  84  and   85,   post. 
Slate   Co.,    144   Fed.    Rep.   724,    16          "Gen.    Ord.    38;    Official    Form 
Am.  B.  R.  407.  No.    3,    Form    No.    5,    post;    Gage 

''In  re  Duplex  Radiator  Co.,  142  &  Co.  v.  Bell,  124  Fed.  Rep.  371. 
Fed.  Rep.  906,   15  Am.   B.   R.  324. 


236  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 

written  out  plainly,  without  abbreviations  or  interlineations, 
except  where  such  abbreviations  or  interlineations  may  be  for 
the  purpose  of  reference/-  It  should  be  prepared  in  duplicate, 
one  copy  for  the  clerk  and  one  for  service  upon  the  bankrupt/^ 

The  petition  should  be  entitled  in  the  proper  court  of  bank- 
ruptcy. The  caption  is  regularly  A.  B.,  C.  D.  and  E.  F., 
petitioners,  v.  X.  Y.,  respondent.  Although  the  title  of  the 
court  and  the  style  of  the  case  are  not  required  to  be  stated 
in  a  caption,  and  in  many  of  the  earlier  cases  were  never  put 
in  the  petition,  it  is  more  convenient  for  reference,  and  is  now 
frequently  inserted  by  the  best  pleaders.  The  petition  is 
addressed  to  the  judge  of  the  court  in  which  it  is  to  be  filed,'* 
as  to  the  Honorable  S.  R.,  judge  of  the  district  court  of  the 
United  States  for  the  district  of . 

The  petition  should  state  the  names  and  residences  of  both 
the  petitioning  creditors  and  the  debtor.  It  should  contain 
a  sufficient  description  of  the  debtor  to  show  that  he  is  subject 
to  be  adjudged  an  involuntary  bankrupt,  and  should  charge 
his  insolvency  at  the  time  of  filing  the  petition. ^^  A  petition 
against  a  corporation  must  state  that  it  is  such  a  corporation 
as  may  be  adjudged  a  bankrupt  "  and  a  petition  against  an 
individual  that  he  is  not  a  wage-earner  or  a  person  engaged 
chiefly  in  farming  or  the  tillage  of  the  soil."     If  such  allega- 

^-  Gen.  Ord.  5 ;  Mahoney  v.  Ward,  can  not  be  stricken  out  as  surplus- 

100   Fed.    Rep.   278 ,   3   Am.    B.    R.  age,  and  consequently  permission  to 

770.      See    also   criticism   of  Judge  iile  was  denied. 

Woolson,    I    N.    B.    N.    239;    West  i^  b.  A.  1898,  Sec.  3&;  /«  r^  Tay- 

Co.  V.  Lea,  43  L.  Ed.  1098,  2  Am.  lor    (C.   C.  A.  7th  Cir.),   102  Fed. 

B.  R.  463.  Rep.  728,  4  Am.  B.  R.  515,  2  N.  B. 

13  B.    A.    1898,    Sec.    sgc;    In    re  N.  929.     See  West  Co.  v.  Lea,  174 

Plymouth    Cordage   Co.    (C.    C.   A.  U.   S.  590,  43  L-  Ed.   1098,  2  Am. 

8th    Cir.),    135    Fed.    Rep.    looo,    13  B.  R.  463. 

Am.  B.  R.  665.  ^^In    re    Elmira    Steel    Co.,    109 

"  In  Anon.,  No.  459  Fed.  Cas.,  s.  Fed.  Rep.  456,  5  Am.  B.  R.  484. 
c.  I  N.  B.  R.  216,  leave  was  asked  .        i"  In    re    Taylor    (C.    C.    A.    7th 

to    present   an    involuntary   petition  Cir.),  102  Fed.  Rep.  728,  4  Am.  B. 

addressed  to   "Hon.    Nye   K.   Hale,  R.  51S;  In  re  Bellah,  116  Fed.  Rep. 

District  Judge."     It  was  held  that  69,  8  Am.  B.  R.  310;  In  re  Calli- 

the    name    of    the    judge    must    be  son,    130    Fed.    Rep.    987,    12    Am. 

given    correctly    if    at    all;    that    it  B.  R.  344.   affirmed    (C.  C.  A.  5th 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  237 

tion  is  omitted  and  the  defendant  answers  on  the  merits  the 
defect  is  waived/*  The  defect  may  be  cured  by  amendment/'' 
It  should  set  forth  all  the  matters  that  are  requisite  to  give 
jurisdiction  to  the  court  over  the  particular  case.  It  should 
show  that  the  debtor  had  had  his  principal  place  of  business, 
resided  or  had  his  domicile  within  the  territorial  jurisdiction 
of  the  court  for  the  greater  portion  of  the  preceding  six 
months.-*'  If  he  has  not  had  a  principal  place  of  business, 
resided  or  had  a  domicile  within  the  United  States,  it  must 
show  that  he  has  property  within  the  jurisdiction  of  the 
court.-^  If  one  creditor  only  petitions,  it  should  be  averred 
that  all  the  creditors  of  the  bankrupt  are  less  than  twelve  in 
number.--  If,  in  fact,  there  are  more  than  twelve  creditors, 
the  court  may  allow  an  amendment  permitting  other  petition- 
ing creditors  to  join  in  the  petition  at  any  time  before  adjudi- 
cation.-^ The  petition  must  also  allege  that  the  debtor  owes 
debts  to  the  amount  of  one  thousand  dollars.-* 

The  petition  must  set  forth  and  describe  the  claim  or  claims 
of  the  petitioning  creditor  or  creditors  sufficiently  to  show  that 
they  are  provable  claims  and  amount  in  the  aggregate  to  five 
hundred    dollars    or   over.-^      Ordinarily   where    the    debt    is 

Cir.),    129   Fed.   Rep.   201,   11   Am.  Novak,  loi  Fed.  Rep.  800,  4  Am.  B. 

B.   R.   797;   In   re   Brett,    130   Fed.  R.  311. 

Rep.  981,  12  Am.  B.  R.  492;  In  re  -'-^  In   re    Plymouth   Cordage   Co. 

White,   135  Fed.  Rep.   199,   14  Am.  (C.  C.  A.  8th  Cir.),  135  Fed.  Rep. 

B.    R.    241;    Rise    v.    Bordner,    140  1000,  13  Am.  B.  R.  665;  In  re  Haff 

Fed.  Rep.  566,   15  Am.  B,  R.  297.  (C.  C.  A.  2d  Cir.),   136  Fed.   Rep. 

1**  Green  River  Bank  v.  Craig,  no  78,  13  Am.  B.  R.  362. 

Fed.  Rep.  137,  6  Am.  B.  R.  381.  -'4  b.  A.   1898,  Sec.  4&;  Taft  Co. 

1^  Beach    v.    Macon    Grocer}-    Co.  v.    Century    Sav.    Bank    (C.    C.    A. 

(C.  C.  A.  5th  Cir.),  120  Fed.  Rep.  8th    Cir.),    141    Fed.    Rep.    369,    15 

736,  9  Am.  B.  R.  762;  In  re  White,  Am.  B.  R.  594. 

135   Fed.   Rep.    199,    14  Am.   B.   R.  253.    A.    1898,    Sec.    59^;    In    re 

241 ;  In  re   Plymouth  Cordage  Co.  Stein,  130  Fed.  Rep.  ^77,  12  Am.  B. 

(C.  C.  A.  8th  Cir.),  135  Fed.  Rep.  R.  364;  In  re  Bedingfield,  96  Fed. 

1000,  13  Am.  B.  R.  665.  Rep.   190,  2  Am.   B.   R.  355;  In  re 

-"  B.  A.  1898,  Sec.  2,  clause  i.  Western  Sav.  &  T.  Co.,  No.  17442 

^'  B.  A.  1898,  Sec.  2,  clause  i.  Fed.  Cas.,  s.  c.  4  Saw.  490;  In  re 

■"B.    A.    1S98,    Sec.    sod;    In    re  Hadley,  No.  5894  Fed.  Cas.,  s.  c.  12 

Miner,   104  Fed.  Rep.  520,  2  N.  B.  N.  B.  R.  366. 
N.   1073,  4  Am.   B.  R.  710;  In  re 


238  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 

founded  upon  a  written  instrument,  as  a  note,  bond,  contract, 
etc.,  the  paper  is  annexed  to  the  petition  as  an  exhibit,  and 
proper  reference  to  it  is  made  in  that  part  of  the  petition  which 
is  designed  to  describe  the  debt  or  claim.  Where  several 
claims  or  debts  are  stated  in  the  petition  each  debt  should  be 
set  forth  in  a  separate  paragraph,  with  sufficient  particularity 
to  show  that  it  is  a  provable  claim. 

The  petition  should  contain  an  allegation  that  the  act  of 
bankruptcy  (setting  forth  in  detail  the  act  of  the  debtor  which 
is  relied  upon  as  an  act  of  bankruptcy)  was  committed  within 
the  period  of  four  months  prior  to  the  filing  of  the  petition. 
The  allegation  in  regard  to  the  act  of  bankruptcy  must  be 
positive,  full  and  unqualified. "'^  Allegations  of  acts  of  bank- 
ruptcy in  the  language  of  the  act,  without  setting  forth  any 
other  facts  or  circumstances,  are  insufficient."^  Evidence  of 
acts  not  set  up  in  the  petition  will  not  be  received  or  con- 
sidered.'"^ Where  the  petition  is  filed  against  a  partnership 
the  allegation  should  set  forth  an  act  of  bankruptcy  on  the 
part  of  the  firm.  An  averment  of  an  act  of  bankruptcy  upon 
the  part  of  one  of  the  members  of  the  firm  acting  within  the 
scope  of  the  firm  business  is  sufficient."''  Several  act  of  bank- 
ruptcy may  be  charged  in  the  same  petition.  When  this  is 
done  they  should  be  alleged  conjunctively.^^  In  such  case  it 
is  enough  if  either  of  them  is  satisfactorily  proven. 


30 


2"  Clark   V.    Henne  &   Meyer    (C.  -' /«  re  Hark,  135  Fed.  Rep.  603, 

C.  A.  sth  Cir.),  127  Fed.  Rep.  288,  14  Am.  B.  R.  400. 

II  Am.  B.  R.  583;  In  re  Mero,  128  -^  Ex  parte  Potts,  No.  11344  Fed. 

Fed.   Rep.  630,   12  Am.  B.  R.   171 ;  Cas.,  s.  c.  Crabbe  469. 

In  re  Blumberg,  133  Fed.  Rep.  845 ,  -^  In   re   Shapiro,    106   Fed.    Rep. 

13  Am.  B.  R.  343 ;  In  re  Vetterman,  495 ,  5  Am.  B.  R.  839 ;  In  re  Grant, 

135   Fed.   Rep.  443 ,    14  Am.   B.   R.  106    Fed.    Rep.    496,    5    Am.    B.    R. 

245;    In    re   White,    135    Fed.    Rep.  837;  see  also  Chap.  XI, /lo.?;. 

199,  14  Am.  B.  R.  241 ;  In  re  Nel-  '•'■^  Bradley  Timber   Co.   v.   White 

son,  98  Fed.  Rep.  76,   i  Am.  B.  R.  (C.  C.  A.  5th  Cir.),   121   Fed.  Rep. 

65;  In  re  Cliffe,  2  Am.  B.  R.  317,  779,    10   Am.    B.    R.    329;    see    also 

94     Fed.     Rep.    354;     In    re    Ew-  In  re  Sears  (C.  C.  A.  2d  Cir.),  117 

ing    (C.    C.   A.  2d   Cir.),    115    Fed.  Fed.   Rep.   294,   8  Am.    B.    R.   713; 

Rep.   707,   8  Am.   B.   R.   269;   Sea-  In  re  Lange,   97   Fed.    Rep.    197,  .3 

board    Steel    Casting   Co.   v.   Trigg  Am.  B.  R.  232 ;  In  re  Drummond, 

Co.,   124  Fed.  Rep.  75,    to  Am.   B.  No.  4093   Fed.   Cas.,   s.  c.    i    N.   B. 

R.  594.  R.  231 ;  In  re  McKibben,  No.  8859 


TROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 


239 


The  petition  should  not  include  an  application  for  a  warrant 
to  seize  property.  If  it  does,  the  petition  is  had  for  multi- 
fariousness.^^ 

The  petition  should  conclude  witli  a  prayer  that  service  of 
the  petition  with  a  suhpcena  may  be  made  upon  tlie  debtor 
(naming  him)  as  provided  In  the  acts  of  Congress  relating  to 
bankruptcy,  and  that  he  should  be  adjudged  by  the  court  to 
be  a  bankrupt  within  the  purview  of  said  acts.^" 

The  petition  should  be  signed  by  the  petitioning  creditor  or 
creditors,  or  their  attorney  or  agent.""'"'  It  must  be  verified  as 
to  matters  of  fact  by  an  affidavit  under  oath.^*  Neither  the 
statute  nor  the  general  orders  require  the  petition  to  be  signed 
or  verified  by  the  petitioners  personally.  An  agent  or  an  attor- 
ne}^  may  make  the  oath  if  it  appears  that  he  has  knowledge  of 
the  facts.  This,  however,  is  not  good  practice  wdiere  it  is  not 
inconvenient  for  the  petitioning  creditors  to  make  it.'^  Where 
it  does  not  appear  that  the  attorney  has  knowledge  of  the  facts 
the  defect  is  waived  if  answer  is  made  on  the  merits.^'''  The 
oath  or  affirmation  may  be  administered  by  a  referee,  an  officer 


^1 /w  re  Kelly,  91  Fed.  Rep.  504, 
Fed.   Cas.,   s.  c.   12   N.   B.   R.  97. 
I   Am.   B.  R.  306;   Mather  v.   Coe, 
92    Fed.    Rep.    2>ay    i    Am.    B.    R. 
504;  in  re  Ogles,  93  Fed.  Rep.  426, 

I  Am.  B.  R.  671. 

32  See  Official  Form  No.  3,  Form 
No.  5,  post. 

^^  In  re  Raynor,  No.  11597  Fed. 
Cas.,  s.  c.  II  Blatch.  43;  Wald  v. 
Weill,  6  Fed.  Rep.  163. 

31 B.  A.  1898,  Sec.  i8c;  In  re 
Donnelh',  5  Fed.  Rep.  783 ;  In  re 
Raynor,  No.    iiS97  Fed.  Cas.,  s.  c. 

II  Blatch.    43;    Wald    v.    Wehl,    6 
Fed.  Rep.  163. 

The  oath  attached  to  the  cred- 
itor's petition,  Form  No.  54,  under 
the  act  of  1867,  provided  for  mak- 
ing oath  on  information  and  be- 
lief. The  oath  attached  to  the  cred- 
itor's petition,   Form   No.   3,   under 


the  present  statute,  provides  only 
for  a  positive  statement  and  not 
for  a  verification  upon  information 
and  belief. 

^'' In  re  Herzikopf,  118  Fed.  Rep. 
loi,  9  Am.   B.  R.  90;  In  re  Hunt, 

118  Fed.  Rep.  282,  9  Am.  B.  R. 
251 ;  In  re  Chequasset  Lumber  Co., 
112  Fed.  Rep.  56,  7  Am.  B.  R.  87; 
but  see  In  re  Nelson.  98  Fed.  Rep. 
76,  I  Am.  B.  R.  63 ;  In  re  Simon- 
son,  Whiteson  &  Co.,  92  Fed.  Rep. 
904,  I  Am.  B.  R.  197;  In  re  Glass, 

119  Fed.    Rep.    509,    9   Am.    B.    R. 

391- 

^'i  In  re  Simonson,  Whiteson  & 
Co.,  92  Fed.  Rep.  904,  i  Am.  B.  R. 
197 ;  Leidigh  Carriage  Co.  v.  Sten- 
gel (C.  C.  A.  6th  Cir.),  95  Fed. 
Rep.  637,  2  Am.  B.  R.  383;  Simon- 
son  V.  Sinsheimer  (C.  C.  A.  6th 
Cir.),  95  Fed.  Rep.  948. 


240 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 


authorized  to  administer  oaths  in  proceedings  before  the 
courts  of  the  United  States  or  under  the  laws  of  the  state 
where  the  same  are  to  be  taken;  or  a  diplomatic  or  consular 
officer  of  the  United  States  in  any  foreign  country. 


37 


§  70.    The  time  and  manner  of  filing  the  petition. 

The  petition  must  be  filed  in  the  oi^ce  of  the  clerk  of  a 
court  of  bankruptcy,  and  not  with  a  referee.  When  there 
is  a  vacancy  in  the  office  of  judge,  the  clerk  should  file  the 
petition  and  issue  subpoena/ 

A  petition  in  bankruptcy  is  deemed  filed  within  the  meaning 
of  the  statute  from  the  time  it  is  presented  to  the  clerk  in  his 
office,  and  not  from  the  time  when  it  is  presented  to  the  judge 
for  his  action."  No  notice  of  filing  a  petition  is  required  to  be 
given  creditors.^  No  schedule  is  required  to  be  filed  with  a 
petition  in  involuntary  bankruptcy.  The  statute  provides  that 
the  petition  shall  be  filed  in  duplicate,  one  copy  for  the  clerk 
and  one  for  service  on  the  bankrupt.*  The  petition  is  re- 
ceived by  the  clerk  and  filed  and  the  case  docketed  as  in  volun- 
tary proceedings.^  The  deposit  for  costs  should  be  made  by 
the  petitioning  creditors  as  by  a  voluntary  debtor.*'  There  is 
one  exception,  namely,  the  petitioning  creditors  are  not  per- 
mitted to  proceed  in  forma  pauperis,  without  making  a 
deposit. 

The  petition  must  l)e  filed  within  four  months  after  the 
commission    of    the    act    of    bankruptcy    upon    which    it    is 


37  B.  A.  1898,  Sec.  20. 

1  In  re  Urban,  etc.,  Title  Co., 
132  Fed.  Rep.  140,  12  Am.  B.  R. 
687. 

-In  re  Von  Borcke,  94  Fed.  Rep. 
352,  2  Am.  B.  R.  322;  In  re  Appel, 
T03  Fed.  Rep.  931,  4  Am.  B.  R. 
722,  2  N.  B.  N.  907;  In  re  Bear, 
5  Fed.  Rep.  53;  In  re  Abrahams, 
No.  20  Fed.  Cas.,  s.  c.  5  Law  Rep. 
328. 

3  In  re  Billing,  145  Fed.  Rep.  395. 

4B.    A.    1898,    Sec.    59r.      If   only 


one  petition  i,s  filed  it  will  be  dis- 
missed. In  re  Dupree,  97  Fed.  Rep. 
28;  In  re  Stevenson,  94  Fed.  Rep. 
no,  2  Am.  B.  R.  66. 

But  if  the  alleged  bankrupt  an- 
swers he  waives  the  objection  that 
only  one  copy  is  filed.  In  re  Ply- 
mouth Cordage  Co.  (C.  C.  A.  8th 
Cir.),  135  Fed.  Rep.  1000,  13  Am. 
B.  R.  665. 

^  Sec.  6t,  ante.  Gen.  Ords.  I 
and  2. 

"  Consult  Sec.  6t,  ante. 


PROCEEDINGS    JN    INVOLUNTARY    BANKRUPTCY. 


241 


foLinded.'  Such  time  does  not  expire  until  four  months  after 
the  date  of  the  recording  or  registering  of  the  transfer  or 
assignment,  when  the  act  consists  in  having  made  a  transfer 
of  any  of  his  property,  with  intent  to  hinder,  delay,  or  defraud 
his  creditors,  or  for  the  purpose  of  giving  a  preference,  or  a 
general  assignment  for  the  benefit  of  his  creditors,  if  by  law 
such  recording  or  registering  is  required  or  permitted,  or,  if 
it  is  not,  from  the  date  when  the  beneficiary  takes  notorious, 
exclusive  or  continuous  possession  of  the  property,  unless  the 
petitioning  creditors  have  received  actual  notice  of  such  trans- 
fer or  assignment.'  ^Mlere  the  act  of  bankruptcy  complained 
of  is  a  preference  resulting  from  legal  proceedings,  the  four 
months'  period  begins  to  run  frorr.  five  days  before  the  sale,  if 
the  property  is  not  released  by  that  time.^  Where  the  petition 
is  filed  within  four  months  after  the  commission  of  the  act 
■of  bankruptcy  charged,  it  has  been  held  sufficient  if  other 
creditors  join  in  the  petition  before  an  adjudication  thereon, 
although  after  the  four  months'  period,  and  are  reckoned  in  the 
making  up  of  the  requisite  number  of  creditors  and  amount  of 
claims.^  Where  the  debtor  suffers  a  preference  to  be  gained 
by  legal  proceedings  the  creditor  need  not  wait  for  sale,  but 
may  file  his  petition  within  the  five  days  before  the  advertised 
date  of  the  sale.^'^ 

In  computing  the  four  months  within  which  the  petition  is 
to  be  filed  the  first  day  is  excluded  and  the  last  day  included, 
unless  the  last  day  falls  upon  a  Sunday  or  a  legal  holiday,  in 
which  event  the  last  day  included  shall  be  the  next  day  there- 


'B.  A.  1898,  Sec.  3b;  In  re  Min- 
go Valley  Creamery  Association, 
100  Fed.  Rep.  282,  4  Am.  B.  R.  67; 
In  re  Romanow,  92  Fed.  Rep.  510, 
I  Am.  B.  R.  461 ;  In  re  Edelman 
(C.  C.  A.  2d  Cir.),  130  Fed.  Rep. 
700,  12  Am.  B.  R.  238. 

8  Parmenter  Mfg.  Co.  v.  Stoever 
(C.  C.  A.  1st  Cir.),  97  Fed.  Rep. 
.330,  3  Am.  B.  R.  220;  2  N.  B.  N. 
174;  In  re  National  Hotel  &  Cafe 
Co.,  138  Fed.  Rep.  947,  15  Am.  B. 
R.  69;  In  re  Rome   Planing  Mills, 


96  Fed.  Rep.  812,  3  Am.  B.  R.  123. 

•'  In  re  Romanow,  92  Fed.  Rep. 
510,  I  Am.  B.  R.  461;  In  re  Beding- 
field,  96  Fed.  Rep.  190,  2  Am.  B.  R. 
355;  In  re  Mercur,  95  Fed.  Rep. 
634,  2  Am.  B.  R.  626;  In  re  Stein 
(C.  C.  A.  2d  Cir.),  105  Fed.  Rep. 
749.  5  Am.  B.  R.  288,  3  N.  B.  N. 
428;  In  re  Ryan.  7  Am.  B.  R.  562, 
I  14  Fed.   Rep.  372. 

'"  In  re  Rome  Planing  Mill,  96 
Fed.  Rep.  812,  3  Am.  B.  R.  123. 


242  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 

after  which  is  not  a  Sunday  or  a  legal  holiday."  Holidays 
are  defined  by  the  act  to  include  Christmas,  the  fourth  of 
July,  the  twenty-second  of  February,  and  any  day  appointed 
by  the  president  of  the  United  States  or  the  Congress  of  the 
United  States  as  a  holiday  or  as  a  day  of  public  fasting  or 
thanksgiving.^' 

The  authority  of  an  attorney  to  file  a  petition  should  be 
challenged  by  rule  to  show  his  authority  supported  by  affida- 
vits and  not  by  answer, 


,.  13 


§  71.    The  writ  of  subpoena. 

The  eighteenth  section  of  the  bankruptcy  act  provides  that 
"upon  the  filing  of  a  petition  for  involuntary  bankruptcy, 
service  thereof,  with  a  writ  of  subpoena,  shall  be  made  upon 
the  person  therein  named  as  defendant  in  the  same  manner 
that  service  of  such  process  is  now  had  upon  the  commence- 
ment of  a  suit  in  equity  in  the  courts  of  the  United  States, 
except  that  it  shall  be  returnable  within  fifteen  days,  unless 
the  judge  shall  for  cause  fix  a  longer  time." 

The  first  step,  therefore,  after  filing  a  petition  in  involun- 
tary bankruptcy  in  the  clerk's  office,  is  to  have  issued  and 
served  a  writ  of  subpoena.^  This  is  a  writ  issuing  out  of  the 
court  of  bankruptcy  directed  to  the  marshal,  commanding  him 
to  summon  the  defendant  or  defendants,  nanfing  them,  to 
appear  before  a  day  certain  and  answer  the  matters  alleged 
against  them." 

11  B.  A.  1898,  Sec.  31 ;  Dutcher  v.  office  of  judge,   In   re  Urban,   etc., 

Wright,   94   U.    S.   553,    24   L.    Ed.  Title    Co.,    132    Fed.    Rep.    140,    12 

130;    In    re    Lang,    No.    8056    Fed.  Am.   B.   R.  687. 

Cas.,  s.  c.  2  N.  B.  R.  480.  -  Gen.  Ord.  3. 

1- B.  A.    1898,   Sec.    I,  clause   14;  In    the    United    States    courts    a 

In  re  Stevenson,  94  Fed.  Rep.   no,  subpoena    is    directed    to    the    mar- 

2  Am.  B.  R.  66;  In  re  Dupree,  97  shal,  although   it  may  be  observed 

Fed.  Rep.  28.  that  formerly  the  writ  of  subpoena 

13  Gage   &   Co.   v.   Bell,    124   Fed.  differed   from   other  writs  of  proc- 

Rep.   371 ,    10  Am.   B.   R.  696.  ess   in   equity   in   being   directed   to 

1  For  form  of  subpoena,  see  Offi-  the  party  himself,  whereas  the  sub- 

cial  Form  No.  5,  Form  No.  8.  post.  sequent   writs   are   directed   to   cer- 

The   clerk   may   issue   a    subpoena  tain    ministerial    officers    command- 
when    there    is    a    vacancy    in    the  ing     them     to     take     proceedings 


PROCEEDINGS    IX    IXVOLUXTARY    BANKRUPTCY.  243 

This  writ  is  issued  as  of  course  upon  application  of  the 
plaintiff.^  The  subpoena  is  issued  under  the  seal  of  the  court 
of  bankruptcy,  and  is  signed  by  the  clerk  of  that  court.* 
The  writ  bears  teste  of  the  judge  or,  when  that  office  is  vacant, 
of  the  clerk  of  that  court ''  as  of  the  date  of  issuing  the  writ." 

The  subpoena  is  returnable  w^ithin  fifteen  days  unless  the 
judge  for  cause  fixes  a  longer  time.'  Formerly  a  writ  of 
subpoena  named  a  money  penalty  in  case  of  disobedience,  but 
this  has  fallen  into  disuse  in  equity,  and  is  unnecessary  in 
bankruptcy  for  the  reason  that  the  plaintiff  has  a  remedy  in 
procuring  an  adjudication  of  bankruptcy,  provided  neither  the 
bankrupt  nor  a  creditor  appears  to  controvert  the  facts  alleged 
in  the  petition.'^ 

At  the  bottom  of  the  subpoena  in  equity  is  placed  a  memo- 
randum that  the  defendant  is  to  enter  his  appearance  in  the 
suit  and  plead  in  the  clerk's  office  on  or  before  the  day  on 
which  the  writ  is  returnable,  otherwise  the  bill  may  be  taken 
pro  confesso,^  but  form  No.  5  in  bankruptcy  contains  no  such 
memorandum.  If  no  service  is  hiade  before  the  return  day, 
other  subpoenas  totics  quotics  may  be  issued  until  the  defend- 
ants are  all  served. ^° 

§  72.    In  what  cases  a  subpcena  is  necessary. 

A  subpoena  is  necessary  in  case  of  a  petition  for  involuntary 
bankruptcy,^  but  not  when  the  petition  is  filed  by  the  bankrupt 
himself.  No  subpoena  or  service  is  required  to  be  served  on 
the  creditors.-  To  bring  a  defendant  whos  is  charged  with 
being  a  bankrupt  before  the  court  in  the  first  instance  the  per- 
sonal service  of  a  subpoena  is  proper  and  necessary.     He  can 

against  the  defendant  calculated  to  "  B.   A.    1898,    Sec.    18. 

enforce     obedience.       See     Daniels  s  g    \    i^g^,  Sec.  i^d. 

Chan.  Prac.  fi  ed.)  554.  "Equity  Rule  12;  B.  A.  1898,  Sec. 

3  Equity  Rule  12.  iM;    Official    Form    No.    5,    Form 

Form  4  provides  for  an  order  to  No.  8,  post. 

show   cause,    etc.,    directing   a    sub-  i"  Equity    Rule    14. 

pcena.  1  B.  A.  1898,  Sec.  18. 

*  R.  S.  Sec.  911;   Gen.  Ord.  3.  -In    re    Billings,    145    Fed.    Rep. 

°  R.   S.   Sec.  911.  395. 

«R.    S.   Sec.   912. 


244  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 

not  be  brought  in  any  .other  way.  But  he  may  voluntarily  enter 
his  appearance  and  thereby  he  waives  any  want  of  or  defect 
in  the  service  of  a  subpoena.^  A  subpoena  should  be  issued 
and  served  on  all  the  defendants  named  in  the  petition. 

If  the  debtor  die  after  the  proceeding  are  begun  and  before 
the  adjudication,  his  legal  representatives  must  be  brought 
in  b)'  subpoena.'* 

§  73.    The  service  of  a  subpoena. 

A  subpoena  and  copy  of  the  petition  are  served  by  the  mar- 
shal or  his  deputy,  or  some  other  person  specially  appointed 
by  the  court  for  that  purpose.^  The  service  can  be  made  only 
within  the  territorial  jurisdiction  of  the  bankruptcy  court  issu- 
ing the  Avrit."  The  writ  can  not  be  served  by  the  marshal  of 
another  district  within  his  jurisdiction. 

The  manner  of  serving  the  subpoena  and  petition  is  pre- 
scribed by  Equity  Rule  13,  which  is  as  follows:  "The  service 
of  all  subpoenas  shall  be  by  delivery  of  a  copy  thereof  by  the 
officer  serving  the  same,  to  the  defendant  personally,  or  by 
leaving  a  copy  thereof  at  the  dwelling-house  or  usual  place 
of  abode  of  each  defendant,  with  some  adult  person  who  is  a 
member  or  resident  in  the  family."  This  must  be  strictly 
followed  or  the  service  will  be  defective  and  mav  be  set  aside. ^ 

"  In    re   Ulrick,    No.    14327    Fed.  -  Jobbins  v.   Montague,   No.   7329 

Cas.,     s.     c.     3     Ben.     355;     John-  Fed.  Cas.,  s.  c.  5  Ben.  422;  Paine  v. 

son    V.    Waters,     in     U.    S.    640,  Caldwell,  No.  10674  Fed.  Cas.,  s.  c. 

28   L.    Ed.    547;    Fitzgerald    Co.    v.  i    Hask.    452;    In    re    Hirsch,    No. 

Fitzgerald,    137    U.    S.    98,    34    L.  6529,  Fed.  Cas.,  s.  c.  2  Ben.  493;  In 

Ed.  608;   Henderson  v.  Carbondale  re    Litchfield,    13    Fed.    Rep.    868; 

Co.,   140  U.   S.  25,  35  L.   Ed.  2>2>^;  Herndon    v.    Ridgway    et    al.,     17 

B.uerk    v.    Imhaeuser,   8    Fed.    Rep.  How.  424,  15  L.  Ed.  100.     But  see 

457.  Babbitt  v.   Burgess,    No.   693,    Fed. 

■*  Shute   V.    Pat.terson    (C.    C.    A.  Cas.,   s.   c.   2   Dill.    169;    Toland  v. 

8th  Cir.),  147  Fed.  Rep.  509.  Sprague,    12    Pet.    300,    9    L.    Ed. 

1  Equity    Rule    15,    R.    S.    Sees.  1093;   Butterworth  v.   Hill,    114  U. 

788-790;  Bray  v.  Cobb,  91  Fed.  Rep.  S.  128,  29  L.  Ed.  119;  Pacific  Rail- 

102,     I     Am.    B.     R.     153;     United  road    v.    Missouri    Pacific    Railway 

States  V.  Montgomery,  2  Dall.  335;  Co.,   3   Fed.   Rep.   772. 

Hyman  v.  Chales,  12  Fed.  Rep.  855 ;  •'*  Romaine    v.     Union     Insurance 

Deacon  v.  Sewing  Machine  Co.,  No.  Co.,  28  Fed.  Rep.  635-6,  and  cases 

3694a  Fed.   Cas.,   s.  c.    14  Reporter  there  collated ;  Von  Roy  v.  Black- 

43.  man,   No.    16997,  Fed.   Cas.,  s.  c.  3 

Woods,  98. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY, 


245 


The  objection  that  service  was  not  properly  made  may  be 
raised  by  motion,  but  not  by  demurrer.* 

The  subpania  is  regularly  returnable  within  fifteen  days, 
unless  the  judge  shall  for  cause  fix  a  longer  time.^  But  the 
failure  to  serve  the  subpoena  within  fifteen  days  after  its  issue 
does  not  put  an  end  to  the  bankruptcy  proceedings,*^  Alias 
subpoenas  may  be  issued  \\hen  for  any  reason  it  has  been  im- 
possible to  serve  the  original  subpoena.' 

Service  is  required  to  be  made  on  each  defendant  at  least 
five  days  before  the  return  day.**  Hence  in  a  suit  ag'ainst  a 
husband  and  wife  each  must  be  personally  served. '^  In  a  suit 
against  an  infant  service  should  be  made  upon  liim  personally, 
and  not  only  upon  his  guardian  or  parent. ^'^ 

Service  is  regularly  made  upon  a  corporation  by  serving  the 
subpoena  upon  one  or  more  of  its  officers  within  the  district 
within  which  it  is  domiciled. ^^  It  can  not  be  made  on  an 
officer  of  a  non-resident  corporation  temporarily  within  the 


*  In  re  Seaboard  Fire  Under- 
writers, 137  Fed.  Rep.  987,  13  Am. 
B.  R.  722. 

5B.  A.    1898,   Sec.   i8a. 

"  Gleason  v.  Smith,  Perkins  & 
Co.,  145  Fed.  Rep.  895  ,  16  Am.  B. 
R.  602;  In  re  Stein  (C.  C.  A.  2d 
Cir.),  105  Fed.  Rep.  749.  5  Am. 
B.  R.  288. 

''  Gleason  v.  Smith,  Perkins  & 
Co.,  145  Fed.  Rep.  895,  16  Am.  B. 
R.  602. 

^  See  Official  Form  4,  Form  No. 
7,  post. 

•'O'Hara  v.  O'Connell,  93  U.  S. 
151 ,  23  L.  Ed.  840. 

"  In  Woolridge  v.  McKenna,  8 
Fed.  Rep.  670,  Judge  Hammond 
said :  "But  never  is  service  of  proc- 
ess upon  the  guardian  or  parent 
or  other  substitvited  process  of  that 
character  sufficient  to  bind  the  in- 
fant where  he  is  personally  an  es- 
sential partj'  defendant."     See  also 


O'Hara  v.  McConnell  93  U.  S. 
150,  where  service  was  made  on 
the  husband  of  an  infant.  In  Smith 
V.  Marshal,  2  Atk.  70,  a  service  on 
the  mother  of  infants  was  held 
good,  it  appearing  that  the  infants 
were  secreted. 

11  Shaw  V.  Quincy  Mining  Co.. 
145  U.  S.  444,  36  L.  Ed.  768;  Gal- 
veston Ry.  v.  Gonzales,  151  U.  S. 
496,  38  L.  Ed.  248;  Southern 
Pacific  Co.  v.  Denton,  146  U.  S. 
202 ,  36  L.  Ed.  277. 

As  to  where  the  domicile  of  n 
corporation  is  located,  see  Sec.  68, 
ante.  Interstate  Com.  Com.  v.  Ry. 
Co.,  57  Fed.  Rep.  948,  s.  c.  6  C.  C. 
A.  653 ;  Harvey  v.  Richmond,  etc., 
R.  Co.,  64  Fed.  Rep.  19.  As  to 
corporations  created  by  two  states, 
see  St.  Louis  &  San  Francisco  R. 
Co.  v.  James,  161  U.  S.  545,  40  L. 
Ed.  802;  Southern  Ry.  Co.  v.  .VUi- 
son,  190  U.  S.  326. 


246 


LAW    AND    TRUCEEDINGS    IN    BANKRUPTCY 


district.^"  It  will  be  observed  that  the  cases  cited  arose. under 
the  act  of  August  13,  1888,'''  where  it  is  provided  that  a  per- 
son sliall  be  sued  only  in  the  district  of  his  residence.  The 
bankrupt  act  provides  that  a  person  may  be  adjudged  a  bank- 
rupt who  has  his  principal  place  of  business,  resides  or  had 
his  domicile  within  the  jurisdiction  of  the  court  for  the  pre- 
ceding six  months,  or  the  greater  portion  thereof,  or  aliens 
who  have  property  within  the  jurisdiction  of  the  court.^*  But 
the  general  rule  is  probably  applicable  to  bankruptcy  suits  that 
service  can  not  be  made  upon  a  non-resident  defendant  tempo- 
rarily within  the  district  for  the  purpose  of  attending  court, 
either  state  or  federal, ^^  nor  upon  a  public  ofihcer  in  the  dis- 
charge of  his  duty  within  the  district  ^"  nor  upon  a  person 
fraudulently  enticed  into  the  district  for  the  purpose  of  getting 
service  on  him/'  So  also  a  person  is  free  to  attend  upon 
bankruptcy  proceedings  as  a  witness  or  to  prove  a  debt,  etc.. 
without  interference  by  service  of  process  of  any  kind.^^ 

Where  personal  service  on  a  resident  defendant  by  delivery 
of  a  copy  of  the  subpoena  to  him  is  impracticable  or  incon- 
venient, the  rule  provides  that  the  copy  shall  be  left  at  his 
house  or  usual  place  of  abode. ^''^     Leaving  a  copy  with  the 


1-  Goldey  v.  Morning  News,  156 
U.  S.  518,  39  L.  Ed.  517;  Fidelity 
Trust  and  Safety  Vault  Co.  v. 
Mobile  St.  R.  R.  Co..  53  Fed.  Rep. 
S50. 

i-'^25  Stat,  at  L.  434. 

1*  B.  A.  1898,  Sec.  2,  clause  i. 

i-"'  Kauffman  v.  Kennedy,  25  Fed. 
Rep.  785;  Parker  v.  Hotchkiss,  No. 
10739,  Fed.  Cas.,  s.  c.  i  Wall.  Jr. 
269 ;  Matthews  v.  Puffer,  10  Fed. 
Rep.  606 ;  Brooks  v.  Farwell,  4  Fed. 
Rep.  167 ;  Kinne  v.  Lant,  68  Fed. 
Rep.    436. 

^"'  Lyell  V.  Goodwin,  No.  8616, 
Fed.  Cas.,  s.  c.  4  McLean,  29;  see 
also  U.  S.  Const.,  Art.  i,  Sec.  6, 
with  reference  to  senators  and 
congressmen ;  Miner  v.  Markham, 
28  Fed.  Rep.  387. 


1"  Union  Sugar  Refinery  v. 
Mathicson,  No.  14397,  Fed.  Cas.,  s. 
c.  2  Cliff.  304;  Steiger  v.  Bonn,  4 
Fed.  Rep.  17;  Plimpton  v.  Winslow, 
9  Fed.  Rep.  365;  Blair  v.  Turtle,  5 
Fed.    Rep.   394. 

IS  Matthews  v.  Tuffts,  87  N.  Y. 
5C8,  and  cases  cited  in  appellant's 
brief;  cases  cited  in  note  to  ex 
parte  Hawkins,  4  Ves.  Jr.  691. 

Brett  V.  Brown,  13  Abb.  Pr.,  N. 
S.  (N.  Y.)  29s;  Sanford  v.  Chase, 
3  Cowen  (N.  Y.)  381;  Norris  v. 
Beach,  2  Johns.  (N.  Y.)  294; 
Lampkin  v.  Starkey,  7  Hun  (N.  Y.) 
479- 

''■•'  Equity  Rule  13.  See  also 
l^'orm   No.  4. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 


247 


clerk  of  a  hotel  at  which  the  defendant  resided  and  of  which 
he  was  proprietor  was  held  sufficient.-"  It  is  sufficient  under 
this  provision  if  a  copy  of  the  subpoena  is  left  "with  some 
adult  person  who  is  a  member  or  resident  in  the  family"  on 
the  steps  or  on  a  portico,  or  in  some  outhouse  or  barn  adjoin- 
ing to  or  immediately  connected  with  the  family  mansion.-^ 
But  it  seems  that  such  service  in  the  corner  of  the  yard,  one 
hundred  and  twenty-five  feet  away  from  the  house,  is  not 
sufficient.'"  The  copy  must  be  left  at  the  present  and  not  at 
some  former  residence  of  the  defendant.^" 

Voluntary  Appearance  Waives  Service. — A  person 
may  voluntarily  appear  and  plead  without  being  served  with 
subpcena.  In  such  case  the  court  has  complete  jurisdiction 
over  him  as  though  he  had  been  legally  served  with  process."* 
So  also  if  a  non-resident  of  the  district  comes  into  the  case 
for  the  purpose  of  proving  a  claim  he  is  subject  to  the  juris- 
diction of  the  court,  irrespective  of  his  place  of  residence,"^ 
and  is  bound  to  take  notice  of  and  obey  the  orders  of  the 
court  to  the  same  extent  as  a  party  to  the  suit. 

§  74.     The  I'eturn  of  the  subpcEna. 

On  or  before  the  day  named  in  the  writ  on  which  it  is 
returnable  the  officer  returns  it  to  the  clerk's  office,  with  his 
action  therewith  endorsed  on  the  back  of  it.  This  is  called 
the  marshal's  return  to  the  writ/  which  should  state  the  dav 
on  which  the  writ  was  received,  and  when,  where  and  how 


20  In  re  Risteen,  122  Fed.  Rep. 
TZ'^',  10  Am.  B.  R.  494. 

-1  Phoenix  Ins.  Co.  v.  Wulf,  i 
Fed.  Rep.  775 ;  Kibbe  v.  Benson, 
17  Wall.  624,  21  L.  Ed.  741. 

--  Kibbe  v.  Benson,  17  Wall.  624, 
21  L. "Ed.  741,  where  the  service 
considered  was  made  under  a  state 
statute  very  similar  to  Rule   13. 

-•■'  Hyslop  V.  Hoppock,  No.  6g88, 
Fed.   Cas.,   s.   c.   5   Ben.  447. 

2-t/n  re  Kirtland,  No.  7S51,  Fed. 
Cas.,  s.  c.  10  Blatch.  515;  In  re  Ul- 


rich,  Xo.  14327,  Fed.  Cas.,  s.  c.  3 
Ben.  355 ;  In  re  Columbia  Real  Es- 
tate Co.,  loi  Fed.  Rep.  965,  4  \m. 
B.    R.   411. 

-•"•Clay  V.  Smith,  3  Pet.  411,  7 
L.  Ed.  72:^;  In  re  Kyler,  No.  7956, 
Fed.  Cas.,  s.  c.  2  Ben.  414;  In  re 
Sabin,  No.  12195,  Fed.  Cas.,  s.  c. 
i<S  N.  B.  R.  151  ;  /;/  re  Pea.se,  29 
Fed.  Rep.  595 ;  In  re  Anderson,  2}, 
Fed.  Rep.  482. 

1  See  Loveland's  Forms  of  Fed. 
eral   Prac.   No.  ^t,^. 


248 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY 


service  was  made.  It  is  then  signed  by  the  marshal,  or  in  the 
name  of  the  marshal  l)y  his  deputy."  The  truth  of  an  un- 
verified return  of  a  marshal  or  his  deputy  is  not  to  be  ques- 
tioned in  the  cause. ^  If  he  makes  a  false  return  he  is  hable 
for  any  damage  that  may  be  sustained  in  consecjuence  of  it.^ 

When  a  writ  is  served  by  one  specially  appointed  for  that 
purpose,  proof  of  the  service  is  made  by  an  affidavit  of  the 
one  who  served  it.-  The  return  of  the  marshal  may  be 
amended  to  comply  with  the  facts, *^  but  not  to  supply  a  fatal 
omission,"  as  the  absence  of  the  clerk's  signature,  or  the 
authority  in  whose  name  it  is  issued,  or  the  like. 

If  the  officer  has  failed  to  make  service  of  it  on  the  defend- 
ants, or  any  of  them,  he  should  return  the  writ  and  state  in 
his  return  the  reason  why  no  service  has  been  made,  as  that 
the  defendant  named  has  not  been  found  within  the  district. 
An  alias  subpoena  may  then  be  issued.^ 

The  endorsement  on  the  writ  that  service  is  accepted  and 
signed  by  the  defendant,  dated  at  a  place  within  the  district, 
is  sufficient.'^  But  accepting  service  without  the  district  "to 
have  the  same  effect  as  if  duly  served  on  me  by  a  proper 
officer"   is  not  a  sufficient  service.^" 


§  75.     Service  by  publication. 

Section  18  of  the  act  also  provides  that  "in  case  personal 
service  can  not  be  made,  then  notice  shall  be  given  by  pub- 


-  See  Hill  V.  Gordon.  45  Fed. 
Rep.    278. 

^  Phoenix  Ins.  Co.  v.  Wiilf,  i 
Fed.  Rep.  775;  Von  Roy  v.  Black- 
man,  No.  16997,  Fed.  Cas.,  s.  c.  3 
Woods,  98;  McClaskey  v.  Barr,  45 
Fed.    Rep.     151. 

*  See  Walker  v.  Robbins,  14  How. 
584,  14  L.  Ed.  552;  Von  Roy  v. 
Blackman,  No.  16997,  Fed.  Cas.,  s. 
c.  3  Woods,  98. 

^  Equity  Rule   15. 

"  R.  S.  Sec.  954 ;  Phoenix  Ins. 
Co.  V.  Wnlf,  I  Fed.  Rep.  775. 

"'  Dwight  V.   Merritt,  4  Fed.   Rep. 


614;  Peaslee  v.  Haberstro,  No. 
10884,  Fed.  Cas.  ,s  .c.  15  Blatch. 
472 ;  United  States  v.  Rose,  14  Fed. 
Rep.   681. 

**  Equity  Rule   14. 

^  The  proper  endorsement  in 
such  a  case  is  "I  promise  to  ap- 
pear at  the  return  of  the  within- 
writ  and  pray  the  court  to  enter 
my  appearance  accordingly,"  and 
signed  by  the  defendant.  This  form 
is  sufficient  if  made  by  a  non-resi- 
dent defendant  without  the  district 

1"  Butterworth  v.  Hill,  114  U.  S. 
132-3- 


PROCEEDINGS    IN    INVOLUNTARY    liANKRUl'TCY.  249 

lication  in  the  same  manner  and  for  the  same  time  as  provided 
by  law  for  notice  by  pnbhcation  in  suits  to  enforce  a  legal  or 
equitable  lien  in  courts  of  the  United  States,  except  that, 
unless  the  judge  shall  otherwise  direct,  the  order  shall  be 
published  not  more  than  once  a  week  for  two  consecutive 
weeks,  and  the  return  day  shall  be  ten  days  after  the  last  publi- 
cation unless  the  judge  shall  for  cause  fix  a  longer  time." 

The  reference  here  is  to  the  method  prescribed  by  Section 
8  of  the  Act  of  March  3,  1875/  The  bankrupt  act  changes 
the  time  for  publication  and  specifies  the  return  day  thereafter. 
In  other  respects  substituted  service  is  made  in  bankruptcy 
as  under  the  Act  of  1875. 

The  court  should  make  an  order  directing  the  absent  de- 
fendant or  defendants  to  appear  and  plead,  answer  or  demur 
by  a  day  certain  to  be  designated,  which  order  is  served  on  the 
absent  defendant  or  defendants,  if  practicable,  wherever  found. 
Where  personal  service  is  not  practicable  the  order  may  be  pub- 
lished in  such  manner  as  the  court  may  direct,  and  "the  order 
shall  be  published  not  more  tlian  once  a  week  for  two  consecu- 
tive weeks,  and  the  return  da}^  shall  be  ten  days  after  the  last 
publication  unless  the  judge  shall  for  cause  fix  a  longer 
period."  "  Upon  proof  of  service  or  publication  of  such  order 
and  the  performance  of  the  directions  contained  in  the  same 
the  court  may  entertain  jurisdiction  and  proceed  to  the  hearing 
and  adjudication  of  such  suit  in  the  same  manner  as  if  such 
absent  defendant  had  been  served  with  process  within  the 
district.  Any  adjudication  affecting  absent  defendants  with- 
out appearance  should  affect  only  property  within  the  district 
which  can  come  into  the  possession  of  the  trustee."  Sub- 
stituted service  under  this  act  does  not  vest  the  court  with 
jurisdiction  of  the  person  generally. 

1  i8  Stat,  at  L.  470,   i   Supp    84.  form  of  order,  see  In  re  Murray,  3 

See  also  Bracken  v.  Union   Pac.  Am.  B.  R.  601,  96  Fed.  Rep.  600. 

Ry.  Co.,  56  Fed.  Rep.  447,  5  C.  C.  -  B.  A.  1898,  Sec.  18,  as  amended 

A.    548;    Batt    V    Proctor,    45    Fed.  Feb.  5,  1903,  32  Stat,  at  L.  797. 

Rep.    515;    Beach   v.    Mosgrove,    16  -In  re  Appel,  103  Fed.  Rep.  93i, 

Fed.    Rep.    305;    Loveland's    Forms  4  Am.  B.  R.  722;   Citizens  Sav.  & 

of  Fed.  Prac,  Nos.  63  to  69.  T.  Co.  v.  T.  C.  R.  R.  Co.,  205  U.  S. 

For    practice    in    bankruptcy    and       46,  51,  —  L.  Ed.  . 


250 


LAW    AND    I'KOCEEUINGS    IN    BANKKUl'TCY 


§  76.    How  to  object  to  an  irregularity  of  service  of  sub. 
pcena. 

Objections  are  properly  raised  to  the  sufificiency  of  the 
service  by  a  motion  to  set  aside  the  return  of  the  marshal ;  ^  to 
an  irregularity  in  issuing  the  subpcjena  by  a  motion  to  quash 
the  writ ;  ^  to  an  order  for  substituted  service  improperly 
granted  by  a  motion  to  set  aside  the  order  or  service  or  both." 
In  these  cases  the  motion  should  be  accompanied  with  a  spe- 
cial appearance  for  the  purpose  of  the  motion  only,  for  by  a 
general  appearance  the  defendant  submits  himself  to  the  juris- 
diction of  the  court." 

§  77.    Interlocutory  orders  to  protect  the  estate. 

Upon  filing  the  petition  in  bankruptcy  it  may  be  desirable 
and  necessary  to  apply  to  the  court  for  a  temporary  order  to 
protect  and  preserve  the  estate  of  the  bankrupt  until  the 
appointment  of  a  trustee  competent  to  take  and  administer 
the  estate.  Such  application  may  be  made  in  voluntary  or 
involuntary  proceedings.  An  application  of  this  nature,  how- 
ever, is  very  rarely  made  in  a  case  of  voluntary  bankruptcy.^ 

It  is  obvious  that  in  every  case  of  involuntary  proceedings 
in  bankruptcy  a  considerable  interval  of  time  is  bound  to 
elapse  between  the  filing  of  the  petition  and  the  appointment 
and  qualification  of  a  trustee.  Thus,  after  the  petition  is 
filed  a  subpoena  must  issue,  be  served  and  returned."  The 
bankrupt  is  entitled  to  ten  days  thereafter  within  which   to 


1  In  re  Seaboard  Fire  Under- 
writers, 137  Fed.  Rep.  987,  13  Am. 
B.  R.  722 ;  Romaine  v.  Union  Ins. 
Co.,  28  Fed.  Rep.  634-5,  where  the 
authorities  are  examined  and  the 
practice  is  explained.  See  also  Fi- 
delity Trust  &  Safety  Vault  Co.  v. 
Mobile  St.  Ry.  Co.,  53  Fed.  Rep. 
850;  Von  Roy  v.  Blackman,  No. 
16997,  Fed.  Cas.,  s.  c.  3  Woods,  98; 
Am.  Bell  Tel.  Co.  v.  Pan  Electric 
Tel.  Co.,  28  Fed.  Rep.  625 ;  Pacific 
R.  Co.  V.  Missouri  R.  R.  Co.,  3  Fed. 


Rep.  772;  Gregory  v.  Pike,  79  Fed. 
Rep.  520. 

^  Fidelity  Trust  &  Safety  Vault 
Co.  V.  Mobile  St.  Ry.  Co.,  53  Fed. 
Rep.  850 ;  Bowen  v.  Christian,  16 
Fed.  Rep.  730;  Rogers  v.  Riessner, 
31   Fed.  Rep.  591. 

^  In  re  Smith.  117  Fed.  Rep.  961, 
9  Am.  B.  R.  98. 

1  In  re  Rosenthal,  144  Fed.  Rep. 
548,  16  Am.  B.  R.  448. 

-B.  A.  1898,  Sec.  i8a. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  251 

plead. •'^  He  may  demand  and  have  a  jury  trial.*  All  this 
takes  place  prior  to  the  adjudication.  Not  less  than  ten  nor 
more  than  thirty  days  after  the  adjudication  a  meeting  of 
creditors  is  required  to  be  held,  at  which  a  trustee  of  the 
bankrupt's  estate  is  chosen  by  the  creditors.^  Upon  their 
failure  to  agree  the  trustee  is  appointed  by  the  court.''  If 
there  is  danger  during  this  interval  of  the  bankrupt  or  any 
other  person  wasting  or  disposing  of  the  property,  or  of  a 
(Creditor  obtaining  an  undue  advantage  over  the  other  cred- 
itors either  by  judicial  process  or  otherwise,  it  is  the  duty  of 
the  court,  upon  proper  application,  to  prevent  such  injury  by 
making  such  orders  as  may  be  most  beneficial  to  the  estate 
and  the  creditors  generally. 

There  are  four  ordinary  modes  of  proceeding  for  this  pur- 
pose : 

First.  The  court  is  expressly  authorized  to  appoint  re- 
ceivers or  the  marshals,  upon  application  of  parties  in  inter- 
est, in  case  the  courts  shall  find  it  absolutely  necessary,  for 
the  preservation  of  estates,  to  take  charge  of  the  property  of 
bankrupts  after  the  filing  of  the  petition  and  until  it  is  dis- 
missed or  the  trustee  is  qualified.^ 

The  court  will  not  appoint  a  receiver  except  upon  applica- 
tion of  a  party  in  interest  for  cause  shown.  The  application 
may  he  by  motion  or  petition  supported  by  affidavits. 

The  court  may  authorize  the  business  of  a  bankrupt  to  be 
conducted  for  limited  periods  by  receivers,  the  marshals  or 
trustees,  if  necessary  in  the  best  interests  of  the  estates.^ 

Second.  The  court  may  order  a  suit,  which  is  founded 
upon  a  claim  from  which  a  discharge  would  be  a  release,  and 
which  is  pending  against  a  person  at  the  time  of  the  filing  of 
a  petition  against  him,  to  be  stayed  until  after  an  adjudica- 
tion or  the  dismissal  of  the  petition.  If  such  person  is  ad- 
judged a  liankrupt,  such  action  may  be  further  stayed  until 

3  B.  A.  1898,  Sec.    }?>h.  «  B.  A.  i8q8,  Sec.  44- 

*  B.  A.  1898,  Sec.    iga.  ^  B.  A.  1898,    Sec.    2,    clause    3. 

5  B.  A.  1898,  Sees.    44  and    55;       See  Sec.  77a,  post. 
Gen.   Ord.   13.  •"*  B.  A.   1898,   Sec.   2,   clause   5. 


252  LAW    AND    PROCEEDINGS    IN     BANKRUPTCY, 

twelve  months  after  the  date  of  such  adjudication,,  or,  if  with- 
in that  time  such  person  apphes  for  a  discharge,  then  until 
the  question  of  such  discharge  is  determined.'' 

Third.  The  court  may  restrain  the  debtor  or  any  other 
person  or  persons  from  making  any  transfer  or  disposition  of 
any  part  of  the  debtor's  property,  not  excepted  by  the  statute 
from  the  operation  thereof,  and  from  any  interference  there- 
with.^'^    This  proceeding  is  further  considered  in  section  78, 

Fourth.  The  court  may  in  a  proper  case  issue  a  warrant 
to  a  marshal  to  seize  and  hold  the  property  of  a  debtor  subject 
to  further  orders.  Proceedings  of  this  nature  are  further  con- 
sidered in  section  79, 

"  Applications  for  orders  of  this  nature  may  be  made  by 
petition  or  motion  supported  by  affidavits.  The  application 
should  be  made  to  the  judge  and  not  to  a  referee.  But  the 
judge  may  refer  such  an  application  or  any  specified  issue 
arising  thereon  to  the.  referee  to  ascertain  and  report  the 
facts, ^^  In  case  the  judge  is  absent  from  the  judicial  district, 
sick  or  unable  to  act,  the  clerk  may  certify  this  fact  to  a  referee 
who  may  exercise  the  powers  of  the  judge  for  taking  posses- 
sion and  releasing  the  property  of  the  bankrupt.^" 

§  yya,.    Receivers  in  bankruptcy. 

The  court  is  expressly  authorized  to  appoint  receivers  or 
the  marshals,  upon  application  of  parties  in  interest,  in  case 
the  court  shall  find  it  absolutely  necessary,  for  the  preserva- 
tion of  estates,  to  take  charge  of  the  property  of  the  bankrupt 
after  the  filing  of  the  petition  and  until  it  is  dismissed  or  the 
trustee  is  qualified.^  The  courts  have  frecjuently  exercised  this 
power  under  the  present  act." 

^  B.  A.  i(Sg8,    Sec.     iia.      As    to  ridge   Furniture   Co.,  92   Fed.   Rep. 

staying  suits  see  also  Sec.  22,  ante.  329,  i  Am.  B.  R.  112;  In  re  Sievers, 

1"  B.  A.  1898,    Sec.   2,    clause    15.  91  Fed.  Rep.  366,  i  Am.  B.  R.  117; 

11  Gen.  Ord.  12.  In   re    Kelly    Dry    Goods    Co.,    102 

12  B.  A.  1898,  Sec.  38.  clause  3.  Fed.  Rep.  747,  4  Am.  B.  R.  528; 
^  B,  A.  1898,  .Sec.  2,  cl.  3.  In  re  Reliance  Storage  &  Ware- 
-  In    re    Fixen    &    Co.,    96    Fed.  house    Co.,    100    Fed.    Rep.    619,    4 

Rep.  748,  2  Am.  B.  R.  822;   Ethe-       Am.  B.  R.  49;  In  re  Florcken,  107 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 


253 


The  application  for  a  receiver  should  be  made  by  a  party  in 
interest.  The  application  may  be  made  by  petition  or  motion 
supported  by  affidavits.^  The  petition  should  show  that  it 
is  necessary  for  the  preservation  of  the  estate  that  a  receiver 
be  appointed.  A  receiver  is  regularly  appointed  by  the  judge, 
but  a  referee  has  power  to  make  the  appointment.*  The  ap- 
pointment will  rarely  be  made  until  the  adverse  interests  have 
notice  and  an  opportunity  to  be  heard."  The  receiver  must 
qualify  and  give  bond  before  he  takes  possession  of  the  prop- 
erty.°  An  ancillary  receiver  has  been  appointed  in  aid  of 
another  court  which  is  administering  the  estate  of  a  debtor.^ 

A  receiver  in  bankruptcy  derives  his  power  from  the  statute 
and  possesses  such  power  only  as  the  statutes  confer  or  such 
as  may  be  fairly  inferred  from  the  general  scope  of  the  law  of 
his  appointment.*  He  is  not  a  general  receiver  in  the  sense 
that  receivers  are  appointed  by  courts  of  equity.  A  receiver 
in  bankruptcy  is  a  temporary  custodian  until  a  trusteee  is  ap- 
pointed. He  does  not  exercise  the  powers  of  a  trustee.^  The 
court  may  order  him  to  sell  property  of  the  bankrupt  and 


Fed.  Rep.  241;  5  Am.  B.  R.  802; 
Booneville  Nat.  Bank  v.  Blakey 
(C.  C.  A.  7th  Cir.),  107  Fed.  Rep. 
891,  6  Am.  B.  R.  13;  In  re  Rogers 
(C.  C.  A.  7th  Cir.),  125  Fed.  Rep. 
169,   ir  Am.  B.  R.  79. 

In  Horner-Gaylord  Co.  v.  Miller 
&  Bennett,  147  Fed.  Rep.  295,  the 
court  appointed  a  receiver  to  take 
charge  of  the  property  of  the  bank- 
rupt before  an  adjudication  on  bill 
filed  by  creditors. 

3  For  form  of  petition,  see  Form 
No.  22,. 

*  In  re  Florcken,  107  Fed.  ReP. 
241,  5  Am.  B.  R.  802;  In  re  Maher, 
reported  Sec.  ^^  note,  ante;  In  re 
Kelly  Dry  Goods  Co.,  102  Fed.  Rep. 
747,  4  Am.  B.  R.  528. 

^Latimer  v.  McNeal  (C.  C.  A. 
3d  Cir.),  142  Fed.  Rep.  451,  16  Am. 
B.    R.    43 ;    Ross-Meehan    Foundry 


Co.  V.  Southern  Car  &  Foundry 
Co.,  124  Fed.  Rep.  403,  10  Am.  B. 
R.  624. 

'■  Beach  v.  Macon  Grocery  Co., 
116  Fed.  Rep.  143;  8  Am.  B.  R. 
751;  In  re  Haff  (C.  C.  A.  2d  Cir.), 
135   Fed.    Rep.   742,    13   Am.    B.   R. 

354- 

''  In  re  Benedict,  140  Fed.  Rep. 
55,    15    Am.    B.    R.    232. 

But  see  Ross-Meehan  Foundry 
Co.  V.  Southern  Car  &  Foundry 
Co.,  124  Fed.  Rep.  403,  10  Am.  B. 
R.  624. 

^  Booneville  Nat.  Bank  v.  Bla- 
key, 107  Fed.  Rep.  891,  6  Am.  B.  R. 
13  ;  Whitney  x.  Wenman,  198  U.  S. 
539,  553;  47  L-  Ed.  1157,  14  Am. 
B.  R.  45 ;  Guaranty  Title  &  Trust 
Co.  v.  Pearlman.  144  Fed.  Rep.  550, 
16   Am.    B.    R.  461. 


254 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


may  appoint  appraisers  when  such  a  course  is  necessary  for 
the  preservation  of  the  value  of  the  estate,"  or  to  take  any 
other  steps  incident  to  the  protection  of  the  property  in  his 
custody/**  A  receiver  may  insure  property  in  his  possession. 
The  court  may  authorize  a  receiver  to  take  possession  of 
property  held  and  claimed  adversely  by  third  parties/^  A  re- 
ceiver can  not  sue  for  the  recovery  of  property  claimed  to  be- 
long to  the  bankrupt's  estate.^'  A  receiver  may  apply  for  an  in- 
junction to  stay  suit  for  removal  of  goods  of  bankrupt  from 
leased  premises  for  non-payment  of  rent,  wdien  the  receiver 
is  in  possession  of  such  goods/^ 

The  statute  provides  that  the  court  may  authorize  the  busi- 
ness of  the  bankrupt  to  be  conducted  for  limited  periods  by 
receivers  if  necessary  in  the  best  interests  of  the  estates." 

\\liere  there  is  a  delay  in  the  appointment  of  the  trustee  and 
it  is  for  the  best  interests  of  the  estate  that  the  business  be 
conducted  by  the  receiver,  the  court  may  authorize  such  re- 
ceiver to  borrow  money  and  issue  receivers'  certificates.  This 
should  only  be  done  when  it  is  made  to  appear  that  it  is  for  the 
best  interests  of  the  estate  to  continue  the  Inisiness  and  that  it 


9  7«  re  Rogers  (C:  C.  A.,  7th 
Cir.),  125  Fed.  Rep.  169,  11  Am.  B. 
R.  79;  In  re  Becker,  98  Fed.  Rep. 
407,  3  Am.  B.  R.  412;  In  re  Styer, 
98  Fed.  Rep.  290,  3  Am.  B.  R.  424; 
In  re  Kelly  Dry  Goods  Co.,  102 
Fed.  Rep.  747,  4  Am.  B.  R.  528. 

^'^•In  re  Hamilton    (Ref.),  4  Am. 

B.  R.  543,  2  N.  B.  N.  959- 

He  may  make  proof  of  loss 
under  a  fire  insurance  policy, 
where  bankrupt  has  absconded, 
Sims  V.  Union  Ass.  Soc.  129  Fed. 
Rep.  804. 

11  In  re  Knopf,  144  Fed.  Rep. 
245,  16  Am.  B.  R.  432,  s.  c.  146 
Fed.  Rep.  109;  In  re  Rochford   (C. 

C.  A.  8th  Cir.),  124  Fed.  Rep.  182, 
10  Am.  B.  R.  608;  In  re  Moody, 
131  Fed.  Rep.  525,  12  .A.m.  B.  R. 
718,  s.  c.  134  Fed.  Rep.  628,  14  Am. 


B  R.  272;  In  re  Muncie  Pulp  Co. 
(C.  C.  A.  2d  Cir.),.  139  Fed.  Rep. 
546,   14  Am.   B.   R.  70. 

But  see  Beach  v.  Macon  Grocery 
Co..  116  Fed.  Rep.  143,  8  Am.  B. 
R.  751. 

1-  Booneville  Nat.  Bank  v.  Bla- 
key  (C.  C.  A.,  7th  Cir.),  107  Fed. 
Rep.  891,  6  Am.  B.  R.  13 ; 
Guaranty  Title  &  Trust  Coi.  v. 
Pearlman,  144  Fed.  Rep.  550,  16 
Am.  B.  R.  461 ;  In  re  Nat.  Mercan- 
tile Agency,  128  Fed.  Rep.  639.  12 
Am.  B.  R.   189. 

But  see  In  re  Fixen  &  Co.,  96 
Fed.  Rep.  748,  2  Am.  B.  R.  822; 
In  re  Barrett,  132  Fed.  Rep.  362, 
12  Am.  B.  R.  626. 

1^/;;  re  Kleinhans,  113  Fed.  Rep. 
107,  7  Am.  B.  R.  604. 

!■*  B.  A.  1898,   Sec.   2,   cl.  5. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  255 

can  not  be  continued  without  borrowing  money  for  that  pur- 
pose. 

The  compensation  of  receivers  is  an  expense  of  the  adminis- 
tration of  the  estate  and  is  entitled  to  priority  under  Sec.  64b 
of  the  bankrupt  act.  The  amount  of  the  compensation  of  a 
receiver  appointed  under  Section  2,  Clause  3,  to  take  charge 
of  the  estate,  rests  in  the  discretion  of  the  court  and  is  not 
limited  by  the  provisions  of  the  bankrupt  act.^"  But  where 
the  compensation  is  for  carrying  on  the  business  of  the  bank- 
rupt pursuant  to  Section  2,  Clause  5,  as  amended  by  the  act 
of  February  5,  1903.  it  is  limited  in  amount  to  that  which 
a  trustee  might  receive  under  the  act  for  the  same  services.^''' 
The  court  having  jurisdiction  of  the  proceedings  has  power  to 
allow  compensation  to  receivers  appointed  by  other  courts.^* 
Expenses  of  a  receivership  will  not  be  allowed  out  of  proceeds 
of  a  sale  of  perishable  property  when  it  will  diminish  bank- 
rupt's exemption.^** 

Where  a  petition  is  dismissed  the  court  may  require  the 
petitioning  creditors  to  pay  the  expenses  of  a  receivership, 
when  the  receiver  was  appointed  on  their  application  upon 
filing  the  petition/'' 

Objections  to  receivers'  reports  should  be  made  promptly. 
The  court. will  not  allow  a  re-examination  after  a  report  has 
been  approved  by  the  creditors  and  a  period  of  acquiescence 
has  elapsed  thereafter.-" 

15 /«   re   Kirkpatrick    (C.    C.    A.      B.   R.    t68:   In  re  Kirkpatrick    (C. 

6th   Cir.),    148   Fed.    Rep.   ,    17       C.  A.  6th  Cir.),  14S  Fed.  Rep.  — . 

Am.  B.  R.  ;   In  re   Sully,    133       17   Am.   B.   R.  . 


Fed.    Rep.   997,    13   Am.    B.   R.   22;  !''/»    re    Sears,    Humbert   &    Co., 

In    re    Adams    Sartorial    Co.,    lor  12S   Fed.    Rep.   275,    10  Am.    B.    R. 

Fed.   Rep.   215,  4  Am.   B.   R.    107;  389. 

In    re    Scott    99    Fed.    Rep.    404,    3  '^^In   re  Le   Vay,    125    Fed.    Rep. 

Am.  B.  R.  625.  990.    II    Am.    B.    R.    114. 

'*B.    A.    1898,    Sec.    2,    cl.    5,    as  10 /;i    re    Lacov     (C.    C.    A.    2d 

amended    by    the    Act    of    Feb.    5,  Cir.),  142  Fed.  Rep.  960,  15  Am.  B. 

1903,    2>2    Stat,    at    L.    797;    In    re  R.  290. 

Richards,  127  Fed.  Rep.  772,  11  Am.  -" /)t     re     Reliance     Storage     & 

B.  R.  5S1 ;  In  re  Cambridge  Lum-  Warehouse  Co.,  100  Fed.  Rep.  619, 

ber  Co.,  136  Fed.  Rep.  983,  14  .\m.  4  Am.  B.  R.  49. 


256 


LAW     AND     PROCEEDINGS    IN     BANKRUPTCY. 


§  78.    Temporary  injunction  or  restraining  order. 

One  means  of  protecting  the  estate  of  the  bankrupt 
is  by  a  temporary  injunction  or  restraining  order.  The 
court  of  bankruptcy  is  expressly  authorized  to  make  such 
orders,  issue  sucli  process  and  enter  such  judgments  in 
addition  to  those  specifically  provided  for  as  may  be 
necessary  for  the  enforcement  of  the  provisions  of  the 
bankrupt  statute/  Under  this  provision  the  court  may,' 
upon  proper  application  and  cause  shown,  restrain  the  debtor 
or  any  other  party  to  the  bankruptcy  proceedings  from  mak- 
ing any  transfer  or  disposition  of  any  part  of  the  debtor's 
property  not  excepted  by  the  statute  from  the  operation  there- 
of, or  from  any  interference  therewith.'  It  has  been  held 
that  a  court  of  bankruptcy  can  not  restrain  a  stranger  from 
dealing  with  property  in  his  possession  which  he  claims  to 


own."^ 


The  mode  of  applying  for  a  temporary  restraining  order  is 
regularly  by  a  separate  petition  01-  motion  supported  by  affi- 
davits.''    The  petition  is  entitled  and  filed  in  the  bankruptcy 


1  B.  A.  1898,  Sec.  2,  clause  15. 

-  In  re  Jersey  Island  Packing 
Co.  (C.  C.  A.  9th  Cir.),  138  Fed. 
Rep.  625,  14  Am.  B.  R.  689;  Beach 
V.  Macon  Grocery  Co.  (C.  C.  A., 
5th  Cir.),  116  Fed.  Rep.  143,  8  Am. 
B.  R.  751 ;  In  re  GutwiUig,  90  Fed. 
Rep.  475,  I  Am.  B.  R.  78;  Blake, 
Moffitt  &  Towne  v.  Francis- Valen- 
tine Co.,  89  Fed.  Rep.  691,  i  Am. 
B.  R.  372;  Horner-Gaylord  Co.  v. 
Miller    &    Bennett,    147    Fed.    Rep. 

293- 

Stengel-Rothschild  v.  Leidigh 
Carriage  Co.,  Southern  District  of 
Ohio  (not  reported).  The  Leidigh 
Carriage  Co.,  of  Dayton,  O.,  on 
July  13,  1898,  made  an  assignment 
with  preferences  in  the  form  of 
confessed  judgments  to  the  amount 
of    something  like  fifty  thousand  dol- 


lars. Attachments  were  issued  and 
levies  made  under  these  judgments 
prior  to  the  assignment,  and  some 
of  the  property  had  been  sold,  but 
funds  arising  therefrom  had  not 
been  distributed.  Upon  an  applica- 
tion for  a  temporary  injunction 
filed  with  the  petition  of  the  cred- 
itors. Judge  Thompson  enjoined 
the  assignee,  the  sheriff  and  the 
preferred  creditors  from  disposing 
of  or  interfering  with  the  property 
of  the   debtor. 

3  In  re  Ward,  104  Fed.  ReP. 
985,  5  Am.  B.  R.  215,  3  N.  B.  N. 
216. 

*  Irving  V.  Hughes,  No.  7076, 
Fed.  Cas.,  s.  c.  2  N.  B.  R.  61; 
Creditors  v.  Cozens,  No.  3378,  Fed. 
Cas.,  s.  c.  3  N.  B.  R.  281. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  257 

proceedings.  It  should  be  positive  in  its  averments,  and  not 
on  information  and  belief,^  and  should  contain  a  description 
of  the  property.  It  must  be  verified  by  the  oath  of  the  peti- 
tioner or  his  agent  or  attorney."  A  bill  in  equity  has  also 
been  used.'  The  hearing  may  be  had  ex  parte.  An  order 
may  be  passed  and  an  injunction  issued  without  notice  to  the 
adverse  party.^  The  injunction  or  restraining  order  is  mere- 
ly temporary,  but  continues  until  vacated  by  order  of  the  court. 
The  present  statute  does  not  limit  the  duration  of  such  in- 
junction. The  writ  of  injunction  issues  out  of  the  court 
under  the  seal  thereof,  and  is  tested  by  the  clerk.^  The  writ 
is  then  served  upon  the  parties  by  the  marshal  and  a  return 
made  as  upon  other  process. 

Any  party  having  an  interest  in  the  property  covered  by 
the  injunction  may  appear  and  move  for  a  dissolution  there- 
of. At  the  hearing  affidavits  and  counter  affidavits  may  be 
read  by  either  party.^"  ^^'hen  the  affidavits  filed  upon  a  mo- 
tion to  dissolve  an  injunction  do  not  sustain  the  allegation  of 
the  petition,  but  disclose  the  existence  of  another  ground  for 
an  injunction,  the  petition  may  be  amended  so  as  to  cover 
that  ground."  It  can  not  be  urged  as  a  ground  for  dissolving 
an  injunction  that  the  petition  does  not  allege  at  what  time 
the  act  of  bankruptcy  was  committed  or  contain  any  positive 
charge  of  the  act  of  bankruptcy,  or  because  there  is  an  irregu- 
larity in  the  proceedings.  These  are  also  matters  that  may 
be  corrected  by  amendment.  Nothing  would  be  gained  by 
dissolving  the  injunction  and  then  reissuing  upon  the  same 
state  of  facts.     In  order  to  obtain  the  dissolution  of  an  injunc- 

•'■' /n    re    Bloss,    No.     1569,    Fed.  nard,    No.     1468,    Fed.    Cas..    s.    c. 

Cas.,    s.   c.   4   N.    B.    R.   427.  5  Law  Rep.  250. 

"/n   re   Fendley,    No.   4728,   Fed.  « In    re    Muller,    No.    9912,    Fed. 

Cas.,  s.  c.  10  N.  B.  R.  250.  Cas.,    s.    c.    Deady,    513,    and    cases 

^  TIorner-Gaylord    Co.    v.    Miller  cited    in   the   opinion. 

&     Bennett,     147     Fed.     Rep.     295;  » Rev.  Stat.,  .Sec.  911;   Gen.  Ord. 

Blake,  Moffiitt  &  Towne,  v.  Francis  3. 

Valentine '  Co.,    8g    Fed.    Rep.    691,  i"  In    re    Bloss,    No.     1562,    I'\>d. 

I    Am.   B.    R.   372;   In  re   Fendley,  Cas.,  s.  c.  4  N.  B.  R.   147. 

No.     4728,     Fed.     Cas.,     s.     c.     10  11  In    re    Bloss,    No.     1562,    Fed. 

N.   B.   R.   250 ;    Blackburn   v.    Stan-  Cas.,  s.  c.  4  N.   B.   R.   147. 


258  LAW    AND     PROCEEDINGS    IN     BANKRUPTCY. 

tion  the  prima  facie  case  made  out  by  the  petition  and  affi- 
davits in  sn])port  thereof  must  be  rebutted.^" 

§  79.    The  seizure  of  the  debtor's  property. 

Whenever  a  petition  is  filed  by  any  person  for  the  purpose 
of  having  another  adjudged  a  bankrupt  an  apphcation  may 
be  made  to  take  charge  of  and  hold  the  property  of  the  alleged 
bankrupt,  or  any  part  of  the  same,  prior  to  the  adjudication 
and  pending  the  hearing  of  the  petition.^  There  was  no 
provision  corresponding  to  this  one  in  the  former  bankrupt 
acts.  The  application  may  be  by  petition  or  motion  sup- 
ported by  an  affidavit  that  the  bankrupt  against  whom  an 
involuntary  petition  has  been  filed  and  is  pending  has  com- 
mitted an  act  of  bankruptcy,  or  has  neglected,  or  is  neglect- 
ing, or  is  about  to  so  neglect  his  property  that  it  has  thereby 
deteriorated,  or  is  thereby  deteriorating,  or  is  about  thereby 
to  deteriorate  in  value."  If  satisfactory  proof  is  made  by  the 
applicant  the  judge  may  issue  a  warrant  to  the  marshal  to 
seize  and  hold  the  property  of  the  bankrupt,  or  any  part  of 
it,  subject  to  further  orders.^ 

The  application  must  regularly  be  made  to  the  judge.  A 
referee  is  authorized  to  exercise  the  powers  of  the  judge  for 
the  taking  possession  and  releasing  of  the  property  of  the 
bankrupt  in  the  event  of  the  issuance  by  the  clerk  of  a  certifi- 
cate showing  the  absence  of  a  judge  from  the  judicial  dis- 
trict, or  the  division  of  the  district,  or  his  sickness  or  inability 
to  act* 

Before  a  warrant  can  be  issued  the  petitioner  applying 
therefor  must  enter  into  a  bond,"  with  at  least  two  good  and 
sufficient  sureties,  who  shall  reside  within  tlie  jurisdiction  of 
said  court,  to  be  approved  by  the  court  or  a  judge  thereof,  in 

12 /w    re    Binns,    No.    1422,    Fed.  ly,  91   Fed.  Rep.  504,   i   Am.  B.  R. 

Cas.,  s.  c.  4  Ben.  152;  In  re  Muller,  306. 
No.   9912,    Fed.    Cas.,    s.   c.    Deady,  ^  B.  A.  1898,  Sec.  69. 

513-  *  B.  A.  1898,  Sec.  38,  clause  3. 

1  B.  A.  1898,  Sec.  3e  and  Sec.  69.  ^'  B.  A.  1898,  Sec.  se  and  Sec.  69. 

2B.  A.  1898,  Sec.  69;  In  re  Kel- 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 


259 


such  sum  as  the  court  shall  direct,  conditioned  for  the  pay- 
ment, in  case  such  petition  is  dismissed,  to  the  respondent, 
his  or  her  personal  representatives,  all  costs,  expenses  and 
damages  occasioned  by  such  seizure,  taking  and  detention 
of  the  property  of  the  alleged  bankrupt.*^  If  such  petition  be 
dismissed  by  the  court  or  withdrawn  by  the  petitioner,  the 
respondent  or  respondents  shall  be  allowed  all  costs,  counsel 
fees,  expenses  and  damages  occasioned  by  such  seizure,  tak- 
ing or  detention  of  such  property.''  Counsel  fees,  costs,  ex- 
penses and  damages  shall  be  fixed  and  allowed  by  the  court 
and  paid  by  the  obligors  in  such  bond.'' 

When  the  marshal  receives  a  warrant  general  in  its  nature 
it  is  his  duty  to  take  possession  of  the  bankrupt's  property. 
If  the  warrant  commands  him  to  seize  certain  specified  prop- 
erty it  is  his  duty  to  take  possession  only  of  the  property 
specified.  He  is  not  entitled  to  seize  property  which  has 
been  transferred  by  a  bankrupt  to  another  person.  Such 
transfers  are  voidable,  but  the  title  is  in  the  transferee  and 
will  not  ordinarily  be  questioned  until  after  the  adjudication.'^ 


cB.  A.  1898.   Sec.  3C. 

"  In  re  Harthill,  No.  6161,  Fed. 
Cas.,  s.  c.  4  Ben.  448;  Doyle  v. 
Sharpe,  74  N.  Y.  154,  affirming  41 
N.  Y.  Super.  312;  43  id.  545. 

But  see  Stevenson  v.  McLaren, 
14  N.  B.  R.  403,  s.  c.  3  Cent.  Law 
Jour.  478. 

In  re  Rockwood,  gi  Fed.  Rep. 
363,  I  Am.  B.  R.  2-/2,  Judge  Shiras, 
construing  this  section,  says:  "It 
does  not  authorize  the  court  to  is- 
sue a  warrant  to  the  marshal  to 
take  the  property  away  from  the 
possession  of  a  third  party  who 
holds  it  under  a  claim  of  right  to 
title.  According  to  the  showing 
made  in  the  application  the  mort- 
gagee has  a  good  title  to  and  the 
right  to  possession  of  the  property 
in  question  unless  such  title  and 
right  are   defeated  under  the   pro- 


visions of  the  bankrupt  law. 
Whether  these  provisions  will  be- 
come operative  against  the  title  and 
right  of  the  mortgagee  depends  pri- 
marily upon  the  question  whether 
Rockwood  will  be  adjudicated  to 
be  a  bankrupt  on  the  petition  of 
the  creditors,  which  is  set  down  for 
a  hearing  at  a  future  day.  The 
mortgagee,  Mary  Boehlen,  is  not  a 
party  to  these  proceedings,  and  in 
by  judgment  Sec.  69  does  not  con- 
fer any  authority  on  the  court  to 
arbitrarily  deprive  her  of  the  pos- 
session of  property  held  by  her 
under  claim  of  title.  It  can  not  be 
judicially  known  at  the  present  time 
whether  Rockwood  will  or  will  not 
be  adjudged  a  bankrupt,  and  until 
he  is  so  adjudged  there  is  no  ground 
shown  for  attacking  the  possession 
of    the    property    now    held   by   the 


260 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


In  such  cases  the  transferee  may  obtain  an  order,  upon  a  peti- 
tion filed  in  the  court  of  bankruptcy  for  that  purpose,  to  have 
such  property  released  from  the  marshal's  possession.^     The 


mortgagee.     Sec.  69  is  intended  to 
authorize  the  court  to  prevent  the 
wasting,    deterioration,    or    loss    of 
the  bankrupt's  property  in  his  pos- 
session,   pending    the    hearing    on 
the    petition    for    adjudication,    but 
it  is  not  intended  to  authorize  the 
taking  away   from  third  parties  of 
property  to  which  they  assert  title. 
The    section    provides    that    before 
the     issuance     of     a     warrant     of 
seizure    a    bond    must   be    executed 
conditioned  to  indemnify  the  bank- 
rupt  for   such   damages  as  he   may 
sustain    if    the    seizure    be    wrong- 
fully    obtained,     it     being     further 
provided    that    the    property    seized 
shall    be    released    if    the    bankrupt 
give     bond     conditioned     to     turn 
over    the    property   or   its   value   to 
the   trustee   in  case  he  is  adjudged 
a  bankrupt. 

"These    provisions    clearly    show 
that  the   section   is   intended  to  ap- 
ply  only   to    seizure  of  property  in 
possession  of   the   bankrupt,   and   it 
does   not   authorize   the    seizure   of 
property    which    has    passed     from 
the  possession  of  the  bankrupt  be- 
fore the   institution   of   proceedings 
under    the    act.      In    a    proper    case 
and  upon  a  proper  showing  an  in- 
junction  or   restraining   order   may 
be    obtained    upon    application     to 
which   the   third   person   is   made   a 
party,   restraining  the  sale  or  other 
disposition    of    the    property    until 
the   hearing   upon   the    petition    for 
adjudication    and    the    appointment 
of  the  trustee,  but  the  proper  show- 
ing  therefor   must   be   made. 

"The    present    application    for    a 
warrant    directing    the    marshal    to 


seize  property  in  the  possession  of 
the  mortgagee  must  be  refused  for 
the  reasons  stated."  See  also  In  re 
■Kelly;  91  Fed.  Rep.  504,  i  Am.  B. 
R.  306. 

In    Goldman,    Bettman   &    Co.   v. 
Smith,    District    Court    for,    etc.,    7 
Cin.  Court  Index,  No.  70,  Dec.  24, 
1898,  s.  c.  Vol.  41  W.  L.  Bui.  4,  a 
petition  for  involuntary  bankruptcy 
was  filed  by   four   Cincinnati  credi- 
tors against  one  Newton  M.  Smith. 
It    was    alleged    that     some     four 
weeks  before  the  filing  of  the  peti- 
tion  Smith   came   to   Cincinnati,    in 
pursuance  of   a   scheme  to   defraud 
his  creditors,  and  with  money  that 
was  advanced  him  by  his  brother- 
in-law,     paid     his     creditors     such 
amounts    as    he    was    then    owing 
them  on  account.     He  immediately 
purchased    large    amounts    of    mer- 
chandise, and  two  weeks  thereafter 
transferred    to    his    brother-in-law 
his  entire  stock  including  the  mer- 
chandise last  purchased.     The  con- 
veyance     was      founded      upon      a 
pretended    consideration    of   a   pre- 
existing debt,   consisting  largely  of 
the     money     advanced     as     above. 
Upon  application  of  the  petitioning 
creditors  and  proof  of  the  facts  by 
affidavit.     Judge     Barr     issued     an 
order     directing     the     marshal     to 
forthwith    seize    the    property    and 
hold  it,  subject  to  the  further  order 
of  the  court,  the  creditors  being  re- 
quired  to  give  bond   for  the  value 
of    the    property.      See    also    cases 
cited  page  254,  note  11. 

>^  In  re  Harthill,  No.  6161.  Fed. 
Cas.,  s.  c.  4  Ben.  448.  See  Sec. 
152  post. 


TROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  261 

marshal  is  not  justified  in  taking  any  property  which  belongs 
to  a  third  person.  If  he  does  so  it  has  been  held  that  his 
warrant  will  protect  him  only  so  far  as  the  goods  belong  to 
the  bankrupt.'' 

In  case  the  bankrupt  desires  to  have  possession  of  his  prop- 
erty until  the  adjudication,  and  a  bond  has  been  given  by  the 
petitioning  creditors,  the  property  must  be  released  to  him 
upon  his  giving  a  bond  in  a  sum  which  is  fixed  by  the  judge, 
with  such  sureties  as  he  shall  approve,  conditioned  to  turn  over 
such  property  or  pay  the  value  thereof  in  money  to  the  trus- 
tee in  the  event  of  his  being  adjudged  a  bankrupt  pursuant 
to  such  petition." 

Where  property  of  an  alleged  bankrupt  has  been  seized  and 
subsequently  the  petition  in  bankruptcy  is  dismissed,  the  debtor 
can  only  recover  on  the  bond  such  costs,  expenses  and  dam- 
ages as  were  incident  to  the  taking  and  withholding  of  the 
property,  as  distinguished  from  such  as  were  incident  to 
bankruptcy  proceedings.^^ 

§  80.     Appearing  for  the  purpose  of  becoming  a  party  to 
the  proceedings. 

Creditors  other  than  original  petitioners  may  at  any  time 
enter  their  appearance  and  join  in  the  petition,  or  file  an 
answer  and  be  heard  in  opposition  to  the  prayer  of  the  peti- 
tion.^ This  may  be  done  more  than  four  months  after  the 
act  of  bankruptcy  was  committed.-     But  a  creditor  will  not  be 

"  Marsh  v.  Armstrong,  20  Minn.  Bates  Mach.  Co-,  91  Fed.  Rep.  625, 

8t,    s.    c.    II    N.    B.    R.    125;    In    re  i  Am.  B.  R.   129;  In  re  Romanow, 

Havens,   No.  6230,   Fed.   Cas.,   s.  c.  92  Fed.  Rep.  510,  i  Am.  B.  R.  461; 

8  Ben.  309;  In  re  Marks,  No.  9095,  In  re  Bedingfield,  96  Fed.  Rep.  190, 

Fed.  Cas..  s.  c.  N.  B.  R.  575;  In  re  2   Am.    B.    R.   355;    In    re   ]\Iercur, 

MuUer,    No.   9912,    Fed.    Cas.,   s.   c.  95  Fed.  Rep.  634,  2  Am.  B.  R.  626; 

Deady,  513.  In  re  Stein   (C.  C.  A.,  2d  Cir.),  103 

10  B.  A.  1898,  Sec.  69.  Fed.   Rep.    749-   5   Am.    B.    R.   288 ; 

1^  Selkregg    v.     Hamilton    Bros.,  In   re   Ryan,    114   Fed.    Rep.   2,7^,,   7 

144   Fed.    Rep.   556,    16  Am.   B.   R.  Am.   B.  R.  562. 
474;    see    also    Konntze    v.    Omaha  2 /„  ,.^  stein   fC.  C.  A.,  2d  Cir.\ 

Hotel  Co.,  107  U.  S.  378,  27  L.  Ed.  105  Fed.  Rep.  749.  5  Am.  B.  R.  288; 

"^-  In  re  Mammouth  Pine  Lumber  Co., 

IB.  A.  1898,     Sec.     S9f;     In     re  109  Fed.  Rep.  308,  8  Am.  B.  R.  651. 


262 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


permitted  to  question  the  debtor's  residence  after  he  has  ac- 
quiesced in  an  adjudication  and  filed  his  claim  for  allowance.^ 
Creditors  may  join  at  any  time  before  the  adjudication  and 
be  counted  to  make  up  the  number  of  creditors  and  the  amount 
of  claims  required  by  the  act/  The  word  creditor,  as  used  in 
the  bankrupt  statute,  includes  anyone  who  owns  a  demand 
or  claim  provable  in  bankruptcy,  and  may  include  his  duly 
authorized  agent,  attorney  or  proxy. '^ 

A  person  who  has  no  provable  claim  is  not  entitled  to 
become  a  party  for  the  purpose  of  opposing  the  prayer  of  the 
petition."  When  a  creditor  intervenes  for  the  purpose  of 
joining  in  the  petition  he  has  a  right  to  prosecute  the  original 
petition  in  the  same  manner  as  the  petitioning  creditors  could 
have  done."  When  a  creditor  intervenes  for  the  purpose  of 
opposing  the  prayer  of  the  petition  he  has  the  same  right  as 
any  other  party  respondent.^  A  preferred  creditor  may  so 
intervene  without  surrendering  his  preference.^  An  inter- 
vening creditor  has  a  right  to  insist  upon  a  trial,  although  the 
petitioning  creditors  may  consent  to  continue  the  case.^^ 

The  proceedings  may  be  conducted  by  the  bankrupt  in  per- 


3  In  re  Hintze,  134  Fed.  Rep.  141, 
13  Am.  B.  R.  721. 

*  In  re  Plymouth  Cordage  Co. 
rC.  C.  A.,  8th  Cir.),  135  Fed. 
Rep.  1,000,  13  Am.  B.  R.  665 ;  In  re 
Brett,  130  Fed.  981,  12  Am.  B.  R. 
492;  In  re  Romanow,  92  Fed.  510, 
512,  I  Am.  B.  R.  461 ;  In  re  Merciir, 
95  Fed.  634,  2  Am.  B.  R.  626;  In  re 
Mackey,  no  Fed.  355,  363,  6  Am. 
B.  R.  577. 

5B.  A.  1898,  Sec.  I,  clause  9. 
See  also  Sec.  66,  ante. 

^  In  re  Columbia  Real  Estate 
Co.,  IT2  Fed.  Rep.  643,  7  Am.  B. 
R.  44T.  As  to  what  are  claims,  see 
"Provable   Debts,"   Chap.  XIII. 

''  In  re  Romanow,  92  Fed.  Rep. 
510,  I  Am.  B.  R.  461 ;  In  re  Beding- 
field,  96  Fed.  Rep.  190,  2  Am.  B. 
R-  355 :  ^"  ''c  Mcrcur,  95  Fed.  Rep. 


634,  2  Am.  B.  R.  626 ;  In  re  Stein 
(C.  C.  A.  2d  Cir.),  105  Fed.  Rep. 
749,  s  Am.  B.  R.  288,  3  N.  B.  N. 
428 ;  In  re  Ryan,  1 14  Fed.  Rep. 
273,  7  Am.  B.  R.  562;  In  re  Lacy, 
No.  7965,  Fed.  Cas.,  s.  c.  12  Blatch. 
322. 

s  Mattoon  Nat.  Bank  v.  First 
Nat.  Bank  (C.  C.  A.,  7th  Cir.), 
102  Fed.  Rep.  728,  4  Am.  B.  R.  515, 
2  N.  B.  N.  929 ;  Goldman  v.  Smith, 
93  Fed.  Rep.  182,  i  Am.  B.  R.  266; 
In  re  Meyer  (C.  C.  A.,  2d  Cir.),  98 
Fed.  Rep.  976,  3  Am.  B.  R.  559. 

9  /;j  ;.^  Moench  &  Sons  Co.,  123 
Fed.  Rep.  977,  10  Am.  B.  R.  590; 
Goldman  v.  Smith,  93  Fed.  Rep. 
182,  I  Am.  B.  R.  266. 

10  Knickerbocker  Ins.  Co.  v. 
Comstock,  No.  7879,  Fed.  Cas.,  s.  c. 
9   N.    B.   R.  484. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  263 

son  in  his  own  behalf,  or  by  a  petitioning  or  opposing  cred- 
itor; but  a  creditor  will  only  be  allowed  to  manage  before 
the  court  his  individual  interest.  Every  party  may  appear 
and  conduct  the  proceedings  by  attorney,  who  shall  be  an 
attorney  or  counsellor  authorized  to  practice  in  the  circuit  or 
district  court."  The  name  of  the  attorney  or  counsellor,  with 
his  place  of  business,  shall  be  entered  upon  the  docket,  with 
the  date  of  the  entry.     All  papers  or  proceedings  offered  by 

* 

an  attorney  to  be  filed  shall  be  endorsed  as  above  required, 
and  orders  granted  on  motion  shall  contain  the  name  of  the 
party  or  attorney  making  the  motion."  Notices  and  orders 
wdiich  are  not,  by  the  act  or  by  these  general  orders,  recjuired 
to  be  served  on  the  party  personally  may  be  served  upon  his 
attorney." 

There  is  no  objection  to  a  person  living  without  a  district 
entering  his  appearance  voluntarily.  In  such  case  the  court 
has  complete  jurisdiction  over  him  as  though  he  had  l)een 
legally  served  with  process.^"  If  a  non-resident  comes  into  the 
case  for  the  purpose  of  proving  a  claim  he  thereby  submits 
himself  to  the  jurisdiction  of  the  court  irrespective  of  his 
place  of  residence.^"''  He  thereby  makes  himself  a  party  to 
the  proceedings,  and  is  bound  to  take  notice  of  and  obey  the 
orders  of  the  court  to  the  same  extent  as  any  other  party. 
When  a  voluntary  appearance  has  been  entered  it  can  not  be 
withdrawn  without  permission  of  the  court." 

§  8i.     Schedules. 

It  is  the  duty  of  the  bankrupt  to  prepare  and  make  oath 
to  and  file  in  court  w-ithin  ten  days,  unless  further  time  is 

1^  Gen.  Ord.  4.  "  In    re    Kyler,    No.    7956.    Fed. 

An  attorney  at  the  time  of  filing  Ca.s.,  s.  c.  2  Ben.  414;  In  re  Sa1)in, 

the   petition   not   admitted   to   prac-  No.  12195,  Fed.  Cas.,  s.  c.  18  N.  B. 

tice  will  not  be  recognized;   /;/    re  R-   i-Si ;  In   re  Pease,  29  Fed.  Rep. 

O'Halloran,    No.    10463,    Fed.    Cas.,  505  ;/« ''^^  Anderson, 23  Fed.  Rep. 483. 

s.  c.  8  Ben.    12S.  1* /«    re   Ulrich,    No.    14327.   Fed. 

'^- In  re  Kirtland,   No.  7851,   Fed.  Cas.,  s.  c.  3  Ben.  355;  see  also  U.  S. 

Cas.,  s.  c.  10  Blatcli.  515;  In  re  Ul-  v.    Curry,    6    How.    106,    T2   L.    Ed. 

rich.   No.    T4327,   Fed.   Cas.,   s.   c.   3  363;  Eldred  v.  Mich.  Ins.  Bank,   17 

Ben.  355.  Wall.  545,  21  L.  Ed.  685. 


264  LAW    AND     PROCEEDINGS    IN     BANKRUPTCY, 

granted,  after  the  adjudication,  if  an  involuntary  bankrupt, 
a  schedule  of  his  property,  showing  the  amount  and  kind  of 
property,  the  location  thereof,  its  money  value  in  detail  and 
a  list  of  his  creditors,  showing  their  residences,  if  known,  if 
unknown,  that  fact  to  be  stated,  the  amounts  due  each  of 
them,  the  consideration  thereof,  the  security  held  by  them, 
if  any,  and  a  claim  for  such  exemptions  as  he  may  be  entitled 
to/ 

He  is  required  to  file  this  schedule  in  triplicate,  one  copy 
for  the  clerk,  one  for  the  referee,  and  one  for  the  trustee/ 
The  form  of  schedule  is  the  same  as  involuntary  proceed- 
ings." The  remarks  that  have  already  been  made  in  regard 
to  schedules  in  voluntary  petitions  apply  equally  to  proceed- 
ings in  involuntary  bankruptcy. 

There  is  one  class  of  cases,  however,  in  which  a  special 
provision  is  made  in  tlie  general  orders,  which  relates  solely 
to  involuntary  proceedings.  When  the  bankrupt  is  absent 
or  can  not  be  found,  it  is  the  duty  of  the  petitioning  creditor 
to  file,  within  five  days  after  the  date  of  the  adjudication,  a 
schedule  giving  the  names  and  places  of  residence  of  all  the 
creditors  of  the  bankrupt,  according  to  the  best  information 
of  the  petitioning  creditor.''  If  the  debtor  is  found  and  is 
served  with  notice  to  furnish  a  schedule  of  his  creditors  and 
fails  to. do  so,  the  petitioning  creditor  may  apply  for  an 
attachment  against  the  debtor,  or  may  himself  furnish  such 
schedule  as  aforesaid.^ 


§  82.     Pleading  to  the  petition. 

As  soon  as  a  petition  in  bankruptcy  is  filed  and  the  re- 
spondent is  served  with  process,  he  should  consider  his  re- 
sponse to  such  petition.  The  bankrupt  or  any  creditor  may 
appear  and  plead  to  the  petition  within  ten  days  after  the 
return   day   or   within  such   further  time  as   the  court  may 

1  B.  A.  1898,  Sec.  7,  clause  8.  ^  Qen.    Ord.    9. 

2  See   note   at   the   end   of    Form 
No.  3.     See  Sec.  60,  ante. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  265 

allow/  but  creditors  cannot  be  compelled  to  intervene.^ 
Where  a  respondent  waives  service  and  files  a  written  admis- 
sion of  the  truth  of  the  allegations  of  the  petition,  no  adjudica- 
tion can  be  made  until  after  the  expiration  of  the  ten  days 
within  which  creditors  may  intervene.'^  Any  creditor  with 
a  provable  claim  may  intervene  to  join  in  the  petition/  or 
for  the  purpose  of  opposing  the  prayer  of  the  petition.^ 
When  a  creditor  so  intervenes  he  has  the  same  right  as  any, 
other  party  and  may  file  an  answer  if  a  respondent."  Al- 
though the  statute  does  not  expressly  require  a  written  de- 
murrer, plea  or  answer,  it  evidently  contemplates  a  formal 
written  pleading  of  some  kind. 

In  what  way  the  bankrupt  or  creditor  may  properly  plead 
to  the  petition  depends  upon  the  circumstances  in  each  par- 
ticular case.  Where  the  averments  of  the  petition  are  not 
sufficiently  precise  and  distinct  the  debtor  may  file  exceptions, 
declining  to  answer  upon  that  ground  and  ask  that  the  alle- 
gations be  made  more  definite  and  certain  or  be  stricken  out.*^ 
If  the  averments  are  not  sufficient  in  law  to  sustain  the  pro- 
ceedings he  may  demur,^  or  may  move  to  dismiss  the  peti- 

1 B.    A.    1898,    Sec.    i8b;    In    re  In  Nenstadter  v.  Dry  Goods  Co., 

Mackey,  no  Fed.  Rep.  355,  6  Am.  g6  Fed.  Rep.  830,  3  Am.  Bankr.  R. 

B.  R.    577-  96,   it   was   said   that   "There   is   no 
2/«    re    Gillette,    T04    Fed.    Rep.  right    given    to    other    creditors    tc 

769,  5  Am.  B.  R.   119.  come  in  and  take  the  conduct  of  the 
3/«    re    Humbert    Co.,    100    Fed.  ^ase  out  of  the  hands  of  the  orig- 
Rep.  439,  4  Am.    B.   R.   76 ;   In   re  jnal  petitioners,  and  it  cannot  rea- 
Columbia  Real  Estate  Co.,  loi  Fed.  sonably    be     presumed     that     Con- 
Rep.  965,  4  Am.  B.  R.  411.  gress    intended    to    authorize     dif- 
*/h   re  Etheridge   Furniture  Co.,  ferent    creditors    to    come    in    suc- 
92  Fed.  Rep.  329,  i  Am.  B.  R.  112.  cessively    and    retry    issues    which 
See  Sec.  80,  ante.  have  been  decided,  and  in  that  way 
^  Mattoon   Nat.   Bank  v.   ist   Nat.  make   the   pendency   of  involuntary 
Bank  (C.  C.  A.,  7th  Cir.),  102  Fed.  cases  perpetual." 
Rep.  728,  4  Am.  B.  R.  515,  2  N.  B.  '^  In  re  Randall,  No.   11551,   Fed. 
N.  929;  Goldman  v.  Smith,  93  Fed.  Cas..  s.  c.  Deady,  557. 
Rep.   182,   I   Am.  B.  R.  266;  In  re  ^  In  re  Benham,  8  N.   B.  R.  94; 
Meyer  (C.  C.  A.,  2d  Cir.),  98  Fed.  Orem   v.    Harley,    No.    10567,    Fed 
Rep.  976,  3  Am.   B.  R.  SS9\. In  re  Ces.,  s.  c.  3  N.  B.  R.  263. 

C.  Moench   &   Sons   Co.,    123    Fed. 
Rep.  977.    10  Am.   B.   R.   590. 


266  LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 

tion/  He  should,  however,  consider  before  making  any  of 
these  dilatory  pleas  whether  he  desires  a  jury  trial  as  to  insol- 
vency. If  he  desires  a  trial  by  jury  of  this  question,  it  is 
necessary  to  file  a  written  application  therefor  at  or  before 
the  time  within  which  the  answer  may  be  filed. °  If  no  such 
application  is  filed  within  such  time,  a  trial  by  jury  is  deemed 
to  have  been  waived."'  It  seems  that  a  debtor  may  file  objec- 
.tions  by  way  of  demurrer  and  an  answer  at  the  same  time  and 
thus  obtain  a  jury  trial. ^"  Where  a  demurrer  or  exceptions 
or  a  motion  to  dismiss  is  filed,  it  should  be  set  down  for  hear- 
ing and  disposed  of  before  proceeding  further  in  the  case.  If 
either  a  demurrer,  motion  or  exception  is  sustained  the  court 
will  ordinarily  allow  the  petition  to  be  amended.^^  If  it  is 
overruled  the  court  will  allow  the  respondent  to  answer  with- 
in a  time  fixed  in  the  order. 

As  soon  as  the  petition  is  adjudged  to  be  correct,  or  is  made 
so  by  amendment,  or  when  no  dilatory  pleading  is  resorted 
to,  the  debtor  should  put  in  his  defense,  if  any,  on  the  merits. 
This  is  regularly  done  by  answer,  which  is  treated  in  the 
next  section. 

By  pleading  to  the  merits  in  the  first  instance  he  waives 
objection  to  formal  defects  in  the  petition  which  do  not  go  to 
the  jurisdiction  of  the  court.^" 

§  83.    The  answ^er. 

The  general  defense  to  a  petition  in  bankruptcy  is  regularly 
put  in  by  answer.  The  answer  is  entitled  in  the  court  in 
which  the  petition  is  filed  followed  by  a  caption  or  style  of  the 
proceedings  as  it  appears  upon  the  docket.     The  commence- 

s'/n    re    Melick,    No.    9399,    Fed.  Rep.  637,  i  N.  B.  N.  387,  2  Am.  B. 

Cas.,  s.  c.  4  N.  B.  R.  97.  R.    383;    Simonson    v.    Sinsheimer 

9B.  A.  1898,   Sec.   19.  (C.   C.  A.,  6th  Cir.),  95  Fed.  Rep. 

10 /n   re   Nickodemus,   No.    10254,  948;    /„    re    Mason,    99    Fed.    Rep. 

Fed.  Cas.,  s.  c.  3  N.  B.  R.  230.  256,  3  Am.  B.  R.  599;  In  re  Cliffe, 

11  See  Amendments,  Sec.  63,  2  Am.  B.  R.  317,  94  Fed.  Rep.  354; 
ante;  Gen.  Ord.,  11.  ^^^^^^    ^-^^^    g^,^,.    ^     ^^^j^     ^^^ 

-Leidigh  Carriage   Co.   v.   Sten-       ^^^    ^^^    ^^^^  ^  ^^^^    B    j^    ^^^ 

gel    (C.   C.   A-,   6th    Cir.),   95    Fed. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 


267 


ment  of  the  answer  may  be  in  substantially  these  words: 
"And  now  the  said  X.  Y.,  respondent  (or,  intervening  cred- 
itor, as  may  be),  appears  and  for  answer"  admits,  denies  or 
says,  as  may  be.  The  answer  usually  admits  the  allegations 
of  the  petition  which  are  true,  if  any,  before  stating  the  de- 
fenses. 

The  defense  is  then  set  forth.  Each  defense  must  be  spe- 
cifically stated.  The  true  object  of  pleading  at  law,  in  equity 
or  in  bankruptcy,  is  to  narrow  the  controversy  to  the  point 
or  points  really  in  dispute  between  the  parties.  No  greater 
latitude  in  pleading  should  be  allowed  the  defense  In  a  peti- 
tion in  bankruptcy  than  in  ordinary  actions  or  suits.^ 

In  order  to  maintain  bankruptcy  proceedings  to  have  a 
debtor  adjudged  a  bankrupt  it  must  appear  from  the  petition 
that  the  debtor  has  committed  an  act  of  bankruptcy  within 
four  months  prior  to  the  filing  of  such  petition."  It  is  also 
stated  in  the  petition  that  the  debtor  is  insolvent,'  but  unless 
the  act  of  bankruptcy  is  that  covered  by  Sec.  3«,  clause  1,  this 
allegation  is  superfluous ;  ■*  that  he  owes  debts  to  the  amount 
of  one  thousand  dollars  and  is  otherwise  subject  to  be  ad- 
judged an  involuntary  bankrupt;"  that  he  has  had  his  prin- 
cipal place  of  business,  resided  or  had  his  domicile  within  the 


^  In  re  Sutherland,  No.  13638, 
Fed.  Cas.,  s.  c.  Deady,  344. 

In  re  Bradley  Timber  Co.  v. 
White  (C.  C.  A.,  5th  Cir.),  121 
Fed.  Rep.  779,  10  Am.  B.  R.  329, 
the   court   said  : 

"The  plaintiff  in  error  also  con- 
tends that  the  court  erred  in 
striking  from  the  files  the  first  an- 
swer filed  by  the  Bradley  Timber 
Company,  but  we  think  that  in  this 
he  can  hardly  be  serious,  because 
the  .said  answer  seems  obnoxious 
on  all  the  grounds  alleged  in  the 
motion  to  strike.  The  alleged  an- 
swer does  not  conform  to  the  form 
for  answers  prescribed  by  the 
United      States      Supreme      Court 


orders.  It  is  prolix,  and  admixed 
with  supposed  grounds  of  the  de- 
murrer to  the  original  petition, 
which  had  already  been  disposed 
of  by  the  court.  It  is  not  properly 
verified,  and  it  did  not  admit,  nor 
unevasively  den}^  upon  the  oath  of 
a  competent  person,  the  material 
facts  alleged  in  the  petition.  Be- 
sides, another  answer  was  filed. 
See  Campbell  v.  Haverhill,  155  U. 
S.  610,  39  L.  Ed.  280." 

2  B.  A.  1898,  Sec.  3&. 

3  B.  A.  1898,   Sec.   2>b,  and   Form 
No.  3. 

*  West  Co.  V.  Lea,  174  U.  S.  590, 
43  L.  Ed.  1098,  2  .'\m.  B.  R.  463. 
5  B.  A.  1898,  Sec.  46. 


268  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

territorial  jurisdiction  of  the  court  for  the  greater  portion  of 
the  preceding  six  months;  or,  if  against  a  person  residing 
without  the  United  States,  that  he  has  property  within  the 
territorial  jurisdiction  of  the  court."  The  defense  set  up 
may  go  to  any  of  these  matters  and  there  may  be  several  de- 
fenses to  any  one  of  them.^  In  such  case  the  defenses  must 
be  separately  pleaded.^  Unless  all  the  essential  facts  re- 
quired by  the  petition  concur,  the  petitioners  have  no  right  to 
prosecute  the  petition,  and  it  must  be  dismissed. 

The  principal  defense  consists  in  a  denial  that  the  debtor 
has  committed  the  act  or  acts  of  bankruptcy  complained  of  in 
the  petition.  When  the  petition  alleges  two  or  more  acts  of 
bankruptcy  and  one  of  them  is  established  by  proof,  it  is  suf- 
ficient. The  answer,  therefore,  should  deny  each  act  separate- 
ly. This  defense  is  regularly  made  by  the  general  denial  pro- 
vided for  in  form  No.  6,  which  is  in  these  words :  "And  now 
the  said  X.  Y.  appears,  and  denies  that  he  has  committed  the 
act  of  bankruptcy  set  forth  in  said  petition,  or  that  he  is  insol- 
vent, and  avers  that  he  should  not  be  declared  bankrupt  for  any 
cause  in  said  petition  alleged."  When  this  defense  is  made  the 
answer  should  conclude  according  to  whether  the  debtor 
wishes  the  question  tried  by  the  court  or  a  jury  in  substantially 
these  words:  "and  this  he  prays  may  be  inquired  of  by  the 
court,"  or  "he  demands  that  the  same  may  be  inquired  of  by  a 
jury."  If  this  defense  is  established  by  proof  the  petition  must 
be  dismissed. 

The  question  of  how  far  a  plea  of  solvency  is  a  defense 
to  an  involuntary  petition  was  considered  by  the  supreme 
court  in  West  Co.  v.  Lea."  It  is  a  complete  defense  to  the 
first  act  of  bankruptcy  to  show  solvency  at  the  time  the  peti- 

«B.  A.  1898,  Sec.  2,  clause  i.  case,   No.   12855,   Fed.   Cas.,   s.  c.   i 

7  In  re  Paige,  99  Fed.  Rep.  538,  Saw.    410 ;    In    re    Sutherland,    No. 

3  Am.  B.  R.  679;   Mather  v.   Coe,  13638,  Fed.  Cas.,  s.  c.  Deady,  344; 

92  Fed.  Rep.  322,,  i  Am.  B.  R.  504;  In  re  Finlay,   No.  4789,   Fed.  Cas., 

In    re   Etheridge   Furniture   Co.,  92  s.  c.  5  Biss.  480. 

Fed.  Rep.  329.   i  Am.  B.  R.   112.  »  174  U.   S.   590,  43  L-   Ed.   1098, 

^       ^  In  re  Ouimette,  No.  10622,  Fed.  2  Am.  B.  R.  463. 

Cas.,   s.   c.    I    Saw.   47 ;    Silverman's 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 


269 


tion  is  filed.^*'  It  is  a  complete  defense  to  the  second  and 
third  classes  of  acts  of  bankruptcy  and  to  that  part  of  the 
fourth  class  which  relates  to  receivers  to  show  solvency  at  the 
time  the  acts  were  committed/^  It  was  directly  ruled  in 
West  Co.  V.  Lea  that  a  deed  of  general  assignment  for  the 
benefit  of  creditors  is  made  by  the  bankrupt  act  alone  suf- 
ficient to  justify  an  adjudication  in  involuntary  bankruptcy 
against  the  debtor  making  such  deed  without  reference  to  his 
solvency  at  the  time  of  the  filing  of  the  petition  and  a  denial 
of  insolvency  is  not  a  defense.  Under  the  fifth  class  of  acts 
the  debtor  has  admitted  his  insolvency  at  the  time  of  com- 
mitting the  act  of  bankruptcy  and  solvency  at  the  time  of 
filing  the  petition  is  no  defense.^' 

A  person  against  whom  an  involuntary  petition  has  been 
filed  is  entitled  to  have  a  trial  by  jury  in  respect  to  the  ques- 
tion of  his  insolvency,  where  the  question  is  material,  except 
as  otherwise  provided  in  the  act,  and  any  act  of  bankruptcy 
alleged  in  such  petition  to  have  been  committed  upon  filing 
a  written  application  therefor  at  or  before  the  time  within 
which  an  answer  may  be  filed."  If  such  application  is  not  filed 
within  such  time,  a  trial  by  jury  will  be  deemed  to  have  been 
waived."  This  right  is  limited  to  the  bankrupt  and  is  not 
extended  to  intervening  creditors  contesting  such  issues." 

The  answer  may  also  deny  that  the  petitioners  or  any  one 
of  them  is  a  creditor  owning  a  provable  debt,"  or  that  the 


ifB.  A.  1898,  Sec.  3c. 

11  West  Co.  V.  Lea,  174  U.  S. 
590.  43  L.  Ed.  1098,  2  Am.  B.  R. 
463 ;  la  re  Rome  Planing  Mill,  96 
Fed.  Rep.  812,  3  Am.  B.  R.  123, 
2  N.  B.  N.  S3 1.  See  also  In  re 
Coddington,  118  Fed.  Rep.  281,  9 
Am.  B.  R.  243.. 

12  West  Co.  V.  Lea.  174  U.  S.  590, 
43  L.  Ed.   1098,  2  Am.  B.  R.  463. 

I'-^B.  A.  ,898,  Sec.  19.  See  also 
In  re  Neasmith  (C.  C.  A.  6th  Cir.), 
147  Vq<\.  Rep.  160. 

^*  In  re  Ilerzikopf,  121  Fed.  Rep. 
544.  9  Am.  B.  R.  745. 


1''  In  re  Brinckmann,  103  Fed. 
Rep.  65,  4  Am.  B.  R.  551 ;  Beers  v. 
Hanlin,  99  Fed.  Rep.  695,  3  Am. 
B.  R.  745 ;  In  re  Morales,  105  Fed. 
Rep.  761,  5  Am.  B.  R.  425;  Hill  v. 
Levy,  98  Fed.  Rep.  94,  3  Am.  B. 
R.  374;  In  re  Big  Meadows  Gas 
Co.,  113  Fed.  Rep.  974,  7  Am.  B. 
R.  697. 

In  re  Manhattan  Ice  Co.,  114 
I"ed.  Rep.  400,  note,  7  Am.  B.  R. 
409,  note.  The  following  opinion 
was  handed  down  May  21,  1901,  by 
Brown,  District  Judge  :  "The  prac- 
tice in  this  district  is  that  a  credi- 


270 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


debts  claimed  by  the  petitioning  creditors  amount  to  five  hun- 
dred dollars/''  or  that  his  total  indebtedness  amounts  to  one 
thousand  dollars;  or  he  may  set  up  a  set-off  for  the  pur- 
pose of  reducing  the  amount  of  such  debts  to  less  than  five 
hundred  dollars/"  or  may  aver  that  the  debts  claimed  are 
barred  by  the  statute  of  limitations ;  ^^  or  may  challenge  the 
jurisdiction  of  the  court/'''  or  plead  infancy/^  or  that  the 
debtor  was  iwn  compos  mentis  at  the  time  the  alleged  act  of 
bankruptcy  was  committed."^  In  those  estates  where  a  mar- 
ried woman  has  no  separate  property  rights  and  cannot  con- 
tract debts  she  may  defend  on  the  plea  of  coverture." 

Where  the  petition  is  filed  by  one  creditor  and  the  defense 
is  that  there  are  more  than  twelve  creditors,  the  act  requires 
that  "there  shall  be  filed  with  the  answer  a  list  under  oath  of 
all  the  creditors  with  their  addresses/^  and  thereupon  the 
court  shall  cause  all  such  creditors  to  be  notified  of  the  pend- 
ency of  such  petition,  and  shall  delay  the  hearing  upon  such 
petition  for  a  reasonable  time,  to  the  end  that  parties  in 
interest  shall  have  an  opportunity  to  be  heard/'  -*  The  serv- 
ice of  the   notice  on   the   creditors   as   provided   by   the   act 


tor  having  a  provable  debt  may  be 
a  petitioning  creditor,  though  the 
debt  is  unHquidated.  These  credi- 
tors evidently  have  a  present  fixed 
debt  to  some  amount.  Only  a  trial 
can  determine  the  amount  of  the 
debts.  If  insufficient  in  amount, 
the  petition  will  be  dismissed,  im- 
less  others  join.  The  defense  must 
be  taken  by  answer.  Motion  de- 
nied." 

1'-  III  re  Ouimette,  No.  10622, 
Fed.  Cas.,  s.  c.  i  Saw.  47;  In  re 
Cal.  Pac.  R.  Co.,  No.  2315,  Fed. 
Cas.,  3  Saw.  240. 

1"  In  re  Osage,  etc.,  R.  Co.,  No. 
10592,  Fed.  Cas.,  s.  c.  9  N.  B.  R. 
281;  In  re  SkcHey.  No.  12921.  Fed. 
Cas.,  s.  c.  3  Biss.  260;  In  re  Shee- 
han,  No.  12738,  Fed.  Cas.,  s.  c.  8 
N.  B.  R.  353. 


i^/n  re  Cornwall,  No.  3250,  Fed. 
Cas.,  s.  c.  9  Blatch.  114. 

10  In  re  Williams,  No.  17706,  Fed. 
Cas.,  s.  c.  14  N.  B.  R.  132. 

2"/;i  re  Derby,  No.  3815,  Fed. 
Cas.,  s.  c.  6  Ben.  2^2. 

-'^  In  re  Maroin,  No.  ^178,  Fed. 
Cas.,  s.  c.  I  Dill.  178;  In  re  Pratt, 
No.  11371,  Fed.  Cas.,  s.  c.  2  Low. 
96;  In  re  Weitzel,  No.  17365,  Fed. 
Cas.,  s.  c.  7  Biss.  289 ;  In  re  Mur- 
phy, No.  9946,  Fed.  Cas.,  s.  c.  10 
N.  B.  R.  48. 

--  In  re  Rachel  Goodman,  No. 
5540,  Fed.  Cas.,  s.  c.  5  Biss.  401 ; 
In  re  Rowland,  No.  6791,  Fed.  Cas., 
s.  c.  2  N.  B.  R.  357. 

-'■■B.  A.  189S.  Sec.  59^;  Gage  & 
Co.  v.  Bell.  124  Fed.  Rep.  371,  10 
Am.  B.  R.  696. 

^•i  B.  A.  1898,  Sec.  59c/. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  271 

should  be  made  by  some  officer  of  the  court."  If  there  are 
more  than  twelve  creditors,  the  court  may  permit  others  to 
join  in  the  petition  at  any  time  before  the  adjudication  to 
make  three  petitioning  creditors.^^ 

A  plea  of  payment,  in  whole  or  in  part,  of  the  debt  of  the 
petitioning  creditor  will  not  ordinarily  defeat  the  petition  for 
adjudication  in  bankruptcy.^'  If  the  debtor  is  insolvent  he 
has  no  right  to  offer  payment  or  the  creditor  to  accept  it. 
This  would  amount  to  a  preference,  which  can  be  aovided  by 
the  trustee.  There  are,  however,  a  few  exceptions  to  this  rule 
in  which  a  plea  of  payment  may  be  made  as  a  defense  to  the 
petition.  Thus,  when  there  is  only  one  creditor  of  the  debtor 
payment  may  be  pleaded. ^^  When  a  payment  has  been  made 
after  the  petition  has  been  filed  and  before  the  trial,  the  re- 
ceipt of  such  payment  by  the  petitioning  creditors  has  been 
held  a  waiver  sufficient  to  defeat  the  adjudication  if  the  pay- 
ment was  sufficient  in  amount  to  reduce  the  indebtedness  be- 
low the  minimum  established  by  the  act."'* 

The  answer  should  be  signed  and  verified  ^'^  under  oath  by 
the  person  answering  or  his  agent  or  attorney. 

The  answer  is  filed  with  the  clerk  of  the  court,  and  not 
with  a  referee.  It  should  be  filed  within  five  days  after  the 
return  day  of  the  subpoena  or  within  such  further  time  as  the 
court  may  allow. ^^  A  debtor  is  entitled  to  a  reasonable  time 
to  answer  an  amended  petition.^" 


25  7m  re  Tribelhorn  (C.  C.  A.,  2d  iams,   No.   17703,  Fed.  Cas.,  s.  c.   i 
Cir.),   137  Fed.  Rep.  3,   14  Am.  B.  Low.  406. 

R.  491-  -^  In  re  Sheehan,  No.  12738,  Fed. 

26  B.    A.    1898,    Sec.    S9d;    In    re  Cas.,  s.  c.  8  N.  B.  R.  353. 
Plymouth  Cordage  Co.    (C.  C.  A.,  "       -^  In  re  Skelley,  No.   12921,  Fed. 
8th   Cir.),    135   Fed.    Rep.    1000,    13  Cas.,  s.  c.  3  Biss.  260. 

Am.  B.  R.  665;  In  re  Haff   (C.  C.  ^o  b.  A.  1898.  Sec.  i8r. 

A..  2d  Cir.),   136  Fed.   Rep.  78,   13  ^i  b.  A.  1898,  Sec.  18&. 

Am.  B.  R.  362.  32Lockman   v.    Lang,    (C.    C.    A. 

-'^  In  re  Ouimette,  No.  10622,  Fed.  8th  Cir.),  132  Fed.  Rep.  i,  12  Am 

Cas.,  s.  c.   I   Saw.  47;  In   re  Will-  B.  R.  497. 


272  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

§  84.    The  order  of  proceeding  where  petitions  are  filed  in 
different  districts. 

It  is  obvious  that  two  or  more  petitions  may  be  filed  against 
the  same  debtor  in  different  districts.  In  such  cases  ^  the 
first  hearing  is  had  in  tlie  district  in  which  the  debtor  has  his 
domicile/  and  the  petition  may  be  amended  by  inserting  arf 
allegation  of  an  act  of  bankruptcy  committed  at  an  earlier 
date  than  that  first  alleged,  if  such  earlier  act  is  charged  in 
either  of  the  other  petitions ;  and  in  case  of  two  or  more  peti- 
tions against  the  same  partnership  in  different  courts,  each 
having  jurisdiction  over  the  case,  the  petition  first  filed  is 
first  heard,  and  may  be  amended  by  the  insertion  of  an  allega- 
tion of  an  earlier  act  of  bankruptcy  than  the  first  alleged,  if 
such  earlier  act  is  charged  in  either  of  the  other  petitions ;  and 
in  either  case  the  proceedings  upon  the  other  petitions  may  be 
stayed  until  an  adjudication  is  made  upon  the  petition  first 
heard;  and  the  court  which  makes  the  first  adjudication  of 
bankruptcy  retains  jurisdiction  over  all  proceedings  therein 
until  the  same  shall  be  closed/ 

In  case  two  or  more  petitions  are  filed  in  different  districts 
by  different  members  of  the  same  partnership  for  an  adjudi- 
cation of  the  bankruptcy  of  said  partnership,  the  court  in 
which  the  petition  is  first  filed,  having  jurisdiction,  takes  and 
retains  jurisdiction  over  all  proceedings  in  such  bankruptcy 
until  the  same  is  closed ;  and  if  such  petitions  are  filed  in  the 
same  district,  action  is  first  had  upon  the  one  first  filed/ 

But  the  court  so  retaining  jurisdiction  must,  if  satisfied 
that  it  is  for  the  greatest  convenience  of  parties  in  interest 
that  another  of  said  courts  should  proceed  with  the  cases, 
order  them  to  be  transferred  to  that  court/ 

IB.  A.  1898,  Sec.  32;  Gen.  Ord.  761,    132   Fed.   Rep.   378,   s.   c.    137 

6]  In  re  Elmira  Steel  Co.,  109  Fed.  Fed.   Rep.  668,  13  Am.  B.  R.  454; 

Rep.  456,  5  Am.   B.  R.  484;  In  re  In    re    Tybo    Min.    Co.,    132    Fed. 

Boston,  etc.,  R.  Co.,  No.  1678,  Fed.  Rep.    697,    13    Am.    B.    R.    62,    and 

Cas.,  s.  c.  9  Blatch.  409.  132   Fed.   Rep.  978,   13  Am.   B.   R. 

In   re   Globe    Sec.    Co.,    132   Fed.  68;  In  re  General  Metals  Co..   133 

Rep.  709,  12  Am.  B.  R.  764  note;  In  Fed.  Rep.  84,  12  Am.  B.  R.  770. 

re  United  Button  Co.,  12  Am.  B.  R.  In    Southwestern    Bridge  &   Iron 


PROCEEDINGS    IN    INVOLUNTARY    BANKRLl'TCV.  273 

§  85.    The  order  of  proceeding  where  two  or  more  petitions 
are  filed  in  the  same  court. 

It  is  clear  that  a  delator  having  a  large  number  of  creditors 
is  liable  to  have  several  petitions  filed  against  him  in  the 
same  court  by  different  creditors.  The  same  or  different  acts 
of  bankruptcy  may  Ije  alleged  as  a  ground  for  having  him 
adjudged  a  bankrupt. 

Whenever  two  or  more  petitions  have  l^een  filed  b}^  cred- 
itors against  a  common  debtor,  alleging  several  acts  of  bank- 
ruptcy committed  by  said  debtor  on  different  days  within  four 
months  prior  to  the  filing  of  said  petitions,  and  the  debtor 
shall  appear  and  show  cause  against  an  adjuJication  of  bank- 
ruptcy against  him  on  the  petitions,  that  petition  is  first  heard 
and  tried  which  alleges  the  commission  of  the  earliest  act  of 
bankruptcy.^  In  case  several  acts  of  bankruptcy  are  alleged 
in  the  different  petitions  to  have  been  committed  on  the  same 
day,  the  court  before  which  the  same  are  pending-  may  order 
them  to  be  consolidated  and  proceed  to  a  hearing  as  upon  one 
petition."  If  an  adjudication  of  bankruptcy  is  made  upon 
either  petition,  or  for  the  commission  of  a  single  act  of  bank- 
ruptcy, it  is  not  necessary  to  proceed  to  a  hearing  upon  the 
remaining  petitions,  unless  proceedings  be  taken  by  the  debtor 
for  the  purpose  of  causing  such  adjudication  to  be  annulled 
or  vacated." 

§  86.    The  reply. 

Where  the  answer  contains  simply  a  general  denial  or  trav- 
erse of  the  allegations  of  the  petition,  no  replication  or  reply 

Co.,  133  Fed.  Rep.  568,   13  Am.  B.  process,     acquires     jurisdiction     of 

R.  304,  it  was  held  that  where  tlie  the   persons   and   possession   of   the 

business  transactions  of  two  alleged  property,    may    proceed    to    a    final 

bankrupt  corporations  organized  in  adjudication   and    determination   of 

different  jurisdictions  are  so   inter-  the    rights   of  the   creditors    in   the 

mingled  as  to  be  impossible  of  sep-  joint  property, 

aration   and   the   necessities   of  the  1  Gen.  Ord.  7. 

case    require    that    the    entire    joint  2  Qe^i.   Ord.   7.     As  to   attorney's 

estate  be  brought  into  one  jurisdic-  fees  on  consolidation,  see  In  re  IMc- 

tion  for  the  purpose  of  administra-  Cracken  &  McLeod,  129  Fed.  Rep. 

tion,    the    court    which    first,    under  621,  I2  Am.  B.  R.  95. 
proper    pleadings  ■  and    by    proper 


274 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


is  needed.^  If  the  petitioning  creditors  wish  to  contest  a  de- 
fense raising  new  matter  they  must  put  in  a  rephcation  and 
have  a  trial  before  an  adjudication  is  made."  Where  a  case 
is  submitted  on  petition  and  answer  the  allegations  of  the 
answer  are  taken  to  be  true,"  and  if  th^  adjudication  is  denied 
the  debtor  is  entitled  to  a  final  decree  dismissing  the  petition.^ 
The  reply  may  be  filed  on  the  day  of  the  hearing. 

It  may  be  observed  that  where  the  answer  contains  pleas 
which  are  irrelevant  and  immaterial,  it  is  proper  to  move  to 
have  them  stricken  out.  If  they  are  insufficient  in  law  it  has 
JDeen  held  that  the  proper  practice  under  the  present  statute 
and  general  orders  is  to  set  the  case  down  for  hearing  upon 
petition  and  answer,  as  in  equity,  and  that  a  demurrer  to  the 
answer  is  improper.* 


§  87.     The  hearing  or  trial. 

If  the  bankrupt  or  any  of  his  creditors  appear  within  the 
time  limited  and  controvert  the  facts  alleged  in  the  petition, 
a  hearing  or  trial  is  had  as  soon  as  may  be  thereafter  upon 
the  issues  presented  by  the  pleadings.^     It  is  the  duty  of  the 


1  In  re  Dunham,  No.  4143,  Fed. 
Cas.,  s.  c.  2  Ben.  488;  In  re  Hawk- 
eyt  Smelting  Co.,  8  N.  B.  R.  385. 

2  Mattoon  Nat.  Bank  v.  First 
Nat.  Bank  (C.  C.  A.,  7tli  Cir.),  102 
Fed.  Rep.  728,  4  Am.  B.  R.  515,  2 
N.  B.  N.  929 ;  Brinkley  v.  Smith- 
wick,  126  Fed.  Rep.  686,  11  Am.  B. 
R.  500 ;  In  re  Doddy,  Jourdan  &  Co., 
127  Fed.  Rep.  771,  it  Am.  B.  R. 
344;  In  re  Waugh  (C.  C.  A..  9th 
Cir.),  133  Fed.  Rep.  281,  13  Am. 
B.  R.  187. 

3/u  re  Waugh  (C.  C.  A.,  9th 
Cir.),  133  Fed.  Rep.  281,  13  Am. 
B.  R.  187. 

■*  In  Goldman,  Beckman  &  Co.  v. 
Smith,  93  Fed.  Rep.  182,  t  Am.  B. 
R.  266,  Judge  Barr  said:  "If  we  are 
to   apply   the   rules  of   equity   prac- 


tice to  proceedings  in  bankruptcy — 
and  we  understand  these  are  to  be 
applied  (see  Rule  ^J,  Supreme 
Court),  the  sufficienc}-  of  an  answer 
can  not  be  raised  by  a  demurrer, 
but  can  only  be  done  by  setting 
the  case  for  hearing  upon  the  bill 
and   answer." 

Consult  as  to  the  practice  in 
equity.  Banks  v.  Manchester,  128 
U.  S.  244,  32  L.  Ed.  425 ;  Walker  v. 
Jack,  88  Fed.  Rep.  576;  Grether  v. 
Wright,  75  Fed.  Rep.  742,  s.  c 
23  C.  C.  A.  500. 

IB.  A.  1898,  Sec.  i8c?;  Mattoon 
Nat  Bank.  v.  ist  Nat.  Bank,  102 
Fed.  Rep.  728.  4  Am.  B.  R.  515,  2 
47  L.  Ed.  200,  9  Am.  B.  R.  50; 
N.  B.  N.  929;  Leidigh  Carriage  Co. 
V.  Stengel,  95  Fed.  Rep.  637,  2  Am. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY.  275 

judge  to  determine  the  issues  so  made  without  tlie  interven- 
tion of  a  jury,  except  in  cases  where  a  jury  trial  is  given  by 
the  statute."  The  case  may  be  set  for  hearing  by  either  party 
upon  any  day  after  the  issues  have  been  made  at  wdiich  it 
can  be  heard  by  tlie  judge.  He  should  serve  notice  upon  tlie 
opposing  party  of  the  day  of  hearing  or  trial. 

It  is  proper  for  a  judge  to  refer  the  proceedings  to  a  special 
master  to  take  evidence  and  report.  When  the  evidence 
has  been  taken  jind  returned  to  the  judge  with  the  opin- 
ion of  the  special  master,  the  judge  will  then  consider 
the  issues  and  determine  the  same.  This  method  of  taking 
testimony  is  the  usual  one  in  courts  of  equity,  and  the  act 
does  not  provide  that  all  the  testimony  shall  be  taken  in  the 
presence  and  hearing  of  the  judge.^ 

The  debtor  is  entitled  to  have  a  trial  by  jury  in  respect  to 
the  question  of  his  insolvency  and  any  act  of  bankruptcy 
aPeged  in  the  petition  against  him  to  have  been  committed 
upon  filing  a  written  application  therefor  at  or  before  the  time 
within  which  an  answ^er  may  be  filed.  If  any  such  written 
application  is  not  filed  within  such  time  the  debtor  is  deemed 
to  have  waived  his  right  to  trial  by  jury,  and  these  questions 
are  then  determined  by  the  judge.* 

This  right  of  jury  trial  is  confined  to  the  debtor.  Creditors 
are  not  entitled  to  demand  a  jury  trial  on  the  question  of  the 
bankrupt's  solvency,^  or  of  the  allowance  of  their  claims.*' 
The  right  to  a  trial  by  jury  on  written  application  of  the 
alleged  bankrupt  is  absolute  and  cannot  be  withheld  at  the 

B.  R.  383,   I   N.  B.   N.  387;   In  re  -In  re  Lacov  (C.  C.  A.,  2d  Cir.), 

Baumann,  96  Fed.  Rep.  946,  3  Am.  134   Fed.    Rep.   237,    13   Am.    B.    R. 

B.  R.  196.  400. 

^  B.  A.   1898,  Sec.   19a.     See  also  '  B.   A.    1898,   Sec.    iSd,   and   Sec. 

Simonson    v.     Sinsheimer     (C.     C.  iga;    In    re    Neasmith     (C.    C.    A- 

A.,    6th    Cir.),    100   Fed.    Rep.   426,  6th  Cir.),  147  Fed.  Rep.  160. 

3  Am.  B.  R.  824;  Bray  v.  Cobb,  91  °  In  re  Herzikopf   (C.  C.  .A.,  9th 

Fed.   Rep.    102;    t    Am.   B.   R.    153;  Cir.),  121  Fed.  Rep.  544,  9  Am.  B. 

Elliott  V.  Toeppner,   187  U.  S.  2,27,  R.  745. 

47   L.    Ed.    200,   9    Am.    B.    R.    50;  " /«  re  Christensen,  loi  Fed.  Rep. 

Morss    V.    Franklin    Coal    Co.,    125  243,  4  Am.  B.  R.  99. 
Fed.  Rep.  998,  11  Am.  B.  R.  423.  " 


276  LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 

discretion  of  the  court.'  In  that  respect  it  differs  from  the 
trial  of  an  issue  out  of  chancery,  which  the  court  of  equity  is 
not  bound  to  grant,  nor  bound  by  the  verdict  if  such  trial  be 
p-ranted.  The  court  cannot,  as  the  chancellor  may,  enter  judg- 
ment  contrary  to  the  verdict,  but  the  verdict  may  be  set  aside 
or  the  judgment  may  be  reversed  for  error  of  law  as  in  com- 
mon law  cases/  In  case  a  jury  is  waived  by  not  demanding 
one  in  writing  and  an  issue  is  submitted  to  a  jury,  the  verdict 
is  advisory  only  as  in  equity.'*  The  judge  and  not  the  referees 
should  preside  at  a  jury  trial. 

Where  the  bankrupt  has  seasonably  demanded  in  writing  a 
trial  by  jury,  the  issues  may  be  tried  before  any  jury  in  attend- 
ance upon  the  court.  If  a  jury  is  not  in  attendance  upon  the 
court  one  may  be  specially  summoned  for  the  trial,  or  the  case 
may  be  postponed,  or,  if  the  case  is  pending  in  one  of  the  dis- 
trict courts  within  the  jurisdiction  of  a  circuit  court  of  the 
United  States,  it  may  be  certified  for  trial  to  the  circuit  court 
sitting  at  the  same  place,  or  by  consent  of  parties,  when  sit- 
ting at  any  other  place  in  the  same  district,  if  such  circuit 
court  has  or  is  to  have  a  jury  first  in  attendance.® 

Where  the  bankrupt  has  controverted  other  allegations  of 
the  petition  in  addition  to  those  relating  to  his  insolvency 
and  commission  of  acts  of  bankruptcy,  there  is  nothing  in  the 
statute  prohibiting  the  court  from  submitting  all  the  issues 
to  the  jury.  Section  19c  of  the  act  would  seem  to  be  author- 
ity for  such  proceedings.  It  would  also  seem  that  the  judge 
may  submit  the  questions  of  insolvency  and  the  commission 
of  an  act  of  bankruptcy,  with  proper  instructions  as  to  the 
other  matters. ° 

At  the  hearing  or  trial  the  petitioners  must  establish  by 
proof  the  truth  of  the  facts  alleged  in  the  petition.     The  bur- 

7  Elliott   V.   Toeppner,    187  U.    S.  «  See  Blue  Mountain  Iron  &  Steel 

327,   47   L.    Ed.   200,   9   Am.    B.    R.  Co.  v.  Portner  (C.  C.  A.,  4th  Cir.). 

50  131    Fed.    Rep.    57,    12   Am.    B.    R. 

'■*/;i  re  Neasmith    (C.  C.  A.  6th  559;    Bean    Chamberlain    Mfg.    Co. 

Cir.),  147  Fed.  Rep.  160.  v.  Standard  Spoke  and  Nipple  Co. 

8b'.  a.  1898,  Sec.  19b.  (C.  C.  A.,  6th  Cir.),  131  Fed.  Rep. 

215,  12  Am.  B.  R.  610. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 


277 


den  of  proof  rests  upon  the  petitioners  in  all  cases/"  except 
in  respect  to  the  question  of  insolvency.  With  reference  to 
the  question  of  solvency  the  burden  of  proof  is  regulated  by 
the  statute/^  It  declares  that  it  shall  be  a  complete  defense 
to  any  proceedings  in  bankruptcy  instituted  under  the  first 
subdivision  of  section  3  to  allege  and  prove  that  the  party 
proceeded  against  was  not  insolvent,  as  defined  in  the  statute, 
at  the  time  of  the  filing  the  petition  against  him,  and  if  sol- 
vency at  such  date  is  proved  by  the  alleged  banl<rupt  the  pro- 
ceedings shall  be  dismissed,  and  under  said  subdivision  one 
the  burden  of  proving  solvency  shall  be  on  the  alleged  bank- 
rupt. ^^'henever  a  person  against  whom  a  petition  has  been 
filed,  as  hereinbefore  provided  under  the  second  and  third 
subdivisions  of  section  3,  takes  issue  with  and  denies  the 
allegation  of  his  insolvency,  it  shall  be  his  duty  to  appear  in 
court  on  the  hearing,  with  his  books,  papers  and  accounts, 
and  submit  to  an  examination,  and  give  testimony  as  to  all 
matters  tending  to  establish  solvency  or  insolvency,  and  in 
case  of -his  failure  to  so  attend  and  submit  to  examination  the 
burden  of  proving  his  solvency  shall  rest  upon  him.  If  he 
does  so  attend,  the  burden  is  upon  the  petitioners.^" 

Where  a  bankrupt  contests  the  debt  of  a  petitioning  cred- 
itor on  the  ground  that  it  is  illegal  because  founded  on  a  gam- 
bling or  wagering  contract,  the  burden  of  proof  is  upon  the 
bankrupt.^^ 

The  evidence  is  put  in  in  the  same  manner  as  at  any  other 


i*'  In  re  Rome  Planing  IVIills,  96 
Fed.  Rep.  812,  3  Am.  B.  R.  123 ; 
In  re  Lange,  97  Fed.  Rep.  197,  3 
Am.  B.  R.  232 ;  In  re  Price,  No. 
11411,  Fed.  Cas.,  s.  c.  8  N.  B. 
R.  514;  Brock  V.  Hoppock,  No. 
1912,  Fed.  Cas.,  s.  c.  2  N.  B.  R. 
7;  In  re  Oregon  Bulletin  Co.,  No. 
IOS59,  Fed.  Cas.,  s.  c.  13  N.  B.  R. 
503;  Philpot  V.  O'Brion  (C.  C.  A., 
1st  C;r.),  126  Fed.  Rep.  167.  11  Am. 
B.  R.  205;  In  re  Foster,  126  Fed. 
Rep.  1014,  II  Am.  B.  R.  131;  Troy 


Wagon   Works   v.   Vastbinder,    130 
Fed.  Rep.  232,  12  Am.  B.  R.  352. 

11  B.  A.  1898,  Sec.  zc  and  3^; 
West  Co.  V.  Lea.  174  U.  S.  590,  43 
L.   Ed.   1098,  2  Am.  B.  R.  463. 

12  M'Gowan  v.  Knittel  (C.  C.  A., 
3d  Cir.),  137  Fed.  Rep.  453,  14  Am. 
B.  R.  208. 

13  Hill  V.  Levy,  98  Fed.  Rep.  94, 
3  Am.  B.  R.  374,  2  N.  B.  N,'  rSo. 
See  also  as  to  presumption  of  le- 
gality of  contracts,  Irwin  v.  Williar, 
no    U.    S.    507,   28   L.   Ed.   225. 


278  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

civil  trial.  The  court  may  summon  any  person  who  is  a  com- 
petent witness  to  appear  in  court  to  be  examined."  ■  The  right 
to  take  depositions  at  such  a  trial  is  determined  by  and  en- 
joyed according  to  the  United  States  laws  in  force  at  thaf 
time  relating  to  the  taking  of  depositions.^'^  When  the  evi- 
dence in  chief,  evidence  in  reply  and  evidence  in  rebuttal  has 
been  introduced  the  case  is  closed  and  the  arguments  of 
counsel  of  the  parties ,  heard.  The  court  submits  the  case  to 
the  jury  with  instructions  as  in  a  common  law  action.  When 
there  is  no  conflicting  testimony  the  court  may  direct  a  ver- 
dict.^*^  A  scintilla  of  conflicting  testimony  is  not  sufficient  to 
require  a  submission  to  the  jury.  The  court  has  power  to 
set  aside  a  verdict  upon  the  grounds  recognized  in  other  civil 
actions.^^  Where  the  case  is  submitted  to  the  judge  without 
the  intervention  of  a  jury  the  evidence  is  not  usually  intro- 
duced with  the  same  formality  as  in  a  jury  trial.  In  such 
case  the  court  determines  the  issues  presented  by  the  plead- 
ings upon  the  proofs  after  arguments  of  counsel,  and  either 
makes  an  adjudication  of  the  bankruptcy  or  dismisses  the 
petition. 

§  88.    Order  of  adjudication. 

If  the  facts  set  forth  in  the  petition  are  sufficient  and  estab- 
lished by  proof  to  be  true,  either  by  a  jury  or  bv  the  court,  it 
is  the  duty  of  the  court  to  adjudge  the  debtor  to  be  a  bank- 
rupt.^ An  order  of  adjudication  ought  not  to  be  made  until 
the  expiration  of  the  time  for  creditors  to  intervene  and  op- 

i*B.     A.      1898,      Sec.     2Ja,     as  preme  court  in  an  opinion  b}^  Mr. 

amended  Feb.  5,  1903,  32  Stat,  at  L.  Justice  Miller  in  ex  parte  Fisk,  113 

797.     In  re  Woodward,  No.   18000,  U.  S.  713,  28  L.  Ed.  11 17. 

Fed.  Cas.,  s.  c.  8  Ben.  112.  1*5  Hardj^  v.  Clark,  No.  1420  Fed. 

^■'"'B.  A.  1898,  Sec.  2ib.    The  sec-  Cas.,   s.   c.  3   N.   B.   R.   385;   In   re 

tions  of  the  Revised  Statutes  which  jelsh,   No.  7257,  Fed.   Cas.,   s.   c.  9 

apply   particular!}'-   to    the    right    to  N.  B.  R.  412. 

take  depositions  are  found  in  chap.  ^'/w    re    Dunn,    No.    41713,    Fed. 

17  of  the  Revised  Statutes  relating  Cas.,   s.   c.   12  Blatch.  42;  In  re  De 

to  evidence  and  particularly  sections  Forest,    No.    2745,    Fed.    Cas.,    s.    c. 

861  to  870.     This  subject  has  been  9  N.  B.  R.  278. 

quite    fully    discussed    by    the    su-  ^  B.  A.  1898,  Sec.  iS^". 


PROCEEDINGS    IX    IXVOLUXTAUV    IJAXKRL^PTCY. 


279 


pose  the  petition,  although  the  bankrupt  appears  and  files  a 
written  admission  of  the  acts  of  bankruptcy  and  waives  serv- 
ice." An  adjudication  of  bankruptcy  against  a  partnership 
will  be  denied,  where  the  existence  of  the  partnership  is  put  in 
issue  by  some  of  the  members,  until  the  existence  of  the  part- 
nership is  established."  The  form  of  adjudication  of  bank- 
ruptcy is  prescribed  by  the  sapreme  court  in  form  Xo.  12. 
This  order  should  be  entered  by  the  clerk  of  record.  A  mer6 
memorandum  not  conforming  substantially  to  this  form  is 
not  an  adjudication.'* 

When  the  debtor  resists  an  adjudication  and  the  court, 
after  hearing,  adjudges  the  debtor  a  bankrupt,  the  petitioning 
creditor  is  entitled  to  recover  and  be  paid  out  of  the  estate  the 
same  costs  that  are  allowed  to  a  party  recovering  in  a  suit  in 
equity;  and  if  the  petition  is  dismissed  the  debtor  shall  re- 
cover like  costs  against  the  petitioner.'^ 


§  89.    Proceedings  to  set  aside  an  adjudication. 

An  adjudication  of  bankruptcy  which  is  correct  in  form 
and  made  by  a  district  court  having  jurisdiction  of  the  bank- 
rupt is  conclusive  of  the  fact  decreed.^  Until  vacated  by  a 
direct  proceeding  in  the  court  of  bankruptcy  it  is  binding  upon 
all  the  parties  and  cannot  be  attacked  collaterally.  Thus 
an  adjudication  by  default  on  the  ground  that  the  bankrupt 
created  a  preference  is  conclusive  against  the  bankrupt  and 


-  In  re  Humbert  Co.,  100  Fed. 
Rep.  439,  4  Am.  B.  R.  76;  In  re 
Columbia  Real  Estate  Co.,  loi  Fed. 
Rep.  965,  4  Am.  B.  R.  411. 

^  In  re  McLaren,  125  Fed.  Rep. 
835,  II  Am.  B.  R.  141. 

*  Consult  in  re  Hill,  No.  6484, 
Fed.  Cas.,  s.  c.  7  Ben.  378;  In  re 
Boston,  H.  &  E.  R.  Co.,  No.  1678, 
Fed.  Cas.,  s.  c.  9  Blatch.  409;  B. 
A.  1898,  Sec.  I,  clause  2. 

^  Gen.  Ord.  34. 

1  In  re  Billing,  145  Fed.  Rep.  395 ; 
^Michaels    v.    Post,    21    Wall.    398, 


22  L.  Ed.  520;  Shawhan  v.  Wher- 
ritt,  7  How.  643,  12  L.  Ed.  847; 
Sloan  V.  Lewis,  22  Wall.  150;  Chap- 
man V.  Brewer,  114  U.  S.  158,  22 
L.  Ed.  832 ;  Graham  v.  Boston,  H. 
&  E.  R.  Co.,  118  U.  S.  161,  30  L. 
Ed.  196;  In  re  Gretchell,  No.  5371, 
Fed.  Cas.,  s.  c.  8  Ben.  256;  In  re 
Ives,  No.  7115,  Fed.  Cas.,  s.  c.  5 
Dill.  146 ;  In  re  McKinley,  No.  8864, 
Fed.  Cas.,  s.  c.  7  Ben.  562;  Lewis  v. 
Sloan,  68  N.  C.  557 ;  Mount  v.  Man- 
hattan Co.,  41  N.  J.  Eq.  211. 


280 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


the  creditor  preferred."  The  court  of  bankruptcy  is  ahvays 
open  for  a  re-examination  of  its  decrees  in  an  appropriate  form. 
Any  order  made  in  a  case  may  be  set  aside  and  vacated  on 
proper  showing  made,  due  regard  being  had  to  rights  which 
have  become  vested  under  it  and  which  will  be  disturbed  by 
its  revocation. 

After  the  order  has  been  formally  entered  an  application 
may  be  made  to  set  aside  the  adjudication  and  grant  a  new 
trial  or  hearing.  The  application  is  usually  by  motion.  The 
court  has  power  to  grant  such  a  motion  in  a  proper  case.^ 
The  party  applying  to  set  aside  the  adjudication  must  file  his 
motion  within  a  reasonable  time  after  the  order  is  entered.* 

The  motion  to  set  aside  the  adjudication  may  be  made  by 
the  bankrupt  or  a  creditor.^  Thus  an  attaching  creditor  or 
a  creditor  whose  security  is  impeached  as  a  preference,"  but 
not  a  secured  or  a  general  creditor/  has  such  an  interest  as 
will  entitle  him  to  make  such  a  motion. 

It  is  not  a  sufficient  ground  for  setting  aside  an  adjudica- 
tion in  bankruptcy,  where  the  debtor  has  admitted  an  act  of 
bankruptcy,  that  the  admission  was  not  true,^  or  that  a 
prior  petition  was  pending  in  another  district,^  or  on  the 
ground  that  there  was  a  misjoinder  or  a  nonjoinder  of  cred- 


2  In  re  American  Brewing  Co., 
112  Fed.  Rep.  752,  7  Am.  B.  R.  463. 

^  In  re  Dunn,  No.  4173,  Fed. 
Cas.,  s.  c.  12  Blatch.  42;  In  re  De 
Forest,  No.  3745,  Fed.  Cas.,  s.  c.  9 
N.  B.  R.  278;  la  re  Great  Western 
Telegraph  Co.,  No.  5739,  Fed.  Cas., 
s.  c.  5  Biss.  359. 

4  In  re  Neilson,  No.  10090,  Fed. 
Cas.,  s.  c.  7  N.  B.  R.  505 ;  Leiter  v. 
Payson,   No.  8226,   Fed.   Cas.,   s.   c. 

In  re  Schenectady  Eng.  &  Const. 

Co.,   127  Fed.  Rep.  782,  11  Am.  B. 

R.  643;  In  re  Ives,   in    Fed.  Rep. 

495,  6  Am.  B.  R.  653;  In  re  Urban 
&   Suburban   Realty  Title   Co.,    132 

Fed.  Rep.,  140,   12  Am.  B.  R.  687; 

In  re  Billing,  145  Fed.  Rep.  395. 


5  In  re  Columbia  Real  Estate  Co.. 
loi  Fed.  Rep.  965,  4  Am.  B.  R.  411. 

«/»  re  Derby,  No.  3815,  Fed. 
Cas.,  s.  c.  6  Ben.  232;  Fogarty  v. 
Gerrity,  No.  4895,  Fed.  Cas.,  s.  c. 
I   Saw.  233. 

''  In  re  Bush,  No.  2222,  Fed. 
Cas.,  s.  c.  6  N.  B.  R.  179;  Karr  v. 
Whittaker,  No.  7613,  Fed.  Cas.,  s.  c. 
5  N.  B.  R.  123.  See  Columbia  Real 
Estate  Co.,  loi  Fed.  Rep.  965,  4  Am. 
B.  R.  411. 

^  In  re  Thomas,  No.  13891,  Fed. 
Cas.,  s.  c.  II  N.  B.  R.  330;  Lea 
V.  West  Co.,  91  Fed.  Rep.  237,  i 
Am.  B.  R.  261.  . 

'^  In  re  Harris,  No.  6111,  Fed. 
Cas.,  s.  c.  6  Ben.  375. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 


281 


iters  who  filed  the  petition,  unless  there  is  proof  that  the  adju- 
dication was  obtained  by  fraud  or  in  bad  faith.'*' 


§  90.    Order  of  reference. 

At  the  time  of  making  the  order  adjudging  the  debtor  to 
be  bankrupt  the  court  regularly  refers  '  the  case  for  subse- 
quent proceedings  to  a  referee  within  the  county  of  which  the 
debtor  is  a  resident  or  has  his  principal  place  of  business.  It 
may  refer  the  case  to  any  referee  within  the  territorial  juris- 
diction of  the  court  if  the  convenience  of  the  parties  in  interest 
will  be  served  thereby,  or  for  cause,  or  if  the  bankrupt  does  not 
do  business,  reside  or  have  his  domicile  in  the  district.- 

All  the  proceedings  thereafter  except  as  required  by  the 
statute  or  by  the  general  orders  to  be  had  before  a  judge,  are 
had  before  the  referee,^  subject  to  be  reviewed  by  the  judge.* 
Applications  for  a  discharge,  or  for  the  approval  of  a  com- 
position, or  for  an  injunction  to  stay  proceedings  of  a  court 
or  officer  of  the  United  States  or  of  a  state  must  be  heard  and 
decided  by  the  judge.^  But  he  may  refer  such  an  applica- 
tion, or  any  specified  issue  arising  thereon,  to  the  referee  to 
ascertain  and  report  the  fact's.^  A  person  claiming  to  be  the 
owner  of  property  in  the  hands  of  the  trustee  is  entitled  to  a 
jury  trial  and  cannot  be  compelled  to  submit  his  claims  to  a 
referee.®  Upon  the  filing  of  an  answer  to  an  involuntary 
petition  in  bankruptcy  it  is  quite  usual  to  have  one  of  the 


1"  In  re  McKinley,  No.  8864,  Fed. 
Cas.,  s.  c.  7  Ben.  562;  In  re  Duncan, 
No.  413 1,  Fed.  Cas.,  s.  c.  8  Ben. 
365;  In  re  Funkenstein,  No.  5158, 
Fed.  Cas.,  s.  c.  3  Saw.  605. 

^  Order  of  Reference,  Official 
Form  No.  14,  Form  No.  31,  post. 

2B.  A.  1898,  Sec.  22. 

In  re  Schenectady  Eng.  &  Const. 
Co.,  147  Fed.  Rep.  868.  it  was  held 
that :  "This  section  refers  to  the 
referees  in  bankruptcy  appointed 
within  the  district  where  the  case  is 


pending,  and  the  court  has  no  juris- 
diction or  power  to  refer  the  case 
to  a  referee  appointed  by  and  resid- 
ing in  another  district." 

^  Gen.  Ord.  12. 

*  Gen.  Ord.  27. 

5  Gen.  Ord.   12. 

As    to    the    power    to    grant    in- 
junctions,  see   Sec.   29,   ante. 

^In  re  Russell  (C.  C.  A.,  2d 
Cir.),  10 1  Fed.  Rep.  248,  3  Am 
R.  R.  658. 


282  LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 

referees  take  the  cvideirce  and  report  upon  the  various  ques- 
tions presented.' 

The  order  referring  a  case  to  a  referee  must  name  a  day 
upon  which  the  bankrupt  shall  attend  before  the  referee,  and 
from  that  day  the  bankrupt  is  subject  to  the  orders  of  the 
court  in  matters  relating  to  his  bankruptcy,  and  may  receive 
from  the  referee  a  protection  against  arrest,  to  continue  until 
the  final  adjudication  on  his  application  for  a  discharge,  unless 
suspended  or  vacated  by  order  of  the  court.^ 

A  copy  of  the  order  must  forthwith  be  sent  by  mail  to  the 
referee,  or  be  delivered  to  him  personally  by  the  clerk  or  other 
officer  of  the  court.  The  time  when  and  the  place  where  the 
referee  shall  act  upon  the  matters  arising  under  the  several 
cases  referred  to  him  shall  be  fixed  by  special  order  of  the 
judge,  or  by  the  referee;  and  at  such  times  and  places  the 
referee  may  perform  the  duties  which  he  is  empowered  by  the 
act  to  perform.^ 

§  91.    Proceedings  on  default. 

If  on  the  last  day  within  which  pleadings  may  be  filed 
none  are  filed  by  the  bankrupt  or  any  of  his  creditors,  the 
judge  on  the  next  day,  if  present,  or  as  soon  thereafter  as 
practicable,  makes  the  adjudication  or  dismisses  the  petition.^ 

If  the  judge  is  absent  from  the  district  or  the  division  of 
the  district  in  which  the  petition  is  pending  on  the  next  day 
after  the  last  day  on  which  pleadings  may  be  filed,  and  none 
have  been  filed  by  the  bankrupt  or  any  of  his  creditors,  the 
clerk  must  forthwith  refer  the  case  to  the  referee.'  In  such 
cases  the  referee  is  authorized  to  consider  all  such  petitions 
and  make  the  adjudications  or  dismiss  the  petitions,^  with 
the  same  effect  as  if  the  order  had  been  made  by  the  judge. 
The  referee  is  not  authorized  to  make  an  adjudication  in  other 

7  Clark    V.    American    Mfg.,  etc.,  1  B.  A.  1898,  Sec.  iSe. 

Co.    (C.  C.  A.,  4th  Cir.),   loi  Fed.  2  b.    A.    1898,    Sec.    18/;    Official 

Rep.  962,  4  Am.  B.  R.  351.  Form  No.  15,  Form  No.  32,  post- 

s  Gen.  Ord.  12.  ^  B.  A.  1898,  Sec.  38,  clause  i. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 


283 


cases.  An  adjucllcation  made  after  the  debtor  or  any  creditor 
has  failed  to  file  pleadings  is  as  binding  as  one  made  upon  a 
trial  or  hearing,  unless  set  aside  by  order  of  the  court. ■* 

An  application  to  set  aside  a  default  adjudication,  should  be 
made  to  the  judge  and  not  the  referee." 


§  92.     Amendments  in  involuntary  proceedings. 

The  court  may,  upon  proper  application,  allow  amendments 
to  the  petition  and  schedules.^  Such  applications  are  ad- 
dressed to  the  judicial  discretion  of  the  court.  Mere  formal 
amendments  may  be  asked  in  open  court  at  the  time  of  the 
hearing  or  trial  and  allowed,  when  justice  may  be  done  by  so 
doing,  even  after  all  the  testimony  in  the  case  has  been  taken.- 

When  new  matter  is  sought  to  be  introduced,  leave  must  be 
first  obtained  of  the  court  to  file  the  amendment.  The  appli- 
cation is  regularly  made  by  petition  or  motion.  It  should  be 
accompanied  by  a  copy  of  the  amendment  or  amendments  to 
be  made.  These  amendments  should  be  printed  or  written, 
signed  and  verified  like  original  petitions  or  schedules.^  If 
the  amendments  are  made  to  separate  schedules  the  same  must 
be  made  separately  with  proper  references.^  The  amendment 
should  state  no  more  of  the  original  paper  than  may  be  abso- 
lutely necessary  to  introduce  and  make  intelligible  the  new 
matter,  which  should  alone  constitute  the  chief  subject  of  the 


*/w  re  American  Brewing  Co., 
112  Fed.  Rep.  752,  7  Am.  B.  R.  463; 
In  re  Le  Favour,  No.  8208,  Fed. 
Cas.,  s.  c.  8  Ben.  43. 

As  to  tlie  binding  force  of  a  de- 
cree in  equity  pro  confcsso,  see 
Thomson  v.  Wooster,  114  U.  S. 
104,  29  L.  Ed.   105. 

^  In  re  Imperial  Corporation,  133 
Fed.  Rep.  jt„   13  Am.  B.  R.   199. 

^  Gen.  Ord.  11. 

2  In  re  Bininger,  No.  1420,  Fed. 
Cas.,  c.  s.  7  Blatch.  262 ;  In  re  Craft, 
No.  3316,  Fed.  Cas.,  s.  c.  2  Ben.  214; 
In    re    Haughton,    No.    6223,    Fed. 


Cas.,  s.  c.  I  N.  B.  R.  460;  In  re 
Gallinger,  No.  5202,  Fed.  Cas.,  s.  c. 
I  Saw.  224. 

Formal  defects  are  usually  waived 
by  answering  on  the  merits,  In  re 
Simonson,  Whiteson  &  Co.,  92  Fed. 
Rep.  904,  I  Am.  B.  R.  197;  Leidigh 
Carriage  Co.  v.  Stengel  (C.  C.  A., 
6th.  Cir.),  95  Fed.  Rep.  637,  2  Am. 
B.  R.  383 ;  Simonson  v.  Sinsheimer 
(C.  C.  A.,  6th  Cir.),  95  Fed.  Rep. 
948;  Green  River  Bank  v.  Craig,  no 
Fed.  Rep.  137,. 6  Am.  B.  R.  381. 

^  Gen.  Ord.   11. 


284 


LAW    AND     PROCEEDINGS    IN     BANKRUPTCY. 


amendment.  The  application  for  leave  to  amend  must  state 
the  cause  of  the  error  in  the  paper  originally  filed.''  In  other 
words,  it  must  be  shown  that  the  petitioner  or  his  attorney 
had  no  knowledge  of  and  could  not  have  ascertained  with 
reasonable  diligence  the  facts  sought  to  be  added  by  the 
amendment  at  the  time  the  original  petition  was  filed,  or  that 
the  facts  were  omitted  by  inadvertence,  mistake  or  other  reason 
which  would  excuse  such  omission.*  The  application  for 
leave  to  amend  must  be  made  within  a  reasonable  time  after 
the  discovery  of  such  facts.^  A  copy  of  the  petition  and 
amendment  should  be  served  upon  the  adverse  party. 

The  granting  or  refusing  to  grant  leave  to  amend  rests  in 
the  sound  discretion  of  the  court.  It  is  not  a  matter  of  right. 
The  courts  are  liberal  in  allowing  amendments  so  long  as  the 
ends  of  justice  are  not  sacrificed.*'  The  courts,  in  allowing 
such  amendments,  are  governed  by  substantially  the  same 
principles  which  apply  to  similar  cases  in  other  courts.  Leave 
to  amend  may  be  granted  on  terms,  as  upon  payment  of  costs.'' 

An  amendment  may  be  allowed  at  any  stage  in  the  proceed- 
ings as  justice  may  require.  The  power  of. the  court  is  not 
limited  in  this  respect.  A  petition  may  be  amended  at  the 
trial,^  or  before  a  new  trial,**  or  an  appellate  court  may  re- 


■■'  Gen.  Ord.  ii. 

4  White  V.  Bradley  Timber  Co., 
Ii6  Fed.  Rep.  768,  8  Am.  B.  R.  671 ; 
Wilder  v.  Watts,  138  Fed.  Rep.  426, 
15  Am.  B.  R.  57;  In  re  Hark,  142 
Fed.  Rep.  279,  15  Am.  B.  R.  460. 

5/u  re  Freudenfels,  No.  5112a, 
Fed.  Cas. 

6  In  re  Plymouth  Cordage  Co. 
(C.  C.  A.,  8th  Cir.),  135  Fed.  Rep. 
1000,  13  Am.  B.  R.  665;  In  re  Shoe- 
smith  (C.  C.  A..  7th  Cir.),  135  Fed. 
Rep.  684,  13  Am.  B.  R.  645;  In  re 
Lange,  97  Fed.  Rep.  I97>  3  Am.  B. 
R.  232,  2  N.  B.  N.  85;  In  re  Mercur, 
95  Fed.  Rep.  634,  2  Am.  B.  R.  626; 
In  re  Nelson,  98  Fed.  Rep.  76.  i 
Am.  B.  R.  63;  In  re  Blair,  99  Fed. 
Rep.  76,  3  Am.   B.   R.   588;   In  re 


Cliffe,  94  Fed.  Rep.  354,  2  Am.  B.  R. 
317;  In  re  Miller,  104  Fed.  Rep. 
764,  5  Am.  B.  R.  140. 

"  hi  re  Rowland,  6791  Fed.  Cas., 
s.  c.  2  N.  B.  R.  357;  In  re  Strait 
(Ref.),  2  Am.  B.  R.  308;  In  re 
Riggs  Restaurant  Co.  (C.  C.  A.,  2d 
Cir.),  130  Fed.  Rep.  691,  11  Am.  B. 
R.  508. 

s  In  re  Miller,  104  Fed.  Rep.  764, 
5  Am.  B.  R.  140;  In  re  Mercur,  95 
Fed.  Rep.  634,  2  Am.  B.  R.  626; 
In  re  Lange,  97  Fed.  Rep.  197,  3 
Am.  B.  R.  232;  Chicago  Motor  Ve- 
hicle Co.  V.  Leather  Co.  (C.  C.  A., 
7th  Cir.),  141  Fed.  Rep.  518,  15 
Am.  B.  R.  804. 

'■>  In  re  Hark,  142  Fed.  Rep.  279, 
15  Am.  B.  R.  460. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 


285 


mand  a  case  with  leave  to  allow  the  petition  to  be  amended.^" 
Leave  to  amend  will  not  be  granted  for  the  purpose  of  adding 
a  member  of  a  firm  as  a  new  party  after  all  the  evidence  has 
been  taken  and  the  case  is  before  the  court  for  final  hearing/^ 

An  amended  petition  cannot  be  filed  as  an  original  peti- 
tion by  erasing  "amended"  after  execution/" 

Where  a  petition  fails  to  properly  aver  jurisdictional  facts 
the  defect  may  be  cured  by  amendment/"*  or  the  petition  may 
be  dismissed/*  Jurisdiction  in  bankruptcy  comes  from  the 
statute  and  is  not  conferred  by  the  accuracy  and  precision 
of  the  averments  made  in  the  petition.  An  amendment  may 
be  allowed  to  set  forth  the  jurisdictional  facts  existing  at 
the  time  the  petition  was  filed.  A  petition  may  be  amended  to 
show  that  the  debtor  is  not  within  one  of  the  excepted  classes, 
as  a  wage  earner  or  farmer/^  or  to  allow  petitioning  cred- 
itors to  join  in  a  petition  averring  less  than  twelve  creditors 
when  it  appears  from  the  answer  that  there  are  more  than 
twelve  creditors/*^  or  to  show  that  the  provable  claims  owned 
by  the  petitioning  creditors  in  the  aggregate  amount  to  $500, 
or  to  permit  petitioning  creditors  to  join  for  the  purpose  of 
making  the  amount  of  provable  claims  equal  to  $500,"  or 


I*'  In  re  Plymouth  Cordage  Co. 
(C.  C.  A,  8th  Cir.),  135  Fed.  Rep. 
1000,  13  Am.  B.  R.  665 ;  Taft  &  Co. 
V.  Century  Savings  Bank  (C.  C.  A., 
8th  Cir.),  141  Fed.  Rep.  369,  15 
Am.  B.  R.  594. 

11 /«  re  Pitt,  1 1 188  Fed.  Cas.,  s. 
c.  8  Ben.  389. 

12 /n  re  Hyde  &  Gload  Mfg.  Co., 
103  Fed.  Rep.  617,  4  Am.  B.  R.  602. 

13  /,j  yg  Plymouth  Cordage  Co. 
(C.  C.  A.,  8th  Cir.),  135  Fed.  Rep. 
1000,  13  Am.  B.  R.  665. 

!■*  Woolford  V.  Diamond  State 
Steel  Co.,  138  Fed.  Rep.  582,  15  Am. 
B.  R.  31. 

^■'  In  re  Pilger,  1 18  Fed.  Rep.  206, 
9  Am.  B.  R.  245 ;  Beach  v.  Macon 
Grocery  Co.  (C.  C.  A.,  5th  Cir.), 
120    Fed.    Rep.    736,    9    Am.    B.    R. 


762;  In  re  Brett,  12  Am.  B.  R.  492, 
130  Fed.  Rep.  981 ;  In  re  White,  135 
Fed.  Rep.  199,  14  Am.  B.  R.  241 ; 
In  re  Bellah,  116  Fed.  Rep.  69,  8 
Am.  B.  R.  310. 

1"  In  re  Plymouth  Cordage  Co. 
(C.  C.  A.,  8th  Cir.),  135  Fed.  Rep. 
1000,  13  Am.  B.  R.  665;  In  re  Haff 
(C.  C.  A.,  2d  Cir.),  136  Fed.  Rep. 
78,  13  Am.  B.  R.  362. 

1^  In  re  Bedingfield,  96  Fed. 
Rep.  190,  2  Am.  B.  R.  355 ;  In  re 
Romano w,  92  Fed.  Rep.  510,  i  Am. 

B.  R.  469. 

But  see  In  re  Stein,  130  Fed.  Rep. 
2i~7,  12  Am.  B.  R.  364,  disapproved 
In    re    Plymouth    Cordage    Co.    (C. 

C.  A.,  8th  Cir.),  135  Fed.  Rep.  1000, 
13  Am.  B.  R.  665. 


286 


LAW     AND    PROCEEDINGS    IN     BANKRUPTCY. 


to  permit  an  amendment  so  as  to  show  that  the  debtor  owed 
at  least  $1,000/**  or  to  allege  the  insolvency  of  partners, 
where  the  original  petition  alleged  that  "the  partnership  is 
insolvent.''  ^" 

An  amendment  to  a  petition  in  bankruptcy  relates  back 
to  the  day  of  filing  the  original  petition,  and  has  the  same 
force  and  effect  as  if  included  in  that  petition,-*'  For  this 
reason  an  original  petition  may  be  amended  by  setting  out 
therein  an  act  of  bankruptcy,  which  occurred  more  than 
four  months  before  the  application  for  leave  to  amend,  pro- 
vided the  act  of  bankruptcy  was  committed  within  four 
months  before  filing  the  petition.-^  Where  the  original 
petition  charged  that  a  transfer  was  made  with  intent  to 
delay,  hinder  or  defraud  creditors  it  may  be  amended  to 
charge  the  same  transfer  to  be  a  preference."  When  the 
proof  discloses  acts  of  bankruptcy  not  averred  in  the  origi- 
nal petition  the  petition  may  be  amended  to  conform  to  the 
proof.-^  Where  two  or  more  petitions  are  filed  against  the 
same  individual  in  dift'erent  districts,  the  petition  filed  in 
the  district  of  his  domicil  may  be  amended  by  inserting  an 
allegation  of  an  act  of  bankruptcy  committed  at  an  earlier 
date  than  that  first  alleged,  if  such  earlier  act  is  charged 
in  either  of  the  other  petitions,  but  not  subsequent  acts.^*  This 
limitation  does  not  apply  to  amendments  in  other  cases.     An 


1^  Taft  Co.  V.  Century  Savings 
Bank  ( C.  C.  A.,  8th  Cir.),  141  Fed. 
Rep.  369,  15  Am.  B.  R.  594. 

19  In  re  Blair,  99  Fed.  Rep.  76. 
3  Am.  B.  R.  588. 

20 /n  re  Shoesmith  (C.  C.  A.,  7th 
Cir.),  135  Fed.  Rep.  684,  13  Am.  B. 
R.  645 ;  International  Bank  v.  Sher- 
man, loi  U.  S.  403,  25  L.  Ed.  866. 

217m  re  Shoesmith  (C.  C.  A.,  7th 
Cir.),  135  Fed.  Rep.  684,  13  Am.  B. 
R.  645. 

But  see  In  re  Haff  (C.  C.  A.,  2d 
Cir.\  136  Fed.  Rep.  78,  13  Am.  B. 
R.  362. 


--  In  re  Hark,  142  Fed.  Rep.  279, 
15  Am.  B.  R.  460;  In  re  Henderson, 
g  Fed.  Rep.  196. 

-3  In  re  Miller,  104  Fed.  Rep.  764, 
5  .\m.  B.  R.  140;  In  re  Mercur,  95 
I-'ed.  Rep.  634,  2  Am.  B.  R.  626;  In 
re  Lange,  97  Fed.  Rep.  197,  3  Am. 

B.  R.   232;   In   re   Hark,    142   Fed. 
Rep.  279,  IS  Am.  B.  R.  460. 

-**  Gen.  Ord.  6.     In  re  Sears   (C. 

C.  A.,  2d  Cir.),  117  Fed.  Rep.  294, 
8  Am.  B.  R.  7^2,- 

See  also  Jn  re  Riggs  Restaurant 
Co.  (C.  C.  A..  2d  Cir.).  130  Fed. 
Rep.  691,  II  Am.  B.  R.  508. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 


287 


amendment  setting-  up  new  acts  of  bankruptcy  ought  not  to 
be  allowed  until  the  petitioners  show  good  reason  why  these 
acts  were  omitted  from  the  original  petition  or  in  some  way 
excuse  the  omission.-^  Where  an  amendment  to  a  petition 
alleges  new  acts  of  bankruptcy,  the  respondent  is  entitled  to 
a  reasonable  time  to  file  his  answer."** 

Where  the  verification  is  defective  it  may  be  amended." 
Supplemental  affidavits  may  be  filed  to  show  an  agent's  au- 
thority to   sign   and  verify   the   petition.^^ 

Where  a  petition  is  referred  to  a  referee  to  make  the  ad- 
judication he  may  also  allow  amendments  to  the  petition. 
He  is  expressly  authorized  and  it  is  his  duty  to  examine 
all  schedules  of  property  and  lists  of  creditors  filed  by  bank- 
rupts and  to  cause  such  as  are  incomplete  and  defective  to 
be  amended.^^  The  referee  may  also  refuse  to  allow  an 
amendment.  Whether  he  grants  or  refuses  an  amendment 
to  be  made,  the  question  is  subject  to  review  by  the  judge.^" 


§  93.     Dismissing  a  petition. 

After  an  involuntary  petition  has  been  filed  in  court  it  can 
not  be  dismissed  by  the  petitioning  creditors  or  for  want  of 
prosecution  or  by  consent  of  parties  until  after  notice  to  the 
creditors.-^ 

The  court  may  dismiss  a  petition  by  consent  of  the  peti- 


-5  White  V.  Bradley  Timber  Co., 
116  Fed.  Rep.  768,  8  Am.  B.  R.  671 ; 
Wilder  v.  Watts,  138  Fed.  Rep.  426, 
15  Am.  B.  R.  57;  In  re  Hark,  142 
Fed.  Rep.  279,  15  Am.  B.  R.  460. 

2"  Lockman  v.  Lang  (C.  C.  A., 
2d  Cir.),  132  Fed.  Rep.  i,  12  Am.  B. 
R.  497- 

-''  In  re  Simmons,  12864  Fed. 
Cas.,  s.  c.  10  N.  B.  R.  253;  In  re 
Sargent,  12361  Fed.  Cas.,  s.  c.  13 
N.  B.  R.  144;  In  re  Cal.  Pac.  R. 
Co.  No.  2315  Fed.  Cas.,  s.  c.  3  Saw. 
240;  In  re  Donnelly,  5  Fed.  Rep. 
783 ;  In  re  Nelson,  58  Fed.  Rep.  76, 


I  Am.  B.  R.  63 ;  In  re  Vastbinder, 
126  Fed.  Rep.  417,  11  Am.  B.  R. 
118;  In  re  Bellah,  116  Fed.  Rep.  69, 
8  Am.  B.  R.  310. 

-^  In  re  Rosenfields.  No.  12061 
Fed.  Cas.,  s.  c.  11  N.  B.  R.  86. 

-» B.  A.  1898,  Sec.  39,  clause  2 ; 
In  re  Miller,  104  Fed.  Rep.  764.  5 
Am.  B.  R.  140. 

30  Gen.  Ord.  27. 

1  B.  A.  1898.  Sees.  59^  and  58a. 

In  re  Py month  Cordage  Co.  (C. 
C.  A.,  8th  Cir.),  135  Fed.  Rep.  1000, 
13  Am.  B.  R.  665. 


288 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


tioning  creditors  after  the  time  has  expired  within  which 
other  creditors  may  intervene  to  join  in  the  petition  or  to 
be  heard  in  opposition  to  it.  The  reason  is  that  the  notice 
required  by  Sec.  58a  is  to  be  given  to  the  creditors  of  the 
bankrupt  as  they  appear  in  the  papers  in  the  case.  If  no 
other  creditors  appear  in  the  papers  in  the  case,  the  alleged 
bankrupt "  or  the  petitioning  creditors  may  dismiss  the  peti- 
tion for  want  of  prosecution  or  by  consent.  Such  a  dismissal 
is  valid  though  there  are  other  creditors  and  they  have  re- 
ceived no  notice  of  the  proceedings.  Such  creditors  may 
move  to  have  the  proceedings  reinstated,  but  must  do  so  within 
a  reasonable  time.^  A  petition  will  not  be  dismissed  if  one 
of  the  petitioning  creditors  objects  to  such  dismissal.*  The 
court  will  not  permit  a  petitioning  or  intervening  creditor  to 
withdraw  to  reduce  the  amount  of  debts  represented  on  the  pe- 
tition below  the  jurisdictional  amount.'^  A  creditor  has  been 
permitted  to  withdraw  where  he  was  misled  or  there  was  a 
mistake  of  fact."  It  has  been  held  that  the  provisions  of  the 
bankrupt  act  with  reference  to  notice  to  creditors  before  dis- 
missal of  proceedings  relates  to  dismissals  by  consent  of  par- 
ties and  not  by  order  of  court  after  a  hearing  on  the  merits.^ 
Where  a  petition  had  been  dismissed  without  notice  to  cred- 
itors and  creditors  thereafter  petition  to  re-open  the  case 
their  application  was  denied  with  leave  to  institute  new  pro- 
ceedings.^   The  rule  was  otherwise  under  the  former  acts.* 

The  death  of  a  person  against  whom  an  involunttary  peti- 
tion has  been  filed  after  the  service  of  the  subpoena  and  before 


"In  re  Levi  &  Klauber  (C.  C.  A. 
2d  Cir.),  15  Am.  B.  R.  294,  142 
Fed.  Rep.  962. 

3  In  re  Jemison  Mercantile  Co. 
(C.  C.  A.,  5th  Cir.),  112  Fed.  Rep. 
966,  7  Am.  B.  R.  588;  In  re  Plym- 
outh Cordage  Co.  (C.  C.  A.,  8th 
Cir.),  135  Fed.  Rep.  1000,  13  Am. 
B.  R.  665. 

*  In  re  Cronin,  98  Fed.  Rep.  584, 
3  Am.  B.  R.  552;  In  re  Lewis,  129 
Fed.  Rep.  147,  11  Am.  B.  R.  683. 


■''•  In  re  Bedingfield,  96  Fed.  Rep. 
190,  2  Am.  B.  R.  355 ;  In  re  Quincy 
Granite  Quarries  Co.,  147  Fed.  Rep. 
279. 

"  In  re  Coburn,  126  Fed.  Rep.  218, 
II  Am.  B.  R.  212. 

"  Neustadter  v.  Dry  Goods  Co., 
96  Fed.  Rep.  830,  3  Am.  B.  R.  96. 

*  In  re  Camden  Rolling  Mill  Co., 
No.  2338  Fed.  Cas.,  s.  c.  3  N.  B. 
R.  590. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 


289 


the  return  da}-  does  not  authorize  a  dismissal  of  the  petition.^ 
If  the  court  is  satisfied  that  a  petition  in  involuntary  bank- 
ruptcy was  not  presented  in  good  faith,  or  for  sinister,  oppres- 
sive and  vexatious  purposes,  it  has  power  to  dismiss  the  pro- 
ceedings after  notice  to  the  creditors/"  The  court  may  dis- 
miss the  petition  upon  condition  that  the  majority  of  the 
creditors  desiring  a  dismissal  give  security  for  the  payment 
of  the  debts  of  the  objecting  creditors." 

§  94.     Involuntary  proceedings  as  to  grounds  for  a  suit  for 
damages. 

Proceedings  by  a  creditor  to  force  a  debtor  into  bank- 
ruptcy cannot  be  resorted  to  as  proceedings  in  terrorem  for 
the  purpose  of  collecting  a  debt.  The  malicious  institution 
of  such  proceedings  in  bankruptcy  may  be  the  foundation 
for  an  action  .for  damages  sustained.^  In  order  to  maintain 
an  action  for  damages  it  is  necessary  to  allege  and  prove 
that  the  proceedings  were  instituted  maliciously  and  without 
probable  cause  and  terminated  without  an  adjudication  in 
bankruptcy."  It  is  not  necessary  to  allege  or  prove  that  there 
was  an  actual  seizure  of  the  debtor's  property.^ 

§  94a.    Costs. 

Where  a  petition  is  contested  the  petitioning  creditors  if 
successful  may  recover  the  same  costs  that  are  allowed  to  a 
party  recovering  in  a  suit  in  equity;  and  if  the  petition  is 


^  In  "re  Hicks,  107  Fed.  Rep.  910, 
6  Am.  B.  R.  182;  Shute  v.  Patter- 
son fC.  C.  A.,  8th  Cir.),  147  Fed. 
Rep.  509, 

^^  In  re  Hamlin,  5994  Fed.  Cas., 
s.  c.  8  Biss.  122.  See  also  Ex  parte 
Ashworth,  18  L.  R.  Eq.  705 ;  Ex 
parte  Harcourt,  2  Rose  203 ;  Ex 
parte  Bourne,  2  Glyn.  &  J.  137. 

^^  In  re  Indianapolis,  etc.,  R.  C, 
No.  7023  Fed.  Cas.,  s.  c.  5  Biss.  287. 

'  Wilkinson  v.  Goodfellow-Brooks 
Shoe    Co.,    141    Fed.    Rep.    218,    15 


Am.  B.  R.  554;  Farley  v.  Banks, 
4  El.  &  Bl.  493;  Chapman  v. 
Pickersgill,  2  Wilson,  145 ;  Cooley 
on  Torts,  187;  Addison  on  Torts, 
867. 

-  Stewart  v.  Sonneborn,  98  U.  S. 
187,  25  L.  Ed.  116,  reversing  No. 
13176  Fed.  Cas.,  s.  c,  2  Woods, 
599;  Whitworth  v.  Hall,  2  B.  & 
Ad.  695. 

^  Wilkinson  v.  Goodfellow-Brooks 
Shoe  Co.,  14T  Fed.  Rep.  218,  15 
Am.  B.  R.  554.    ■ 


290 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


dismissed  the  debtor  may  recover  like  costs  against  the  peti- 
tioners/ But  this  does  not  authorize  the  taxation  of  attor- 
neys' fees."  Upon  an  apphcation  for  a  warrant  of  seizure 
the  court  may  allow  attorneys'  fees  as  costs  of  the  proceed- 
ings when  the  petition  is  dismissed.^  Witness  fees  must  be 
paid  according  to  statute;  one  dollar  and  fifty  cents  per  day 
for  actual  attendance  and  mileage.^  No  allowance  will  be 
made   for  expert  witnesses.* 

Where  an  adjudication  is  made  the  petitioning  creditors 
are  entitled  to  have  the  deposit  of  thirty  dollars  refunded 
to  them  out  of  the  estate.^  It  is  competent  for  the  court  to 
make  a  reasonable  allowance  as  indemnity  for  costs  and  ex- 
penses in  preserving  the  estate,^  but  no  such  allowance  will 
be  made  for  vain  attempts  to  discover  concealed  assets  made 
at  the  suggestion  of  the  attorney  for  the  creditors  and  against 
the  objection  of  labor  claimants,  whose  claims  will  exhaust 
the  entire  estate.^  A  person  cannot  recover  expenses  and 
costs  incurred  by  him  in  an  attachment  suit  to  enforce  a  lien, 
which  was  invalidated  by  the  bankruptcy  proceedings.^  An 
assignee  is  entitled  to  pay  for  services  in  a  state  assignment 
proceedings  when  the  property  is  subsequently  administered 
in  bankruptcy. '^ 

The  costs  and  expenses  of  administration  of  an  estate  in 


^  Gen.  Ord.  34 ;  In  re  Haeseler- 
Kohlhoff  Carbon  Co.,  135  Fed.  Rep. 
867,   14  Am.  B.  R.  381. 

-  In  re  Ghiglione,  93  Fed.  Rep. 
186,  I  Am.  B.  R.  580.  As  to  attor- 
neys' fees,  see  Sec.  41a,  ante. 

3  In  re  Abraham,  93  Fed.  Rep. 
7^7  (78s),  2  Am.  B.  R.  266.  As  to 
attorneys'   fees,   see   Sec.  410,  ante. 

*  In  re  Carolina  Cooperage  Co., 
96  Fed.  Rep.  604,  3  Am.  B.  R.  154, 
2  N.  B.  N.  23. 

"'  In  re  Silverman,  97  Fed.  Rep. 
325,  4  Am.  B.  R.  83,  2  N.  B.  N. 
760;  In  re  Harrison  Mercantile  Co., 
95  Fed.  Rep.  123,  2  Am.  B.  R.  419. 

^  hi   re   Carolina   Cooperage    Co., 


96  Fed.  Rep.  604,  3  Am.  B.  R.  154, 
2  N.  B.  N.  2:^;  In  re  Lesser,  100 
Fed.  Rep.  433,  3  Am.  B.  R.  758,  2 
N.  B.  N.  599- 

■'■  In  re  Rozinsky,  loi  Fed.  Rep. 
229,  3  Am.  B.  R.  830,  2  N.  B.   N. 

787. 

^  In  re  Young,'  96  Fed.  Rep.  606, 
2  Am.  B.  R.  673;  In  re  Copper 
King,  144  Fed.  Rep.  689;  In  re 
Beaver  Coal  Co.,  107  Fed.  Rep.  98, 
S  Am.  B.  R.  587. 

But  see  In  re  Lewis,  99  Fed.  Rep. 
935,  4  Am.  B.  R.  51 ;  In  re  Gold- 
berg &  Bros.,  144  Fed.  Rep.  566. 

'-'  Randolph  v.  Scrugg,  190  U.  S. 
533,  47  L.  Ed.  1165,  10  Am.  B.  R. 


PROCEEDINGS    IN    INVOLUNTARY    BANKRUPTCY. 


291 


bankruptcy  must  be  paid  out  of  the  estate  before  there  is  any 
distribution  to  creditors/" 

The  petitioning  creditors  who  have  procured  the  appoint- 
ment of  a  receiver  may  be  required  to  pay  the  costs  incurred 
by  such  receivership  upon  the  dismissal  of  the  petition. 


11 


§  95.    Proceedings  subsequent  to  the  adjudication. 

Proceedings  in  invokmtary  bankruptcy  subsequent  to  the 
order  of  adjudication  and  reference  are  not  different  from  the 
proceedings  had  upon  a  voknitary  petition  or  a  petition  for 
the  purpose  of  having  a  partnership  or  the  members  thereof 
adjudged  bankrupts.  The  examination  of  the  bankrupt,  the 
first  creditors'  meeting,  the  election  of  the  trustee,  the  collec- 
tion of  the  assets  of  the  bankrupt,  the  distribution  of  the 
estate  and  other  matters  pertaining  to  the  proper  administra- 
tion of  the  estate  will  be  considered  hereafter  under  appro- 
priate heads. 


i;  In  re  Pauly  (Ref.  Op.),  2  Am. 
B.  R.  33:^;  In  re  Scholtz,  106  Fed. 
Rep.  834,  5  Am.  B.  R.  782. 

In  Sinsheimer  v.  Simonson  (C.  C. 
A.,  6th  Cir.),  107  Fed.  Rep.  898,  5 
Am.  B.  R.  537,  the  circuit  court  of 
appeals  held  that  where  an  assignee 
in  a  state  court  had  been  paid  a 
fee  and  had  paid  his  attorney  for 
services  rendered  in  a  state  pro- 
ceeding that  such  sums  could  not  be 
recovered  in  a  court  of  bankruptcy 


bj'  a  rule  to  show  cause.  Affirmed 
Louisville  Trust  Co.  v.  Comingor, 
184  U.  S.  18,  46  L.  Ed.  413,  7  Am. 
B.  R.  421. 

"  B.  A.  1898,  Sec.  64;  In  re  Tebo, 
loi    Fed.   Rep.   419,   4   Am.    B.    R. 

233. 

11  In  re  Lacov  (C.  C.  A.,  2d  Cir.), 
142  Fed.  Rep.  960,  15  Am.  B.  R.  290. 
See  also  Beach  v.  Macon  Grocery 
Co.,  125  Fed.  Rep.  513,  11  Am.  B. 
R.  104. 


292  LAW     AXl)     PROCEEDINGS     IN     BANKRUPTCY. 


CHAPTER   XI. 

PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS. 

§  96.    Partnership  bankruptcy  generally. 

The  mode  of  proceeding  to  have  a  partnership  adjudged  to 
be  bankrupt  is  the  same  as  in  the  case  of  an  individual  debtor.^ 
Partners  may  present  a  voluntary  petition,  or  a  petition  may 
be  filed  against  them  by  creditors,  or  a  petition  may  be  pre- 
sented by  or  against  the  partners  individually  as  by  or  against 
any  other  person.  Where  a  creditor  brings  the  petition 
against  a  firm  an  act  of  bankruptcy  and  a  sufficient  debt  must 
be  alleged  and  proved,  as  in  the  case  of  an  individual.  There 
are,  however,  some  peculiarities  connected  with  the  bank- 
ruptcy of  partnerships  which  should  be  noticed  and  which 
will  be  dealt  with  in  this  chapter.  These  peculiarities  arise 
partly  from  the  rights  of  partners  between  themselves  and 
partly  from  the  rule  which  has  long  prevailed  in  equity  for 
the  distribution  of  the  effects  of  insolvent  partners  among  their 
creditors,  according  to  which  the  joint  creditors  are  entitled 
to  priority  of  payment  out  of  the  joint  estate,  and  the  sep- 
arate creditors  of  each  partner  out  of  his  separate  estate." 

The  general  scheme  of  the  bankrupt  act  with  reference  to 
the  settlement  of  the  estates  of  firms  and  the  partners  is 
founded  upon  and  its  provisions  merely  declaratory  of  recog- 
nized equitable  principles  of  the  administration  of  insolvent 
partnerships.^     By  provisions  of  section  5   of  the  bankrupt 

1  B.  A.  1898,  Sec.  5 ;  compare  R.       Wms.  500 ;  Gray  v.  Chiswell,  9  Ves. 
S.  Sec.  5121.  118;    Ridgeway  v.   Clare,    19   Beav. 

2  B.  A.  1898,  Sec.  sf  and  g;  In  re       iii. 

Melick.  No.  9399  Fed.  Cas.,  s.  c.  4  ^  In  re  Meyer  (C.  C.  A.,  2d  Cir.), 

N.    B.    R.   97;    In   re   Collier,   3002  98  Fed.  Rep.  976,  3  Am.  B.  R.  559; 

Fed.   Cas.,   s.   c.    12   N.   B.   R.  266;  Amsinck    v.    Bean,    22    Wall.    403, 

Harrison  v.   Sterry,  5  Cranch  289;  22  L.  Ed.  8or ;   Murray  v.  Murray, 

Collins  V.  Hood,  No.  3015  Fed.  Cas.,  2    Johns.    Chan.    60;     Colly.     Part, 

s.  c.  4  McLean  186 ;  Murrill  v.  Neill,  854. 
8  How.  414;  Ex  parte  Cook,  2  P. 


PROCEEDINGS    PECULIAR    TO     PARTNERSHIPS.  293 

act,  "a  partnership,"  during  the  continuance  of  the  business, 
or  after  its  dissolution  and  before  the  final  settlement  of  its 
business,  may  be  adjudged  a  bankrupt,  and  jurisdiction  of  all 
the  partners  and  the  administration  of  the  partnership  and 
individual  property  is  conferred  upon  any  court  of  bank- 
ruptcy having  jurisdiction  of  one  of  the  partners.  The  sec- 
tion provides  that  the  creditors  of  the  partnership  shall  ap- 
point the  trustee ;  that  the  trustee  shall  keep  separate  accounts 
of  the  partnership  property  and  of  the  individual  property ; 
that  the  expenses  shall  be  paid  from  the  partnership  prop- 
erty and  the  individual  property  in  such  proportion  as  the 
court  may  determine;  and  that  the  net  proceeds  of  the  part- 
nership property  shall  be  appropriated  to  the  payment  of  the 
partnership  debts,  and  any  siu-plus  added  to  the  assets  of  the 
individual  partners,  and  tlie  net  proceeds  of  the  individual 
estate  of  each  partner  shall  be  appropriated  to  the  payment 
of  his  individual  debts,  and  any  surplus  to  the  payment  of  the 
partnership  debts.  It  authorizes  the  partnership  estate  to 
prove  against  the  individual  estate,  and  vice  versa,  and  directs 
the  assets  of  the  partnership  estate  and  the  individual  estates 
to  be  marshaled  so  as  to  prevent  preferences,  and  secure 
the  equitable  distribution  of  tlie  property  of  the  several  es- 
tates. It  further  provides  that  the  property  of  a  partnership 
shall  not  be  administered  in  bankruptcy  when  less  than  all 
the  members  are  adjudged  bankrupt;  and  in  that  event  the 
partner  not  adjudged  bankrupt  is  to  settle  tlie  partnership 
business  expeditiously,  and  account  for  the  interests  of  the 
adjudged  bankrupt. 

§  96a.    Individual  petition  by  or  against  a  partner. 

There  is  nothing  in  the  bankrupt  statute  to  prevent  a  peti- 
tion by  or  against  a  partner  individually  and  separately  with- 
out joining  the  other  members  of  the  firm.  The  statute 
contains  no  restrictions  upon  partners  because  they  are  part- 
ners with  respect  to  the  right  to  adjudge  them  bankrupts  in- 
dividually as  other  persons.     The  statute  recognizes  the  right 


294 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


of  such  a  proceeding/  It  expressly  provides  that  in  the 
event  of  one  or  more,  but  not  all,  of  the  members  of  a  part- 
nership being  adjudged  bankrupt,  the  partnership  property 
shall  not  be  administered  in  bankruptcy,  unless  by  consent  of 
the  partner  or  partners  not  adjudged  bankrupt;  but  such  part- 
ner or  partners  not  adjudged  bankrupt  shall  settle  the  part- 
nership business  as  expeditiously  as  its  nature  will  permit, 
and  account  for  the  interest  of  the  partner  or  partners  ad- 
judged bankrupt.-  This  provision  applies  to  a  proceeding 
by  or  against  one  partner  or  any  number  less  than  all,  and 
means  that  the  bankruptcy  of  one  partner  shall  not  preclude 
the  other  members  from  settling  the  partnership  business,^ 
unless  by  the  consent  of  the  solvent  partners..  This  consent 
may  be  inferred  from  the  acts  of  the  partners.*  Such  pro- 
ceedings are  simply  voluntary  or  involuntary  by  or  against 
the  individual.  The  partnership  debts  and  assets  are  not 
drawn  into  bankruptcy  to  be  administered.  Only  the  indi- 
vidual debts  and  assets,  including  the  interest  of  the  bank- 
rupt partner  or  partners  in  the  partnership  as  accounted  for 
by  the  solvent  partners,  is  administered  in  bankruptcy.  All 
debts  of  the  partnership  having  been  settled  by  the  solvent 
partners,  a  discharge  granted  the  bankrupt  partner  will  re- 
lease him  from  all  liability  for  partnership  as  well  as  his  in- 
dividual debts. ^ 

It  has  been  held  that  if  the  petition  does  not  pray  that  the 
firm  be  adjudged  bankrupt  the  co-partners  can  not  come  in 
voluntarily  and  make  themselves  parties  to  the  proceedings 


1  B.  A.  1898,  Sees.  Sc,  5^^  and  16 ; 
In  re  Hirsch,  97  Fed.  Rep.  571,  3 
Am.  B.  R.  344;  In  re  Merciir  (C.  C. 
A.,  3d  Cir.),  122  Fed.  Rep.  384,  10 
Am.  B.  R.  505. 

-  B.  A.  1898,  Sec.  sh ;  Amsinck  v. 
Bean,  22  Wall.  395,  22  L.  Ed.  801 ; 
Moses  V.  Pond,  4  Am.  B.  R.  655. 

As  to  the  power  of  a  solvent  part- 
ner to  compromise,  see  In  re  Saul, 
5  Fed.  Rep.  715. 

^  In  re  Meyer  (C.  C.  A.,  2d  Cir.), 


98  Fed.  Rep.  976;  3  Am.  B.  R.  559; 
In  re  Hirsh,  97  Fed.  Rep.  571 ;  3 
Am.  B.  R.  344;  2  N.  B.  N.  137. 

4/m  re  Meyer  (C.  C.  A.,  2d  Cir.), 
98  Fed.  Rep.  976;  3  Am.  B.  R.  559; 
In  re  Dnguid,  100  Fed.  Rep.  274 ;  3 
Am.  B.  R.  794;  2  N.  B.  N.  607:  In 
re  Grant,  106  Fed.  Rep.  496;  3  N.  B. 
N.  425- 

•'"' Jarecki  Mfg.  Co.  v.  McElwaine, 
T07  Fed.  Rep.  249,  5  Am.  B.  R. 
751- 


PROCEEDINGS    PECULIAR    TO     PARTNERSHIPS. 


295 


for  the  purpose  of  adjudicating  the  firm  bankrupt."  A  part- 
nership creditor  may  join  in  a  petition  against  one  of  the 
partners  individually." 

Petitions  by  an  insolvent  partner  of  a  partnership,  which 
has  ceased  to  do  business  and  has  no  assets,  have  attracted 
considerable  attention.  How  can  such  a  partner  proceed  to  be 
relieved  of  his  liability  for  partnership  debts  as  well  as  indi- 
vidual debts?  Two  methods  of  procedure  have  been  adopted 
under  the  present  act. 

An  insolvent  partner  of  such  a  firm  has  filed  his  individual 
petition,  scheduled  the  partnership'  and  his  individual  debts, 
averred  that  the  firm  has  no  assets,  set  forth  his  property  if  he 
had  any,  and  prayed  to  be  adjudged  a  bankrupt  without  asking 
an  adjudication  against  the  firm.  The  prevailing  opinion 
seems  to  be  that  in  such  cases  he  must  at  least  give  notice  to 
his  former  partners  of  the  proceeding  and  his  desire  to  be  dis- 
charged from  partnership  debts. ^  It  has  been  held  that  a 
discharge  upon  an  individual  petition  releases  the  debtor  from 
his  liability  for  individual  and  partnership  obligations.'' 

The  other  and  safer  course  to  pursue  is  to  have  the  part- 
nership and  himself  adjudicated  bankrupts  upon  a  petition  by 
■less  than  all  of  the  partners.^"  In  this  way  the  partnership 
affairs  are  surely  brought  into  the  bankruptcy  proceedings  and 
there  can  be  no  question  but  what  a  discharge  will  operate  as  a 
release  of  both  firm  and  individual  obligations. 


"  Mahoney  v.  Ward,  loo  Fed.  Rep. 
278,  3  Am.  B.  R.  770 ;  In  re  Boylan, 
1757  Fed.  Cas.,  s.  c.  i  Ben.  266;  In 
re  Mercur  (C.  C.  A.,  3d  Cir.),  122 
Fed.  Rep.  384,  10  Am.  B.  R.  505. 

'  In  re  Mercur,  95  Fed.  Rep.  634, 
2  Am.  B.  R.  626,  s.  c.  (C.  C.  A., 
3d  Cir.),  122  Fed.  Rep.  384,  10  Am. 
B.  R.  505. 

^In  re  Meyers,  96  Fed.  Rep.  408, 
2  Am.  B.  R.  707,  s.  c.  97  Fed.  Rep. 
757,  3  Am.  B.  R.  260,  2  N.  B.  N. 
Ill;  In  re  Russell,  97  Fed.  Rep. 
2,2,  3  Km.  B.  R.  91 ;  In  re  McFaun, 
96  Fed.  Rep.  592,  3  Am.  B.  R.  66; 


In  re  Elliott  (Ref.  Op.),  2  N.  B.  N. 
350;  In  re  Lauglilin,  96  Fed.  Rep. 
589,  3  .\m.  B.  R.  I ;  In  re  Hartman, 
96  Fed.  Rep.  593,  3  Am,  B.  R.  65; 
In  re  Morrison,  127  Fed.  Rep. 
186,  II  Am.  B.  R.  498. 

"  Jarecki  v.  McElwaine,  107  Fed. 
Rep.  249,  5  Am.  B.  R.  751.  See 
also  In  re  Meyer,  97  Fed.  Rep. 
757,  3  Am.  B.  R.  260,  2N.  B.  N.  III. 

■^•^  For  proceedings  on  such  a  peti- 
tion, see  Sec.  98,  tliird  post. 

In  re  Russell,  97  Fed.  Rep.  32,  3 
Am.  B.  R.  91 ;  In  re  Murray,  96 
Fed.  Rep.  600,  3  Am.  B.  R.  601. 


296 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


§  97.    When  a  partnership  may  be  adjudged  a  bankrupt. 

A  partnership  which  owes  debts  is  entitled  to  be  adjudged 
a  voluntary  bankrupt.^  Any  unincorporated  company  owing 
debts  to  the  amount  of  one  thousand  dollars  or  over  may  be 
adjudged  an  involuntary  bankrupt  upon  default  or  impartial 
trial,  and  is  subject  to  the  provisions  and  is  entitled  to  the 
benefits  of  the  statute."  In  order  to  maintain  proceedings 
against  partnership  it  is  essential  to  establish  a  partnership 
in  fact  ^  and  they  must  also  be  alleged  and  proved  to  be  in- 
solvent,* to  have  committed  an  act  of  bankruptcy  within  four 
months  prior  to  filing  the  petition,^  and  to  have  had  their  prin- 
cipal place  of  business  within  the  territorial  jurisdiction  of  the 
court."  In  other  words,  the  same  things  must  concur  in  re- 
spect to  the  partnership  as  in  case  of  proceedings  against  an 
individual.^ 

A  partnership  is  deemed  insolvent  only  when  the  indebted- 


1  B.  A.   1898,  Sec.  40  and  Sec.   i, 
clause  19. 

2  B.  A.  1898,  Sec.  4b. 

^  Jones  V.  Burnham  Williams  & 
Co.  (C.  C.  A.,  3d  Cir.),  138  Fed. 
Rep.  986,  15  Am.  B.  R.  85;  In  re 
Beckwith  &  Co.,  130  Fed.  Rep.  475, 
12  Am.  B.  R.  453 ;  Lott  v.  Young 
(C.  C.  A.,  9th  Cir.),  109  Fed.  Rep. 
798,  6  Am.  B.  R.  436;  In  re  Mc- 
Laren, 125  Fed.  Rep.  835,  11  Am.  B. 
R.  141  ;  Buckingham  v.  First  Nat. 
Bank  (C.  C.  A.,  6th  Cir.),  131  Fed. 
Rep.  192,  12  Am.  B.  R.  465. 

In  Burkhart  v.  German-American 
Bank,  137  Fed.  Rep.  958,  14  Am. 
B.  R.  222,  the  defense  was  made  that 
it  was  a  joint  stock  association 
under  the  laws  of  Ohio,  but  it  was 
held  to  be  a  partnership  and  was 
adjudged  to  be  a  bankrupt.  See 
also  s.  c.  sub.  noni.  Dickas  v. 
Barnes  (C.  C.  A.,  6th  Cir.),  140 
Fed.   Rep.  849,    15  Am.   B.   R.   566. 

In    Davis    v.    Stevens,    104    Fed. 


Rep.  235,  4  Am.  B.  R.  763,  a  cor- 
poration non  de  jure  was  adjudged 
bankrupt    as    a    partnership. 

*Vaccaro  v.  Security  Bank  (C. 
C.  A.,  6th  Cir.),  103  Fed.  Rep.  436, 
4  Am.  B.  R.  474,  2  N.  B.  N.  1037; 
In  re  Perley  &  Hay;  ""S  Fed.  Rep. 
927,  IS  Am.  B.  R.  54;  In  re  Blair, 
99  Fed.  Rep.  76,  3  Am.  B.  R.  588,  2 
N.  B.  N.  364;  Davis  v.  Stevens, 
104  Fed.  Rep.  235,  4  Am.  B.  R.  763, 
3  N.  B.  N.  131. 

5  B.  A.  1898,  Sec.  3&;  In  re  Sha- 
piro, 106  Fed.  Rep.  495,  5  Am.  B. 
R.  839;  In  re  Grant,  106  Fed.  Rep. 
496,  5  Am.  B.  R.  837;  In  re  Meyer 
(C.  C.  A.  2d  Cir.),  98  Fed.  Rep. 
976,  3  Am.  B.  R.  559;  Albany  Bank 
v.  Johnson,  No.  133  Fed.  Cas. ;  5  L. 
R.  Rep.  313. 

"  B.  A.  1898,  Sec.  2,  clause  i ;  In 
re  Blair,  99  Fed.  Rep.  76,  3  Am.  B. 
R.  588,  2  N.  B.  N.  364. 

^  For  further  consideration  of 
this  subject,  see  Sec.  98,  post. 


PROCEEDINGS    PECULIAR    TO     PARTNERSHIPS. 


297 


ness  of  the  firm  and  partners  exceeds  the  vakie  of  the  property 
of  the  firm  together  with  that  of  the  individual  partners.^ 

A  partnership  may  be  adjudged  bankrupt  at.  any  time  during 
the  continuation  of  the  partnership  business,  or  after  its  disso- 
lution and  before  the  final  settlement  thereof.'*  The  lanp-uao-e 
of  this  provision  is  simply  declaratory  of  a  well-recognized 
rule  that  where  there  are  assets  or  debts  of  a  partnership  re- 
maining, the  partnership,  even  after  dissolution,  may  properly 
be  considered  as  subsisting  as  to  its  creditors  and  for  the  pur- 
pose of  applying  its  joint  stock  and  property  to  the  payment 
of  its  creditors.^** 

When  a  partnership  is  dissolved  by  the  death  of  one  of  the 
partners  the  firm  can  not  be  adjudged  to  be  bankrupt."  The 
reason  for  this  rule  is  that  a  court  of  bankruptcy  has  no  juris- 
diction to  adjudge  a  deceased  person  to  be  a  bankrupt  or  to 
administer  his  estate.  It  has,  however,  been  held  that  a  sur- 
viving partner  may  be  adjudged  to  be  a  voluntary  ^-  or  an 
involuntary "  bankrupt,  both  individually  and  as  surviving 
partner  of  the  firm.     By  this  method  the  property  of  a  part- 


8  Vaccaro  v.  Security  Bank  (C. 
C.  A.,  6th  Cir.),  103  Fed.  Rep.  436, 
4  Am.  B.  R.  474;  In  re  Perley  & 
Hays,  138  Fed.  Rep.  927,  15  Am. 
B.  R.  54;  Davis  v.  Stevens,  104  Fed. 
Rep.  235,  3  Am.  B.  R.  131 ;  In  re 
Blair,  99  Fed.  Rep.  76,  3  Am.  B.  R. 
588. 

But  see  In  re  McMurtrey  & 
Smith,  142  Fed.  Rep.  853,  15  Am. 
B.    R.    427. 

"B.  A.  1898,  Sec.  5a;  In  re 
Meyer  (C.  C.  A.,  2d  Cir.),  98  Fed. 
Rep.  976,  3  Am.  B.  R.  559;  In  re 
Levy,  95  Fed.  Rep.  812,  2  Am.  B. 
R.  21 ;  In  re  Rudnick,  102  Fed. 
Rep.  750,  2  N.  B.  N.  975,  4  Am. 
B.  R.  531;  In  re  Rosenbaum,  I  N. 
B.  N.  541. 

10 /n  re  Crockett,  No.  3402  Fed. 
Cas.,  s.  c.  2  Ben.  514;  In  re  Noo- 
nan,    No.    10292    Fed.    Cas.,    s.   c.   3 


Biss.  491 ;  In  re  Stowers,  No.  13516 
Fed.  Cas.,  s.  c.  i  Low.  528;  In  re 
Foster,  No.  4962  Fed.  Cas.,  s.  c.  3 
Ben.  386;  In  re  McFarland,  No. 
8788  Fed.  Cas.,  s.  c.  10  N.  B.  R. 
381. 

11  In  re  Temple,  No.  13825  Fed. 
Cas.,  s.  c.  4  Saw.  92;  Adams  v. 
Terrell,  4  Fed.  Rep.  802 ;  Vaccaro  v. 
Bank  (C.  C.  A.,  6th  Cir.),  103  Fed. 
Rep.  436,  4  Am.  B.  R.  474,  2  N.  B. 
N.  1037. 

12  Briswalter  v.  Long,  14  Fed. 
Rep.  153;  In  re  Pierce,  102  Fed. 
Rep.  977,  4  Am.  B.  R.  489,  2  N.  B. 
N.  979. 

^2  In  re  Stevens,  No.  13393  Fed. 
Cas.,  s.  c.  r  Saw.  397;  Vaccaro  v. 
Security  Bank  (C.  C.  A.,  6th  Cir.), 
]03  Fed.  Rep.  436,  4  Am.  B.  R.  474, 
2  N.  B.  N.  1037. 


298  LAW    AND     rROCEEDINGS    IN     BANKRUPTCY. 

nership  dissolved  by  the  death  of  a  partner  can  be  drawn  into 
the  court  of  bankruptcy  and  the  administrator  has  nothing  to 
do  with  it,  except  to  receive  the  share  of  the  surpkis,  if  any 
there  be,  after  settlement  of  the  partnership  affairs  belonging 
to  the  deceased  partner."  A  partnership  may  be  adjudged  a 
bankrupt  after  the  insanity  of  the  partner  and  the  appointment 
of  a  conservator  of  his  estate.^^ 

The  trustee  can  not  take  possession  of  any  property  of  which 
the  administrator  has  custody  without  his  consent." 

Where  one  of  the  partners  is  an  infant  the  adjudication  may 
be  made  against  the  firm  and  the  partner  who  is  of  age.''  In 
such  case  the  petition  should  be  dismissed  as  to  the  minor 
partner  without  costs  and  with  a  specific  statement  that  the 
dismissal  is  made  by  reason  of  his  minority.^' 

Where  a  partner  is  exempt  from  an  adjudication  because 
a  wage-earner  or  tiller  of  the  soil  or  because  he  has  not  com- 
mitted an  act  of  bankruptcy,  the  firm  and  such  partners  as  are 
subject  to  the  law  may  be  declared  bankrupts  and  the  property 
of  the  firm  and  all  of  the  partners  individually  may  be  admin- 
istered by  the  court.'^ 

§  98.     How  to  institute  proceedings  to  have  a  partnership 
declared  bankrupt. 

Proceedings  to  have  a  partnership  declared  to  be  bankrupt 
may  be  instituted  upon  three  descriptions  of  petitions.  The 
proceedings  may  be  begun,  first,  upon  the  petition  of  all  the 
partners  of  the  firm ;  second,  upon  the  petition  of  creditors  of 
the  partnership;  and,  third,  upon  the  petition  of  less  than  all 
of  the  partners. 

i*Briswaltcr    v.    Long,    14    Fed.  Moses  v.    Pond,  4  Am.  B.   R.  655. 

Rep.    153;    In    re    Pierce,    102    Fed.  " /m  re  Dunningan,  95  Fed.  Rep. 

Rep.  977,  4  Am.  B.  R.  489,  2  N.  B.  428,  2  Am.   B.  R.  628;   In  re   Du- 

N.  979.  guid,   100  Fed.  Rep.  274,  3  Am.  B. 

15 /m  re   Stein  &  Co.    (C.   C.   A.,  R.  794,  2  N.  B.  N.  607. 

7th    Cir.),    127    Fed.    Rep.    547,    ti  is  Dickas  v.  Barnes,  Trustee    (C. 

Am.  B.  R.  536.  C.  A.,  6th  Cir.),  140  Fed.  Rep.  849, 

16  In  re  Pierce,  102  Fed.  Rep.  977,  IS  Am.  B.  R.  566. 
4  Am.  B.  R.  489,  2  N.  B.  N.  979; 


PROCEEDINGS     PECULIAR    TO     PARTNERSHIPS.  299 

First.  The  petition  of  all  the  partners  is  a  purely  voluntary- 
petition  under  section  4a.^  Where  they  all  unite  in  it  the 
jurisdiction  must  be  shown,  as  that  they  have  had  their  prin- 
cipal place  of  business  or  resided  or  have  had  their  domicile 
within  the  territorial  jurisdiction  of  the  court  for  the  greater 
portion  of  the  preceding  six  months.  It  is  not  necessary  to 
allege  an  act  of  bankruptcy  to  have  been  committed.  The 
filing  of  such  petition  is  an  act  of  bankruptcy." 

Second.  The  proceeding  upon  the  petition  of  creditors  of 
the  firm  is  a  purely  involuntary  proceeding  under  section  Ab.'^ 
Such  a  petition  must  specify  an  act  of  bankruptcy  to  have  been 
committed  and  set  forth  other  requisites  of  an  involuntary 
petition. 

To  support  an  adjudication  of  bankruptcy  against  a  part- 
nership it  seems  that  formerly  there  must  have  been  separate 
acts  of  bankruptcy  by  each  partner.*  The  present  act  pro- 
vides that  the  court  of  bankruptcy  w^hich  has  jurisdiction  of 
one  of  the  partners  may  have  jurisdiction  of  all  the  partners 
and  of  the  administration  of  the  partnership  and  individual 
property.^  A  partnership  has  been  adjudged  bankrupt  upon 
a  petition  charging  an  act  of  bankruptcy  by  one  or  more  (but 
less  than  all)  of  the  partners,  wdiere  such  act  was  within  the 
scope  of  the  partnership  business  so  as  to  constitute  in  fact  an 
act  of  the  firm.°     Where  it  is  sought  to  have  the  individual 

^  See      Voluntan'      Proceedings,  where  the  banking  house  was,  and 

Chap.   IX.  was    the    only    partner    who    trans- 

-  B.  A.  1898,  Sec.  3a,  clause  5.  acted   business,    the    other   two    re- 

^  See     Involuntary     Proceedings,  siding   at   a   distance    from    it,    ab- 

Chap.  X.  sented    himself    from    the    banking 

*  Allen  V.    Hartley,   4   Doug.   20 ;  house,  shut  it  up  and  stopped  pay- 

In    re    Redmond,    No.    11632    Fed.  ment.     Mills  v.  Bennett,  2  M.  &  S. 

Cas.,  s.  c.  9  N.  B.  R.  408,  and  cases  556,  s.  c.  2  Rose  269. 

cited    in    opinion ;    In    re    Weaver,  ^  g    \    \9,g2>.  Sec.  Sc 

No.  17307  Fed.  Cas.,  s.  c.  9  N.  B.  ^  In  re  Meyer  (C.  C.  A.,  2d.  Cir.), 

R.  132;  In  re  Waite,  No.  17044  Fed.  98  Fed.  Rep.  976,  3  Am.  B.  R.  559; 

Cas.,  s.  c.  I  Low.  207 ;  In  re  Cook,  In  re  Grant,   106  Fed.   Rep.  496,   5 

No.  3150  Fed.  Cas.,  s.  c.  3  Biss.  122.  Am.  B.  R.  837;  In  re  Duguid,  100 

It   was   held   not   evidence   of  an  Fed.  Rep.  274,  3  Am.  B.  R.  794,  2 

act   of   bankruptcy    by    three    part-  N.   B.   N.  607;   In  re  Kersten,   no 

ners  of  a   banking   concern,  where  Fed.  Rep.  929,  6  Am.  B.  R.  516. 
one   of  them   resided   at   the   place 


300  LAW    AND     PROCEEDINGS    IN    BANKRUPTCY. 

partners  also  declared  bankrupts  in  the  same  proceeding  it  is 
necessary  to  show  that  they  have  committed  or  been  partici- 
pants in  committing  one  of  the  enumerated  acts.'  A  general 
assignment  by  a  partnership  is  an  act  of  bankruptcy  by  the  firm 
and  the  partners.*  Tlie  sale  by  one  member  of  an  insolvent 
firm  of  his  interest  to  his  partner  is  an  act  of  bankruptcy."  If 
a  partnership  has  committed  any  one  or  more  of  the  enumer- 
ated acts  of  bankruptcy  it  is  sufficient  to  support  an  adjudica- 
tion. 

To  maintain  an  adjudication  against  a  partnership  it  must 
generally  be  shown  to  be  insolvent.  Each  partner  is  liable 
m  solido  for  the  debts  of  the  firm  so  that  there  are  debts  of 
each  individual  partner.  It  has  accordingly  been  held  that  a 
partnership  is  not  insolvent  within  the  meaning  of  the  bank- 
rupt act  while  any  of  the  partners  are  able  to  pay  the  firm  lia- 
bilities.^'^ Where  a  partnership  has  made  a  general  assign- 
ment, which  is  charged  as  an  act  of  bankruptcy,  it  should  be 
adjudged  bankrupt  irrespective  of  its  solvency." 

Third.  Proceedings  upon  petition  of  less  than  all  the  part- 
ners to  have  a  firm  adjudged  bankrupt  is  a  proceeding  which 
necessarily  is  neither  wholly  voluntary  nor  wholly  involun- 
tary. So  far  as  the  petitioners  are  concerned,  it  is  voluntary.^- 
So  far  as  the  partners  not  petitioning  are  concerned,  it  is  not 
involuntary  in  the  sense  of  section  Ab,  unless  the  adjudication 
is  asked  on  the  ground  of  the  commission  of  an  act  of  bank- 
ruptcy, although  it  may  be  involuntary  in  the  sense  of  not 
being  voluntary  under  section  Aa}-     Where  it  is  not  involun- 

"^  In  re  Mej'er  (C.  C.  A.,  2d  Cir.),  ^^  Vaccaro  v.   Security  Bank    (C 

98  Fed.  Rep.  976,  3  Am.  B.  R.  559;  C.  A.,  6th  Cir.),  103  Fed.  Rep.  436, 

In  re  Shapiro,  106  Fed.  Rep.  495,  5  4  Am.  B.  R.  474,  2  N.  B.  N.  1037; 

Am.  B.  R.  839.  In  re  Blair,  99  Fed.  Rep.  76,  3  Am. 

8  Green  River  Deposit  Bank  v.  B.  R.  588;  2  N.  B.  N.  364,  Davis  v. 
Craig,  no  Fed.  Rep.  137,  6  Am.  B.  Stevens,  104  Fed.  Rep.  235,  3  N.  B. 
R.  381.  N.  131,  4  Am.  B.  R.  763. 

9  In    re    Shapiro,    106    Fed.    Rep.  ''  West  Co.  v.  Lea,  174  U.  S.  590, 
495,  5  Am.  B.  R.  839;  In  re  Waite,  43  L.  Ed.  1098,  2  Am.  B.  R.  463. 
No.    17044  Fed.   Cas.,   s.  c.    i    Low.  ^-  In  re  Murray,  96  Fed.  Rep.  600, 
207;  In  re  Cook,  No.  3150  Fed.  Cas.,  i   N.  B.  N.  570,  3  Am.  B.   R.  601 ; 
s.  c.  3  Biss.  122.  In  re  Carleton,  115  Fed.  Rep.  246; 

8  Am.  B.  R.  270. 


PROCEEDINGS    PECULIAR    TO     PARTNERSHIPS. 


301 


tary  in  ihe  sense  of  section  4^  the  adjudication  may  be  asked 
for  on  the  ground  that  the  members  of  the  partnership  are 
unable  to  pay  all  their  debts  in  full.  Form  No.  2,  prescribed 
by  the  supreme  court,  is  a  petition  of  this  character. 

Any  member  of  a  partnership  who  refuses  to  join  in  a  peti- 
tion to  have  the  partnership  declared  bankrupt  is  entitled  to 
resist  the  prayer  of  the  petition  in  the  same  manner  as  if  the 
petition  had  been  filed  by  a  creditor  of  the  partnership.  No- 
tice of  the  filing  of  the  petition  must  be  given  to  him  in  the 
same  manner  as  provided  by  law  and  by  the  rules  in  the  case 
of  a  debtor  petitioned  against.^^  He  has  the  right  to  appear 
at  the  time  fixed  by  the  court  for  tlie  hearing  of  the  petition 
and  to  make  proof,  if  he  can,  that  the  partnership  is  not  in- 
solvent or  has'  not  committed  an  act  of  bankruptcy,  and  to 
make  all  defenses  which  any  debtor  proceeded  against  is  en- 
titled to  take  by  the  provisions  of  the  act.^* 

In  any  proceeding  to  have  a  partnership  declared  bankrupt 
all  of  the  partners  should  be  named  in  the  petition  and  brought 
before  the  court. ^'^     One  who  holds  himself  out  as  a  partner, 


^3  Gen.  Ord.  8;  In  re  Russell,  97 
Fed.  Rep.  2,2,  3  Am.  B.  R.  91 ;  In  re 
Elliott  (Ref.  Op.),  2  N.  B.  N.  350; 
In  re  Altman,  95  Fed.  Rep.  263,  2 
Am.  B.  R.  407;  In  re  Moore,  No. 
9750  Fed.  Cas.,  s.  c.  5  Biss.  79 ; 
In  re  Prankard,  No.  1136  Fed.  Cas., 
s.  c.  I  N.  B.  R.  297 ;  In  re  Lewis, 
No.  831 1  Fed.  Cas.,  s.  c.  2  Ben.  96. 

For  form  of  notice  when  service 
is  made  by  publication,  see  In  re 
]\Iurray,  96  Fed.  Rep.  600,  3  Am. 
B.  R.  601. 

^*  Gen.  Ord.  8 ;  In  re  Laughlin,  96 
Fed.  Rep.  589.  3  Am.  B.  R.  i ;  in  re 
Fowler,  No.  4998  Fed.  Cas.,  s.  c.  i 
Low.  161. 

In  re  Forbes,  128  Fed.  Rep. 
137,  II  Am.  B.  R.  787,  Judge 
Lowell  held  "that  a  non-assenting 
partner  can  not  set  up  the  want  of 
an  act  of  bankruptcy  as  a  defense 
to   a  petition  brought   by   his   part- 


ner against  the  firm  and  partners, 
but  that  he  may  set  up  the  defense 
of  solvency.  If  the  firm  is  ad- 
judged bankrupt,  the  adjudication 
must  be  several  as  well  as  joint. 
The  non-assenting  partner  is  en- 
titled to  trial  by  jury  upon  the  is- 
sue of  insolvency  and  upon  that 
issue  only.  Upon  the  issue  of 
partnership  he  is  entitled  to  a  trial 
by  the  court." 

15  In  re  Moore,  No.  9750  Fed. 
Cas.,  s.  c.  5  Biss.  79;  In  re  Lewis, 
No.  831 1  Fed.  Cas.,  s.  c.  2  Ben.  96; 
In  re  Prankard,  No.  11366  Fed. 
Cas.,  s.  c.  I  N.  B.  R.  297;  Gen.  Ord. 
8 ;  In  re  Meyers,  97  Fed.  Rep.  757,  3 
Am.  B.  R.  260,  2  N.  B.  N.  in;  In 
re  Laughlin,  96  Fed.  Rep.  589,  3 
Am.  B.  R.  I  ;  Dickas  v.  Barnes, 
trustee  (C.  C.  A.,  6th  Cir.),  140 
Fed.  Rep.  849,  15  Am.  B.  R.  566. 


302  LAW     AND    PROCEEDINGS    IN     BANKRUPTCY. 

although  he  has  actually  retired  from  the  firm,  may  be  made  a 
bankrupt  as  a  member  of  the  firm  upon  a  creditor's  petition."^ 
It  is  not  necessary,  however,  to  name  or  serve  a  secret  or  dor- 
mant partner  in  order  to  have  a  valid  adjudication  in  bank- 
ruptcy.^^ If  the  name  of  such  partner  is  known,  he  should 
be  made  a  party  to  the  proceedings. 

The  petition  to  have  a  partnership  adjudged  to  be  bankrupt 
may  be  filed  in  the  district  where  the  firm  has  had  its  principal 
place  of  business  for  the  greater  portion  of  the  six  months 
preceding  the  filing  of  the  petition.^^  It  may  be  filed  in  any 
district  in  which  a  court  of  bankruptcy  has  jurisdiction  of  one 
of  the  partners.^''  If  the  court  has  jurisdiction  of  one  of  the 
partners  of  a  firm  it  niay  have  jurisdiction  of  all  the  partners 
and  of  the  administration  of  the  partnership  and  of  the  indi- 
vidual property."  In  case  two  or  more  petitions  are  filed  in 
different  districts  by  different  members  of  the  same  partner- 
ship for  an  adjudication  of  the  bankruptcy  of  said  partnership, 
the  court  -in  which  the  petition  is  first  filed  having  jurisdiction 
takes  and  retains  jurisdiction. over  all  proceedings  in  such  bank- 
ruptcy until  the  same  are  closed.'^  If  such  petitions  are  filed 
in  the  same  district,  action  is  first  had  upon  the  one  first  filed. 
But  the  court  so  retaining  jurisdiction  may,  if  satisfied  that  it 
is  for  the  greatest  convenience  of  parties  in  interest  that  an- 
other of  said  courts  should  proceed  with  the  cases,  order  them 
to  be  transferred  to  that  court.'^ 

Where  a  petition  is  filed  by  partners,  whether  all  or  a  part 
only  join,  the  petition  must  be  in  the  prescribed  form.'-     It 

'^^  In  re  Krneger,   No.   7941    Fed.  ship,  S.  D.  O.  (not  reported),  it  was 

Cas.,  s.  c.  2  Low.  66.  ruled    under    this    clau.se    that    the 

17  Metcalf  V.  Officer,  No.  9496  court  had  jurisdiction  of  the  part- 
Fed.  Cas.,  s.  c.  5  Dill.  565;  In  re  nership  by  virtue  of  Stern's  resid- 
Ilarris,  4  Am.  B.  R.  132,  108  Fed.  ing  within  the  district.  Strauss  was 
Rep.  517.  a   non-resident   of   the   district   and 

IS  B.  A.  1898,  Sec.  2,  clause  i.  the  firm  had  no  place  of  business. 

19  B.  A.  1898,  Sec.  5(-,-  In  re  Blair,  20  Gen.  Ord.  6. 

99  "Fed.  Rep.  76,  3  Am.  B.  R.  588,  -1  B.  A.  i8g8.  Sec.  32 ;  Gen.  Ord. 

2  N.  B.  N.  364;  In  re  Murray,  96  6.     See  Sec.  84,  ante. 
Fed.   Rep.  600,    i    N.   B.    N.   570,   3  --  Official  Form  No.  2,  Form  No. 

Am.  N.  B.  R.  601.  4,  post. 

In  re  Strauss  &  Stern,  a  partner- 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS. 


303 


must  be  accompanied  by  a  separate  schedule  (jf  the  habihties 
and  assets  of  the  partnership  and  by  separate  schedules  of  the 
individual  liabilities  and  assets  of  each  petitioning  partner."^ 
These  schedules  are  prepared  in  the  mamier  required  in  a  case 
of  voluntary  bankruptcy.-*  If  any  partner  refuse  to  join  in 
the  petition  to  have  the  partnership  declared  bankrupt  and 
an  adjudication  is  made,  such  partner  must  file  a  schedule  of 
his  debts  and  an  inventory  of  his  property  in  the  same  manner 
as  is  required  by  the  act  in  cases  of  debtors  against  whom 
adjudication  of  bankruptcy  shall.be  made.-''  In  the  case  of  a 
petition  filed  by  creditors  the  schedules  are  prepared  as  in 
involuntary  proceedings. 

It  is  not  necessary  to  file  a  petition  by  or  against  all  the 
partners  and  also  a  separate  petition  against  each  in  order  to 
administer  the  joint  and  separate  estates  of  the  firm  and  the 
several  partners.-"  A  petition  by  or  against  a  partnership  is 
one  proceeding.  Only  one  deposit  for  costs  need  be  made.-° 
In  such  cases  the  prayer  of  the  petition  should  be  that  the 
"firm  and  the  partners  individually''  be  adjudged  bankrupts. 
Otherwise  the  firm  only  is  adjudged  bankrupts.-'  The  stat- 
ute expressly  authorizes  the  court  of  bankruptcy  which  Has 
jurisdiction  of  one  of  the  partners  to  administer  the  part- 
nership and  individual  property.^* 

A  creditor  will  not  be  permitted  ordinarily  to  intervene  to 
oppose  an  adjudication  of  a  partnership  upon  petition  of  a 
partner.^" 


23  In  re  Laughlin,  96  Fed.  Rep. 
589,  3  Am.  B.  R.  I ;  In  re  Brick, 
4  Fed.  Rep.  804;  Wilkins  v.  Davis, 
No.    17664  Fed.   Cas.,   s.  c.  2  Lx)w. 

511- 

2*  Official  Form  No.  i,  Schedules 
A  and  B ;  see  Forms  Nos.  2  and  3, 
post. 

2"  Gen.  Ord.  8. 

26  In  re  Gay,  98  Fed.  Rep.  870,  3 
Am.  B.  R.  529;  In  re  Langslow, 
98  Fed.  Rep.  869,  i  N.  B.  N.  232.  3 
Am.  B.  R.  529;! ;  but  sec  In  re  Bar- 


den,  loi  Fed.  Rep.  553,  2  N.  B.  N. 
741,  4  Am.  B.  R.  31 ;  In  re  Farley, 
115  Fed.  Rep.  359,  8  Am.  B.  R. 
266. 

-"  Strause  v.  Hooper,  105  Fed. 
Rep.  590,  5  Am.  B.  R.  225;  In  re 
Meyer  (C.  C.  A.,  2d  Cir.),  98  Fed. 
Rep.  976,  3  Am.  B.  R.-559- 

28  B.  A.  1898,  Sec.  5r;  Diekas  v. 
Barnes  (C.  C.  A.  6th  Cir.),  140 
Fed.  Rep.  849,  15  Am.  B.  R.  566. 

-^  In  re  Carleton,  115  Fed.  Rep. 
246,  8  Am.  B.  R.  270. 


304  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

§  98a.    The    adjudication    and    reference    in    partnership 
cases. 

The  proceedings  leading  up  to  an  adjudication  and  refer- 
ence in  partnership  cases  are  the  same  as  in  other  vohmtary  or 
involuntary  proceedings  according  as  the  petition  seeking  an 
adjudication  is  voluntary  or  involuntary.^ 

When  a  petition  on  behalf  of  a  part  of  the  members  of  a 
firm  is  filed  in  the  clerk's  ofiice.  it  can  not  then  be  classed  as  an 
involuntary  proceeding,  because  it  may  never  become  such, 
and,  in  the  absence  of  the  judge  from  the  district  or  division, 
it  is  the  duty  of  the  clerk  to  refer  the  case  to  the  proper  referee. 
The  case,  however,  whether  coming  before  the  judge  or  a 
referee,  can  not  be  properly  proceeded  with  until  notice  of  the 
pendency  of  the  proceeding  has  been  given  to  the  member  or 
members  of  the  firm  who  have  not  joined  in  the  petition  as 
filed,  and,  under  the  provisions  of  general  order  No.  8.  a  time 
must  be  fixed  for  a  hearing  upon  the  petition,  of  which  due 
notice  must  be  given. 

If  the  non-joining  member  or  members  of  the  firm  can  be 
found,  in  the  district  or  out  of  it,  personal  service  of  the  notice 
must  be  made;  but,  if  personal  service  can  not  be  had,  then, 
upon  filing  before  the  judge  (or  the  referee,  if  the  case  has 
been  referred  by  the  clerk)  an  affidavit  showing  that  personal 
service  of  notice  can  not  be  made,  an  order  of  publication  of 
notice  will  be  made,  as  provided  for  in  section  18  of  the  act, 
which  enacts  that  notice  by  publication  shall  be  given  in  the 
same  manner,  and  for  the  same  time,  as  in  cases  in  equity  in 
courts  of  the  United  States,  which  are  governed  by  the  pro- 
visions of  section  8  of  the  judiciary  act  of  March  3,  1875,^ 
which  requires  the  court  to  make  an  order  requiring  the  named 
party  to  appear  and  plead  to  the  petition  by  a  named  day,  and 
to  direct  the  publication  of  such  order,  if  personal  service 
thereof  can  not  be  made,  in  such  manner  as  the  court  may 
direct,  not  less  than  once  a  week  for  six  consecutive  weeks. 
If,  upon  the  hearing  thus  provided    for,   the  nonpetitioning 

1   In  re  Murray,  96  Fed.  Rep.  600,  -  18  Stat,  at  L.  472. 

3  Am.  B.  R.  601,  I  N.  B.  N.  570. 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS.  305 

member  or  members  of  the  firm  join  with  their  copartners  in 
the  prayer  of  the  petition,  or,  by  faiHng  to  enter  an  appearance, 
show  that  they  do  not  propose  to  contest  the  adjudication,  then 
the  referee  will  enter  the  adjudication,  and  the  case  will  be 
proceeded  with  as  in  other  voluntary  proceedings. 

If  the  nonpetitioning  members  of  the  firm  should  appear  at 
the  hearing,  and,  by  proper  pleading,  should  make  defense  to 
the  proceedings  as  provided  for  in  general  order  Xo.  8.  then 
the  referee  must  certify  the  case  to  the  judge,  before  whom  the 
issue  will  be  heard,  a  jury  trial  being  had  if  the  party  has 
demanded  the  same  under  the  provisions  of  section  19  of  the 
act;  that  is,  by  filing  with  the  referee  a  written  demand  for  a 
jury  at  or  before  the  time  fixed  for  the  hearing  before  him. 

Where  a  proper  case  is  made  by  the  petition  and  proofs  the 
firm  and  the  individual  partners  are  regularly  adjudicated 
bankrupt  in  one  proceeding.  As  the  commission  of  an  act  of 
bankruptcy  is  indispensable  to  jurisdiction  in  an  involuntary 
proceeding,  the  individual  partners  can  not  be  adjudged  bank- 
rupts in  such  a  proceeding,  who  have  not  committed,  or  been 
participants  in  committing  one  or  more  of  the  enumerated 
acts.^  This  draws  into  the  court  of  bankruptcy  the  estates 
and  debts  of  the  partnership  and  the  individual  estates  and 
debts  of  the  several  partners  to  be  administered.*  The  firm 
and  the  individual  partners  may  thereupon  be  discharged  from 
both  firms  and  individual  debts.^ 

A  partnership  may  be  adjudged  a  bankrupt  in  a  voluntary 
or  involuntary  proceeding,  wnthout  an  adjudication  against 
any  or  some  of  the  partners  individually."  Such  a  proceeding 
may  draw  to  the  administration  the  mdividual  estates  of  tb.e 

^  In  re  Meyer  (C.  C.  A..  2d  Cir.),  B.  N.  232.     See  aso  In  re  Barden, 

98  Fed.  Rep.  976,  3  Am.  B.  R.  559;  loi  Fed.  Rep.  553,  4  Am.  B.  R.  31  ; 

In  re  Shapiro,    106   Fed.   Rep.  495,  In   re    Farle3%    115    Fed.    Rep.    339, 

5  Am.  B.  R.  839 ;  In  re  Hale,  6  Am.  8  Am.  B.  R.  266. 
B.  R.  35,   107  Fed.  Rep.  432.  ^  In  re  Meyer  (C.  C.  A.,  2d  Cir.~), 

4/m  re  Gay.  98  Fed.  Rep.  870,  3  98  Fed.  Rep.  976,  3  Am.  B.  R.  559; 

Am.   B.   R.   529;    In   re   Grant.    106  In   re   Shapiro,    106  Fed.   Rep.  495, 

Fed.  Rep.  496,  5  Am.  B.  R.  837 ;  In  5  .^m.  B.  R.  839 ;  In  re  Hdle,  6  Am. 

re  Langslow,  98  Fed.  Rep.  869,  t  N.  B,  R.  35,   107  Fed.  Rep.  432. 


306  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

partners  as  well  as  the  partnership  assets,  and  marshal  and  dis- 
tribute them  according  to  equity.*'  The  assets  of  the  individual 
estates  and  the  debts  provable  against  them  can  be  ascertained 
without  adjudicating  the  individual  partners  bankrupts.  If 
there  is  an  adjudication  of  any  of  the  partners  there  is  nothing 
to  prevent  such  partners  from  receiving  a  discharge  individ- 
ually, if  they  are  otherwise  entitled  to  it  under  the  act.^  The 
partners  are  not  entitled  to  a  discharge  individually  if  they  are 
not  adjudicated  bankrupts.^ 

§  99.    The  administration  of  partnership  estates. 

The  trustee  in  proceedings  to  have  a  firm  declared  bankrupt 
is  appointed  by  the  creditors  of  the  partnership,  as  distin- 
guished from  the  creditors  of  the  individual  partners.^  The 
trustee  administers  both  the  partnership  property  and  the  prop- 
erty belonging  to  the  individual  partners.  The  trustee  admin- 
isters the  property  of  the  individual  partners  even  when  such 
partners  are  and  can  not  be  adjudged  bankrupts. ■  He  is  re- 
quired to  keep  separate  accounts  of  such  properties.^  The  ex- 
penses are  paid  from  the  partnership  property  and  the  indi- 
vidual property  in  such  proportions  as  the  court  may  deter- 
mine.* 

When  a  person  not  in  partnership  with  another  is  adjudged 
a  bankrupt  the  whole  of  his  property  becomes  divisible  among 

e/n  re  Meyer  (C  C.  A.  2d  Cir.),  98  Fed.  Rep.  976,  3  Am.  B.  R.  559; 

98  Fed.  Rep.  976,  3  Am.  B.  R.  559;  In  re  Amelia  Meyers,  97  Fed.  Rep. 

In  re  Stokes,   106  Fed.  Rep.  312,  6  757,  3  Am.  B.  R.  260,  2  N.   B.  N. 

Am.  B.  R.  262;  In  re  Duguid,  100  iii. 

Fed.    Rep.    274,    3   Am.    B.    R.   794,  ^  Strause    v.    Hopper,     105    Fed. 

2  N.  B.  N.  607.  Rep.  590,  5  Am.  B.  R.  225,  3  N.  B. 

In  re  Dickas  v.  Barnes  (C.  C.  A.,  N.  276. 

6th  Cir.),  140  Fed.  Rep.  849,  15  Am.  ^  B.    A.     1898,     Sec.     5^7;     In     re 

B.  R.  566,  some  of  the  partners  were  Eagles  &  Crisp,  99  Fed.  Rep.  695,  3 

wage  earners  and  farmers  and  not  Am.  B.  R.  jTii- 

subject  to  be  adjudicated  bankrupts  ^  Djckas   v.    Barnes,   Trustee    (C. 

in   an    involuntary   proceeding,   but  C.  A.,  6th  Cir.),  140  Fed.  Rep.  849, 

their   estates  were   administered   in  15  Am.  B.  R.  566. 

the  bankruptcy  proceedings  against  ^  B.  A.  1898,  Sec.  Sd. 

the  partnership.  *  B.   A.    1898,    Sec.   Se. 

''In  re  Meyer  (C.  C.  A.,  2d  Cir.), 


PROCEEDINGS    TECULIAR    TO    PARTNERSHIPS.  307 

all  his  creditors  ratabh\  A  different  mode  of  distribution 
prevails  as  to  bankrupt  partners. 

The  statute  enacts  that  "the  net  proceeds  of  the  partner- 
ship property  shall  be  appropriated  to  the  payment  of  the  part- 
nership debts,  and  the  net  proceeds  of  the  individual  estate  of 
each  partner  to  the  payment  of  his  individual  debts.  Should 
any  surplus  remain  of  the  property  of  any  partner  after  paying 
his  individual  debts,  such  surplus  shall  be  added  to  the  part- 
nership assets  and  be  applied  to  the  payment  of  the  partnership 
debts.  Should  any  surplus  of  the  partnership  i)roperty  remain 
after  paying  the  partnership  debts,  such  surplus  shall  be  added 
to  the  assets  of  the  individual  partners  in  the  proportion  of 
their  respective  interests  in  the  partnership.  The  court  may 
permit  the  proof  of  the  claim  of  the  partnership  estate  against 
the  individual  estates,  and  vice  versa,  and  may  marshal  the 
assets  of  the  partnership  estate  and  individual  estates  so  as  to 
prevent  preferences  and  secure  the  equitable  distribution  of 
the  property  of  the  several  estates."  ^ 

This  is  substantially  the  rule  stated  at  an  early  date  by 
Lord  Chancellor  King  in  ex  parte  Cooke.*'  and  subsequently 
confirmed  by  Lord  Eklon  '  and  others.  It  has  been  the  sub- 
ject of  enactment  in  the  English  bankruptcy  act  of  1883,^  and 
in  the  former  bankruptcy  laws  of  the  United  States.^ 

Where  several  persons  are  members  of  different  firms  and 
a  joint  adjudication  is  obtained  against  all  of  them,  distinct 
accounts  will  be  had  of  the  estates  of  the  respective  firms  as 
well  as  of  the  separate  estate  of  each  bankrupt,  and  each  estate 
will  be  made  to  bear  its  own  debts  and  its  fair  proportion  of 
the  expenses.'"     Where  the  same  partners  conduct  business  in 

5  B.  A.  1898,  Sec.  5/  and  ;:;  In  re  "  R.  S.  Sec.  5121 ;  the  act  of  1841, 

Blumer,    12    Fed.    Rep.   489;    In   re  5  Stat,  at  L.,  Sec.  14,  p.  448. 
Bates,  100  Fed.  Rep.  263,  4  Am.  B.  io/,j  ,.^  Hinds,  No.  6516  Fed.  Cas., 

R-  56.  s.  c.  3  N.  B.  R.  351 ;  In  re  Dunker- 

«2  P.  W.  500.  son,  No.  4156  Fed.  Cas..  s.  c.  4  Biss. 

7  Ex  parte  Clay.  6  Ves.  813^;  E.v  227;  In  re  Ellis,  No.  4399  Fed.  Cas., 

farfe  Taitt,   16  Ves.   193.  s.  c.  5  Ben.  421 ;  Ex  parte  Marlin, 

« Sec.  40,  Subsec.  3,  of  the  act  of  2    Bro.    C.    C.    15 ;    In    re    Stanton, 

1883,   Eng.   Bank.   Rule,   No.  293.  No.  13295  Fed.  Cas.,  28  Miss.  447. 


308 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


two  different  places  under  different  names,  the  two  firms  will 
be  treated  as  one  firm  in  the  distribution  of  the  assets,  and  no 
notice  will  be  taken  of  the  indebtedness  of  one  firm  to  the 
other.^^  Where  one  partner  has  sold  out  to  his  copartner 
before  bankruptcy,  the  property  belonging  to  the  firm  at  the 
time  of  the  dissolution  should  be  applied  first  to  the  payment 
of  the  firm  creditors,  the  separate  estate  of  the  purchasing 
partner  should  be  applied  first  to  the  payment  of  his  separate 
debts,  and  any  surplus  in  either  fund  should  then  be  applied 
on  the  other /^ 

The  general  rule  prescribed  by  the  statute  applies  only  when 
there  are  two  funds  to  be  administered — a  joint  fund  and  an 
individual  fund.  Where  there  are  no  "net  proceeds"  of  the 
partnership  estate  for  distribution  the  firm  and  individual 
creditors  may  share  pari  passu  in  the  individual  estate. ^^  It 
has  been  held  that  this  exception  to  the  general  rule  does  not 
apply  under  the  present  bankrupt  act  because  it  is  not  men- 
tioned in  the  statute.^*     But  when  Congress  adopts  a  rule  of 


^1  In  re  Vetterlein,  No.  16927 
Fed.  Cas.,  s.  c.  5  Ben.  311 ;  Buckiier 
V.  Calcote,  28  Miss.  432,  and  note 
on  page  447 ;  Ln  re  Lloyd,  22  Fed. 
Rep.  90;  Ballin  v.  Ferst,  55  Ga.  546; 
In  re  Williams,  No.  17707  Fed. 
Cas.,  s.  c.  3  Woods  493 ;  In  re  Sav- 
age, No.  12381  Fed.  Cas.,  s.  c.  16  N. 
B.  R.  368;  In  re  Vetterlein,  44  Fed. 
Rep.  57. 

'^- In  re  Denning,  114  Fed.  Rep. 
219,  8  Am.  B.  R.  133. 

13  Conrader  v.  Cohen  (C.  C.  A., 
3d  Cir.),  121  Fed.  Rep.  801,  9  Am. 
B.  R.  619,  affirming  In  re  Conrader, 
118  Fed.  Rep.  676,  9  Am.  B.  R.  85; 
In  re  Green,  116  Fed.  Rep.  118.  8 
Am.  B.  R.  553;  In  re  West,  39  Fed. 
Rep.  203 ;  In  re  Downing,  No.  4044 
Fed.  Cas.,  s.  c.  i  Dill.  2>2>'>  ^"  '"'' 
Jewett,  No.  7304  Fed.  Cas-,  s.  c.i  N. 
B.  R.  491;  In  re  Rice.  No.  IT750 
Fed.    Cas.,    s.    c.   9    N.    B.    R.    37^; 


In  re  McEwen,  No.  8783  Fed.  Cas., 
s.  c.  6  Biss.  294;  In  re  Collier,  No. 
3002  Fed.  Cas.,  s.  c.  12  N.  B.  R. 
266;  In  re  Mills,  No.  9611  Fed. 
Cas.,  s.  c.  II  N.  B.  R.  74;  In  re 
Knight,  No.  7880  Fed.  Cas.,  s.  c. 
2  Biss.  518. 

i*/m  re  Janes  (C.  C.  A.,  2d  Cir.), 
133  Fed.  Rep.  912,  13  Am.  B.  R. 
341 ;  In  re  Henderson,  142  Fed. 
Rep.   588,    16  Am.   B.   R.  91. 

In  re  Wilcox,  94  Fed.  Rep.  84,  2 
Am.  B.  R.  117,  Judge  Lowell  has  re- 
viewed the  history  of  the  practice  in 
this  country  and  in  England  in  an 
elaborate  opinion  and  held  that  this 
e.xception  to  the  general  rule  did  not 
apply  under  the  present  bankrupt 
act.  The  large  number'  of  cases  re- 
viewed by  him  shows,  however, 
that  this  exception  has  generally 
been  recognized  both  in  equity  and 
bankruptcy    from   very   early   times. 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS. 


309 


administering"  partnership  property  which  has  received  a  uni- 
form construction  in  the  courts  of  equity  and  bankruptcy  from 
very  early  times,  it  is  presumed  that  it  intends  the  same  con- 
struction placed  on  its  language,  unless  it  expressly  declares 
otherwise.  Any  partnership  assets,  however  small,  which  are 
available  for  distribution  will  defeat  the  right  of  firm  creditors 
to  receive  dividends  from  the  separate  estate  until  after  the 
individual  debts  are  paid.^'  ^^d^ere  the  firm  assets  are  only 
sufficient  to  pay  the  expenses  of  the  proceedings,  the  firm 
creditors  may  share  in  the  individual  estate,  for  the  words 
"net  proceeds"  refer  to  the  estate  to  be  distributed  among 
the  creditors.^''  The  weight  of  authority  is  to  the  efifect  that 
in  order  to  exclude  the  firm  creditors,  an  available  joint  fund 
must  be  affirmatively  shown  to  exist.  The  burden  of  proving 
that  there  is  such  a  fund  rests  upon  the  individual  creditors.^^' 
Where  there  are  no  individual  assets  the  separate  creditors  of 
the  partners  can  not  prove  against  the  partnership  fund,^^ 
except  in  the  surplus  after  paying  the  firm  debts. 

It  seems  that  the  general  rule  may  be  waived  by  the  part- 
nership, as  by  giving  a  mortgage  upon  partnership  property 
to  secure  an  individual  debt.^** 


In  re  Mills,  95  Fed.  Rep.  269,  2 
Am.  B.  R.  667,  Judge  Baker  re- 
fused to  permit  partnership  cred- 
itors, who  had  received  fifty-five 
percentum  of  their  claims  in  a  state 
proceeding,  closing  up  a  partner- 
ship, to  prove  the  residue  of  their 
claims  equally  with  the  individual 
creditors  in  the  distribution  of  the 
individual  estate.  There  were  no 
firm  assets. 

1^ /m  re  Marwick,  No.  9181  Fed. 
Cas.,  s.  c.  2  Ware  233 ;  In  re  Smith, 
No.  12987  Fed.  Cas.,  s.  c.  13  N.  B. 
R.  500;  In  re  Morse,  No.  9854  Fed. 
Cas.,  s.  c.  13  N.  B.  R.  376;  /;;  re 
Blumer,  12  Fed.  Rep.  489;  In  re 
Litchfield,  5  Fed.  Rep.  47. 

'"/n   re  McEwen,   No.  8783  Fed. 


Cas.,  s.  c.  6  Biss.  294;  In  re  Litch- 
field, 5  Fed.  Rep.  47. 

1^  In  re  Jewett,  No.  7304  Fed. 
Cas.,  s.  c.  I  N.  B.  R.  491 ;  In  re 
West,  39  Red.  Rep.  203 ;  contra  In 
re  Byrne,  No.  2270  Fed.  Cas.,  s.  c. 
I  N.  B.  R.  464. 

18 /w  re  Knikead,  No.  7825  Fed. 
Cas.,  s.  c.  3  Biss.  405. 

19  In  re  Kahley,  No.  7593  Fed. 
Cas.,  s.  c.  2  Biss.  383 ;  Thompson  v. 
Spittle,  102  Mass.  207. 

See  also  Fisher  v.  Syfers,  109 
Ind.  514;  Nat.  Bank  v.  Sprague,  20 
N.  J.  Eq.  13 ;  Kennedy  v.  Nat. 
Union  Bank,  23  Ilun  (N.  Y.)  494; 
Purple  V.  Farrington,  119  Ind.  164, 
Winslow  V.  Wallace,  116  Ind.  317, 
Jones  Chat.  Mort.,  Sec.  44. 


310 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


In  view  of  the  general  rule  of  distribution  prescribed  by  the 
statute,  it  is  important  to  ascertain,  first,  what  property  is  to 
be  treated  as  belonging  to  the  firm  and  what  property  as  be- 
longing to  the  individual  partners;  and,  second,  what  debts 
are  properly  firm  debts  and  what  are  properly  individual  debts. 
These  matters  will  be  discussed  in  the  next  two  sections. 


§  100.    What  is  firm  and  individual  property  respectively. 

It  may  be  stated  generally  that  the  partnership  property 
consists  of  all  the  property  which  forms  the  stock  of  the  firm, 
and  all  debts  owing  to  the  partnership,  and  all  of  the  real  or 
personal  property  purchased  with  the  firm  money.^  The  pre- 
sumption that  it  belongs  to  the  firm  will  arise  when  real  estate 
is  purchased  with  firm  money,  although  the  conveyance  is 
made  to  one  partner  alone,  who  in  such  case  is  considered  a 
trustee  for  the  firm ;  -  so  also  when  stock  in  a  corporation  is 
purchased  with  firm  money  and  transferred  in  the  name  of  one 
of  the  partners  he  will  be  deemed  the  trustee  for  the  firm.^  But 
where  property  is  bought  with  firm  money  and  taken  in  the 
name  of  one  partner  under  an  agreement  that  it  shall  be  his 
separate  property,  it  will  be  regarded  as  a  loan  to  him  from 
the  partnership  of  the  partnership  money.*  Property  ac- 
quired by  a  surviving  partner  by  means  of  his  position  as  part- 
ner is  deemed  firm  property.^ 

Premises  used  by  persons  for  the  purpose  of  carrying  on. 


*  Hiscocks  V.  Jaycox,  No.  6531 
Fed.  Cas.,  s.  c.  12  N.  B.  R.  507; 
Marrett  v.  Murphy,  No.  9103  Fed. 
Cas.,  s.  c.  II  N.  B.  R.  131;  Thrall 
V.  Crampton,  No.  14008  Fed.  Cas., 
s.  c.  9  Ben.  218;  Buchan  v.  Sum- 
ner, 2  Barb.  Ch.  165,  and  approved 
in  Collumb  v.  Read,  24  N.  Y.  505; 
Fereday  v.  Wightwick,   i   R.  &  AI. 

49- 

But  not  so  when  the  deed  to  real 
estate  is  taken  to  themselves  jointly 
as  tenants  in  common.  Jones'  Ap- 
peal, 70  Penn.   169. 


2  Smith  V.  Smith,  5  Ves.  193 ;  Ex 
parte  Hinds,  3  De  G.  &  S.  613 :  In 
re  Groetzinger,  127  Fed.  Rep.  814, 
II  Am.  B.  R.  723. 

^  Ex  parte  Council,  Deac.  201,  s. 
c.  3  j\I.  &  A.  581. 

*  Smith  V.  Smith,  5  Ves.  193 ; 
Taylor  v.  Rasch,  No.  13801  Fed. 
Cas.,  s.  c.  5  N.  B.  R.  399. 

•'  Featiherstonhaugh  v.  Fenwick, 
17  Ves.  308;  Clements  v.  Hall,  2 
De  G.  &  J.  172. 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS. 


311 


their  trade  are  prima  facie  a  part  of  the  partnership  property, 
but  this  presumption  may  be  rebutted." 

A  sale  by  one  partner  to  his  copartner,  when  the  firm  is 
insolvent,  which  if  held  would  operate  to  apply  the  property 
of  the  retiring  partner  to  the  payment  of  the  individual  debts 
of  the  partner  purchasing,  is  considered  fraudulent.  Such  a 
sale  will  be  set  aside  and  the  property  distributed  as  firm  prop- 
erty.^ But  it  is  competent  for  solvent  partners  to  make  any 
arrangements  which  they  think  proper  with  respect  to  their 
joint  property  in  the  partnership,  or  the  separate  property  of 
the  partners,  and  to' alter  the  character  of  the  property  so  as  to 
convert  joint  into  separate  property  and  vice  versa.  Such 
agreement,  if  made  bona  fide,  will  bind  their  creditors,  and  in 
the  event  of  bankruptcy  the  property  will  be  administered  as 
firm  or  separate  property,  according  to  the  character  which 
the  partners  have  placed  upon  it.^  W'here  one  partner  sold 
his  interest  to  another,  with  an  agreement  that  the  continuing 
partner  should  collect  the  firm  assets  and  pay  the  firm  debts, 
and  he  carried  on  the  business  and  from  time  to  time  replen- 
ished the  stock  of  goods,  mingling  the  old  and  new  together 
and  sold  from  either  indifferently  so  that  it  was  impossible  to 
tell  which  were  the  goods  of  the  old  firm  and  which  were  the 
goods  of  the  continuing  partner  alone,  it  was  held  upon  the 
bankruptcy  of  both  partners  of  the  old  firm  that  the  assets  in 
the  hands  of  the  continuing  partner  were  to  be  regarded  as 
individual  assets,  to  be  applied  to  the  payment  of  his  individual 
debts  before  any  portion  could  be  used  to  pay  the  debts  of  the 
old  firm.^ 


^  Osborn  v.  McBride,  No.  10593 
Fed.  Cas.,  s.  c.  3  Saw.  590 ;  Feather- 
stonhaugh  v.  Fenwick,  17  Ves.  308. 

"^  In  re  Cooke,  No.  3150  Fed. 
Cas.,  s.  c.  3  Biss.  122;  Collins  v. 
Hood,  No.  3015  Fed.  Cas.,  s.  c.  4 
McLean  186;  In  re  Byrne,  No.  2270 
Fed.  Cas..  s.  c.  i  N.  B.  R.  464;  Mat- 
tocks V.  Rogers,  i  Hask.  547;  In  re 
Zng,  No.  18222  Fed.  Cas.,  s.  c.  16 
N.  B.  R.  280. 


s  In  re  Long,  No.  8476  Fed.  Cas., 
s.  c.  7  Ben.  141  ;  In  re  Montgomery, 
No.  9727  Fed.  Cas.,  s.  c.  3  Ben.  565 ; 
In  re  Willey,  No.  17656  Fed.  Cas., 
s.  c.  4  Biss.  214;  In  re  Lane,  No. 
8044  Fed.  Cas.,  s.  c.  2  Low.  t,t,t,  ;  //( 
re  McEwen,  No.  8783  Fed.  Cas., 
s.  c.  6  Biss.  294;  In  re  Kahley,  No. 
7593  Fed.  Cas.,  s.  c.  2  Biss.  383. 

^  In  re  Montgomery,  No.  9727 
Fed.  Cas.,  s.  c.  3  Ben.  565. 


312 


LAW    AND    TROCEEDINGS    IN     BANKRUPT^/. 


The  assets  of  an  individual  partner  consist  of  that  property 
in  which  such  partner  is  separately  interested  at  the  time  of 
the  bankruptcy/"  Where  all  the  property  of  the  firm  belongs 
to  one  partner  and  the  others  having  no  interest  in  the  gains 
and  profits,  such  property  is  the  individual  property  of  the  part- 
ner. Where  the  interest  of  each  partner  extends  to  the  entire 
stock  in  trade,  the  excess  of  the  interest  of  one  partner  over 
that  of  the  other  partners  is  not  the  former's  separate  estate. 


11 


§  loi.    What  are  firm  and  individual  debts  respectively. 

Having  regard  to  the  rule  prescribed  by  the  statute  for  the 
administration  of  the  estates  of  firms  and  partners,  their  debts 
may  be  divided  into  three  classes,  namely,  first,  joint  or  firm 
debts,  that  is,  debts  for  which  the  partners  are  jointly  liable* 
second,  individual  debts,  that  is,  debts  for  which  they  are  sep- 
arately liable;  and,  thirdly,  joint  and  separate  debts,  or  debts 
for  which  the  partners  are  separately  as  well  as  jointly  liable. 

First  :  Firm  Debts. — A  debt  is  considered  a  firm  debt  and 
may  be  proved  against  the  joint  or  partnership  fund  when  it 
is  contracted  or  incurred  by  the  partnership  in  the  ordinary 
course  of  business.  It  is  clearly  so  when  all  the  partners  act 
jointly.  Thus  it  has  been  held  to  be  joint  debt  where  a  joint 
and  several  note  was  given  for  money  borrowed  by  a  firm  and 
signed  in  the  firm  name,  with  other  names  following,^  or 
where  a  note  was  endorsed  in  the  name  of  the  firm.^     Trust 


1"  In  re  Lowe,  No.  8564  Fed.  Cas., 
s.  c.  II  N.  B.  R.  221;  In  re  Clark, 
No.  2798  Fed.  Cas.;  s.  c.  4  Ben.  88. 

In  re  Rudnick,  102  Fed.  Rep.  750, 
4  Am.  B.  R.  531,  2  N.  B.  R.  975.  it 
was  held  that  where  one  partner 
had,  prior  to  bankruptcy,  trans- 
ferred all  of  his  property  and  inter- 
ests to  the  other  partner,  and  it 
became  in  the  hands  of  the  other 
partner,  who  was  also  a  bankrupt 
debtor,  exempt  under  the  laws  of 
the  state,  he  may  lawfully  sell  or 
dispose  of  it,  and  the  trustee  takes 


no  title  therein.  But  see  In  re 
Rosenbaum,   i   N.  B.  N.  541. 

11  In  re  Lowe,  No.  8564  Fed.  Cas., 
s.   c.    II    N.   B.   R.  221. 

i/n  re  Holbrook,  No.  6588  Fed. 
Cas.,  s.  c.  2  Low.  259;  Bush  v. 
Crawford,  No.  2224  Fed.  Cas.,  s.  c. 
7  N.  B.  R.  299.  See  McDaniel  v. 
Stroud  (C.  C.  A.,  4th  Cir.),  106 
Fed.  Rep.  486,  S  Am.  B.  R.  685. 

-  Gauss  V.  Schrader,  48  Fed.  Rep. 
816;  In  re  Norris,  No.  10302  Fed. 
Cas.,  s.  c.  2  Hask.  19;  In  re  Morse, 
^'o.  9853  Fed.  Cas.,  s.  c.  11  N.  B.  R. 


PROCEEDINGS    PECULIAR    TO    PARTNERbHIPS.  313 

funds  which  have  been  invested  by  an  executor  in  his  partner- 
ship business  with  the  knowledge  and  consent  of  his  copartner 
may  be  proved  against  the  partnership  fund.^  A  judgment 
against  partners  and  others  jointly^  is  a  several  claim  as  against 
the  partners,  and  can  not  receive  a  dividend  from  the  joint  es- 
tate,* but  a  j  udgment  on  a  firm  note  for  a  firm  debt  is  provable 
against  the  firm.^  A  claim  on  a  bond  or  notes  signed  by 
individual  partners,  but  not  for  a  firm  obligation,  is  not  enti- 
tled as  against  the  firm  creditors  to  be  paid  from  the  partner- 
ship assets.''  When  a  note  or  bond  is  given  for  a  firm  debt 
the  rule  is  otherwise.'  A  note  given  by  a  firm  and  endorsed 
by  one  partner  is  a  firm  debt.^ 

A  debt  is  not  always  so  manifestly  a  firm  debt  when  it  is 
contracted  by  one  of  the  partners  for  the  firm.  In  determin- 
ine  whether  such  a  debt  is  a  firm  debt  or  an  individual  debt 
resort  must  be  had  to  the  general  law  of  partnership.''  The 
general  rule  is  that  every  partner  is  the  general  agent  of  the 
firm  to  carry  out  its  objects  and  transact  its  business  in  the 
usual  and  ordinary  way ;  that  he  is  not  the  agent  of  each 
partner  individually  and  can  not  bind  them  severally  or  any 
number  of  them  less  than  all.  Unless  his  power  is  limited  by 
the  articles  and  the  restriction  is  known,  he  represents  all  the 
powers  of  the  firm  within  the  scope  of  its  ordinary  business, 
but  is  confined  to  such  acts  as  are  necessary  for  carrying  on 
the  partnership  business   in  the  ordinary  way.   according  to 

482;    Ex  parte   Russell,    No.    12148  ^  In    re    Webb,    No.    17313    Fed. 

Fed.  Cas.,  s.  c.  16  N.  B.  R.  476.    But  Cas.,   s.  c.  2   N.   B.    R.   614;   In   re 

see  In  re  Jones,  100  Fed.  Rep.  781,  Roddin,  No.   11989  Fed.  Cas.,  s.  c. 

4  Am.  B.  R.  141,  2  N.  B.  N.  193.  6  Biss.  2>77\  ^»  ''<^  ]Miller,  No.  9556 

3  In   re   Tesson,    No.    13844    Fed.  Fed.  Cas ,  s.  c.   i   N.  Y.  Leg.  Obs. 

Gas.,  5.  c.  9  N.   B.   R.  378.  180;    In    re    Bucyrns    Machine    Co., 

*  In    re    Herrick,    No.   6420    Fed.  No.  2100  Fed.  Cas.,  s.  c.  5  N.  B.  R. 

Cas.,  s.  c.   13  N.  B.  R.  312;  In  re  303;    Strause  v.    Hooper,    105    Fed. 

Lewis,  No.  8313  Fed.   Cas.,  s.  c.  8  Rep.  590,  5  hm.  B.  R.  225,  3  N.  B. 

N.  B.  R.  546.  N.  276. 

s  In   re   Berriam,    No.    1351    Fed.  "  /;;   re  Warren,  No.   17191,  Fed 

Cas.,  s.  c.  6  Ben.  297;  In  re  Kitz-  Cas.,  s.  c.  2  Ware  322. 

inger.  No.  7861   Fed.   Cas.,  s.  c.   19  ''Lamoille   County   Nat.   Bank  v. 

N.  B.  R.  152.  Stevens,   107  Fed.  Rep.  245,  6  Am. 

B.  R.  164. 


314  LAW    AND    PROCEEDINGS.  IN     BANKRUPTCY. 

the  usages  of  the  particular  business.  The  several  instances 
in  which  a  partner  may  contract  a  debt  for  the  firm  will  be 
found  in  the  works  on  partnership  and  need  not  be  consid- 
ered here." 

Second:  Individual  Debts. — Individual  debts  are  such 
as  are  contracted  by  the  individual  partners  for  their  own 
benefit  or  such  liabilities  as  by  law  they  are  required  to  liqui- 
date. Debts  for  individual  clothing,  furniture  and  the  like 
are  individual  and  not  partnership  debts."  Creditors  holding 
individual  obligations  of  the  members  of  the  firm,  although 
given  for  a  consideration  moving  to  the  firm,  are  entitled  to  a 
dividend  out  of  the  individual  estates."  A  solvent  partner 
who  has  paid  firm  debts  out  of  his  separate  estate  is  entitled  to 
prove  contribution  against  the  separate  estate  of  his  bankrupt 
partners.^-  An  administrator  of  a  deceased  partner,  whose 
property  has  been  converted  by  the  surviving  partner,  has  a 
provable  claim  against  the  separate  estate  of  the  surviving 
partner.^^  A  firm  may  prove  against  the  separate  estate  of  a 
partner  for  moneys  withdrawn  by  the  latter  from  the  firm." 
A  firm  debt  may  be  pro^'ed^  in  proceedings  instituted  by  a 
single  partner  on  an  individual  petition. ^'^     The  reason  for 

»  See  Bates  on   Partnership,   Sec.  65,  5  Am.  B.  R.  415;  In  re  Dell,  No. 

315,    et   seq.;    Lindley   on    Partner-  3774   Fed.    Cas.,   s.   c.    5    Saw.   344. 

ship,  p.    124;  Taylor  v.  Rasch,  No.  See  In   re   Hamilton,    i    Fed.    Rep. 

13800  Fed.  Cas.,  s.  c.  i  Flip.  385.  800,  where  two  firms  were  partners, 

10  Taylor  v.  Rasch,  No.  13800  and  one  firm  tried  to  prove  against 
Fed.  Cas.,  s.  c.  i  Flip.  385.  the  individual  estate  of  a  member 

11  In  re  Lehigh   Lumber  Co.,   lOi  of   the   other   firm. 

Fed.  Rep.  216,  4  Am.  B.  R.  221,  2  ^^  In  re  Mills,  No.  961 1  Fed.  Cas., 

N.   B.   N.   512;   In  re  Stevens,   104  s.  c.   11   N.  B.  R.  74. 

Fed.  Rep.  323,  5  Am.  B.  R.  9;  In  re  ^"^  In  re  May,  No.  9328  Fed.  Cas., 

Jones,    116    Fed.    Rep.    341,   8   Am.  s.   c.    19  N.   B.  R.   loi ;   In  re  Mc- 

B.  R.  626;  In  re  Bucyrus  Machine  Lean,  No.  8879  Fed.  Cas.,  s.  c.  15  N. 

Co.,    No.    2100    Fed.    Cas.,    s.    c.    5  B.  R.  32,^ ;  B.  A.  1898,  Sec.  5g. 

N.    B.    R.    303;    In   re   Miller,    No.  See  In   re   Lane,   No.   8044   Fed. 

9556  Fed.   Cas.,  s.  c.   i   N.  Y.  Leg.  Cas.,  s.  c.  2  Low.  333;  In  re  Mc- 

Obs.  180.  Ewen,   No.  8783  Fed.   Cas.,  s.  c.  6 

12  7n    re    Dillon,    100    Fed.    Rep.  Biss.  294;   In  re  Smith,  No.   12991 
627,  4  Am.   B.   R.   63;   In  re  Car-  Fed.  Cas.,  s.  c.  16  N.  B.  R.  113. 
michael,  96  Fed.  Rep.  594,  2  Am.  B.  '^■'  In    re    Webb,    No.    17317    Fed. 
R.  815;  In  re  Swift,   106  Fed.  Rep.  Cas.,   s.   c.  4  Saw.   326;   Wilkins  v. 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS.  315 

this  is,  that  each  partner  is  Hable  for  the  debts  of  the  firm  and 
is  released  from  such  Habihty  by  his  discharge/® 

Third:  Joint  and  Separate  Debts. — There  are  some 
debts  of  such  a  character  that  they  may  be  proved  both  against 
the  firm  and  the  individual.  In  such  cases  where  a  dividend 
has  been  paid  on  one  estate,  the  amount  should  be  deducted 
and  a  dividend  only  on  the  balance  allowed  from  the  other. 
But  when  the  dividends  on  both  estates  are  simultaneous  the 
creditor  is  entitled  to  prove  against  both  estates  for  the  whole 
debt.  In  no  case  is  he  entitled  to  collect  more  than  the  amount 
of  his  debt  from  both  estates. 

Thus,  a  note  made  by  a  firm  and  endorsed  by  one  of  the 
partners  individually  may  be  proven,  both  against  the  estate 
of  the  firm  and  the  individual  estate  of  the  endorser.^'  So 
also  the  beneficiaries  of  a  trust  fund,  invested  by  the  executor 
in  his  partnership  business  with  the  knowledge  and  consent  of 
his  copartner,  may  prove  their  claim  against  the  partnership, 
although  they  have  proved  it  against  the  estate  of  the  execu- 
tor.^^  Where  a  member  of  a  firm  which  is  general  agent  of  a 
corporation  misappropriated  funds  to  the  uses  of  the  firm. 
which  was  known  by  the  firm,  it  was  held  that  proof  might  be 
made  both  against  the  firm  and  the  individual  estate.'^  ^^'here 
a  creditor  holds  difterent  notes  for  partnership  debts,  some 
made  by  the  individual  partners  and  others  in  the  name  of  the 
firm,  he  may  prove  the  individual  notes  against  the  individual 
estates  and  the  firm  notes  against  the  firm  estates.-" 

Davis,  No.   17664  Fed.  Cas..  s.  c.  2  Cas.,  s.  c.  2  Biss.  515 ;  Mead  v.  Na- 

Low.    sri;    In   re   Frear,    No.    5074  tional  Bank,  No.  9366,  Fed.  Cas.,  s. 

Fed.  Cas.,  s.  c.  2  Ben.  467.  c.  6  Blatch.  180;  In  re  Knight,  No. 

i«See   Effect   of   Discharge,   Sec.  7880   Fed.    Cas.,   s.   c.   2    Biss.   518; 

102,  post.  In  re  Long,  No.  8476  Fed.  Cas.,  s. 

1^  Buckingham  v.  First  Nat.  Bank  c.    7    Ben.    141 ;    In    re    Adams,    29 

(C.  C.  A.,  6th  Cir.),  131  Fed.  Rep.  Fed.  Rep.  843. 

192,  12  Am.  B.  R.  465;  In  re  Far-  is /n   re  Tesson,   No.    13844   Fed. 

num,    No.   4674   Fed.    Cas.,    s.    c.   6  Cas.,  s.  c.  9  N.  B.  R.  378. 

Law  Rep.  21;  Emerj^  v.  Canal  Nat.  i» /;j    re    Baxter,    No.    119    Fed. 

Bank,    No.   446    Fed.    Cas.,    s.   c.   3  Cas.,  s.  c.  18  N.  B.  R.  62. 

Cliff.   507 ;    Stephenson  v.   Jackson,  20  Mead    v.    National    Bank,    No. 

No.  T3374  Fed.  Cas.,  s.  c.  2  Hughes  9366  Fed.  Cas.,  s.  c.  6  Blatch.  180. 
204;  In  re  Bradley,  No.  1772,  Fed. 


316 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY, 


^^^lere  a  creditor  of  a  partnership  has  a  hen  on  both  the 
partnership  and  individual  assets  of  the  members,  he  may 
resort  to  either  fund  for  payment  at  his  option,  unless  there 
are  creditors  having  liens  only  on  the  individual  fund.  Then 
the  equitable  rule  as  to  two  funds  will  apply  and  the  partner- 
ship creditor  must  first  exhaust  the  partnership  fund.'"'  A 
partnership  creditor  who  is  secured  by  a  pledge  or  mortgage 
upon  the  individual  property  of  a  partner  may  ordinarily  prove 
for  his  whole  claim  against  the  partnership  without  first  ex- 
hausting his  security."^ 

Another  class  of  joint  and  separate  debts  arises  upon  the 
conversion  of  joint  into  separate  debts  and  vice  versa.  Thus, 
when  one  of  the  partners  takes  the  firm  assets  and  agrees  to 
pay  the  joint  debt  he  becomes  individually  liable,""  and  the 
retiring  partner  will  also  continue  liable  as  before  the  dissolu- 
tion of  the  partnership.'*  The  retiring  partner  may  be  re- 
leased from  such  liability  if  the  creditors  agree  to  accept  the 
continuing  partner  as  their  sole  debtor.  Precisely  what 
amounts  to  such  an  acceptance  it  is  impossible  to  state.  It 
seems  that  mere  dealing  by  the  creditor  with  the  continuing 
partner  as  his  debtor,  or  the  taking  of  a  separate  security  from 
him  not  involving  a  merger  of  the  original  debt,  is  not  conclu- 
sive evidence  of  an  intention  to  abandon  all  claims  against  the 
retiring  partner.-^  In  order  that  the  transaction  should  have 
this  effect  it  must  be  shown  that  the  security  was  intended  to 


21  In  re  Lewis,  No.  8313  Fed. 
Cas.,  s.  c.  2  Hughes  320. 

22  In  re  May,  No.  9327  Fed.  Cas., 
s.  c.  17  N.  B.  R.  192.  See  also  In  re 
Norris,  No.  10302  Fed.  Cas.,  s.  c.  2 
Hask.  19. 

23/7?  re  Lloyd,  22  Fed.  Rep.  88; 
In  re  Collier,  No.  3002  Fed.  Cas., 
s.  c.  12  N.  B.  R.  266;  In  re  Down- 
ing, No.  4044  Fed.  Cas.,  s.  c.  i 
Dill.  33;  III  re  Rice,  No.  11750  Fed. 
Cas.,  9  N.  B.  R.  Z75-^  ^«  re  Long, 


No.  8476  Fed.  Cas.,  s.  c.  7  Ben. 
141. 

2*/m  re  Pease,  No.  10881  Fed. 
Cas.,  s.  c.  T3  N.  B.  R.  168;  Dicken- 
son V.  Lockyer,  4  Ves.  36 ;  Smith  v. 
Jameson,  5  T.  R.  601 ;  Graham  v. 
Whichelo,  I  Cr.  &  M.  186. 

25  Harris  v.  Farwell,  15  Beav.  31 ; 
David  V.  Ellice,  5  B.  &  C.  196; 
hx  parte  Smith,  i  M.  D.  &  D. 
165;  Heath  v.  Percival,  i  P.  W. 
682;  Lodge  V.  Dicas,  3  B.  &  A. 
611. 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS. 


317 


be  taken  in  satisfaction  of  the  original  debt,  or  that  a  new  was 
substituted  for  the  old  liability.'" 

In  case  there  is  no  such  acceptance  the  firm  creditors  may 
prove  against  the  estate  of  the  continuing  partner  and  share 
pari  passu  with  the  separate  creditors.-'  They  may  then  pur- 
sue the  individual  partner  for  the  balance.'** 

It  may  happen  upon  the  formation  of  a  partnership  between 
two  persons  that  it  is  agreed  that  the  debts  of  one  of  them 
shall  become  the  joint  debts  of  the  firm.  Such  an  agreement 
will  not  make  his  separate  creditors  joint  creditors  of  both 
partners  unless  the  creditors  assent  to  the  arrangement.  If 
the  partnership  is  adjudged  bankrupt  before  such  assent  is 
given,  such  creditors  will  not  be  entitled  to  prove  their  claims 
as  joint  creditors  of  the  firm  against  the  partnership  estate.-^ 

The  character  of  a  debt  may  be  changed  from  joint  to  sep- 
arate or  vice  versa  by  taking  security  of  a  higher  nature  or  by 
obtaining  a  judgment.  The  theory  upon  which  this  rule  rests 
is  that  the  original  debt  is  extinguished  or  merged,  and  the 
right  to  prove  depends  upon  the  nature  of  the  substituted  se- 
curity whether  it  is  joint  or  separate.  Thus,  a  simple  contract 
debt  will  merge  in  a  bond  and  a  bond  in  a  judgment,^"  but  a 


2^  See  cases  cited  in  last  note 
above,  and  Bilborough  v.  Holmes,  5 
Chan.  Div.  255 ;  Ex  parte  Butcher, 
13  Chan.  Div.  465. 

2Un  re  Lloyd,  22  Fed.  Rep.  88; 
hi  re  Collier,  No.  3002  Fed  Cas., 
s.c.  12  N.  B.  R.  266;  In  re  Down- 
ing, No.  4044  Fed.  Cas.,  s.  c.  i  Dill. 
i^;  In  re  Rice,  No.  11750  Fed.  Cas., 
9  N.  B.  R.  T,y^ ;  In  re  Long,  No. 
8476  Fed.  Cas.,  s.  c.  7  Ben.  141. 

28  In  re  Pease,  No.  10881  Fed. 
Cas.,  s.  c.  13  N.  B.  R.   168. 

-^  In  re  Isaacs,  No.  7093  Fed. 
Cas.,  s.  c.  3  Saw.  35 ;  Hibberd  v. 
McGill  (C.  C.  A.,  3d  Cir.),  129 
Fed.  Rep.  590,  12  Am.  B.  R.  loi. 

In  First  Nat.  Bank  v.  State  Nat. 
Bank  (C.  C.  A.,  9th  Cir.),  13T  Fed. 


Rep.  422,  12  Am.  B.  R.  429  and  440, 
affirming  In  re  Mclntire,  132  Fed. 
Rep.  295,  12  Am.  B.  R.  787,  it  was 
held  that  where  there  is  no  suffi- 
cient evidence  to  sustain  a  finding 
that  a  partnership  assumed  the  in- 
debtedness of  an  old  firm  at  the  for- 
mation of  the  new  partnership, 
the  notes  of  the  new  firm  signed  by 
the  partner  of  the  old  firm  as 
renewal  notes  of  such  indebtedness 
-  to  bank  which  had  knowledge  of 
the  fact,  are  not  provable  against 
the  new  firm's  estate  in  bankruptcy. 
30  Higgens's  Case,  6  Coke  344 ; 
Ex  parte  Christy,  2  Dea.  &  Chit. 
15s;  Price  V.  Mouhon.  10  C.  B. 
561  ;  Ex  parte  Davy  Ridg.  289. 


318  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

simple  contract  debt  will  not  merge  in  a  bill  of  exchange  or  a 
promissory  note,  for  the  quality  is  not  changed. ^^ 

§  102.     The  effect  of  a  discharge. 

Proceedings  to  obtain  a  discharge  and  in  opposition  thereto 
in  cases  in  which  partners  are  adjudged  bankrupts  are  the 
same  as  in  other  cases. ^  It  is,  however,  important  to  consider 
the  effect  of  a  discharge  of  bankrupt  partners.  Where  the 
firm  and  some  or  all  of  the  partners  are  declared  bankrupts  the 
discharge  of  a  partner  releases  him  from  his  individual  and 
the  partnership  debts  which  are  provable  in  bankruptcy." 

The  effect  of  a  discharge  of  a  partner  upon  an  individual 
petition  and  without  any  proceedings  by  or  against  the  firm  is 
not  so  clear.  The  authorities  are  conflicting  upon  this  point. 
It  has  been  held  that  where  an  individual  member  of  a  part- 
nership files  his  petition  in  bankruptcy  and  obtains  a  discharge, 
that  such  discharge  releases  him  from  his  individual  debts  and 
also  from  his  partnership  obligations.^  This  is  also  the  rule 
in  England.*  But  it  has  been  held  that  such  a  discharge 
does  not  release  him  from  partnership  obligations.^ 

"The  cases  holding  that  a  discharge  granted  to  one  member 
of  a  firm  does  not  release  him  from  partnership  indebtedness, 
where  he  alone  is  adjudged  a  bankrupt,  proceed  on  the  prin- 

31  Ex  parte  Lobb,  J  Ves.  592;  Ex  Abbe,  No.  4  Fed.  Cas.,  s.  c.  2  N.  B. 

parte  Seddon,  2  Cox    49.  R.  75;  In  re  Leland,  No.  8228  Fed. 

1  See    Discharges,    Chap.    XXVI.  Cas.,  s.  c.  5  Ben.  168;  In  re  Brick, 

2/n  re  Meyer  ( C.  C.  A.,  2d  Cir.),  4  Fed.  Rep.  805-6;  In  re  Webb,  No. 

98  Fed.  Rep.  976,  3  Am.  B.  R.  559;  17317  Fed.  Cas.,  s.  c.  4  Saw.  326. 

In  re  Gay,  98  Fed.  Rep.  870,  3  Am.  *  Ex    parte    Yale,    3    P.    W.    25, 

B.  R.  529;  In  re  Amelia  Meyers,  97  note    a;    Ex    parte    Hammond,    21 

Fed.  Rep.  757,  3  Am.  B.  R.  260,  2  Wkly.  Rep.  865 ;  Thomson  v.  Hard- 

N.   B.   N.    in;   In   re  Leland,   No.  ing,  3  C.  B.  (N.  S.)  254. 

8228    Fed.  Cas.,  s.  c.  5  Ben.  168.      -  =  Hudgins  v.  Lane,  No.  6827,  Fed. 

3  Jarecki     Mfg.     Co.     v.     McEl-  Cas.,    s.    c.    2    Hughes    361 ;    In    re 

waine,  107  Fed.  Rep.  249,  5  Am.  B.  Noonan,  No.  10292    Fed.  Cas.,  s.  c. 

R.  751;  Wilkins  v.  Davis,  No.  17664  10  N.  B.  R.  330;  In  re  Little,  No. 

Fed.   Cas.,  s.  c.  2  Low.  511;  In  re  8390   Fed.  Cas.,  s.  c.  2  Ben.  186;  In 

Downing,  No.  4044    Fed.  Cas.,  s.  c.  re  Grady,  No.  5654    Fed.  Cas.,  s.  c. 

I  Dill.  T,2,;  In  re  Stevens,  No.  13393  3  N.  B.  R.  227;  In  re  Bidwell,  No. 

Fed.  Cas.,  s.  c.   i    Saw.  397;  In   re  1392   Fed.  Cas.,  s.  c.  2  N.  B.  R.  229. 


PROCEEDINGS    PECULIAR    TO    PARTNERSHIPS.  319 

ciple  that  the  trustee  could  not  acquire  possession  of  and  ad- 
minister the  assets  of  the  lirm.  In  so  holding  it  seems  to 
have  been  overlooked  that  the  bankruptcy  of  one  member  is 
ipso  facto  a  dissolution  of  the  firm,  and  that,  while  the  solvent 
partner  would  be  allowed  to  adminster  the  partnership  assets, 
yet  the  trustee, in  bankruptcy  is  entitled  to  the  bankrupt's  share 
of  the  partnership  assets  after  the  payment  of  the  partnership 
debts.  The  separate  estate  of  the  bankrupt  partner,  and  his 
beneficial  interest  in  the  firm  after  the  payment  of  firm  debts, 
is  to  be  administered  by  the  trustee  for  the  payment  of  the 
bankrupt's  individual  debts.  The  adjudication  of  one  partner 
as  a  bankrupt  brings  within  the  jurisdiction  of  the  court  his 
entire  estate  for  administration,  and  if,  after  the  payment  of 
his  individual  debts  out  of  his  individual  estate,  any  surplus 
remains,  it  will  be  applicable  to  the  payment  of  firm  indebted- 
ness. For  the  purpose  of  reaching  any  such  surplus,  firm 
creditors  may  prove  against  the  estate  of  the  bankrupt  part- 
ner." « 

Where  an  individual  petition  is  filed  by  a  partner  of  a  firm 
without  assets,  the  prevailing  opinion  at  present  is,  that,  if 
objection-  is  made  pending  the  bankruptcy  proceeding,  on  the 
ground  that  the  other  partner  has  not  been  made  a  party,  the 
court  should  order  that  to  be  done  and  upon  failing  to  comply 
with  such  order,  to  dismiss  the  proceeding  or  refuse  a  dis- 
charge." But  if  a  discharge  is  granted  without  objection  it 
will  operate  to  rekase  all  debts  provable  in  bankruptcy. 

It  may  be  doubted  if  a  firm  will  be  released  from  partnership 
debts  without  each  partner  is  declared  to  be  bankrupt,  unless  it 
be  shown  in  the  bankruptcy  proceeding  that  there  is  no  indi- 
vidual estate  of  any  partner.    The  reason  for  this  is,  that  each 

"Judge    Baker    in    Jarecki    Mfg.  96  Fed.  Rep.  592,  3  Am.  B.  R.  66; 

Co.    V.    McElwaine,    107   Fed.    Rep.  In  re   Elliott    (Ref.   Op.),  2   N.   B. 

2_i9.  5  Am.  B.  R.  751.  N.    350;    In    re    Laughlin,   96   Fed. 

■^  In    re    Meyers,    96    Fed.    Rep.  Rep.    589,    3    Am.    B.    R.    i ;    In   re 

408,  2  Am.  B.  R.  707,  s.  c.  97  Fed.  Hartman,  96  Fed.  Rep.  593,  3  Am. 

Rep.  7:^7,  3  Am.  B.  R.  260,  2  N.  B.  B.  R.  65;  In  re  Morrison,  127  Fed. 

N.  in;  In  re  Russell,  97  Fed.  Rep.  Rep.  186,  11  Am.  B.  R.  498. 
Z2,  3  .^m.  B.  R.  91 ;  In  re  McFaun, 


320  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

individual  estate  is  liable  for  partnership  debts  after  paying 
the  individual  debts.  A  partner  will  not  be  granted  a  dis- 
charge unless  he  is  individually  adjudicated  to  be  a  bank- 
rupt.*^ 

When  objections  are  filed  to  the  discharge  of  partners  who 
are  bankrupts  the  trial  may' be  joint,  but  the  verdicts  and 
judgments  must  be  separate.** 

8  Strause    v.    Hooper,    105    Fed.  R.  559;  In  re  Hale,  107  Fed.  Rep. 

Rep.  590,  5  Am.  B.  R.  225,  3  K.  B.  432,  6  Am.  B.  R.  35. 

N.  276;  In  re  Meyer  (C.  C.  A.,  2d  ^  In    re    George,    No.    5325    Fed. 

Cir.),  98  Fed.  Rep.  976,  3  Am.  B.  Cas.,  s.  c.  i  Low.  409. 


MEETINGS  OF  CREDITORS.       ■•  321 


CHAPTER  XII. 


MEETINGS    OF    CREDITORS. 


§  103.    Proceedings  after  a  reference  generally. 

A  copy  of  the  order  referring  a  case  to  a  referee  is  imme- 
diately sent  by  mail  to  the  referee,  or  delivered  to  him  per- 
sonally by  the  clerk  or  other  officer  of  the  court. ^  AU  the 
proceedings  thereafter,  except  such  as  are  required  by  the 
act  or  by  the  general  orders  to  be  had  before  the  judge,  are 
regularly  had  before  the  referee.^  Proofs  of  claims  and  other 
papers  filed  subsequent  to  the  reference,  except  such  as  call 
for  action  by  the  judge,  may  be  filed  either  with  the  referee 
or  with  the  clerk. - 

The  first  step  usually  taken  by  a  referee  after  having  notice 
of  the  reference  is  to  call  the  first  meeting  of  the  creditors  of 
the  person  adjudged  to  be  bankrupt.  The  purpose  of  this 
meeting  is  to  afford  the  creditors  of  the  bankrupt  an  oppor- 
tunity to  prove  their  claims,  to  appoint  a  trustee,  to  examine 
the  bankrupt  and  to  transact  such  other  business  as  properly 
may  be  transacted,  relating  to  the  administration  of  the  estate 
of  the  bankrupt. 

§  104.     The  time  and  manner  of  calling  the  first  meeting  of 
creditors. 

The  first  meeting  of  the  creditors  of  a  bankrupt  should  be 
held  not  less  than  ten  nor  more  than  thirty  days  after  the 
adjudication  at  the  county  seat  of  the  county  in  which  the 
l^ankrupt  has  had  his  principal  place  of  business,  resided  or 
had  his  domicile.  If  that  place  would  be  manifestly  incon- 
\'enient  as  a  place  of  meeting  for  the  parties  in  interest,  or  if 
the  bankrupt  is  one  who  does  not  do  business,  reside  or  have 
his  domicile  within  the  United  States,  the  court  fixes  a  place 

1  Gen.  Ord.   12.  kirV,   T03   Fed.   Rep.  779,  4  Am.   B. 

2  Gen.    Ord.    2,    20;    In    re    Oder-       R.  617. 


322  LAW     AND    PROCEEDINGS    IN     BANKRUPTCY. 

for  the  meeting  which  is  the  most  convenient  for  parties  in 
interest/  If  such  meeting  should  by  any  mischance  not  be 
held  within  such  time,  the  court  or  referee  fixes  the  date  as 
soon  as  may  be  thereafter  when  it  shall  be  held."  The  meet- 
ing must  be  held  in  strict  accordance  with  the  time  and  place 
specified.^ 

The  creditors  should  have  at  least  ten  days'  notice  by  mail 
to  their  respective  addresses,  as  they  appear  in  the  list  of  cred- 
itors of  the  bankrupt  of  the  first  meeting.*  The  notice  to 
creditors  of  the  first  meeting  should  also  be  published  at  least 
once  and  may  be  published  such  number  of  additional  times 
as  the  court  may  direct.'^  The  last  publication  must  be  at  least 
once  and  may  be  published  such  number  of  additional  times 
as  the  court  may  direct.''  The  last  publication  must  be  at  least 
one  week  prior  to  the  date  fixed  for  the  meeting.^  The  paper 
in  which  the  notice  is  published  is  designated  by  order  of 
court." 

The  form  of  notice  is  prescribed  by  the  supreme  court/  and 
is  regularly  given  by  the  referee.^  In  mailing  these  notices 
the  referee  is  entitled  to  use  a  government  penalty  envelope 
and  need  not  pay  postage.® 

§  105.    Who  are  entitled   to  vote   at   the  first   creditors' 
meeting. 

Only  creditors  of  the  bankrupt  are  entitled  to  vote  at  the 
first  or  any  subsequent  meeting  of  the  creditors.  Not  all  of 
his  creditors,  however,  are  entitled  to  vote.  A  creditor  is 
defined  by  the  statute  to  include  anyone  who  owns  a  demand 
or  claim  provable  in  bankruptcy,  and  may  include  his  duly 
authorized  agent,  attorney  or  proxy.^ 

1  B.  A.   1898,  Sec.  5Sa.     Compare  «  B.  A.  1898,  Sec.  28. 

R.  S.  Sees.  5034  and  5035.  '^  Form  No.  18. 

2B.  A.    1898,   Sec.   55a,  and   Sec.  «  B.  A.   1898,  Sec.  s8c. 

I,  clause  7;  Gen.  Ord.  12,  par.  2.  ^  This    cjuestion    has    been    ruled 

3  In  re  Eagles,  99  Fed.  Rep.  695,  upon  by  the  Post-office  Depart- 
3  Am.  B.  R.  yT,;^.  ment  at  Washington,  Sec.  22^  note. 

4  B.  A.  1898,  Sec.  58a.  1  B.  A.  1898,  Sec.  i,  clause  9. 

5  B.  A.  1898,  Sec.  s?,b. 


MEETINGS  OF  CREDITORS. 


?>2'6 


In  order  to  vote,  a  creditor  must  own  an  unsecured  claim 
provable  in  bankruptcy  and  have  actually  proved  it  and  had  it 
allowed.  ■ 

An  attorney  at  law  can  not  vote  without  producing  a 
letter  of  attorney,  duly  appointing  him  an  attorney  in  fact.'' 
The  same  rule  applies  to  an  agent  or  a  proxy.  Such  letters 
of  attorney  should  be  filed  by  the  referee  as  a  part  of  his 
record.'*  \Miere  a  power  of  attorney  is  mislaid  and  not  pro- 
duced until  the  meeting  is  over,  the  attorney  is  properly  re- 
fused the  right  to  participate.^ 

Where  a  claim  has  been  assigned  after  proof  the  real  owner 
alone  can  vote,  and  if  he  holds  several  claims  he  can  only  cast 
one  vote.**  The  managing  officers  of  a  bankrupt  corporation, 
when  bona  fide  creditors,  have  the  same  right  to  vote  as  any 
other  creditor.^  An  individual  creditor  of  one  partner  can 
not  vote  for  a  trustee  for  the  partnership  estate."  The  credi- 
tors of  the  partnership  appoint  such  trustee.'"  A  joint  or  firm 
creditor,  on  the  separate  bankruptcy  of  one  member  of  a  firm, 
may  vote  at  the  creditors'  meeting.'*     The  reason  for  this  dis- 


2B.  A.  1898,  Sec.  56a  and  h;  In 
re  Malino,  118  Fed.  Rep.  368,  8  Am. 
B.  R.  205;  hi  re  Eagles,  99  Fed. 
Rep.  695,  3  Am.  B.  R.  72,^. 

3  In  re  Blankfein,  97  Fed.  Rep. 
191,  3  Am.  B.  R.  165 ;  In  re  Eagles, 
99  Fed.  Rep.  695,  3  Am.  B.  R.  7^5; 
In  re  Richards,  103  Fed.  Rep.  849; 

4  Am.  B.  R.  631 ;  In  re  Lazoris, 
120  Fed.  Rep.  716.  10  Am.  B.  R. 
31 ;  In  re  Scully,  108  Fed.  Rep.  372, 

5  Am.  B.  R.  716. 

As  to  what  constitutes  a  sufficient 
form  of  power  of  attorney,  see  In 
re  Blue  Ridge  Packing  Co.,  125  Fed. 
Rep.  619,  II  Am.  B.  R.  36. 

*  In  re  Eagles,  99  Fed.  Rep.  695, 
3  Am.  B.  R.  732,- 

•'  In  re  Blue  Ridge  Packing  Co., 
125  Fed.  Rep.  619,  11  Am.  B.  R.  36. 

^  In  re  Kenney  Co.,  136  Fed.  Rep. 
451,  14  Am.  B.  R.  611;  Lowenstein 


V.  McShane  Mfg.  Co..  130  Fed. 
Rep.  1007,  12  Am.  B.  R.  601  ;  In 
re  Messengill,  113  Fed.  Rep.  366, 
7  Am.  B.  R.  669;  In  re  Columbia 
Iron  Works,  142  Fed.  Rep.  234,  14 
Am.  B.  R.  526;  In  re  Frank,  No. 
5050    Fed.  Cas.,  s.  c.  5  Ben.  164. 

''  In  re  Northern  Iron  Co.,  No. 
10322  Fed.  Cas.,  s.  c.  14  N.  B.  R. 
356. 

''B.    A.    1898,    Sec.    sb. 

^  In  re  Beck,  no  Fed.  Rep.  140, 
6  Am.  B.  R.  554;  In  re  Webb,  No. 
17317  Fed.  Cas.,  s.  c.  4  Saw.  326; 
Wilkins  v.  Davis,  No.  17664  Fed. 
Cas.,  s.  c.  2  Low.  511;  In  re  Down- 
ing, No.  4044  Fed.  Cas.,  s.  c.  i  Dill. 
23;  In  re  Stevens,  No.  13393  Fed. 
Cas.,  s.  c.  I  Saw.  397;  In  re  Abbe, 
No.  4  Fed.  Cas.,  s.  c.  2  N.  B.  R.  75; 
In  re  Leland,  No.  8228  Fed.  Cas., 
s.  c.  5  Ben.  168;  In  re  Brick,  4  Fed. 


324 


LAW     AND    PROCEEDINGS    IN     BANKRUPTCY. 


tinction  seems  to  be  that  each  individual  partner  is  liable  for 
the  firm  debts  and  will  be  released  from  such  liability  by  a  dis- 
charge. A  separate  creditor  can  vote  for  the  trustee  in  the 
separate  bankruptcy  of  one  of  the  partners  although  all  the 
assets  are  joint. ^"  It  has  been  held  that  one  of  several  joint 
creditors,  who  are  not  partners,  can  not  vote  without  the  con- 
sent of  the  others.^^ 

Creditors  holding  claims  which  are  secured  or  have  priority 
are  not  in  respect  to  such  claims  entitled  to  vote.^'  Such  a 
creditor  may  surrender  his  security  or  preference  at  the  first 
meeting,  when  it  is  of  such  a  nature  as  to  be  effectually  de- 
stroyed by  such  surrender,  and  thereupon  he  is  entitled  to  vote 
like  any  other  creditor.^^  The  holder  of  a  lien  which  is  made 
void  by  the  act  no  longer  has  any  security  and  therefore  may 
vote.^*  Claims  of  secured  creditors  and  those  who  have  pri- 
ority may  be  allowed  to  enable  such  creditors  to  participate 
in  the  proceedings  at  creditors'  meetings  held  prior  to  the  de- 
termination of  the  value  of  their  securities  or  priorities,  but 
shall  be  allowed  for  such  sums  only  as  to  the  court  seem  to 
be  owing  over  and  above  the  value  of  their  securities  or  pri- 
orities/^  Where  the  debt  consists  of  several  parts,  one  of 
which  is  secured,  he  may  vote  on  the  unsecured  portion.^*^    If 


Rep.  805-6 ;  Ex  parte  Yale,  3  P.  W. 
25,  note  a. 

There  is  authority  holding  the 
opposite  view.  In  re  Purvis,  No. 
1 1476  Fed.  Cas.,  s.  c.  i  N.  B.  R. 
163;  Hudgins  v.  Lane,  No.  6827 
Fed.  Cas.,  s.  c.  2  Hughes  361 ;  In  re 
Noonan,  No.  10292  Fed.  Cas.,  s.  c. 
10  N.  B.  R.  330;  In  re  Little,  No. 
8390   Fed.  Cas.,  s.  c.  i  N.  B.  R.  341. 

1" /;z  re  Beck,   no  Fed.  Rep.   140, 
6  Am.  B.  R.  554. 

11 /«   re   Purvis,   No.    11476    Fed. 
Cas.,  s.  c.  I  N.  B.  R.  163. 

12  B.    A.    1898,    Sec.    56&;    In    re 
Eagles,  99  Fed.  Rep.  695,  3  Am.  B. 


R.  732,;  III  i-e  Malino,  118  Fed.  Rep. 
368,  8  Am.  B.  R.  205. 

^"  In  re  'Saunders,  No.  12371  Fed. 
Cas.,  s.  c.  2  Low.  444;  B.  A.  1898, 
Sec.  57g;  In  re  Eagles,  99  Fed.  Rep. 
695,  3  Am.  B.  R.  jTiT, ;  In  re  Malino, 
118  Fed.  Rep.  368,  8  Am.  B.  R. 
205. 

^^  In  ;r  Scully,  108  Fed.  Rep.  37-, 
5  Am.  B.  R.  716. 

!>■  B.  A.  1898.  Sec.  S7e. 

i«B.  A.  1898,  Sec.  56&;  In  : -: 
Eagles,  99  Fed.  Rep.  695,  3  Am.  B. 
R.  y^i^ ;  I}i  re  Parkes,  No.  10754 
Fed.  Cas.,  s.  c.  10  N.  B.  R.  82;  In  re 
Hanna,  No.  6027  Fed.  Cas.,  s.  c.  5 
Ben.  5. 


MEETINGS  OF  CREDITORS.  325 

the  security  is  upon  property  of  a  third  person/'  the  crechtor 
may  prove  the  whole  claim  and  vote.  Where  the  security 
is  upon  property  exempted  by  law  to  the  bankrupt,  the 
creditor  can  vote  on  unsecured  balance  only.^^  It  was  held 
under  the  former  act  that  where  a  mortgage  creditor  had  sold 
the  mortgaged  premises  after  the  adjudication  and  had  be- 
come himself  the  purchaser  he  could  not  vote  on  the  deficiency 
as  an  unsecured  creditor.^*' 

A  creditor,  charged  witli  haviilg  received  a  preference,  is 
not  entitled  to  vote  until  the  question  of  his  preference  is 
determined."^  If  he  has  received  a  preference,  he  is  not  enti- 
tled to  vote  until  he  surrenders  such  preference,-^  because  the 
claim  can  not  be  allowed  until  after  the  preference  is  sur- 
rendered and  he  is  not  entitled  to  vote  until  after  the  claim  is 
allowed.  Where,  under  a  general  assignment  made  by  a 
debtor  more  than  a  year  before  the  commencement  of  proceed- 
ings in  bankruptcy,  a  creditor  therein  preferred,  had  received 
a  partial  payment  of  his  claim,  he  is  not  required,  before  being 
admitted  to  prove  his  debt  in  the  bankruptcy  proceedings  and 
vote  in  the  election  of  a  trustee,  to  refund  to  the  estate  of  tlie 
bankrupt  the  amount  so  received.""  The  claim  is  provable  for 
the  balance  remaining  unpaid. 

In  order  to  entitle  a  creditor  to  vote  at  a  creditors'  meeting 
it  is  not  oqly  necessary  that  he  prove  his  claim,  but,  as  has 
already  been  stated,  it  must  be  allowed.  The  statute  expressly 
provides  that  "claims  which  have  been  duly  proved  shall  be 
allowed,  upon  receipt  by  or  upon  presentation  to  the  court, 
unless  objection  to  their  allowance  shall  be  made  by  parties  in 
interest,  or  their  consideration  be  continued  for  cause  by  the 
court  upon  its  own  motion.-'^ 

Where  claims  are  presented  to  which  o1)jection  is  made  or 

1'^  In    re    Cram,    No.    3343     Fed.  '''•'  In  re  Hunt.  Xo.  6884  Fed.  Cas., 

Cas.,  s.  c.  I  Hask.  89.  s.  c.   17  N.  B.   R.  205. 

" /w   re  Laiitzenhcimer,    124   Fed.  '"In    re    Columbia    Iron    Works, 

Rep.  716,  TO  Am.  B.  R.  720.  142  Fed.  Rep.  234,  14  Am.  B.  R.  526. 

But  see  In  re  Stillwell,  No.  13448  ''  B.  A.  1898.  Sec.  57^. 

Fed.  Cas..  s.  c.  7  N.  B.  R.  226;  In  re  "In   re   Folb,   91    Fed.   Rep.    107, 

Tertelling-,  No.   13842    Fed.  Cas.,  s.  i  Am.  B.  R.  22. 

c.  2  Dill.  339.  ^'''B.  A.   1898,  Sec.  57J. 


326  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

cause  exists  for  continuing  the  consideration  of  the  claim  upon 
his  own  motion,  how  shall  a  referee  proceed  with  reference  to 
the  voting?  It  is  clear  that  so  long  as  objections  are  pending 
against  their  claims  creditors  are  not  entitled  to  vote.  Where 
such  objections  can  be  disposed  of  by  the  referee  at  once  he 
should  either  sustain  or  overrule  them,  so  as  to  permit  the 
creditor  to  vote  if  he  shall  allow  the  claim.  The  bankrupt  is 
regularly  present  at  the  first  meeting  of  the  creditors.  Under 
section  7  it  is  his  duty  to  examine  the  correctness  of  proofs  of 
claims  filed  against  his  estate  when  ordered  to  do  so  by  the 
referee  or  a  judge,  and  to  disclose  the  fact  when  any  person 
tries  to  prove  a  false  claim  against  his  estate.  It  would  there- 
fore seem  that  with  the  assistance  of  the  bankrupt  and  such 
evidence  as  may  be  introduced  that  the  referee  can  ordinarily 
dispose  of  objections  at  the  first  meeting  before  a  vote  is  taken. 
In  case  he  can  not  conveniently  do  so,  he  has  undoubted  au- 
thority to  continue  the  allowance  of  a  particular  claim.  The 
act  of  1867  expressly  provided  for  continuing  claims  when  the 
register  entertained  doubts  of  their  validity  or  the  right  of  the 
creditors  to  prove  them  or  was  of  the  opinion  that  the  validity 
or  right  should  be  investigated  by  an  assignee.'*.  It  would 
seem  that  a  cause  which  would  justify  the  postponement  of 
the  proof  under  the  former  act  would  not  necessarily  be  suf- 
ficient to  justify  a  postponement  under  the  present  act. 

Where  a  claim  is  regularly  and  properly  proved,  the  referee 
should  allow  it  and  permit  the  creditor  to  vote  at  the  first 
meeting,  unless  a  clear  case  is  made  in  opposition  to  it.'"'  A 
claim  which  has  been  allowed  may  be  reconsidered  and  re- 
allowed,  or  rejected  In  whole  or  in  part,  according  to  the 
equities  of  the  case  at  any  time  before  the  estate  has  been 
closed. ■"  The  application  for  such  re-examination  may  be 
made  to  the  referee."'     The  judge  may  review  the  matter  upon 

"R.    S.    Sec.    5083:    Til    re    Bar-       4  Ben.  126;  In  re  Orne,  No.  10581, 
tusch,  No.   1088,  Fed.  Cas.,  9  N.  B.       Fed.   Cas.,  s.  c.   i   Ben.  361. 
R.    478;    In    re   Jackson,    No.    7123,  -^  In    re    Malino,    118    Fed.    Rep. 

Fed.   Cas.,  s.  c.  7  Biss.  280;  In  re       368,  8  Am.  B.  R.  205. 
Herrman,  No.  6425,  Fed.  Cas.,  s.  c.  "  B.   A.    1898,   Sec.   75^. 

"'Gen.    Ord.    21,    par.    6. 


MEETINGS  OF  CREDITORS.  327 

the  question  being"  certified  to  him."^  The  effect  of  allowing 
the  claim  or  postponing  the  proof  of  it  affects  no  right  of  a 
creditor  except  the  right  to  vote  at  the  creditors'  meeting.  If 
it  is  made  to  appear  to  a  reasonable  certainty  that  the  result 
would  be  changed  by  such  vote  or  votes,  the  referee  or  the 
judge  may  set  aside  the  result  of  the  vote  and  direct  a  new 
vote  to  be  taken. ^'^  Where  it  appears  that  the  exercise  of  the 
right  to  vote  would  have  been  barren  of  result  the  court  will 
not  delay  proceedings  in  order  to  afford  such  creditors  the 
opportunity  to  exercise  such  right."'"' 

The  referee  and  the  bankrupt  are  required  by  law  to  attend 
the  first  meeting  of  the  creditors,  but  neither  of  them  are  en- 
titled to  vote,  because  the  business  is  transacted  by  the  cred- 
itors alone.^^ 

§  io6.    How  to  conduct  the  first  meeting  of  creditors. 

The  first  meeting  of  creditors  of  a  bankrupt  should  be  held 
at  the  time  and  place  specified  in  the  notice  for  holding  it.^ 
It  is  not  proper  to  hold  a  meeting  before  that  time.  If  any 
creditor  desires  to  have  a  voice  in  the  business  for  wdiich  the 
meeting  is  called  he  should  attend  personally  or  by  a  duly 
authorized  agent  or  attorney."  Where  no  creditor  is  present 
or  represented  the  meeting  is  considered  as  held  as  fully  and 
effectually  as  if  creditors  had  appeared  or  been  represented 
and  the  referee  is  not  authorized  to  wait  for  or  require  a 
"quorum."  ^  The  judge  or  referee  is  required  by  statute  to 
be  present.*  The  referee  regularly  attends.  The  bankrupt  is 
also  required  to  be  present,  provided  the  meeting  is  had  at  a 


Gen.   Ord.   27.  =' B.    A.     1898,    Sec.    56,    Sec.    7, 

'In  re  Ea'gles,  99  Fed.  Rep.  695,       clause  i,  and  Sec.  55&. 
3  Am.  B.  R.  733.  1  In  re  Eagles,  99  Fed.  Rep.  695, 


29 


31) 


In   re   Northern   Iron   Co.,    No.  3  Am.  B.  R.  733. 

10322    Fed.  Cas.,  s.  c.   14  N.  B.  R.  2  See  Official  Forms  Nos.  20  and 

356;    In    re    Lake    Superior    Ship  21,  see  Forms  Nos.  39  and  40,  post. 

Canal  R.  R.  &  Iron  Co.,  No.  7997  •''  In  re  Eagles,  99  Fed.  Rep.  695, 

Fed.  Cas.,  s.  c.  7  N.  B.  R.  376;  In  3  Am.  B.   R.  733;  In  re  Cogswell, 

re  Jackson,  No.  7123    Fed.  Cas.,  s.  No.  2959   Fed.  Cas.,  s.  c.  i  Ben.  388. 

c.  7  Biss.  280.  *  B.  A.  1898,  Sec.  55&. 


328  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

place  not  more  than  one  hundred  and  fifty  miles  from  his  home 
or  principal  place  of  business.^ 

If  creditors  attend,  the  meeting  should  be  organized  at  the 
hour  designated  in  the  notice  or  as  soon  thereafter  as  prac- 
ticable. The  judge  or  referee  presides,*'  The  duties  of  the 
referee  as  presiding  officer  are  of  a  judicial  character.  His 
actions,  therefore,  under  all  circumstances  should  be  free  from 
reproach  and  above  all  suspicion  of  interest  or  partisanship. 
It  is  especially  incumbent  upon  him  in  no  manner  to  interfere 
with  or  influence  the  choice  of  a  trustee  by  the  creditors.  The 
policy  of  the  bankrupt  law  is  to  give  the  creditors  of  a  bank- 
rupt a  free,  deliberate,  unbiased  choice  in  the  first  instance  of 
the  person  who  is  to  take  the  assets  and  manage  them.'^  It  is 
also  incumbent  upon  the  creditors  to  take  such  steps  as  may, 
be  pertinent  and  necessary  for  the  promotion  of  the  best  in- 
terests of  the  estate  and  the  enforcement  of  the  act.^  The 
referee  presides  at  this  meeting  exactly  in  the  same  manner 
and  in  the  same  sense  that  a  judge  presides  over  his  court. 

Before  proceeding  with  the  other  business  the  referee  regu- 
larly allows  or  disallows  the  claims  of  creditors  there  pre- 
sented."  Although  creditors  may  prove  their  claims  at  any 
time  after  the  commencement  of  the  proceedings  in  bank- 
ruptcy, they  do  not  generally  prove  them  until  the  first  meet- 
ing. In  practice,  therefore,  where  the  estate  is  large  and  tlie 
creditors  numerous,  it  may  require  a  whole  day  or  several 
days  to  take  the  proofs,  elect  the  trustee  and  transact  the 
other  business  that  may  properly  come  before  the  creditors. 
In  such  cases  the  meeting  may  be  adjourned  from  day  to  day 
so  as  to  furnish  proper  opportunity  for  all  creditors  to  prove 
their  debts  and  to  come  to  an  agreement  in  regard  to  the 
selection  of  a  trustee  if  possible.  The  several  adjournments 
will  constitute  but  one  meeting.     It  will  be  the  first  meeting 

5B.     A.     1898,     Sec.     7;     Official  Tn    re    Smith,    No.    12971     Fed. 

Forms  Nos.   14  and   18,  see  Forms  Cas.,  s.  c.  2  Ben.  113. 

Nos.  31  and  35,  post:  In  re  Eagles,  ^  B.  A.  1898.  Sec.  55r. 

99  Fed.  Rep.  695,  3  Am.  B.  R.  72,^.  ^  B.  A.   1898,  Sec.  5S&. 

6B.  A.  1898,  Sec.  55&. 


MEETINGS  OF  CREDITORS.  329 

of  the  creditors  within  tlie  contemplation  of  the  statute, 
whether  held  on  the  day  designated  in  the  notice  or  on  the 
day  to  which  the  meeting  assembled  on  that  day  has  been 
adjourned."  What  debts  are  provable  ^^  and  the  manner  of 
making  the  proof  ^'  are  considered  in  another  place.  The 
referee  should  include  in  his  record  a  list  of  creditors  who 
have  proved  their  debts  at  the  first  meeting,  together  with 
their  residence  and  the  amount  of  each  creditor's  debt.^^ 

The  referee  may  publicly  examine  the  bankrupt  or  cause  him 
to  be  examined  at  the  instance  of  a  creditor  before  proceeding 
with  the  election  of  the  trustee  or  with  other  business."  The 
examination  should  not  be  permitted  at  the  instance  of  a 
creditor  until  after  he  has  proved  his  claim.  Tlie  proceed- 
ings relating  to  the  examination  of  the  bankrupt  and  other 
persons  are  treated  under  a  separate  head.^'"'  After  the  exam- 
ination of  the  bankrupt  an  offer  of  composition  may  be  made. 
It  is  not  necessary  to  call  a  special  meeting  for  this  purpose.^'' 

The  principal  business  to  be  transacted  at  the  first  creditors 
meeting  is  the  election  of  one  trustee  or  three  trustees.^'  The 
manner  of  conducting  the  election  of  the  trustee  is  not  pre- 
scribed by  the  statute,  and  is  therefore  left  to  be  determined 
by  the  creditors  themselves.  They  may  either  organize  into 
a  general  meeting  or  vote  in  the  same  manner  as  at  any  other 
election.  The  preliminary  ballots  may  be  taken  either  viva 
voce  or  upon  written  slips.  If  on  the  first  vote  there  is  no 
choice  made,  a  second,  third,  or  an}-  number  of  ballots  may 
be  had  until  the  required  concurrence  is  obtained.  A  creditor 
may  change  his  vote  at  any  time  during  the  progress  of  such 
election. ^^     Votes  may  be   solicited   for  any  particular  trus- 

1°  In  re  Eagles,  99  Fed.  Rep.  695,  1*  B.  A.  1898,  Sec.  55^. 

3  Am.  B.  R.  7^2;  In  re  Phelps,  No.  i"' See  Examinations,  Chap.  XIX. 

11071    Fed.   Cas.,   s.  c.   i    N.   B.  R.  i«/m   re   Hilhorn,    104   Fed.    Rep. 

525;  in  re  Norton,  No.  10348    Fed.  866,  4  Am.  B.  R.  741. 

Cas.,  s.  c.  6  N.  B.  R.  297.  i^  B.  A.  1898,  Sec.  44. 

i^Chap.  XTII.  18 /n  re  Pfromm,  No.  11061    Fed. 

12  Chap.  XIV.  Cas.,  s.  c.  8  N.  B.  R.  357. 

Inofficial  Form  No.  19;  see  Form 
No.  38,  post. 


330 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


tee.  The  creditors  should  can\-ass  and  discuss  the  thfferent 
candidates  so  that  the  choice  of  a  trustee  may  be  made  with 
full  knowledge  of  all  the  facts  and  their  bearings.  The  solici- 
tation of  votes  must  be  properly  exercised.  Improper  means 
and  undue  influence  will  not  be  permitted.  Where  such  means 
are  employed  or  where  the  voters  had  no  right  to  vote  the 
referee  will  reject  the  vote  or  disapprove  the  election.^®  The 
referee  has  power  to  reject  improper  votes, -^  but  has  no  power 
to  set  aside  the  election  for  such  reasons,  but  can  merely  re- 
fuse to  confirm  it  and  report  his  refusal  to  the  judge,  who 
alone  can  remove  the  trustee  elected."^  The  court  will  often 
reject  a  trustee  elected  through  the  influence  of  the  bankrupt,-^ 
but  will  not  do  so  where  all  the  general  creditors  have  been 
paid  in  full.""  The  unanimous  choice  of  creditors  should  not 
be  disapproved  on  complaint  of  the  bankrupt  except  in  ex- 
treme cases.-*  Wdien  a  final  result  is  reached,  it  must  be  made 
a  matter  of  record  in  the  form  prescribed."^  The  creditors 
who  have  appointed  a  trustee  must  sign  the  certificate,  with 
their  residences  and  amount  of  debts  claimed  and  allowed. 
The  reason  for  this  requirement  is,  that  if  any  dispute  should 
arise  in  regard  to  the  actual  result  of  election  there  would  be 
satisfactory  evidence  before  the  court  to  settle  the  controversy. 


19 /w  re  McGill  CC.  C.  A.,  6th 
Cir.),  io6  Fed.  Rep.  57,  5  Am.  B.  R. 
155;  I^i-  ''^  Henschel  (C.  C.  A.,  2d 
Cir.),  109  Fed.  Rep.  86i,  at  865,  6 
Am.  B.  R.  305 ;  In  re  Rekersdres, 
108  Fed.  Rep.  206,  5  Am.  B.  R. 
811;  In  re  Dayville  Woolen  Co., 
TT4  Fed.  Rep.  674,  8  Am.  B.  R. 
85;  In  re  Morton,  118  Fed.  Rep. 
908,  9  Am.  B.  R.  508;  In  re  East- 
lake,  145  Fed.  Rep.  68. 

20 /ji  re  McGill  (C.  C.  A..  6th 
Cir.),  106  Fed.  Rep.  57,  5  Am.  B. 
R.  155;  In  re  Malino,  118  Fed.  Rep. 
368,  8  Am.  B.  R.  205. 

21 /«  re  Hare,  119  Fed.  Rep.  246, 
9  Am.  B.  R.  520;  In  re  Mackellar, 


116  Fed.  Rep.  547;  Gen.  Ord.  13. 

22 /«  re  McGill  (C.  C.  A.  6th 
Cir.),  106  Fed.  Rep.  57,  5  Am.  B.  R. 
15s;  III  re  Henschel  (C.  C.  A.  2d 
Cir.),  109  Fed.  Rep.  861,  at  865; 
In  re  Rekerdres,  108  Fed.  Rep. 
206,  S  Am.  B.  R.  811;  In  re  Day- 
ville Woolen  Co.,  114  Fed.  Rep.  674, 
8  Am.  B.  R.  85;  In  re  Morton,  118 
Fed.  Rep.  908. 

-^  In  re  Morton,  118  Fed.  Rep. 
908. 

2^  In  re  Lewensohn,  98  Fed.  Rep. 
576,  3  Am.  B.  R.  299;  In  re  Man- 
gan,  133  Fed.  Rep.  1000,  13  Am.  B. 
R-  2)^3',  ^'^  ^'^  McKellar,  116  Fed. 
Rep.  547,  8  Am.  B.  R.  669. 


MEETINGS  OK  CREDITORS. 


331 


After  a  creditor  has  signed  this  certificate  he  can  not  change 
his  vote.-"  Where  only  one  creditor  appears  at  the  first  meet- 
ing of  creditors  and  proves  his  debts  he  may  appoint  the  trus- 


tee 


If  the  creditors  do  not  appoint  the  trustee  the  court  should 
do  80,-^  but  only  after  the  creditors  have  been  given  full  op- 
portunity ;  '-•'  thus  where  the  creditors  are  unable  to  agree  at 
their  first  meeting  and  a  majority  in  number  and  amount  re- 
quest an  adjournment  for  a  reasonable  time  in  order  that  they 
may  come  to  some  agreement  the  referee  should  grant  such 
adjournment  and  should  not  himself  appoint  a  trustee."" 
Where  no  request  is  made  for  a  second  meeting  the  referee 
may  appoint  the  trustee  after  failure  to  elect  one  by  the 
creditors.^^  Where  two  days  have  been  used  up  in  unsuc- 
cessful attempts  by  creditors  to  choose  a  trustee  and  one  is 
needed  at  once  the  referee  should  appoint  him.^-  ^^dlere  the 
majority  in  number  vote  for  one  person  for  trustee  and  the 
majority  in  amount  for  another  the  referee  may  appoint. ■'^^ 
WHiere  a  committee  acquired  by  assignment  the  claims  of 
several  creditors  it  is  entitled  to  one  vote  for  trustee  and  not 
a  vote  for  each  creditor  beneficially  interested.''^  It  has  been 
held  that  the  referee  may  appoint  a  trustee  where  it  is  im- 
practicable to  pass  on  a  large  number  of  contested  claims  at 


25  Official  Form  No.  22 ;  see  Form 
No.  41,  post. 

^^  In  re  Scheiffer,  No.  12445  Fed. 
Cas.,  s.  c.  2  N.  B.  R.  591. 

27  In  re  Haynes,  No.  6269  Fed. 
Ca.s.,  s.  c.  2  N.  B.  R.  227;  Anon., 
No.  458  Fed.  Cas.,  s.  c.  i  N.  B.  R. 
216. 

28  B.  A.  1898,  Sec.  44,  and  Sec.  i, 
clause  7 ;  Official  Form  No.  23 ;  see 
Form  No.  42,  post;  In  re  Brooke, 
100  Fed.  Rep.  432,  4  Am.  B.  R.  50. 

-^  In  re  Hare,  119  Fed.  Rep.  246, 
9  Am.  B.  R.  520;  In  re  Mackellar, 
116  Fed.  Rep.  547;  In  re  Lewen- 
sohn,  98  Fed.  Rep.  576,  3  Am.  B.  R. 
299' 


^^  In  re  Nice  &  Schreiber,  123 
Fed.  Rep.  987. 

21  In   re   Machin,    128   Fed.    Rep. 

315- 

In  Clark  v.  Pidcock  (C.  C.  A. 
3d  Cir.),  129  Fed.  Rep.  745,  a 
trustee  was  appointed  more  than 
a  year  after  the  creditors'  meeting. 

32  In  re  Kuffler,  97  Fed.  Rep.  187, 
3  Am.  B.  R.  162. 

33 /n  re  Richards,  103  Fed.  Rep. 
849,  4  Am.  B.  R.  631 ;  In  re  Ken- 
ney  &  Co.,  136  Fed.  Rep.  451. 

3-1 /u  re  Kenney  Co.,  136  Fed. 
Rep.  451. 


332  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

the  first  meeting;""'  but  the  better  practice  is  to  adjourn  the 
election  until  such  claims  may  be  adjudicated. 

If  the  schedule  of  a  voluntary  bankrupt  discloses  no  assets, 
and  if  no  creditor  appears  at  the  first  meeting,  the  court  may, 
by  order  setting  out  the  facts,  direct  that  no  trustee  be  ap- 
pointed; but  at  any  time  thereafter  a  trustee  may  be  appoint- 
ed, if  the  court  shall  deem  it  desirable."*'  If  no  trustee  is 
appointed  as  aforesaid,  the  court  may  order  that  no  meeting 
of  the  creditors  other  than  the  first  meeting  shall  be  called. ^'^ 

The  number  of  votes  for  an  election  or  to  carry  any  matter 
of  business  is  prescribed  by  the  statute.  Creditors  pass  upon 
matters  submitted  to  them  at  their  meetings  by  a  majority 
vote  in  number  and  amount  of  claims  of  all  creditors  whose 
claims  have  been  allowed,  and  are  present,  except  as  other- 
wise provided  by  statute.^'^ 

It  will  be  observed  that  in  order  to  pass  a  matter  it  is  neces- 
sary to  have  a  majority  of  the  votes  of  all  who  have  proved 
claims  and  are  present,  and  not  merely  a  majority  of  the 
votes  cast.^^  The  claims  of  creditors  who  are  not  present  are 
not  counted,"'"  and  a  creditor  is  not  considered  as  present  who 
has  sent  a  proxy  which  has  been  rejected. ■*"  The  number  and 
amount  of  debts  proved  upon  the  first  day  is  determined  from 
the  list  required  to  be  made  by  the  referee.*^  It  is  also  neces- 
sary that  there  be  a  majority  in  number  and  value  of  all  the 
debts  proved.  By  this  mode  of  counting  every  debt  upon 
which  a  vote  has  not  been  cast  in  favor  of  a  question  or  person 
must  be  counted  as  a  vote  in  the  negative,  if  the  creditor  owing 
claim  is  present.     A  question  is  not  carried  which  receives  the 

35/;;  re  Cohen,  131  Fed.  Rep.  391,  R.  662;  In  re  Mackellar,   116  Fed. 

II  Am.  B.  R.  439.  Rep.  547. 

""Gen.-  Ord.    15.  4o/„   re   Henschel    (C    C.   A.   2d 

37  B.  A.  1898.  Sec.  56.  Cir.),  113  Fed.  Rep.  443,  7  Am.  B. 

38 /n   re   Purvis,    No.    11476   Fed.  R.  662;  In  re  McGill  (C.  C.  A.  6th 

Cas.,   s.   c.    I    N.   B.   R.    163;   /;:   re  Cir.),   106  Fed.  Rep.  57,   5  Am.  B. 

Scheiffer,  No.  12445  Fed.  Cas.,  s.  c.  R.   155;   In  re  Mackellar.    116   Fed. 

2  N.  B.  R.  591 ;  B.  A.  1898.  Sec.  56.  Rep.  547. 

3" /;i   re   Henschel    (C.    C.  A.   2d  *i  Official  Form  No.  19;  see  Form 

Cir.),  113  Fed.  Rep.  443,  7  Am.  B.  No.  38,  post. 


MEETINGS  OF  CREDITORS.  333 

majority  of  the  debts  proved  unless  the  majority  in  number 
also  constitutes  a  majority  in  the  amount  of  claims  proved. 
So,  also,  it  is  not  carried  where  a  majority  in  amount  of  debts 
proved  is  cast  in  favor  of  the  question  unless  that  majority  in 
amount  also  constitutes  a  majority  in  number.  The  majority 
must  be  a  joint  majority  of  both  the  number  and  the  value. 
The  reason  for  this  provision  seems  to  be  to  prevent  one  large 
creditor  from  controlling  the  meeting  to  the  detriment  of 
other  creditors,  and  at  the  same  time  to  prevent  several  cred- 
itors having  small  claims  from  uniting  to  the  injury  of  the 
large  creditor,  who  may  be  the  only  one  who  has  a  real  in- 
terest in  the  proceedings. 

The  creditors  not  only  appoint  the  trustee  or  trustees,  but 
they  should  fix  the  amount  of  the  bond  required.*-  They 
may  at  any  time  increase  the  amount  of  the  bond.  If  the 
creditors  do  not  fix  the  amount  of  the  bond  of  the  trustee  the 
court  must  do  so.*- 

No  costs  will  be  allowed  out  of  the  estate  on  contest  be- 
tween creditors  for  the  purpose  of  electing  a  trustee.*^ 

§  107.    Notice  to  trustee. 

The  appointment  of  a  trustee  by  the  creditors  is  subject  to 
be  approved  or  disapproved  by  the  referee  or  the  judge.^ 
Ordinarily  the  referee  makes  the  order  approving  the  appoint- 
ment. He  thereupon  immediately  notifies  him  in  person  or 
by  mail  of  his  appointment."  The  notice  should  contain  a 
statement  of  the  penal  sum  of  the  trustee's  bond."  The  trus- 
tee is  required  forthwith  to  notify  the  referee  of  his  accept- 
ance or  rejection  of  the  trusteeship.^  Where  the  trustee 
accepts  the  trust  he  should  immediately  qualify.*  If  he  de- 
clines to  accept  the  trust  a  vacancy  occurs  in  the  office  of 
trustee.     The    creditors    are    then    entitled    to    have    another 

"^B.  A.  1898.  Sec.  5or.  =  Gen.  Ord.  16:  Official  Form  No. 

•*•■'/;;    re    Wortii,    130    Fed.  Rep.       24;  see  Form  No.  43.  post. 
927.    12  Am.   B.   R.   566.  ■-!  Gen.  Ord.  16. 

1  Gen.  Ord.  13.  *  Trustees,  Chap.  XV. 


334  LAW     AND    PROCEEDINGS    IN     BANKRUPTCY. 

meeting  to  elect  a  trustee.^  The  creditors  may,  of  course, 
waive  this  privilege,  in  which  case  the  judge  or  referee  (usu- 
ally the  referee)   appoints  one  or  three  trustees.^ 

§  io8.    Other  meetings  of  creditors. 

Creditors  may  hold  meetings  other  than  the  first  one  when- 
ever it  may  be  necessary  to  consider  matters  pertinent  to  the 
administration  of  the  estate  or  other  matters  relating  to  the 
proceedings  in  bankruptcy.  Where  the  schedule  of  a  volun- 
tary bankrupt  discloses  no  assets,  and  no  creditor  appears  at 
the  first  meeting,  the  court  may  direct  that  no  trustee  be  ap- 
pointed, and  no  meeting  of  the  creditors  other  than  the  first 
meeting  be  called.^ 

A  meeting  of  creditors,  subsequent  to  the  first  one,  may  be 
held  at  any  time  and  place  when  all  of  the  creditors  who  have 
secured  the  allowance  of  their  claims  sign  a  written  consent 
to  hold  a  meeting  at  such  time  and  place."  Whenever,  by 
reason  of  a  vacancy  in  the  office  of  trustee,  or  for  any  other 
cause,  it  becomes  necessary  to  call  a  special  meeting  of  the 
creditors  in  order  to  carry  out  the  purposes  of  the  act,  the 
court  may  call  such  a  meeting,  specifying  in  the  notice  the 
purpose  for  which  it  is  called.^  The  judge  or  referee  is  re- 
quired to  call  a  meeting  of  creditors  whenever  one-fourth  or 
more  in  number  of  those  who  have  proven  their  claims  shall 
file  a  written  request  to  that  effect;  if  such  request  is  signed 
by  a  majority  of  such  creditors,  which  number  represents  a 
majority  in  amount  of  such  claims,  and  contains  a  request  for 
such  meeting  to  be  held  at  a  designated  place,  the  court  shall 
call  such  meeting  at  such  place  within  thirty  days  after  the 
date  of  the  filing  of  the  request.* 

Creditors  who  have  proved  their  claims  at  the  first  meeting 
or  have  proved  them  subsequently  are  entitled  to  vote  at  these 
meetings  subject  to  the  restrictions  contained  in  section  56. 
Creditors,  whether  they  have  proved  their  claims  or  not,  are 

s  B.  A.  1898,  Sec.  44.  "  Gen.  Ord.  25. 

iGen.  Ord.   15.  *  B.   A.   1898,  Sec.   55^,  and  Sec. 

2  B.  A.  1898,  Sec.  55c?.  I,  clause  7. 


MEETINGS  OF  CREDITORS.  335 

entitled  to  have  at  least  ten  days'  notice  by  mail  to  their 
respective  addresses  as  they  appear  in  the  list  of  creditors  of 
the  bankrupt,  or  as  afterwards  filed  with  the  papers  in  the  case 
by  the  creditors,  unless  they  waive  notice  in  writing  of  all  such 
meetings  of  creditors.^  The  referee  regularly  gives  this  no- 
tice.'' 

The  referee  is  not  required  to  be  present  or  preside  at  these 
meetings,  but  in  practice  he  usually  does  so.  The  bankrupt 
is  not  required  to  attend  such  meetings  unless  specially  ordered 
to  do  so.  There  is  no  form  prescribed  for  conducting  the 
business  or  taking  the  votes  except  that  the  creditors  can  only 
pass  upon  matters  submitted  to  them  at  such  meetings  by  a 
majority  vote  m  number  and  amount  of  claims  of  all  creditors 
whose  claims  have  been  allowed  and  are  present.'^  Such  meet- 
ings are  properly  guided  by  the  rules  and  usages  of  parlia- 
mentary bodies.^ 

Whenever  the  afifairs  of  the  estate  are  ready  to  be  closed  a 
final  meeting  of  creditors  must  be  ordered. ° 

5  B.  A.  1898,  Sec.  58a.     See  In  re  ^  B.  A.  1898,  Sec.  560- 

Mills,   No.  9610,  Fed.   Cas.,  s.  c.  7  ^  In  re  Merchants'   Ins.  Co.,   No. 

Ben.  452 ;  Anon.,  No.  457  Fed.  Cas.,       9442  Fed.  Cas.,  s.  c.  6  Biss.  252. 
s.  c.  I  N.  B.  R.  122.  9  B.  A.  1898,  Sec.  55/- 

6  B.  A.  1898,  Sec.  39,  clause  4,  and 
Sec.  58c. 


336  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


CHAPTER  XIII. 

WHAT  DEBTS   ARE   PROVABLE. 

§  109.     Provable  debts  defined. 

Debts  of  the  bankrupt  may  be  proved  and  allowed  against 
liis  estate/ 

First,  which  are  a  fixed  liability,  as  evidenced  by  a  judg- 
ment or  an  instrument  in  writing,  absolutely,  owing  at  the 
time  of  the  filing  of  the  petition  against  him,  whether  then 
payable  or  not,  with  any  interest  thereon  which  would  have 
been  recoverable  at  that  date  or  with  a  rebate  of  interest  upon 
such  as  were  not  then  payable  and  did  not  bear  interest. 

Second,  debts  due  as  costs  taxable  against  an  involuntary 
bankrupt  who  was  at  the  time  of  the  filing  of  the  petition 
against  him  plaintiff  in  a  cause  of  action  which  would  pass 
to  the  trustee  and  which  the  trustee  declines  to  prosecute 
after  notice. 

Third,  debts  founded  upon  a  claim  for  taxable  costs  in- 
curred in  good  faith  by  a  creditor  before  the  filing  of  the  peti- 
tion in  an  action  to  recover  a  provable  debt. 

Fourth,  debts  founded  upon  an  open  account,  or  upon  a 
contract  express  or  implied. 

Fifth,  debts  founded  upon  provable  debts  reduced  to  judg- 
ments after  the  filing  of  the  petition  and  before  the  considera- 
tion of  the  bankrupt's  application  for  a  discharge,  less  costs 
incurred  and  interests  accrued  after  the  filing  of  the  petition 
and  up  to  the  time  of  the  entry  of  such  judgments. 

The  five  classes  of  debts  quoted  above  are  contained  in  Sec. 
63a  and  include  every  class  of  debt  provable  in  bankruptcy. 
If  a  claim  does  not  fall  within  one  of  these  classes  it  is  not 
provable. 

1 B.   A.   1898.   Sec.  .63.     Compare   R.    S.    Sees.    5067   to    5072. 


WHAT    DEBTS    ARE    PROVABLE. 


337 


In  order  that  a  debt,  demand  or  claim  may  be  proved  and 
allowed  against  the  estate  of  a  bankrupt  it  must  l)e  liquidated. - 

In  Section  636  provision  is  made  for  unliquidated  claims 
against  the  bankrupt,  which  may  be  liquidated  upon  applica- 
tion to  the  court  in  such  manner  as  it  shall  direct  and  may 
thereafter  be  proved  and  allowed  against  his  estate.  Par.  h  of 
Sec.  63  adds  nothing  to  the  class  of  debts  which  may  be  proved 
under  par.  a  of  the  same  section.'^  Its  purpose  is  to  permit  an 
unliquidated  claim  coming  within  the  provisions  of  Sec  63a 
to  be  liquidated  as  the  court  may  direct.  The  court  may  adopt 
any  procedure  appropriate  to  the  particular  case,  whether  it 
be  submission  to  a  jury  on  an  issue  framed,  or  an  adjudication 
on  evidence  before  the  referee  or  judge,  or  some  other 
method.* 

Unliquidated  claims  which  may  be  liquidated  and  proved 
under  this  provision  are  numerous  and  varied.  Familiar  ex- 
amples are  damages  for  breach  of  executory  contracts,  damage 
for  breach  of  covenants  in  a  contract  and  stockholder's  lia- 
bility.^ Notes  and  contracts  to  deliver  specific  articles  of  mer- 
chandise may  be  liquidated.*' 

The  rights  of  creditors  to  prove  debts  and  share  in  the  dis- 
tribution of  the  estate  of  the  bankrupt  are  fixed  by  the  status 
of  their  claims  at  the  time  of  filing  the  petition  in  bankruptcy.^ 


2  B.  A.  1898,  Sec.  63&.  In  re  Sil- 
verman, loi  Fed.  Rep.  219,  2  N.  B. 
N.  760,  4  Am.  B.  R.  83  ;  /;;  re  Big 
Meadow  Gas  Co.,  113  Fed.  Rep.  974, 
7  Am.  B.  R.  697.  But  see  In  re 
Manhattan  Ice  Co.  (C.  C.  A.  2d 
Cir.),  116  Fed.  Rep.  604,  8  Am.  B. 
R.  569. 

^  See  observation  of  Mr.  Justice 
Peckham  in  Dunbar  v.  Dunbar,  190 
U.  S.  340,  350,  47  L.  Ed.  1084,  10 
Am.  B.  R.  139;  In  re  Pettingill  & 
Co.,  137  Fed.  Rep.  143,  14  Am. 
B.  R.  72^;  In  re  TTirschman,  104 
Fed.   Rep.   6q.   4   Am.   B.    R.   715. 

*/n  re  United  Button  Co.,  140 
Fed.  Rep.  495,   15  Am.  B.  R.  390. 


■'  Fourth  National  Bk.  v.  Franck- 
lyn,  120  U.  S.  747,  30  L.  Ed.  825; 
Garrett  v.  Sayles,  i  Fed.  Rep.  371 ; 
James  v.  Atlantic  Delaine  Co.,  No. 
7179  Fed.  Cas.,  11  N.  B.  R.  390; 
Gibson  v.  Lewis,  No.  539S  Fed. 
Cas.,  1 1  N.  B.  R.  247;  In  re  Rouse, 
40  Law  Bui.    (Ohio)   220. 

'■  Chandler  v.  Windship,  6  Mass. 
310;  McMullen  v.  Bank  of  Penn.,  2 
Penn.    St.    243. 

■^  Swarts  V.  Fourtli  National  Bank 
(C.  C.  A.  8th  Cir.),  ii7  Fed.  Rep. 
I,  8  Am.  B.  R.  673;  In  re  Pettin- 
.qill  &■  Co.,  137  Fed.  Rep.  143,  14 
Am.  B.  R.  728;  In  re  Bingham, 
94  Fed.  Rep.  796,  2  Am.  B.  R.  223; 


338  LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 

The  present  act  admits  to  proof  only  those  claims  which  can 
be  liquidated  by  legal  proceedings  instituted  at  the  time  of 
bankruptcy.  Other  liabilities  of  the  bankrupt  are  deemed  so 
far  contingent  that  they  cannot  be  proved  in  bankruptcy,  nor 
are  they  released  by  the  bankrupt's  discharge.^ 

A  debt  contracted  by  the  bankrupt  subsequent  to  the  filing 
of  the  petition  cannot  be  proved  in  bankruptcy.*^  The  pay- 
ment of  such  debts  may  be  sought  out  of  property  acquired 
after  the  adjudication  of  bankruptcy  at  any  time.  The  bank- 
rupt is  not  released  from  such  debts  by  discharge  in  bank- 
ruptcy. 

Debts  secured  by  a  mortgage  lien  or  other  kind  of  security 
are  not  provable  under  this  section  until  the  secured  creditor 
surrenders  such  preferences  except  for  the  amount  each  claim 
exceeds  the  value  of  its  security.^''  This  section  relates  to 
debts,  demands  and  claims  only  which  are  not  preferred  or 
secured,  and  which  have  no  priority  over  any  other  debts. 
They  are  the  debts,  demands  and  claims  of  the  general  cred- 
itors against  the  general  assets  of  the  bankrupt  at  the  time 
the  petition  was  filed. 


§  no.     What  is  a  "debt." 

It  is  to  be  observed  that  debts  only  are  provable  under  the 
first  paragraph  of  section  63 — the  first  five  clauses  above.     To 

Phillips   V.    Dreher    Shoe    Co.,    112  Am.  B.  R.  12;  In  re  Pennewell  (C. 

Fed.    Rep.   404,   7   Am.    B.    R.    326;  C.  A.  6th  Cir.),  119  Fed.  Rep.  139, 

In    re    Swift    (C.    C.    A.    1st    Cir.),  9  Am.  B.  R.  490;  In  re  Garlington, 

112  Fed.  Rep.  315,  7  Am.  B.  R.  374;  115  Fed.  Rep.  999,  8  Am.  B.  R.  602. 

In  re  Grafif,  8  Am.  B.  R.  744.  But  see  Spalding  v.  Dixon,  21  Vt. 

8/)z  re  Pettingill  &  Co.,  137  Fed.  45,  where  it  was  held  under  the 
Rep.  143,  14  Am.  B.  R.  728;  In  re  act  of  1841,  that  a  debt  arising  after 
Ellis  (C.  C.  A.  6th  Cir.),  143  Fed.  the  petition  filed  and  before  the  ad- 
Rep.  103,  16  Am.  B.  R.  221  ;  Dun-  judication  was  provable,  and  there- 
bar  V.  Dunbar,  190  U.  S.  340,  47  L.  fore  barred  by  a  discharge  in  bank- 
Ed.    1084,    10  Am.   B.   R:    139.  ruptcy. 

» In    re    Merrell,     i9    Fed.    Rep.  "  B.   A.   1898,  Sec.  S7e.  f  and  g. 

874;  In  re  Ward,  12  Fed.  Rep.  325;  See    Rights    of    Secured    Creditor, 

In  re  Burka,   104  Fed.  Rep.  326,  5  Sec.   203,   post. 


WHAT   DEBTS    ARE    PROVABLE. 


339 


ascertain,  therefore,  what  is  provable  under  these  provisions 
it  is  necessary  to  inquire  at  the  outset  what  is  included  in  the 
word  "debts." 

A  debt,  as  defined  by  the  act  itself,  includes  "any  debt, 
demand  or  claim  provable  in  bankruptcy."'  This  definition 
does  not  throw  much  light  on  its  meaning  In  this  connection, 
although  it  fully  defines  it  wherever  it  is  used  in  any  other 
part  of  the  act. 

The  word  "debt"  seems  to  have  been  used  in  other  bank- 
rupt acts  -  as  defined  by  Mr.  Justice  Blackstone.  He  said : 
"The  legal  acceptation  of  debt  is  a  sum  of  money  due  by 
certain  and  express  agreement,  as  by  a  bond  for  a  determinate 
sum;  a  bill  or  note;  a  special  bargain;  or  rent  reserved  on  a 
lease ;  where  the  quantity  is  fixed  and  specific  and  does  not 
depend  upon  any  subsec[uent  valuation  to  settle  it."  ^  That 
this  is  the  sense  in  which  debt  is  used  in  this  section  is  fairly 
to  be  inferred  from  the  context.  A  sum  of  money  due  is 
deemed  fixed  and  certain  wlien  it  can  be  ascertained  from 
fixed  data  by  mere  computation. 

If  this  is  the  meaning  of  debts  in  this  section  it  is  clear 
that  a  judgment  for  a  fine  or  penalty,*  or  a  claim  for  ali- 
mony," or  any  other  claim  not  founded  upon  an  agree- 
ment or  contract,  however  just  or  lawful  in  itself,  is  not 
provable  in  bankruptcy.     A  claim  against  a  father  to  pay  for 


1  B.  A.  1898,  Sec.  I,  clause  ir. 

2/n  re  Sutherland,  No.  i3639  Fed. 
Cas.,  Deady,  416;  In  re  Lache- 
meyer.  No.  7966  Fed.  Cas.  ,18 
N.  B.  R.  270;  In  re  Foye,  No.  5021 
Fed.  Cas.,  2  Low.  399;  Sigsby  v. 
Willis,  No.  12849  Fed.  Cas.,  3  Ben. 

371. 

3  Blackstone's  Com.  i54.  See  also 
Audubon  v.  Shufeldl.  181  U.  S.  575, 
45  L.  Ed.  1009,  5  Am.  B.  R.  829. 

*  In  re  Moore,  rii  Fed.  Rep.  145, 
6  Am.  B.  R.  .S90;  In  re  Sutherland, 
No.    13639    Fed.    Cas.,    Deady,   416; 


Spalding  v.  New  York,  4  TTow. 
21,  affirming  7  Hill  (N.  Y.  301; 
s  c.  10  Paige  (N.  Y.)  284;  Wilson 
V.  Nat.  Bank,  3  Fed.  Rep.  39i ; 
Macey  v.  Jordan,  2  Den.  (N.  Y.) 
570. 

As  to  penalties  due  the  United 
States,  a  state  or  municipality,  see 
B.    A.   1898.   Sec.   57/. 

^■Audubon  v.  Shufeldt.  181  U.  S. 
575.  45  L.  Fd.  1009,  5  Am.  B.  R. 
829 ;  Dunbar  v.  Dunbar,  190  U.  S. 
340,  47  L.  Ed.  1084,  10  Am.  B.  R. 
139- 


340  LAW     AND    PROCEEDINGS    IN     BANKRUPTCY. 

the  support  of  his  minor  children  which  at  common  law  he  is 
bound  to  support  is  not  such  a  debt  as  may  be  proved  in  bank- 
ruptcy/' Such  claims  might  be  enforced  at  law  or  in  equity/ 
In  construing  state  laws  relating  to  insolvents  a  broader 
meaning  has  been  given  to  the  word  "debt."  Thus  it  has 
been  said  that  "the  word  'debt'  is  of  large  import,  including 
not  only  debts  of  record,  or  judgments,  and  debts  by  specialty, 
but  also  obligations  rising  under  simple  contract  to  a  very 
wide  extent,  and  its  popular  sense  includes  all  that  is  due 
to  a  man  under  any  form  of  obligation  or  promise,"  ®- 

§  III.    Equitable  debts— Assignee's  expenses,  etc. 

It  has  been  repeatedly  held  in  England  that  an  equitable 
as  well  as  a  legal  debt  may  be  proved  in  bankruptcy/  And 
the  same  rule  would  appear  to  be  established  in  this  country 
under  the  former  bankrupt  acts." 

Thus,  a  solvent  partner  upon  winding  up  the  partnership  is 
entitled  to  prove  against  bankrupt  partners  the  share  of  the 
loss  which  each  partner  should  have  borne  as  a  debt  against 
his  separate  estate."     The  reason  for  this  is  that  the  solvent 

^Dunbar    v.    Dunbar,    190    U.  S.  Co.,    No.    2485    Fed.    Cas.,   2    Story 

340,  47  L.  Ed.   1084,   10  Am.  B.   R.  432.       But     neither     of     the     cases 

139;  In  re  Baker,  96  Fed.  Rep.  954,  arose  under  a  bankrupt  statute. 

3  Am.  B.  R.   loi ;  In  re  Hubbard,  ^  Ex   parte   Yonge.   3   Ves.   &   B. 

98  Fed.  Rep.  710,  3  Am.  B.  R.  528.  3i ;   Jeffs  v.   Wood,  2  P.   WilHams 

'Stockwell    V.    U.    S.,    13    Wall.  128;    Murphy's   Case,   1    Schoaels  8 

531,  20  L.  Ed.  491.  L.  44;  E.v  parte  Watson,  4  Madd. 

That     judgments     to     enforce     a  477. 

moral  or  natural  duty,  as  for  seduc-  -  In  re  Kelly,   18  Fed.   Rep.   528 ; 

tion   or   the   support   of   a   bastard,  In  re  Fortune,  No.  4955  Fed.   Cas., 

are  not  discharged — not  being  debts  i     Low.     306;     In     re     Secor,     18 

in   the   sense  that   word   is   used   in  Fed.  Rep.  3i9;  In  re  Wells,  4  Fed. 

bmkruptcy,   see   /;/    re   Cotton,   No.  Rep.  68;  Butcher  v.  Forman,  6  Hill 

3269     Fed.     Cas.,     2     N.     Y.     Leg.  (N    V.)   583. 

Obs.    370;    Comm.    v.    Erisman,   21  s  ii> /xrrfe  Watson,  4  IMadd.  477; 

Pitts.  L.  Jour.  69;  Nassau  v.   Par-  Sigsby    v.    Wilhs,    No.    124S9    Fed. 

ker,  2  Penn.  L.  Jour.  298.  Cas.,    3    Ben.    2,7'^ ;    ^"    re    Dillon, 

8  Gray  v.  Bennett,  3  Met.  (Mass.)  100  Fed.  Rep.  627,  4  Am.  B.  R.  63; 

526.     This   view   was   approved  by  In  re  Carmichael,  95  Fed.  Rep.  594, 

Mr.  Justice  Story  in  Carver  v.  Mf.  2  Am.  B    R.  8; 5. 


WHAT    DEBTS    ARE    PROVABLE. 


341 


partners  ha\ino-  paid  all  of  the  joint  debts  of  the  firm  are  re- 
garded as  standing  in  the  light  of  sureties  or  persons  liable 
for  him,  and  therefore  entitled  to  come  in  and  prove  in  respect 
to  the  bankrupt's  share  of  the  copartnership  debts.*  So  also 
where  a  trustee  demanded  wagons  of  the  bankrupt  which 
were  in  the  possession  of  a  bailee  it  was  held  that  the  bailee 
was  entitled  to  an  equitable  compensation  for  storage.'  So 
also  charges  against  the  estate  for  expenses  incurred  in  the 
administration  of  it,  as  wages,  rent,  etc.,  are  provable  debts 
in  bankruptcy."  Creditors  of  a  bankrupt  "get  rich  quick" 
concern  have  been  allowed  to  prove  claims  for  money  ad- 
vanced on  false  representations  (although  intended  by  the 
creditors  to  be  used  in  gambling)  on  the  ground  that  the  bank- 
rupt debtor  was  a  trustee  for  them.'  In  the  absence  of  any 
authoritative  state  decision  or  statute  governing  the  case,  a 
vendee  under  a  contract  for  the  purchase  of  land,  who  has 
recorded  bis  bond  for  a  deed  and  paid  the  purchase  money  on 
the  bankruptcy  of  the  vendor  without  having  conveyed,  is 
entitled  to  prove  his  claim  as  one  secured  by  an  equitable  Hen 
on  the  land.^ 

An  assignee  for  the  benefit  of  creditors  and  his  attorney 
may  prove  for  services,  rendered  both  prioi-  and  subsequent  to 
the  filing  of  the  petition  in  bankruptcy,  which  were  beneficial 
to  the  estate.**  Attorneys  for  a  receiver  appointed  by  a  state 
court  prior  to  bankruptcy  are  entitled  to  fees  only  so  far  as 
their  services  were  beneficial  to  the  estate.^"    An  attorney  may 


*Ex  parte  Yonge,  3  Ves.  &  B.  3i ; 
Aflalo  V.  Fourdrinier,  6  Bing.  306; 
Sigsb  yv.  Willis,  No.  12489  Fed. 
Cas.,  3  Ben.  371. 

5  In  re  Kelly,  18  Fed.  Rep.  528. 

^  l7t  re  Wells,  4  Fed.  Rep.  68;  In 
re  Secor,  18  Fed.  Rep.  319;  In  re 
Beaver  Coal  Co..  107  Fed.  Rep.  98, 
5  Am.  B.  R.  787;  In  re  Allen,  95 
Fed.  Rep.  512,  3  Am.  B.  R.  38. 

'In  re  Arnold  &  Co.,  133  Fed. 
Rep.  789;  i3  Am.  B.  R.  320. 


^  In  re  Peasley,  137  Fed.  Rep. 
190,  i4  Am.  B.  R.  496. 

»  Randolph  v.  Scruggs,  190  U.  S. 
533>  47  L-  Ed.  1165,  10  Am.  B.  R. 
I,  overruling  In  re  Peter  Paul  Book 
Co.,  104  Fed.  Rep.  786,  5  Am.  B. 
R.  105;  Stearns  v.  Flick,  103  Fed. 
Rep.  919,  4  Am.   B.   R.  723. 

'"/»  re  Zier  &  Co.  (C.  C.  A.  7tli 
Cir.),  142  Fed.  Rep.  102,  15  Am.  B. 
R.  646.  Randolph  v.  Scruggs,  190 
U.  S.  533.  47  L.  Ed.  il65,  10  Am. 
B.  R.  1. 


342 


LAW     AND     PROCEEDINGS    IN     BANKRUPTCY. 


prove  for  services  rendered  the  bankrupt  in  preparing  a 
deed  of  assignment,  which  was  afterwards  set  aside  by  bank- 
ruptcy proceedings." 


§  112.     Contingent  demands  and  liabilities  not  debts. 

Where  a  liabihty  of  the  bankrupt  is  not  fixed  so  that  it  can 
be  hquidated  by  legal  proceedings  instituted  at  the  time  of 
bankruptcy,  it  is  not  a  debt.  It  is  deemed  so  far  contingent 
that  it  cannot  be  proved  in  bankruptcy,  nor  is  it  released  by 
the  bankrupt's  discharge/  A  sum  of  money  payable  upon 
a  contingency  is  not  provable  because  it  does  not  become  a 
debt  until  the  contingency  has  happened.-  Noii  constat  the 
contingency  will  not  happen. 

Thus,  under  the  trustee  laws  of  Massachusetts,  it  has  been 
held  that  the  wages  of  a  sailor,  being  contingent  on  the  arrival 
of  the  ship,  are  not  a  debt  until  the  ship  has  arrived,  and, 
therefore,  until  then  not  attachable.^  So  of  a  covenant  to 
pay  rent  quarterly.  It  creates  no  debt  until  it  becomes  due.  for 
before  that  time  the  lessee  may  quit,  with  the  consent  of  the 
lessor,  or  he  may  assign  his  term  with  his  consent,  or  he  may 
be  evicted  by  a  title  paramount  to  that  of  the  lessor,  in  either 
of  which  cases  he  will  be  discharged  from  his  covenant.*  So 
a  contract  between  the  shippers  of  a  cargo  and  the  owners  of 
the  ship,  that  the  latter  shall  receive  a  share  of  the  profits,  does 
not  create  a  debt  from  the  former  to  the  latter  until  the 
termination   of  the   voyage."*      Under   a   contract  between   a 


"  Randolph  v.  Scruggs,  190  U.  S. 
533,  47  L.  Ed.  1 165,  10  Am.  B.  R.  i. 

1  In  re  Pettingill  &  Co.,  i37  Fed. 
Rep.  143,-  14  Am.  B.  R.  728 ;  In  re 
Ellis  (C.  C.  A.  6th  Cir.),  143  Fed. 
Rep.  103,  16  Am.  B.  R.  221 ;  Dun- 
bar V.  Dunbar,  190  U.  S.  340,  47 
L.  Ed.   1084,  10  Am.  B.  R.  139- 

=  Dunbar  v.  Dunbar,  190  U.  S. 
340,  47  L.  Ed.  Ii84.  10  Am.  B.  R. 
139;    Godding    v.    Roscenthal,    180 


Mass.  43;  Morgan  v.  Wordell,  178 
Mass.  350;  Insley  v.  Garside  (C. 
C.  A.  9th  Cir.),  121  Fed.  Rep.  699, 
10  Am.  B.  R.  52. 

3  Wentworth  v.  Whittemore,  I 
Ma.ss.  47i. 

4  Wood  V.  Partridge,  II  Mass. 
488.  See  also  Riggin  v.  Magwire, 
15  Wall.  549.  21  L.  Ed.  232. 

5  Davis  V.  Ham,  3  Mass.  33; 
Frothingham  v.  Haley,  3  Mass.  68. 


WHAT    DEBTS    ARE    PROVABLE.  343 

building  contractor  and  a  sub-contractor  that  the  building 
contractor  shall  not  pay  until  he  has  been  paid  by  the  owner 
the  sub-contractor  has  no  provable  claim  against  the  building 
contractor  until  the  owner  pays  the  building  contractor." 

So  a  claim  for  damages  upon  a  bond  conditioned  upon  the 
faithful  performance  of  certain  duties  is  not  a  debt  until  the 
contingency  has  happened  and  the  damage  has  been  assessed.^ 
But  it  has  been  held  that  where  an  agreement  indemnifying 
a  contractor's  surety  assigned  to  the  latter  all  the  contract- 
or's'plant  in  the  event  of  the  contractor  being  unable  to  com- 
plete the  contract,-  and  the  contractor  subsequently  abandoned 
the  contract,  and  was  declared  a  bankrupt,  the  surety  became 
a  creditor  of  the  bankrupt  from  the  date  of  the  latter's  aban- 
donment of  the  contract,  though  the  amount  of  the  surety's 
claim  depended  upon  contingencies,  and  was  not  liquidated.'' 
Before  the  day  at  which  rent  is  covenanted  to  be  paid  it  is  in 
no  sense  a  debt.     It  is  neither  dcbifuiii  nor  sok'ciuhiiu.^ 

A  contract  by  a  husband  to  pay  his  wife  a  certain  sum  an- 
nually during  her  lifetime  or  widowhood  is  not  provable  in 
bankruptcy.^*' 

It  has  been  held  that  the  bond  of  the  bankrupt  to  secure 
payment  to  the  obligee  of  an  annuity  for  life  may  be  proved 
under  Sec.  63a,  clause  1,^'  and  that  the  creditor  might  prove 
under  Sec.  63a,  clause  4,  against  the  estate  of  the  bankrupt 
after  the  liability  had  become  fixed,  where  the  contingency  w^as 
that  the  bankrupt  w^as  the  endorser  of  commercial  paper  not 
due  at  tlie  time  of  filing  the  petition.^-     \Miere  an  adminis- 

«/n  re  Ellis   (C.  C.  A.  6th  Cir.\  i«  Dunbar  v.   Dunbar,    igo   U.    S. 

143    Fed.   Rep.    103,    16   Am.   B.   R.  340,  47  L.  Ed.   i084.   lO  Am.   B.  R. 

221.  1 39. 

^  Ellis     V.     Ham,     28     Me.     385;  "  Cobb    v.    Overman    (C.    C.    A. 

Woodward  v.  Herbert.  24  Me.  358;  4th  Cir.),  109  Fed.  Rep.  65.  6  Am. 

Godding  v.    Roscenthal,    180   IMass.  B.  R.  324. 

43.  ''Moch  V.  National  Bank   (C.  C. 

"Wood  V.  U.  .S.  Fidelity  &  Guar-  A.   3d    Cir.),    107  Fed.   Rep.   897,  6 

antee    Co.,    143    h'ed.    Rep.    424,    16  Am.    B.   R.    11;   /;;   re   Philip   Sem- 

Am.  B.  R.  21.  mer  Glass   Co.    (C.   C.   A.  2d  Cir.), 

'•'De-inc    V.    Caldwell,    127    Mass.  135  Fed.  Rep.  77,  14  Am.  B.  R.  25; 

2R  In   re   Smith,   i46  Fed.   Rep.  923. 


344  l.AVV    AND    PROCEEDINGS    IN     BANKRUPTCY. 

trator  commits  a  breach  and  dies  before  bankruptc)  of  his 
surety  damages  for  breach  is  provable  against  the  estate  of 
the  surety/^  No  provable  claim  exists  where  the  breach  was 
after  bankruptcy.^'' 

It  \vas  held  under  tlie  act  of  1841,  which  provided  for 
proving  uncertain  and  contingent  demands,  that  so  long  as 
the  demand  remained  wholly  uncertain  whether  a  contract 
or  engagement  would  ever  give  rise  to  an  actual  debt  or  lia- 
bility and  there  was  no  means  of  removing  the  uncertainty 
by  calculation,  such  contract  or  engagement  was  unprovable 
under  the  act.^^ 

§  113.    Debts  which  are  a  fixed  liability  provable. 

Debts  of  the  bankrupt  may  be  proved  and  allowed  against 
his  estate  which  are  a  fixed  liability,  as  evidenced  by  a  judg- 
ment or  an  instrument  in  writing,  absolutely  owing  at  the 
time  of  the  filing  of  the  petition  against  him,  whether  then 
payable  or  not,  without  any  interest  thereon  which  would  have 
been  recoverable  at  that  date  or  with  a  rebate  of  interest  upon 
such  as  were  not  then  payable  and  did  not  bear  interest.^ 

In  order  to  be  a  debt  provable  under  this  provision  two 
things  must  concur.  First,  it  must  be  a  debt  with  a  fixed 
liability  absolutely  ownng  at  the  time  of  the  filing  of  the 
petition;  and,  second,  the  debt  must  be  evidenced  by  a  judg- 
ment or  an  instrument  in  writing. 

Under  this  provision  debts  may  be  proved  which  are  due  at 
the  time  of  filing  the  petition  in  bankruptcy  on  judgments, 
bonds  for  a  determinate  sum,  some  debts  arising  under  con- 
tract, notes,  bills  of  exchange,  checks,  etc.  It  should  be  ob- 
served tliat  many  debts  may  be  proved  under  this  clause  and 
also  under  clause  4  of  the  same  section,  which  is  broader  in  its 
terms  and  includes  debts  wdiich  cannot  be  proved  under  this 
section.     What  constitutes  a  fixed  liability  absolutely  owing 


13  Harmon     v.      McDonald,     187  i^  Riggen   v.    Magwire,    15    Wall. 

Mass.  578.  549,  21  L.  Ed.  232. 

!■*  Loring     v.     Kendall,     i     Gray  ^  B.   A.    1898,    Sec.   630. 
(Mass.)    305. 


WHAT    DEBTS    ARE    PROVABLE. 


345 


and  what  are  debts  evidenced  by  a  judgment,  or  an  instrument 
in  writing,  is  further  considered  in  the  next  three  paragraphs. 


§  114.    What  constitutes  a  fixed  liability  absolutely  owing. 

A  fixed  liability  absolutely  owing  means  that  the  obligation 
to  pay  exists  at  the  time  of  filing  the  petition  and  is  sufiiciently 
definite  in  amount  to  permit  of  computation.  It  has  been  held 
that  the  bond  of  a  bankrupt  to  secure  the  payment  to  the 
obligee  of  an  annuity  for  life  may  be  proved  under  this  sec- 
tion.^ A  judgment  note  waiving  exemptions  is  a  provable 
debt.^  The  liability  of  a  bankrupt  as  surety  on  the  bond  of  an 
administrator  is  held  to  be  a  fixed  liability  absolutely  owing 
where  no  final  decree  has  been  rendered  in  the  state  court 
adjudging  the  liability  of  the  principal.'^ 

Contingent  debts  or  liabilities  or  demands,  the  valuation  or 
estimation  of  which  it  is  substantially  impossible  to  prove,  are 
not  provable  debts  under  this  clause,*  or  a  claim  for  a  breach 
of  a  covenant  in  a  lease  where  no  breach  is  shown  prior  to 
bankruptcy,^  or  an  attorney's  fee  stipulated  in  a  judgment 
note  where  the  note  lias  not  been  placed  in  the  hands  of  an  at- 
torney for  collection  prior  to  the  filing  of  the  petition  in  bank- 
ruptcy',*' or  for  the  breach  of  a  contract  of-  lease  where  the 
lessor  has  re-entered  and  taken  possession  of  the  leased  prop- 
erty.'^    The  liability  of  a  bankrupt  as  surety  becomes  a  fixed 


1  Cobb  V.  Overman  (C.  C.  A. 
4th  Cir.),  i09  Fed.  Rep.  65,  6  Am. 
B.  R.  324,  overruling  Bray  v.  Cobb, 
100  Fed.  Rep.  270,  3  Am.  B.  R.  788. 

"  Claster  v.  Soble,  22  Pa.  Super. 
Ct.  631,  TO  Am.  B.  R.  446. 

3  Hibberd  v.  Bailey  (C.  C.  A.  3d 
Cir.),  129  Fed.  Rep.  575,  12  Am. 
B.  R.  104,  reversing  In  re  Wiseman, 
123   Fed.   Rep.    185,    10  Am.   B.   R. 

545- 

*  Dunbar  v.  Dunbar,  190  U.  S. 
340,  47  L.  Ed.  i084,  tO  Am.  B.  R. 
139. 

'^In   re   Penncwell    (C.   C.  A.  6th 


Cir.),  119  Fed.  Rep.  139,  9  Am. 
B.   R.  490. 

^  In  re  Garlington,  115  Fed.  Rep. 
999,  8  Am.  B.  R.  602;  In  re  Keeton, 
126  Fed.  Rep.  462,  11  Am.  B.  R. 
367;  In  re  Gerson  (C.  C.  A 
3d  Cir.),  107  Fed.  Rep.  897.  6  Am. 
B.  R.  11;  /;/  re  Gebhard,  140 
Fed.  Rep.  571,  15  Am.  B.  R.  381. 

But  see  IMcrchants'  Bnnk  v. 
Thomas  (C.  C.  A.  5th  Cir.^  121 
Fed.  Rep.  306,  10  Am.  B.  R.  299. 

'  Lamson  Consol.  Store  Service 
V.  Bowland  (C.  C.  A.  6th  Cir.),  114 
Fed.   Rep.  639,  52  C.   C.  A.  335. 


346 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


liability  by  maturity  notice  and  non-payment  of  the  debt,^ 
but  may  be  proved  under  clause  4  as  a  contract  of  endorse- 
ment.'^ 

The  word  "debt"  is  as  applicable  to  a  sum  of  money 
which  has  been  promised  at  a  future  day  as  to  a  sum  now 
due  and  payable.  Whether  the  debt  is  owing  or  not  is  in  no 
respect  determined  by  a  reference  to  the  time  of  payment. 
A  sum  of  money  which  is  certainly  and  in  all  events  payable, 
is  a  debt  absolutely  owing  without  regard  to  the  fact  whether 
it  be  payable  now  or  at  a  future  time.  The  provision  re- 
quires the  debt  to  be  absolutely  owing,  and  expressly  includes 
both  classes  of  debts;  namely,  those  debts  which  are  pay- 
able at  the  date  of  the  commencement  of  bankruptcy  and  those 
debts  which  are  payable  at  a  subsequent  date.  It  is  sufficient 
if  the  debt  is  a  fixed  liability  absolutely  owing  when  the  petition 
in  bankruptcy  is  filed. ^° 

It  is  the  actual  value  of  the  debt  owing  at  the  commence- 
ment of  bankruptcy  proceedings  that  is  provable."  This  pro- 
vision establishes  that  date  as  the  time  at  which  the  liability 
is  to  be  ascertained  and  determined.  Accrued  interest  at 
that  date  is  as  much  a  part  of  the  indebtedness  as  the  princi- 
pal.^- But  interest  accruing  thereafter  is  not  provable.  The 
question  of  interest  is  further  considered  elsewhere.^ 


13 


§  115.     Judgment  debts  provable. 

It  may  be  stated  as  a  general  rule  that  judgment  debts  are 
provable  in  bankruptcy.     The  statute  recognizes  two  classes 


s/«  re  Schaefer,  104  Fed.  Rep. 
973,  5  Am.  B.  R.  92n :  In  re  Gerson, 
1O5  Fed.  Rep.  891,  5  Am.  B.  R.  89, 
affirmed  (C.  C.  A.  3d  Cir.),  107 
Fed.  Rep.  897,  6  Am.  B.  R.  11. 

9/m  re  Gerson  (C.  C.  A.  3d  Cir.), 
107  Fed.  Rep.  897,  6  Am.  B.  R.  ir. 

'"B.  A.   1898,  Sec.  63a,  clause  i. 

"In  re  Garlington,  T15  Fed.  Rep. 
999,  8  Am.  B.  R.  602;  /;;  re  Pen- 
ncwell  (C.  C.  A.  6th  Cir.),  119 
Fed.  Rep.  139,  9  Am.  B.  R.  490; 
Merchants'  Bank  v.  Thomas  (C.  C. 


A.  5th  Cir.),  10  Am.  B.  R.  299,  121 
Fed.  Rep.  306;  Hibberd  v.  Bailey 
(C.  C.  A.  3d  Cir.),  129  Fed.  Rep. 
575,  12  Am.  B.  R.  104,  reversing 
In  re  Wiseman,  123  Fed.  Rep.  185, 
10  Am.  B.  R.  545. 

^-  Sloan  V.  Lewis,  22  Wall.  150, 
22  L.  Ed.  832;  In  re  Bartenbach, 
No.  1068  Fed.  Cas..  11  N.  B.  R.  61 ; 
In  re  Haake,  No.  5883  Fed.  Cas.,  2 
Saw.  231 ;  In  re  New  Brunswick 
Carpet  Co.,  4  Fed.  Rep.  514. 

"  Sec.    117,    f^flst. 


WHAT    DEBTS    ARE    PROVABLE.  347 

of  judgment  debts  which  may  be  proved.  First,  a  debt  evi- 
denced by  a  judgment  obtained  prior  to  the  commencement 
of  bankruptcy  proceecHngs ;  ^  and,  second,  a  debt  founded 
upon  a  provable  debt  reduced  to  judgment  pending  bankruptcy 
proceedings.- 

Judgment  Debts  Prior  to  Bankruptcy. — In  order  to 
constitute  a  judgment  debt  provable  under  the  first  clause  of 
section  63  a  judgment  must  have  been  actually  rendered.^  A 
mere  verdict  in  an  action  is  not  sufficient.  A  certified  copy 
of  the  judgment  is  evidence  of  the  debt.'*  A  judgment  car- 
ries also  costs  and  interest  to  the  date  of  the  filing  of  the 
petition,  where  it  would  do  so  under  the  laws  of  the  state  in 
which  it  was  rendered.  Such  costs  and  interest  form  a  part 
of  the  provable  debt  in  such  cases.'^  A  judgment  for  costs  is 
regularly  a  provable  debt."  A  judgment  for  breach  of  promise 
of  marriage  is  a  provable  debt.' 

It  should  be  observed  that  only  a  judgment  which  is  an  evi- 
dence of  debt  is  provable.  If  the  nature  of  the  liability,  the 
original  cause  of  action,  is  not  debt,  it  cannot  be  proved  under 
this  clause.  Tlius  it  is  not  a  provable  debt  where  the  I'udg- 
ment  is  for  a  fine  or  penalty  imposed  for  punishment  under 
the  state  law,^  or  for  alimony  whether  in  arrear  at  the  time 
of  adjudication  in  bankruptcy  or  for  alimony  accruing  since 

1  P..   A.    1898,    Sec.   63,   clause    i ;  *  E.r   parte    Anderson,    14    Q.    B. 

In  re  McCauley,  loi  Fed.  Rep.  223,  D.  606. 

4  Am.   B.  R.   122;  In   re  Alderson,  ^  Ex     parte     O'Neil,     No.     10527 

98  Fed.  Rep.  588,  3  Am.  B.  R.  544,  Fed.  Cas.,   i  Low.  163. 

3  X.  B.  N.  189.  6  Graham  v.   Pierson,  6  Hill    (N. 

2B.    A.    1898,    Sec.    63,   clause   5;  Y.)  247. 

In  re  McBryde,  99  Fed.   Rep.  686,  "  In   re   Fife,    109   Fed.    Rep.   880, 

3  Am.   B.   R.   729;   In   re   Fife.   109  6  .\m.  B.  R.  258;  In  re  McCauley, 

Fed.  Rep.  880,  6  Am.  B.  R.  258.  loi    Fed.    Rep.    223,    4   Am.    B.    R. 

3  Black  V.   McClelland,   No.    1462  122;  Finnegan  v.  Hall   (N.  Y.  Sup. 

Fed.     Cas.,     12     N.     B.     R.     481;  Ct.),  6  Am.  B.  R.  648. 

Crouch  V.  Gridley,  6  Hill    (N.  Y.)  ^  In  re  Moore,  in  Fed.  Rep.  145, 

250;   Ex  parte  Columbian  Ins.  Co.  6  Am.  B.  R.  590. 

No.  3037  Fed  Cas.,  2  Low.  5.  But  see  In  re  Alderson,  98  Fed. 

.  Rep.  588,  3  Am.  B.  R.  544. 


348 


LAW     AND    PROCEEDINGS    IN     BANKRUPTCY. 


that  adjudication,"  because  a  judgment  for  alimony  or  an 
allowance  in  the  nature  of  alimony  is  not  a  debt  within  the 
meaning  of  that  word  as  used  in  Sec.  63  of  the  bankrupt  act, 
but  is  a  penalty  imposed  for  failure  to  perform  a  duty,  or  for 
the  support  of  minor  children/"  or  a  judgment  for  seduction, 
or  for  the  commission  of  an  immoral  act,  or  for  the  failure  to 
perform  a  natural  duty." 

A  judgment,  if  not  outlawed,  obtained  at  any  time  prior  to 
the  filing  of  the  petition,  even  within  four  months,  is  prov- 
able.^- It  should  be  observed  that  while  a  judgment  lien  may 
be  invalid  as  a  preference  for  the  reason  that  it  was  obtained 
within  four  months,  the  judgment  is  not  for  this  reason  in- 
valid as  an  evidence  of  the  debt.  The  creditor  may  not  be 
entitled  to  a  preference,  but  still  be  entitled  to  prove  his  debt 
as  a  general  creditor."  But  where  the  judgment  no  longer 
exists  it  is  not  evidence  of  the  debt,  and  the  proof  of  the  claim 
will  not  be  allowed.^*  Where  a  writ  of  error  has  been  prose- 
cuted the  judgment  debt  may  still  be  proved, ^^  subject  to  liav- 


9  Audubon  v.  SInifeldt.  i8i  U.  S. 
575,  45  L.  Ed.  1009,  5  Am.  B.  R. 
829;  Dunbar  v.  Dunbar,  190  U.  S. 
340,  47  L.  Ed.  1084,  10  Am.  B.  R. 
139;  Wetmore  v.  Markoe,  196  U.  S. 
68,  49  L.  Ed.  390,  13  Am.  B.  R.  i ; 
Turner  v.  Turner,  T08  Fed.  Rep. 
785,  6  Am.  B.  R.  289. 

But  see  Arrington  v.  Arrington 
(Sup.  Ct.  N.  C),  10  Am.  B.  R.  103, 
where  it  was  held  that  a  final  judg- 
ment for  alimony  entered  in  an- 
other state  upon  a  decree  for  abso- 
lute divorce  is  a  provable  and  dis- 
chargeable debt. 

In  England  alimony  is  neither 
discharged  nor  provable  in  bank- 
ruptcy. Linton  v.  Linton  (1885), 
15  Q.  B.  D.  239;  Hawkins  v.  Haw- 
kins (1894),  I  Q.  B.  D.  25;  Wat- 
kins  V.  Watkins  (1896),  Prob.  222; 
Kerr  v.  Kerr  (1897),  2  Q.  B.  439. 

-'/n    re    Richard,    94    Fed.    Rep. 


6t,2.  2  Am.  B.  R.  506;  Dunbar  v. 
Dunbar,  190  U.  S.  340,  47  L.  Ed. 
1084,  10  Am.  B.  R.  139;  In  re  Hub- 
bard, 98  Fed.  Rep.  710,  3  Am.  B. 
R.  528;  /;;  re  Baker,  96  Fed.  Rep. 
954,  3  Am.  B.  R.  loi. 

11  Consult  Colwell  v.  Tinker  (N. 
Y.  Sup.  Ct.),  6  Am.  B.  R.  434; 
Y)\f^\er  V.  McCauley  (N.  Y.  Sup. 
Ct.),  6  .A.m.  B.  R.  491 ;  In  re  Maples, 
105  Fed.  Rep.  919,  5  Am.  B.  R. 
426;  Burnham  v.  Pidcock  (N.  Y. 
Sup.  Ct.  App.  Div.),  5  Am.  B.  R. 
590. 

1- /n  re  Farmer,  116  Fed.  Rep. 
763,  g,Am.  B.  R.  19. 

13  /,j  yg  Richard,  94  Fed.  Rep. 
633,  2  Am.  B.  R.  506. 

1*  In  re  Bruce,  No.  2044  Fed. 
Cas.,  6  Ben.  515;  In  re  Lipman, 
94  Fed.  Rep.  353,  2  Am.  B.  R.  46. 

i^/w  re  Sheehan,  No.  127^7  Fed. 
Cas.,  8  N.   B.  R.  345. 


WHAT    DEBTS    AKli    PROVAIJLE.  349 

ing  the  dividends  withheld  until  the  appellate  court  disposes 
of  the  writ  of  error. 

How  far  a  court  of  bankruptcy,  at  the  instance  of  a  trustee 
or  creditors,  may  go  behind  a  judgment  offered  for  proof  is 
not  free  from  doubt.  The  American  cases  under  the  act  of 
1867  incline  strongly  to  the  opinion  that  a  judgment  valid 
against  the  debtor  and  not  in  fraud  of  creditors,  cannot  be 
attacked  in  a  court  of  bankruptcy.^"  But  where  tlie  judgment 
is  void  for  fraud  or  want  of  jurisdiction  in  the  court  rendering 
it,  it  may  be  examined  into  by  a  court  of  bankruptcy  in  which 
it  is  offered  for  proof.  If  there  be  an  intermediate  case  in 
which  it  would  be  discretionary  with  the  court  which  ren- 
dered the  judgment  to  vacate  it  upon  the  ground  of  mistake, 
a  court  of  bankruptcy  usually  will  leave  the  trustee  to  that 
remedy,  postponing  the  proof  in  "tlie  meantime.^'' 

The  English  rule  seems  to  be  somewhat  broader.  A  judg- 
ment is  there  deemed  prima  facie  evidence  of  a  provable  debt, 
but  if  there  are  circumstances  which  cast  suspicion  upon  the 
judgment  or  on  the  debt  on  which  it  was  founded,  the  court 
has  the  right  to  call  upon  the  claimant  to  prove  the  consider- 
ation for  the  deljt." 

It  has  been  held  under  the  present  act  that  "the  court  will 
look  beyond  the  form  of  the  judgment.  It  will  look  at  the  na- 
ture of  the  liability,  the  original  cause  of  action."  ^^ 

Debts  Reduced  to  Judgment  Pending  Bankruptcy. — ■ 
Another  class  of  judgment  debts  which  may  be  proved  in 
bankruptcy  are  those  "founded  upon  provable  debts  reduced 
to  judgments  after  the  filing  of  the  petition  and  before  tlie 
consideration  of  the  bankrupt's  application  for  a  discharge, 

See  In   re   Yates,    114   Fed.    Rep.  Fed.   Cas.,  4  N.   B.   R.   38. 

365,  8  Am.  B.  R.  69.  17  Ex  parte  Anderson,  14  Q.  B.  D. 

'«/m    re    Burns,    No.    2182    Fed.  606;  Ex  parte  Lennox,  16  Q.  B.  D. 

Cas.,     I     N.     B.     R.     174;     Camp-  315;  Ex  parte  Revell,   13  Q.  B.  D. 

bell's   Case,   No.  2349  Fed.   Rep.,    i  720:  Ex  parte  Seaton,  8  Mor.  97. 

Abb.   U.   S.    185;   Ex  parte   O'Ncil,  isTnrner    v.    Turner,     108    Fed. 

No.    10527   Fed.    Rep.    i   Low.    163;  Rep.  785,  6  Am.  B.  R.  289. 
McKensey    v.    Harding,    No.    8866 


350  LAW      AM)     PROCEEDINGS     IX     BANKRUPTCY. 

less  costs  incurred  and  interests  accrued  after  the  filing  of  the 
petition  and  up  to  the  time  of  the  entry  of  such  judgments."  ^^ 

Two  elements  are  necessary  to  make  a  judgment  debt  of 
this  character  provable.  First,  it  must  be  founded  upon  a 
provable  debt;  and,  second,  it  must  be  reduced  to  judgment 
pending  bankruptcy  proceedings  before  the  bankrupt's  ap- 
plication for  a  discharge  is  considered  by  the  court.  In  this 
class  all  debts  are  on  the  same  basis  in  respect  to  interest  as 
other  claims.'"  The  actual  value  of  the  debt  at  the  date  of 
the  filing  of  the  petition  is  what  is  provable  after  costs  have 
been  deducted. 

There  was  much  conflict  of  opinion  with  reference  to 
whether  this  class  of  debts  was  provable  under  the  former 
bankrupt  acts.  Under  these  acts,  as  under  the  present  stat- 
ute, debts  created  during  bankruptcy  were  not  provable.  The 
division  of  opinion  grew  out  of  the  application  of  the  doc- 
trine of  merger.  Some  judges  conceived  the  debt  existing  at 
the  time  of  filing  the  petition  to  be  merged  in  the  judgment 
obtained  thereafter  and  to  become  a  new  debt,  as  of  the  date 
of  the  judgment,  and  hence  not  provable.^^  Others  held  the 
view  that  the  judgment  retained  the  character  of  the  indebted- 
ness out  of  which  it  arose,  and  was  not  to  be  regarded  as  a 
new  debt  arising  subsequently  to  the  filing  of  the  petition.^^ 

I!' B.  A.  1898,  Sec.  63,  clause  5;  2  Denio  (N.  Y.)  j^;  Roden  v.  Jaco, 
In  re  McBryde,  99  Fed.  Rep.  686,  17  Ala.  344;  McCarthy  v.  Good- 
3  Am.  B.  R.  729 ;  In  re  Fife,  109  win,  8  Mo.  App.  380. 
Fed.  Rep.  880,  6  Am.  B.  R.  258.  22  /„  ,.^  Crawford,  No.  3363  Fed. 
^"See  Sec.  117,  post.  Cas.,  3  N.  B.  R.  698;  In  re  Brown, 
21  In  re  Williams,  No.  17705  Fed.  No.  1975  Fed.  Cas.,  5  Ben.  i ; 
Cas.,  2  N.  B.  R.  229;  In  re  Mans-  Barnes  v.  United  States,  No.  1023 
field,  No.  9049  Fed.  Cas.,  6  N.  B.  Fed  Cas.,  12  N.  B.  R.  526;  In  re 
R.  388;  In  re  Gallison,  No.  5203  Vickery,  No.  16930  Fed.  Cas.,  3  N. 
Fed.  Cas.,  2  Low.  72;  Sanford  v.  B.  R.  696;  Fox  v.  Woodruff,  9 
Sanford,  58  N.  Y.  67;  Bradford  v.  Barb.  498;  Dresser  v.  Brooks,  3 
Rice,  102  Mass.  472 ;  Cutter  v.  Barb.  429 ;  Johnson  v.  Fitzhugh,  3 
Evans,  115  Mass.  27;  Woodbury  Barb.  Ch.  360;  Clark  v.  Rowling, 
V.  Perkins,  5  Cush.  86;  Ellis  v.  3  N.  Y.  216;  Stockwell  v.  Wood- 
Ham,  28  Me.  385;  Uran  v.  Houd-  ward,  52  Vt.  234;  Harrington  v. 
lette,  36  Me.  15;  Pike  v.  McDonald,  McNaughton,  20  Vt.  293;  Blanford 
32   Me.   418;   Kellogg  v.    Schuyler,  v.   Foote,   i   Cowp.   138;   Rogers  v. 


WHAT    DEBTS    ARE    PROVABLE.  351 

The  latter  view  was  taken  by  the  supreme  court  when  the 
matter  came  before  it  for  the  first  time,  about  eight  years  after 
the  bankrupt  law  had  been  repealed."'"  No  such  conflict  of 
opinion  can  arise  under  the  present  statute,  which-  expressly 
declares  such  judgments  to  be  provable  debts. 

§  ii6.    Debts  evidenced  by  an  instrument  in  writing. 

A  debt  which  is  a  fixed  liability  as  evidenced  by  an  instru- 
ment in  writing  and  absolutely  owing  at  the  time  of  the  filing 
of  the  petition  is  provable.^  A  debt  created  by  oral  agree- 
ment or  upon  an  open  account  is  provable  under  another  pro- 
vision of  the  63d  section,  but  not  under  the  first  clause."  An 
instrument  in  writing,  as  used  in  this  connection,  is  a  written 
document  which  is  the  legal  evidence  of  a  fixed  liability  to 
pay  a  debt,  such  as  bonds  for  a  determinate  sum,  notes,  bills 
of  exchange,  checks,  etc.  Checks,  however,  are  not  evidence 
of  a  debt  accruing  to  a  bank  by  reason  of  an  overdraft.^ 

Where  the  bankrupt  is  the  maker,  or  the  one  primarily 
bound  by  the  written  instrument,  the  debt  evidenced  by  the 
written  instrument  is  clearly  provable.  But  it  is  the  debt 
due  in  equity  wdiich  is  provable  and  not  the  penalty.*  It  has 
been  held  that  where  a  person  previous  to  becoming  a  bank- 
Ins.  Co.,  I  La.  Ann.  i6i ;  Imlay  v.  *  Ex  Jarte  Fidgeon,  4  Dea.  217; 
Carpentier,  14  Cal.  173;  Stratton  v.  Ex  parte  Maclean,  2  Mont.  D.  & 
Perry,  2  Tenn.  Ch.  633 ;  Raymond  D.  564,  s.  c.  6  Jur.  609.  See  also 
V.  Merchant,  3  Cow.  147;  Dick  v.  Wilson  v.  Nat.  Bank,  3  Fed.  Rep. 
Powell,    2    Swan    632;    McDonald      391. 

V.  Ingraham,  30  Miss.  389;  Ander-  In  Ex  parte  Capper,  4  Chan.  D. 

son  V.  Anderson,  65  Ga.  518;  Betts  724,  it  was  held  that  where  a  build- 
V.  Bagley,  12  Pick.  572;  Dawson  ing  contract  provided  that  in  case 
V.  Hartsfield,  79  N.  C.  334;  Dins-  the  contract  should  not  be  in  all 
dale  V.  Fames,  4  Moore  350 ;  2  things  duly  performed  by  the  con- 
Brod.  &  B.  8.  tractors  the}'  should  pay  to  the  em- 

23  Boynton  v.  Ball,  121  U.  S.  457,      plover    1000/  as   and   for   liquidated 
466,  30  L.  Ed.  985.  damages,  yet  that  the  1000/  was  in 

^  B.  A.  189S,  Sec.  63,  clause  i.  the  nature  of  a  penalty,  and  proof 

-  B.  A.  1898,  Sec.  63,  clause  4.  could    only   be   had    for   the   actual 

■"•  In    re    New    Brunswick    Carpet      damage    sustained. 
Co.,   4   Fed.    Rep.    515;    Fletcher   v. 
Manning.  12  M.  &  W.  571. 


5S2  LAW    AND    TKOCEEDINGS    IN    BANKRUPTCY, 

rupt  was  liable  on  a  bond,  by  the  terms  of  which  he  became  a 
continuing  guarantor  of  notes  discounted  by  a  certain  bank 
for  a  company  of  which  he  was  the  president,  and  at  the  time 
of  his  bankruptcy  the  bank  held  a  note  so  discounted  indorsed 
by  him,  the  fact  that  a  renewal  note  was  given  after  the  filing 
of  his  petition  did  not  prevent  the  debt  from  being  proved 
as  a  claim  against  his  estate.^ 

Notes  given  by  a  corporation  to  pay  for  shares  of  its  own 
stock  are  not  provable  debts  against  the  estate  of  the  corpora- 
tion.*' 

The  Liabilities  of  Bankrupts  as  Sureties^  Endors- 
ers, ETC. — A  provable  debt  may  arise  with  reference  to  an 
endorser  or  surety,  first,  where  the  bankrupt  is  the  endorser 
or  the  surety;  second,  where  another  person  is  the  surety  or 
an  endorser  for  the  bankrupt. 

In  case  the  bankrupt  is  the  person  secondarily  liable  as  an 
endorser  or  a  surety,  it  is  necessary  that  the  liability  has 
become  absolute  and  fixed,  as  by  maturity  notice  and  non-pay- 
ment of  the  debt  prior  to  bankruptcy  proceedings,  to  be  prov- 
able under  the  first  clause  of  Sec.  63,^  but  the  contract  of  en- 
dorsement may  be  proved  under  clause  4  of  the  same  section.^ 

^'  In  re  Letchworth,   19  Fed.  Rep.  the  note  by  delivery  to  Knott,  who 

S73.      But    see   In    re    Ankeny,    100  endorsed    it    "to    be    liable    in    the 

Fed.  Rep.  614,  4  Am.  B.  R.  72.  second  instance"  to  McNeil.    Segur 

^  In   re    Smith   Lumber    Co.,    132  paid  ofif  and  discharged  the  note  to 

Fed.   Rep.   618,   13   Am.   B.   R.    123.  Kunke   while   the   note  was   in   his 

"^  In   re   Schaefer,    104   Fed.    Rep.  possession.  McNeil  then  sued  Knott, 

973'  3  N.  B.  N.  261,  5  Am.  B.  R.  who,  pending  the  action,  had  been 

92h;  In   re   Gerson,    105   Fed.   Rep.  discharged  under  the  bankrupt  act 

891,   5   Am.   B.   R.  89,  3   N.    B.   N.  of    1841.     Knott   pleaded   discharge 

249.    affirmed    (C.    C.    A.    3d    Cir.)  in  bankruptcy.     The  court  held  the 

107  Fed.  Rep.  897,  6  Am.  B.  R.  11 ;  debt  to  be  a  provable  debt  in  bank- 

In   re  Loder,    No.   8457   Fed.   Cas.,  ruptcy    and    the    plea   of   discharge 

4    B;n.    305;     In    re    Bruce,     No.  in  bankruptcy  a  good  defense. 
2044  Fed.  Cas.,  6  Ben.  515.  ''Compare  R.  S.  Sec.  5069. 

In  McNeil  v.   Knott,   11   Ga.   142,  In  re  Gerson   (C.  C.  A.  3d  Cir.), 

Segur  and   Crawford  made  a  note  107  Fed.  Rep.  897,  6  Am.  B.  R.  11, 

for    $100,    payable  Christmas    next  affirming  105  Fed.  Rep.  891,  5  Am. 

thereafter  to  Henry  Kunkle  or  bear-  B.  R.  89. 
er.     Kunkle,  the  payee,  transferred 


WHAT    DEBTS    ARE    PROVABLE.  353 

It  has  been  held  that  where  a  city  treasurer  defaulted  and 
the  city  council  passed  a  resolution  that  the  sureties  might 
give  their  individual  bonds  for  their  pro  rata  of  the  balance 
due,  but  that  the  old  bonds  should  be  retained  and  remain  in 
full  force,  that  the  estates  of  the  bankrupt's  sureties  who  did 
not  give  such  bonds  were  liable,  and  that  the  city  might 
prove  against  their  estates  for  the  whole  debt." 

Where  the  holder  has  forfeited  his  right,  or  the  debt  has 
been  discharged  by  payment,  no  provable  debt  exists  against 
the  estate  of  the  bankrupt.  Thus,  where  the  note  is  barred 
by  the  statute  of  limitations,  or  where  a  note  payable  on  de- 
mand is  not  presented  for  payment,  and  no  demand  made 
within  a  reasonable  time,  the  endorser  is  released."  Where 
the  maker  has  paid  a  part  of  the  note  to  the  holder,  the 
holder  can  prove  against  the  bankrupt's  estate  only  for  the 
balance  not  paid."  So  also  where  a  settlement  has  been, 
with  leave  of  court,  made  with  the  makers  of  a  note  at  forty 
cents  on  the  dollar,  the  creditor  is  only  entitled  to  prove  for 
sixty  percent  against  the  estate  of  the  bankrupt  sureties. ^^ 
Creditors  are  entitled  to  dividends  from  the  estate  of  a  bank- 
rupt endorser  only  on  the  balance  due  after  collaterals  have 
been  exhausted. ^^ 

It  may  be  observed  in  this  connection  that  the  liability  of 
a  person  who  is  a  co-debtor  with,  or  guarantor,  or  in  any 
manner  a  surety  for,  a  bankrupt,  is  not  altered  by  the  dis- 
charge of  such  bankrupt." 

Where  the  Endorser,  Surety,  etc.,  is  a  person  other 
THAN  the  Bankrupt. — A  person  who  is  secondarily  liable 
for  a  debt  of  the  bankrupt,  as  endorser  or  surety,  has  a  prov- 
a1)le  claim  against  the  estate,  provided  the  principal  creditor 
fails  to  prove  his  debt.^"'"' 

^  In  re  Blumer,  13  Fed.  Rep.  623.  Cns,,  4   N.   B.   R.   571;   In   re   Bur- 

10 /m  re  Crawford,  No.  3364  Fed.  chell,  4  Fed.  Rep.  406. 
Cas.,  5  N.  B.  R.  301.  i'^ /«  re  Matthews,  132  Fed.  Rep 

'■i  In  re  Pulsifer,  14  Fed.  Rep.  274,  13  Am.  B.  R.  gr. 
247.  11  B.    A.    1898,    Sec.    16. 

12 /n  re  Howard,   No.   6750  Fed.  i^  B.   A.    1898,   Sec.  SJi- 


354  LAW     AM)    rUOCllI'lDlNUS    IN     I!  A  N  KRL' PTCV. 

The  statute  provides  that  ''whenever  a  crechtor  whose 
claim  against  a  bankrupt  estate  is  secured  by  the  individual 
undertaking  of  any  person,  fails  to  [)rovc  such  claim,  such 
person  may  do  so  in  the  creditor's  name,  and  if  he  discharge 
such  undertaking  in  whole  or  in  part  he  shall  be  subrogated 
to  that  extent  to  the  riglits  of  the  creditor."  "'  The  surety 
has  no  provable  claim  until  the  creditor  'fails  to  prove. ^' 

This  provision  is  intended  to  protect  the  surety  or  en- 
dorser. The  creditor  may  prove  his  debt  under  section  63 
of  the  act,  but  he  is  not  compelled  to  do  so.  He  has  the 
double  security  of  the  bankrupt's  liability  and  that  of  the 
surety.  He  may  prefer  not  to  prove  his  debt  against  the 
bankrupt's  estate,  but  rely  wholly  upon  the  endorser  or  sure- 
ty. In  such  case,  were  it  not  for  this  provision,  the  surety 
clearly  would  be  without  protection,  for  it  is  evident  that  the 
debt  to  be  proved  by  the  surety  is  not  the  indebtedness  of  the 
bankrupt  to  him.  He  therefore  would  have  no  provable 
claim  against  his  estate.  This  clause  of  the  act,  however, 
expressly  gives  him  this  right.  If  the  creditor  proves  his 
debt,  and  receives  his  proportionate  share  of  the  bankrupt's 
estate  with  other  creditors,  the  surety  or  endorser  has  no 
provable  claim.  For,  were  he  also  permitted  to  prove  the 
debt,  it  would  be  to  allow  the  same  debt  to  be  proved,  in 
part  at  least,  twice.     Whatever  the  creditor  receives  in  div- 

See  also  Mace  v.  Wells,  7  How.  800,  2  Am.   B.   R.  651 ;   Morgan  v. 

272,  12  L.  Ed.  698;  In  re  HoUister,  Wordell,  178  Alass.  350,  3  N.  B.  N. 

3  Fed.  Rep.  452;  Kyle  &  Gunter  v.  513;  Livingston  v.  Heineman  (C.  C. 

Bostick  &  Sherrod,  10  Ala.  589;  Lis-  A.    6th    Cir.),    120    Fed.    Rep.    786, 

comb  V.  Grace,  26  Ark.  231;  Liddell  10  Am.   B.   R.   39;  In  re  Lyon    (C. 

V.   Wiswell,   59  Vt.  365;    Post,   Ad-  C.  A.  2d  Cir.),   121   Fed.   Rep.  72^, 

ministrator,  v.  Losey  et  al.,  iii  Ind.  10   Am.    B.    R.    25;    Insley   v.    Gar- 

74;  Fulwood  V.  Bushfield,  14  Penn.  side    (C.   C.  A.  9th   Cir.),   121   Fed. 

St.  90;  Tubbs  V.  Williams,  9  N.  C.  Rep.  699,  10  Am.  B.  R.  52;  Swarts 

i;  Morse  v.  Hovey,  7  N.  Y.  Chan.  v.  Fourth  Nat.  Bank  (C.  C.  A.  8tfi 

Rep.    (i   Sandf.)    186;  In  re  Filer-  Cir.),  117  Fed.  Rep.  i,  8  Am.  B.  R. 

horst.  No.  4381   Fed.  Ca.s.,  5  N.  B.  673;    Swarts    v.    Siegel    (C.    C.    A. 

R.    144.  8th  Cir.),  117  Fed.  Rep.  13,  8  Am. 

16  B.  A.  1898,  Sec.  571.     Compare  B.  R.  689. 
R.  S.  Sec.  5070.  ^^  Phillips  v.  Dreher  Co.,  112  Fed. 

In     re     Heyman,     95     Fed.     Rep.  Rep.   404,   7   Am.   B.   R.   326. 


WHAT    DEBTS    ARE    PROVABLE.  355 

ideiids  diminishes  pro  tan  to  the  surety's  habihty,  and  is 
equivalent  to  a  payment  made  on  his  account  and  for  his 
benefit. 

Where  the  surety  has  paid  a  part  of  the  debt  to  the  creditor, 
such  creditor  may  prove  for  the  fuU  amount  owing  by  the  bank- 
rupt upon  the  obhgation  and  after  receiving  in  dividends  satis- 
faction of  the  balance  due  him,  will  hold  as  trustee  for  the 
surety  any  dividends  received  by  him  in  excess. ^^  In  case 
the  creditor  does  not  so  receive  the  full  amount  of  his  debt  the 
surety  can  not  complain  if  called  upon  to  pay  the  balance. 
Where  the  creditor  has  insisted  upon  the  double  liability  he  had 
secured,  the  surety  has  no  right  to  intercept  any  sums  which 
the  creditor  can  collect  from  the  bankrupt's  estate,  or  to  di- 
minish the  funds  to  which  he  has  a  right  to  look  for  satisfac- 
tion. It  is  only  when  the  holder  is  fully  satisfied  that  the 
surety  can  urge  any  claims  to  dividends  payable  on  the  orig- 
inal debt  of  the  bankrupt. 

Where  a  judgment  recovered  against  a  maker  and  payee 
of  a  note  is  satisfied  by  the  payee,  the  latter's  claim  against  the 
maker  is  provable  under  Sec.  57/  and  barred  by  discharge.^* 

In  case  the  creditor  omits  to  prove,  the  suretv  may  do  so, 
and  will  hold  any  dividends  he  may  receive  to  meet  his  lia- 
bility to  the  original  creditor  to  the  extent  he  shall  have 
actually  discharged  it  and  no  further.  It  is  not  necessary  to 
make  the  claim  provable  that  the  surety  has  paid  the  debt  for 
which  he  is  liable.""  He  may  prove  his  claim  although  he 
does  not  pay  the  note  or  other  liability  until  after  the  com- 
mencement of  proceedings   in  bankruptcy,'"^  or  although   the 

^^  Swarts    V.    Fourth    Nat.    Bank  Barb.  Ch.  404;  Kyle  v.  Bostick.   10 

(C.  C  A.  8th  Cir.),   117  Fed.  Rep.  Ala.    589;    Tubbs'  v.    Williams,    9 

I,  8  Am.  B.  R.  673;  In  re  Bingham,  Tred.    i;    Inilwood    v.    I'.uslilicld,    14 

94  Fed.  Rep.  796,  2  Am.  B.  R.  223;  Pcnn.  90. 

In   re   Heyman,  95    Fed.   Rep.   800,  Contra,   Cake  v.   Lewis,   8   Penn. 

2  Am.   B.   R.  651.  493;    McMullin   v.    Bank,    2    Penn. 

"*  Smith    V.    Wheeler,    55    N.    Y.  343. 

App.   Div.   170.  -^  Hardy    v.    Carter,    8    Humph. 


2fl 


Mace  V.  Wells,  7  How.  272,   12       (Tenn.)    153;  Tunno  v.   Bethune, 
L.   Ed.   698,    17  Vt.   503:    Morse  v.      Dessau   (S.  C.)   285. 
Hovcy.  I  Sandf.  Ch.  (\.  V, )   186.  r 


356 


LAW     AND    I'ROCEEDI  X  (.;S    I  N    U  A  \  K  R  L'  I'TCV. 


debt  does  iml  fall  due  until  after  the  petition  is  filed.-'-'  A 
joint  maker  who  takes  up  the  note  by  giving  his  own  indi- 
vidual nt>te  is  entitled  to  prove  his  debt."'"  But  an  endorser 
or  a  surety  is  authorized  to  prove  a  debt  in  case  only  that  the 
principal  creditor  could  prove  it  and  fails  to  do  so.-^  He  can 
not  participate  in  the  distribution  of  the  estate  until  he  has 
surrendered  preferences  received  by  the  creditor.-'"'  He  ac- 
quires no  higher  or  better  rights  than  the  prior  holder. 

A  creditor  or  a  surety  or  endorser  is  entitled  regularly  to 
prove  the  whole  debt  against  the  estate  of  a  bankrupt  maker, 
irrespective  of  wdiether  payments  have  been  made  by  the 
surety  to  the  creditor  or  not.-°  It  is  evident  that  the  estate  of 
the  bankrupt  is  indebted  to  the  creditor  for  the  whole  debt. 
This  debt  is  not  affected  by  dealings  between  the  surety  and 
the  principal.  It  is  immaterial  wdiether  the  payment  of  this 
indebtedness  is  made  to  the  creditor  directly  or  to  an  endorser 
or  surety  wdio  has  been  subrogated  to  the  rights  of  the  cred- 
itor by  actual  payments  made  by  him. 


Where  Principal  and  Surety  are  both  Bankrupts. — 
It  is  well  settled  that  if  a  mortgage,  pledge  or  other  lien  is 
given  by  a  principal  debtor  to  secure  his  endorser  and  other 


22  Crafts  V.  Mott,  5  Barb.  (N.  Y.) 
305,   affirmed    in   4   N.    Y.   606. 

23  In  re  Morrow,  No.  9821  Fed. 
Cas.,  2  Saw.  356. 

21  B.  A.  1898,  Sec.  57/;  Morgan  v. 
Wordell,  178  Mass.  350,  3  N.  B.  N. 
513;  Sigsby  V.  Willis,  No.  12849 
Fed.  Cas.,  3  Ben.  371 ;  Ellis  v.  Ham, 
28  Me.  38s ;  Crafts  v.  Mott,  4  N.  Y. 
606. 

2-''' Livingston  v.  Heineman  (C.  C. 
A.  6th  Cir.),  120  Fed.  Rep.  786, 
10  Am.  B.  R.  39;  In  re  Lyon  (C.  C. 
A.  2d  Cir.),  121  Fed.  Rep.  723. 
10  Am.  B.  R.  25;  Swarts  v.  Siegel 
(C.  C.  A.  8th  Cir.),  117  Fed.  Rep. 
13.  8  Am.   B.   R.  689. 


2«  Gorman  v.  Wright  (C.  C.  A. 
4th  Cir.),  136  Fed.  Rep.  164,  14  Am. 
B.  R.  135;  In  re  Noyes  Bros.  (C.  C. 

A.  I  St  Cir.),  127  Fed.  Rep.  286,  11 
Am.  B.  R.  506 ;  In  re  Heyman,  95 
Fed.  Rep.  800,  2  Am.  B.  R.  651; 
In  re  Swift,  106  Fed.  Rep.  65.  5 
Am.  B.  R.  415 ;  Swartz  v.  Fourth 
Nat.  Bank  (C.  C.  A.  8th  Cir.),  117 
Fed.  Rep.  i,  8  Am.  B.  R.  673 ;  In  re 
Bingham,  94  Fed.  Rep.  796,  2  Am. 

B.  R.  223;  In  re  Ellerhorst,  No. 
4381  Fed.  Cas.,  s  N.  B.  R.  144; 
Downing  v.  Traders  Bank,  No.  4046 
Fed.  Cas.,  2  Dill.  136;  as  explained 
In  re  Hollister,  3  Fed.  Rep.  452; 
Ex  parte  Talcntt,  No.  13184  Fed. 
Cas.,  9  B.  R.  502. 


WHAT    DEBTS    xVRE    PROVABLE.  357 

surety,  and  both  become  bankrupts,  the  holders  of  the  notes 
or  other  debts  for  which  the  surety  is  bound  have  an  equity 
to  apply  the  property  to  the  discharge  of  their  debts  specitic- 
ally.'-'  A  distinction  has  been  sometimes  taken  between  a 
security  for  the  indemnity  of  the  surety  and  one  conditioned 
for  the  payment  of  the  debt.  But  it  seems  well  settled  by 
the  authorities  that  the  creditor  has  an  equitable  claim  to  the 
security  as  well  when  a  mortgage  is  g-r\en  fc-  mere  indemnity 
as  when  the  condition  is  added  that  the  principal  shall  pay 
the  debt.-' 

It  is  quite  immaterial  whether  the  surety  has  or  has  not 
actually  paid  the  debt.  If  he  has  become  absolutely  bound 
for  its  payment,  as  was  said  by  Lord  Eldon,-'-'  "It  is  true  these 
bills  were  not  paid,  but,  inasmuch  as  the  estate  of  the  debtor 
could  not  be  withdrawn  until  the  debts  were  paid  .  .  . 
and  inasmuch  as  the  estate  of  the  creditor  holding  the  security 
was  in  a  condition  that  he  was  not  able  to  make  payment  of 
the  security  and  pay  the  bills.  .  .  .  The  bill  holder  comes 
in.  not  on  account  of  any  special  lien  he  has  upon  the  property, 
but  because  the  person  from  whom  he  holds  has  a  security, 
which  security  cannot  be  taken  away  until  all  liability  upon 
the  bills  is  at  an  end." 

Where  a  maker  and  an  endorser  whose  liability  is  fixed  are 
both  adjudged  bankrupts  the  whole  debt,  it  seems,  may  be 
proved  against  either  or  both  estates. •''°  The  reason  is  that 
each  of  them  is  liable  for  the  full  amount.  The  debt  only 
can  be  collected  once.  If  the  estate  of  the  endorser  discharges 
a  part  of  the  debt  it  would  seem  that  the  trustee  of  the  en- 
dorser might  prove  such  claim  against  the  estate  of  the 
maker. '^ 

27£.t-  parte  Morris,  Xo.  9823  Fed.  No.  9275  Fed  Cas .  2  Ilask.  289. 

Cas.,  2  Low.  424 ;  Matthews  v.  Ab-  29  j^    ^^   parte   Waring,    19   Ves. 

bott,   Xo.  9275    Fed.   Cas.,  2   Hask.  345. 

289.  ^°  Wollaston  v.  Porter,  122  Mass. 

-^  New  Bedford  Institution  v.  Fair  308. 

Haven  Bank,  9  Allen   (Mass.)    178;  ^^  B.  A.  1898,  Sec.  S7m.    See  Wol- 

approvcd    in    Matthews    v.    Abbott,  laston  v.  Porter,  122  Mass.  308. 


358  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

§  117.    Interest. 

In  ascertaining  the  amount  of  a  debt  actually  owing  at  the 
time  the  petition  in  bankruptcy  is  filed,  the  question  of  in- 
terest becomes  important.  Debts  which  are  provable  under 
the  first  clause  of  section  63  are  allowable  "with  any  interest 
thereon  which  would  have  been  recoverable  at  that  date  or 
with  a  rebate  of  interest  upon  such  as  were  not  then  payable 
and  did  not  bear  interest." 

By  this  provision,  interest  which  has  accrued  and  would 
have  been  recoverable  at  the  date  of  filing  the  petition  is  to 
be  added  to  and  become  a  part  of  the  principal  debt.^  The 
interest  which  is  to  be  so  added  is  clearly  that  which  could 
have  been  recovered  under  the  state  law,'  or,  in  the  absence 
of  state  law,  under  the  laws  of  the  United  States.^  Hence 
if  the  interest  is  usurious,  so  much  of  the  debt  and  interest  is 
provable  as  could  be  recovered  under  the  local  law.*  R  is 
obvious  that  interest  which  accrues  subsequently  is  not  a 
debt  absolutely  owing  at  the  time  of  the  filing  of  the  petition 
in  bankruptcy.  Where  a  debt  bearing  interest  at  specified 
intervals,  becomes  due  and  payable  before  proceedings  in 
bankruptcy  are  commenced,  the  creditor  is  entitled  to  prove 
for  such  interest,  and  also  for  interest  from  the  date  of  ma- 
turity.^ 

Where  the  debt  is  payable  at  a  future  date  the  present 
value  of  the  debt  only  is  provable.  If  such  debts  bear  inter- 
est all  interest  subsequent  to  the  filing  of  the  petition  is  re- 


^  Sloan  V.  Lewis,  22  Wall.  150,  22  Fed.    Cas.,    2   Saw.    416;    Nat.    Ex- 

L.  Ed.  832;  In  re  Haake.  No.  58^3  change   Bank  v.   Moore,    No.    10041 

Fed.  Cas.,  2  Saw.  231 ;  In   re  Bar-  Fed.  Cas.,  2  Bond  170. 

tenbach,    1068   Fed.    Cas.,    ti    N.   B.  ^ /«  re  Wild,  No.  17645  Fed.  Cas., 

R.  61 ;  In  re  Orne,  No.  T0581  Fed.  1 1     Blatch.     243 ;     Nat.     Exchange 

Cas.,   I    Ben.    161.  Bank    v.    ]\Ioore,    No.    10041    Fed. 

-In  re   Prescott,  No.   11389  Fed.  Cas.,  2  Bond  170. 

Cas.,  5  Biss.  523 ;  In  re  Conrad,  No.  *  See  cases  cited  in  last  two  notes 

3126  Fed.  Cas.,  6  A.  M.  Law  Rev.  above;  In  re  Worth,  130  Fed.  Rep. 

385 ;  Providence  County  Sav.  Bank  927,  12  Am.'  B.  R.  566. 

V.    Frost,    No.    1 1453    Fed.    Cas.,    8  ■'"'/«  re  Bartenbach,  No.  1068  Fed. 

Ben.  293;  In  re  Pittock,  No.   11 189  Cas.,  11  N.  B.  R.  61. 


WHAT    DEBTS    ARE    PROVABLE.  359 

bated.  Where  such  debts  do  not  bear  interest  and  are  paya- 
ble at  a  future  date,  the  present  vakie  of  the  debt  is  ascer- 
tained by  deducting  from  the  amount  of  the  debt  the  amount 
of  interest  on  it,  from  the  date  of  the  fihng  of  the  petition 
until  the  time  it  becomes  payable."  The  remainder  only  is 
provable. 

It  is  manifest  that  both  classes  of  creditors,  namely,  those 
whose  debt  has  matured  and  those  whose  debt  is  payable  at 
a  future  date,  are  to  be  on  an  equal  footing.  The  date  of 
the  filing  of  the  petition  is  established  as  the  time  at  which 
the  liability  is  to  be  ascertained  and  determined.  It  may 
also  be  observed  that  where,  as  in  most  of  the  states  of  the 
Union,  interest  is  regulated  by  law,  and  all  the  debts  of  the 
bankrupt  bear  the  same  or  nearly  the  same  rate  of  interest, 
it  is  immaterial  to  the  creditor  at  what  time  the  interest  stops 
on  his  debts,  provided  interest  on  all  the  debts  stops  simul- 
taneously with  his  own.  For  his  proportionate  share  of  the 
assets  will  be  the  same  if  the  same  period  is  fixed  for  the 
stoppage  of  interest  on  all  the  debts. 

Preferred  creditors,  however,  are  entitled  to  interest  upon 
their  claims  to  the  date  of  the  actual  payment." 

§  ii8.     Costs. 

Where  costs  are  incident  to  a  judgment  obtained  prior  to 
bankruptcy  proceedings  ^  it  is  regularly  a  provable  debt  un.Ier 
section  63.  The  reason  for  this  is  that  it  is  a  fixed  liability 
evidenced  by  a  judgment. 

The  former  acts  contained  no  provision  for  costs  in  pend- 
ing cases,  or  where  the  judgment  was  obtained  pending  bank- 
ruptcy proceedings.-  But  the  present  act  expressly  provides 
that  costs  are  provable  in  such  cases.  Among  the  debts  of 
the  bankrupt  which  may  be  pro\cil  and  allowed  against  his 

"/»  re  Ornc,  Xo.  105^1  Fed.  Cas.,  Cas..   T  T.ow.   i6,v.  Graham  v.   Picr- 

I  Ron.  361.  son,  6  TTill   (X.  V.)  247. 

■  /)(   re  Strachen,   Xo.   1.3519  Fed.  2/7;    re    Fortune.    Xo.    4955    Fed. 

Cas.,  3   P.iss.    181.          •  Cas.,  T  Low.  306:  Sandford  v.  Sand- 

1  Ex  parte  O'Xeil,  Xo.  T0527  Fed.  ford,  ^8  X.  Y.  66. 


360  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

estate  are  debts  "due  as  costs  taxable  against  an  involun- 
tary bankrupt  who  was  at  the  time  of  the  filing  of  the  peti- 
tion against  him  plaintiff  in  a  cause  of  action  which  would 
pass  to  the  trustee  ami  which  the  trustee  declines  to  prose- 
cute after  notice" ; "'  and  debts  "founded  upon  a  claim  for 
taxable  costs  incurred  in  good  faith  by  a  creditor  before  the 
filing  of  the  petition  in  an  action  to  recover  a  provable  debt."  * 
Costs  to  be  provable  must  fall  within  one  of  the  provisions.® 
Costs  awarded  against  a  trustee  as  substituted  defendant  in 
a  suit  pending  in  a  state  court  have  been  ordered  paid  in 
full." 

§  119.    Debts  founded  upon  contract. 

Debts  founded  upon  an  open  account,  or  upon  a  contract 
express  or  implied,  are  provable  in  bankruptcy.^  They  need 
not  be  evidenced  by  a  writing,  but  may  be  founded  upon  an 
oral  agreement." 

Under  this  clause  debts  arising  upon  open  accounts  or  the 
usual  contracts  of  bargain  and  sale,  although  for  future  de- 
livery, are  provable.  Where  a  creditor  proves  for  goods  sold 
and  delivered  he  is  not  entitled  to  damages  sustained  by 
fraudulent  representations  in  making  the  contract,^  or 
generally  for  speculative  profits  or  damages.*  Where  a 
loss  upon  a  policy  of  insurance  has  been  duly  and  ref^ularly 
adjusted  in  good  faith  before  the  company  is  adjudicated  a 
bankrupt,  the  claim  can  be  proved  like  any  other  debt  arising 
upon  a  contract.'^     Where  a  bankrupt  has  received  property 

3  B.  A.   1898,  Sec.  63,  cl.  2.  ^  In  re  Neely,  108  Fed.  Rep.  371, 

*  B.  A.  1898,  Sec.  63,  cl.  3 ;  In  re  5  Am.  B.  R.  836. 
Allen,    96    Fed.    Rep.    512,    3    Am.  1  B.  A.   1898,  Sec.  63,  cl.  4. 

B.  R.  38 ;  In  re  Lewis,  99  Fed.  Rep.  -  Capelle   v.    M.    E.    Church,    Nc. 

935,  4  Am.  B.  R.  51.  2392  Fed.  Cas.,  11  N.  B.  R.  536. 

But    see    In    re    Young,   96    Fed.  ^  In  re  Hildebrant,  120  Fed.  Rep. 

Rep.  606,  2  Am.  B.  R.  673.  992,  10  Am.  B.  R.  184. 

'^  In    re    Alarcus,    104    Fed.    Rep.  *  In   re    Silverman    Brothers,    loi 

331,  5   Am.   B.   R.    19,  affirmed    (C.  Fed.  Rep.  219,  4  Am.  B.  R.  83. 
C  A.   1st  Cir.)     105  Fed.  Rep.  907,  ^' In   re    Ffremen's    Ins.    Co.,    No. 

5  .^m.  B.  R.  365.  4796   Fed.   Cas.,   3   Biss.   462. 


WHAT    DEBTS    ARE    PROVABLE. 


361 


in  trust,  and  has  appropriated  it  in  violation  thereof,  the  debt 
thus  created  is  provable."  So  also  a  claim  founded  upon  a 
covenant  to  repay  a  part  of  a  premium,  paid  upon  a  policy  of 
insurance  upon  the  cancellation  of  the  policy,  is  provable  in  the 
absence  of  provisions  in  the  state  laws,  the  charter  or  by-laws 
of  the  company  which  would  make  it  void." 

A  stockholder's  statutory  liability  in  an  insolvent  corpora- 
tion,* or  an  unpaid  subscription  for  stock  in  a  corporation, 
may  be  proved  against  the  estate  of^  a  bankrupt  stockholder 
on  the  theory  that  it  is  a  claim  founded  on  an  implied  contract. 

A  claim  arising  ex  delicto  and  also  of  such  a  character  as 
to  constitute  a  claim  on  the  theory  of  a  quasi  contract  is  prov- 
able under  Sec.  63,  clause  4.^  Such  a  claim  is  provable  though 
the  plaintiff  elect  to  sue  ex  delictn}^ 

It  has  been  held  that  a  county  may  prove  a  claim  for  money 
due  for  the  hire  of  convict  labor.^^     A  debt  has  been  held 


^•In  re  Jordan,  2  Fed.  Rep.  319; 
In  re  Upson,  123  Fed.  Rep.  807, 
10  Am.  B.  R.  602;  In  re  Rundle, 
No.  12138  Fed.  Cas.,  2  N.  B.  R. 
113;  Ungewitter  v.  Von  Sachs,  No. 
14343  Fed.   Cas.,  4  Ben.   167. 

"  In  re  Independent  Ins.  Co.,  No. 
7019  Fed.  Cas.,  2  Low.  187. 

^  Dight  V.  Chapman,  44  Ore.  265 ; 
Longfuld  V.  Minnesota  Sav.  Bank, 
95  IMinn.  54,  14  Am.  B.  R.  413. 

In  re  Rouse,  40  Law  Bull.  (Ohio) 
220,  the  referee  held  that  a  stock- 
holder's statutory  liability  in  an  in- 
solvent Ohio  corporation  is  not  only 
a  liability  created  by  statute,  but  is 
also  a  claim  founded  upon  an  im- 
plied contract,  and  as  such  is  a 
provable  debt  against  the  estate  of 
the  bankrupt  stockholder,  whenever 
the  circumstances  are  such  that  a 
stockholder's  liability  suit  would  lie. 

It  is  an  unliquidated  claim,  and 
upon  application  to  the  court  the 
court  will  direct  the  manner  of  its 
liquidation. 

But  the  court  will  nr)t  proceed  to 


direct  the  manner  of  liquidation  un- 
less application  is  made  to  it  therefor. 

In  cases  of  stockholder's  double 
liability  the  court  may  direct  that 
a  stockholder's  liability  suit  be  in- 
stituted by  the  creditor  making  the 
application,  or  that  an  already  pend- 
ing suit  in  the  state  court  be  main- 
tained for  the  purpose  of  liquida- 
ting the  claim ;  or,  if  the  facts  are 
simple  and  undisputed,  may  itself 
undertake  to  determine  the  amount 
provable  as  the  bankrupt's  stock- 
holder's liability,  and  to  whom  the 
same  is  payable. 

"  Crawford  v.  Burke,  195  U.  S. 
176,  193,  49  L.  Ed.  147,  12  Am.  B. 
R.  659;  In  re  Filer,  125  Fed.  Rep. 
262,  5  Am.  B.  R.  835;  In  re  Hilde- 
brant,  120  Fed.  Rep.  992,  10  Am.  B. 
R.  184;  In  re  Ilirschman,  104  Fed. 
Rep.  69,  4  .'\m.  B.  R.  715. 

'"  Crawford  v.  Burke,  195  U.  S. 
176,  193,  49  L.  Ed.  147,  12  .^m.  B. 

R.  659. 

1'  /;;  re  Wright,  95  Fed.  Rep. 
807,  2   .Am.   B.   R.  592,  affirmed  on 


362  LAW   AND   PROCEEDINGS  IN   BANKRUPTCY. 

provable  against  the  estate  of  a  corporation  in  bankruptcy, 
where  it  was  contracted  by  the  company  and  amounted  to 
more  than  one-half  the  sum  of  its  available  assets,  but  did 
not  exceed  one-half  the  amount  of  the  stock  paid  up  and 
actually  issued  to  stockholders  and  held  by  them,  where  the 
articles  of  association  limited  the  amount  of  indebtedness 
which  it  might  contract  to  one-half  the  amount  of  the  paid-up 
capital  stock. ^-  The  value  of  an  annuity  based  upon  the  ex- 
pectancy of  life,  has  been  held  to  be  a  provable  debt.^'*  A  claim 
for  margins  "  or  a  claim  for  damages  for  conversion  of  col- 
laterals in  his  possession, ^^  against  a  bankrupt  broker  has 
been  allowed.  A  claim  for  commissions  for  sales  of  goods 
has  been  allowed.^" 

It  would  seem  as  if  a  contingent  debt  founded  in  contract 
might  be  proved  in  case  the  contingency  happened  and  a  debt 
was  thereby  created,  although  the  contingency  happened  pend- 
ing bankruptcy  proceedings.^'  Where  the  liability  of  an  en- 
dorser becomes  fixed  after  bankruptcy,  but  within  the  time 
limited  for  proving  claims,  he  may  prove  under  this  clause, 
although  he  has  not  a  provable  claim  under  Sec.  63a,  clause 

Whether  a  claim  for  damages  for  breach  of  an  executory 

appeal   sub   nom;   In   re   Worcester  "^^  In   re   Floyd,   Crawford   &   Co., 

County,   102  Fed.   Rep.  8o8,  4  Am.  15  Am.  B.  R.  277. 

B.  R.  496.  !"/«    re    Ladue,    Tate    Mfg.    Co., 

1-  Cunningham  v.   German  Insur-  135    Fed.    Rep.   910,    14   Am.    B.    R. 

ance  Bank   (C.  C.  A.  6th  Cir.),  lOi  235.     But  see  In  re  Silverman,   loi 

Fed.  Rep.  977,  4  Am.  B.  R.  363.  Fed.  Rep.  219,  4  Am.  B.  R.  83. 

13  Cobb    V.    Overman    (C.    C.    A.  ^"^  In    re    Gerson     (C.    C.    A.    2(1 

4th  Cir.),  109  Fed.  Rep.  65,  6  Am.  Cir.),  107  Fed.  Rep.  897.  6  Am.  B. 

B.  R.  324,  overruling  Bray  v.  Cobb,  R.  11;  In  re  Semmcr  Glass  Co.   (C. 

100  Fed.  Rep.  270,  3  Am.  B.  R.  788.  C.   A.   2d   Cir.),    135   Fed.    Rep.   77, 

See  also  Dunbar  v.  Dunbar,  190  U.  14  Am.  B.  R.  25 ;  In  re  Smith,   146 

S.  340,  47  L.  Ed.   1084,   10  Am.  B.  P>d.  Rep.  923.     See  Dunbar  v.  Dnn- 

R.  139.  bar,  190  U.  S.  340,  47  L.  Ed.  1084, 

^*  In  re  Swift,  105  Fed.  Rep.  493,  10  Am.  B.  R.  139. 

5  Am.  B.  R.  335;  In  re  Grafif,  117  i** /h    re    Ger.son    (C.    C.    A.    3d 

Fed.   Rep.   343,   8   Am.   B.   R.   744.  Cir.),   107  Fed.   Rep,  897,  6  Am.   B. 

But    see    In    re    Knott.    109    Fed.  R.    11. 
Rep.  626,  6  Am.  B.  R.  749. 


WHAT   DEBTS    ARE    PROVABLE.  363 

contract  is  provable  depends  upon  its  status  at  the  time  the 
petition  in  bankruptcy  is  filed/**  The  doctrine  that  a  suit  may 
be  maintained  to  recover  damages  under  the  entire  contract, 
when  there  is  an  anticipatory  breach  of  an  executory  contract 
by  an  absolute  refusal  to  perform  it  is  well  settled.-"  If  at  the 
time  the  petition  in  bankruptcy  is  filed  the  liability  of  the 
bankrupt  is  so  fixed  that  the  proving  creditor  could  maintain 
such  a  suit  he  has  a  provable  claim.  Wdiere,  prior  to  bank- 
ruptcy, the  bankrupt  has  destroyed  the  subject-matter  of  the 
contract  or  disabled  himself  so  as  to  make  performance  im- 
possible, his  conduct  is  deemed  equivalent  to  a  breach  of  the 
contract,  although  the  time  for  performance  had  not  arrived 
and  the  other  party  to  the  contract  may  prove  a  claim  for 
damages  for  breach  of  the  contract.-^  It  has  been  held  that 
bankruptcy  is  the  equivalent  of  disenablement  and  repudiation 
md  that  a  claim  for  damages  is  provable  although  there  was 
10  breach  of  the  contract  prior  to  filing  the  petition."  The 
oetter  rule  is  that  where  there  was  no  breach  of  an  executory 
contract  prior  to  bankruptcy,  that  the  filing  of  an  involuntary 
petition  does  not  operate  as  a  repudiation  of  the  contract. 
Many  courts  have  applied  this  rule  in  holding  that  a  vendor 
will  not  be  permitted  to  prove  damages  under  a  contract  for 
the  sale  of  a^mual  crops  to  be  raised  in  successive  years, '^  or 
a  landlord  to  prove  for  future  installments  of  rent  under  a 

i»  In  re  Pettingill  &  Co.,  137  Fed.  R.  445 ;  In  re  Silverman  Bros.,  roi 

Rep.  143,  14  Am.  B.  R.  728;  Swarts  Fed.  Rep.  219,  4  Am.  B.  R.  83. 

V.  Fourth  Xat.  Bank   (C.  C..A.  8th  As  to  the  right  of  a  surety  on  a 

Cir.),  117  Fed.  Rep.  i,  8  Am.  B.  R.  contractor's     hond     to     prove,     see 

673;  In   re   Bingham,  94  Fed.   Rep.  Wood    v.    Guaranty    Co..    143    Fed. 

796,  2  Am.  B.  R.  223.  Rep.  424.   16  Am.  B.   R.   21. 

20  Roehm   v.    1  loxst,   178  U.   S.    T,  --  /;;  re  Pettmgill  &  Co..  137  Fed. 

44   L.   Ed.  953,   and   cases   collected  Rep.   143,   14  Am.  B.  R.  728;  /;(  re 

m  the  opinion.  Swift   (C.  C.  A.  ist  Cir.),  112  Fed. 

-' /h  re  Stern  (C.  C.  A.  2d  Cir.),  Rep.  315.  7  Am.   B.   R.  375. 

116  Fed.  Rep.  604,  8  Am.  B.  R.  569;  But  see  In  re  Imperial   Brewing 

In  re  Grant  Shoe  Co.   (C.  C.  A.  2d  Co.,    143    Fed.    Rep.    579,    16    Am. 

Cir.),    130   Fed.    Rep.   881.    12   Am.  B.   R.  no. 

I5     R.   349;    In    re   Saxton   Furnace  -■'/;/    ;<■    Imperial    Brewing    Co., 

Co.,  142  Fed.  Rep    293.  15  Am.  B.  143   Fed.   Rep.   579,   16  Am.   B.   R. 

iia 


3o4 


LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 


lease,"*  or  an  employe  to  prove  a  claim  for  damages  for  breach 
of  contract  of  employment.-'"  If  the  damages  at  the  time  of 
bankruptcy  are  so  far  contingent  that  they  cannot  be  computed 
by  any  process  known  to  the  law,  tlic  claim  is  not  provable."*^ 

An  annual  corporation  fee  required  by  state  law  solely  as  a 
condition  of  its  continued  existence  without  regard  to  the 
value  of  its  property  and  franchises  is  not  provable  as  a  debt 
upon  contract  express  or  implied."^ 

It  has  been  held  that  salary  of  an  officer  of  a  bankrupt 
corporation  is  not  provable,  unless,  ])ri()r  to  the  services,  the 
compensation  was  fixed  by  by-law  or  a  resolution  of  the  di- 
rectors duly  entered  on  the  minutes  of  the  board. ■'^ 

A  contract  by  a  husband  to  pay  a  wife  a  certain  sum  at 
stated  periods  during  her  life  or  widowhood,""  or  for  the  sup- 
port of  his  minor  children  is  not  provable  against  his  estate 
in  bankruptcy.^'^ 

\\'here  an  administrator  commits  a  breach  of  his  bond  and 
dies  before  the  bankruptcy  of  the  surety,  a  claim  for  damages 
is  provable  against  the  estate  of  the  surety."  But  if  the 
breach  is  committed  after  the  bankruptcy  of  the  surety,  no 
provable  claim  exists. "- 


24  Watson  V.  Merrill  (C.  C.  A. 
8th  Cir.),  136  Fed.  Rep.  359,  14 
Am.  B.  R.  453;  In  re  Pennewell  (C. 
C.  A.  6th  Cir.),  119  Fed.  Rep.  139, 
9  Am.  B.  R.  490;  Atkins  v.  Wil- 
cox (C.  C.  A.  5th  Cir.).  105  Fed. 
Rep-  595.  5  Am.  B.  R.  313:  In  re 
Curtis,  109  La.  Ann.  171,  9  Am.  B. 
R.  286. 

2^  In  re  Sweetser,  Pembroke  & 
Co.  (C.  C.  A.  2d  Cir.),  142  Fed. 
Rep.  131,  15  Am.  B.  R.  650. 

In  re  Silverman  Bros.,  loi  Fed. 
Rep.  219,  4  \m.  B.  R.  83,  the 
breach  occurred  before  bankruptcy 
and  the  employe  was  allowed  to 
prove  balance  of  salary. 

26  As  to  Contingent  Claims  see 
Sec.  112,  ante. 


""In  re  Danville  Rolling  Mill 
Co.,  121  Fed.  Rep.  432,  10  Am.  B. 
R.  327. 

zA.s  to  such  fees  being  a  tax  en- 
titled to  priority,  see  New  Jersey 
V.  Anderson  203  U.  S.  ■. 

^  In  re  Grubbs-Wiley  Grocery 
Co.,  96  Fed.  Rep.  183,  2  Am.  B.  R. 
442. 

■"  Dunbar  v.  Dunbar,  igo  U.  S. 
340,  47  L.  Ed.   1084,   10  Am.  B.  R. 

139- 

''"  Dunbar  v.  Dunbar,  190  U.  S. 
340,  47  L.  Ed.  1084,  10  Am.  B.  R. 

1.39- 

''M-^armon  v.  McDonald,  iS^? 
Mass.   578. 

"-  Lormg  v.  Kendall,  i  Gray 
I  Mass.     305. 


WHAT    DEBTS    ARE    PROVABLE. 


365 


A  debt  is  not  provable  when  founded  upon  an  illegal  con- 
sideration,^^ as  where  money  is  loaned  a  debtor  for  the  pur- 
pose of  committing  an  act  of  bankruptcy,''  or  where  an  over- 
draft has  been  made  by  a  collusion  with  the  cashier.^' 

\\'here  the  claim  for  damages  for  breach  of  a  contract  is 
unliquidated  it  may  be  liquidated  under  the  provisions  of  Sec 


§  120.     Rent. 

Rent  due  by  the  bankrupt  is  regularly  provable  in  bank- 
ruptcy. Under  the  act  of  1867  rents  ceased  at  the  time  of 
the  bankruptcy.^ 

Under  the  present  act  there  is  no  such  provision.  The 
courts  have  uniformly  permitted  to  be  proved  against  the  es- 
tate of  the  bankrupt  lessee  rent  due  prior  to  the  adjudication,^ 
and  rent  for  the  occupation  and  use  of  leased  premises  after 
bankruptcy  where  such  premises  were  actually  used  by  a  re- 
ceiver or  trustee.-'  Where  bankruptcy  occurs  between  rent 
days  it  may  be  doubted  if  the  landlord  can  prove  rent  beyond 
the  last  rent  day.  The  general  rule  is,  that  rent  cannot  be  ap- 
portioned as  to  time.* 

A  contract  of  lease  is  not  ipso  facto  terminated  by  the  bank- 
ruptcy of  the  lessee.-'     \Miether  rent  under  a  lease  accruing 


"Forsyth  v.  Woods,  n  Wall. 
484,  20  L.  Ed.  207. 

^  In  re  Hatje,  No.  6215,  Fed. 
Cas.,  s.  c.  6  Biss.  436. 

^  In  re  Eureka  Ins.  Co.,  No. 
4550,  Fed.  Cas.,   i   Low.  500. 

^/n  re  Pettingill  &  Co..  137  Fed. 
Rep.   143,   14  Am.   B.  R.  728. 

^  R.  S.  Sec.  5017. 

-In  re  llinckcl  Brewing  Co.,  123 
Fed.  Rep.  942,  10  .'\in.  B.  R.  4S4 ; 
In  re  Arnstein,  tot  Fed.  Rep.  706, 
4  Am.  B.  R.  246. 

" /h  ye  Hinckel  Brewing  Co.,  123 
Fed.  Rep.  942,  10  .^m.  B.  R.  484. 

•IToagland  v.  Crum.  113  II].  365; 
Ziile  V.  Zule,  24  Wend.   (N.  Y.)  74; 


The  ATayor  v.  Ketclium.  67  How. 
Prac,  N.  Y.  161  ;  Perry  v.  Aldrich, 
13  N.  H.  343;  Randall  v.  Rich,  11 
Mass.  494. 

■'"'  In  re  Pennewell  (C.  C.  A.  6th 
Cir.),  119  Fed.  Rep.  139,  9  Am.  B. 
R.  490 :  Lamson  Consol.  Store  Serv- 
ice Co.  V.  Bowdand  (C.  C.  A. 
6th  Cir.),  T14  Fed.  Rep.  639,  52 
C.  C.  A.  335;  In  re  Ells,  98  Fed. 
Rep.  967,  3  Am.  B.  R.  564;  Atkins 
V.  Wilco.x  (C.  C.  A.  5th  Cir.), 
T05  Fed.  Rep.  595.  5  Am.  B.  R. 
313;  Watson  V.  Merrill  (C.  C.  A. 
8th  Cir.).  136  Fed.  Rep.  359,  14  Am. 
H.   R.  4.S3. 

But   sec  In  re  Jefferson,  93  Fed. 


366 


LAW    AND    PROCEEDINGS    TX    BANKRUPTCY. 


after  bankruptcy  may  be  proved  against  the  tenant's  estate 
in  bankruptcy  depends  upon  the  terms  of  the  lease,  and  the 
election  of  the  trustee  to  take  or  reject  the  contract  of  lease. 

It  is  entirely  competent  to  contract  that  the  consequences  of 
a  default  of  rent  for  the  use  of  property,  or  the  bankruptcy 
of  the  lessee,  shall  be  the  precipitancy  of  the  maturity  of 
future  installments  for  the  rental  of  the  property  in  respect  to 
which  default  has  been  made.*'  Such  terms  in  a  lease  make 
future  rent  provable.  But  the  trustee  may  reject  the  contract 
of  lease  and  render  such  claim  not  pro\'ablc. 

In  the  opinions  of  the  referees  and  of  the  judges  there  is  a 
marked  unanimity  to  the  extent  that  rent  to  accrue  in  the  fu- 
ture is  not  a  provable  debt  under  the  leases  ^vhich  have  been 
considered.'  There  is  a  great  diversity  of  view  as  to  the 
ground  on  which  this  ruling  is  placed.^  Where  by  the  terms 
of  the  lease  future  installments  of  rent  are  made  immediately 
due  and  payable,  the  landlord  may,  acting  under  another  clause 
of  the  lease,  terminate  it  by.  re-entry,®  or  by  accepting  a 
surrender  of  a  part  of  the  lease,"  and  thereafter  be  estopped 
from  proving  for  future  rents  after  bankruptcy. 

Rep.  948,  2  Am.  E.  R.  206;   In   re      Am.    B.    R.    453;    Wilson    v.    Penn 

Trust  Co.,  114  Fed.  Rep.  742,  8  Am. 

B.  R.  169;  Atkins  v.  Wilcox  (C.  C. 
A.  5th  Cir.),  105  Fed.  Rep.  965,  5 
Am.  B.  R.  31,3;  Lamson  Consol. 
Store  Service  Co.  v.  Bowland   (C. 

C.  A.  6th  Cir.),  114,  Fed.  Rep.  639, 
52  C.  C.  A.  335- 

^Iii  re  Pcnnewell  (C.  C.  A.  6th 
Cir.),  119  Fed.  Rep.  139,  9  Am.  B. 
R.  490;  Lamson  Consol.  Store  Serv- 
ice Co.  V.  Bovi^land  (C.  C.  A.  6th 
Cir.),  114  Fed.  Rep.  639,  52  C.  C. 
A.  335 ;  In  re  Mahler,  105  Fed.  Rep. 
428,  5  Am.  B.  R.  453;  In  re  Ells, 
98  Fed.  Rep.  967,  3  Am.  B.  R.  564. 

10  Wilson  V.  Penn.  Trust  Co., 
114  Fed.  Rep.  742,  8  .\m.  R.  R.  169; 
/;;  re  Winfield  Mfg.  Co..  137  Fed. 
Rep.  984,  s.  c.  140  Fed.  Rep.  185. 
But  =ee  Evans  v.  Lincoln  Co.,  204 
Pa.  St.  448,  10  Am.  B.  R.  401. 


Hays,  Foster  &  Ward  Co.,  117  Fed. 
Rep.  879,  9  Am.  B.  R.  144;  Bray 
V.  Cobb,  100  Fed.  Rep.  270,  3  Am. 
B.  R.  788. 

^  Lamson  Consol.  Store  Service 
Co.  V.  Bowland  (C.  C.  A.  6th  Cir.), 
114  Fed.  Rep.  639,  52  C.  C.  A.  335; 
Piatt  V.  Johnson,   168  Pa.  47. 

'  Watson  V.  Merrill  (C.  C.  A.  8th 
Cir.),  136  Fed.  Rep.  359,  14  Am. 
B.  R.  453,  and  cases  cited  in  the 
opinion. 

'^  In  re  Jefiferson,  93  Fed.  Rep. 
948,  2  Am.  B.  R.  206;  In  re  Hays, 
Foster  &  Ward  Co.,  117  Fed.  Rep. 
879,  9  Am.  B.  R.  144:  In  re  Arn- 
stein,  loi  Fed.  Rep.  706,  4  Am.  B. 
R.  246;  Bray  v.  Cobb,  too  Fed.  Rep. 
270,  3  Am.  B.  R.  788;  In  re  Ells, 
98  Fed.  Rep.  967,  3  Am.  B.  R.  564; 
In  re  Mahler,   105  Fed.  Rep.  428,  5 


WHAT    DEBTS    ARE    PROVABLE.  367 

It  has  been  held  that  a  tenant  could  not  prove  for  damages 
for  a  breach  of  covenant  for  quiet  enjoyment  of  premises  un- 
der a  lease  to  begin  after  the  date  of  bankruptcy/^  or  a  land- 
lord for  breach  of  a  covenant  that  the  lessee  should  be  liable 
for  loss  and  damage  sustained  by  the  lessor  on  account  of  the 
premises  remaining  unleased  or  relet  for  less  rent  after  the  ter- 
mination of  the  lease  l)y  re-entry/'  The  landlord  cannot 
prove  for  damages  occasioned  by  restoring  alterations  made  by 
the  lessee  when  in  possession."  \Miere  a  landlord  claims  full 
rental  under  his  lease,  it  may  be  shown  that  he  agreed  to  reduce 
the  rent,  had  accepted  several  installments  at  the  reduced  rates, 
and  had  been  moved  to  make  the  reductions  by  considerations 
advantageous  to  himself,  his  claim  for  rent  against  the  tenant's 
estate  in  bankruptcy  must  be  reduced  by  the  amount  received 
from  reletting  the  premises.^* 

The  trustee  in  bankruptcy  may  elect  to  take  the  lease  as  an 
asset  of  the  bankrupt  tenant's  estate.  In  such  case  the  lease 
is  regularly  sold  subject  to  the  future  payments  of  rent  stipu- 
lated in  it.  The  trustee  and  the  estate  are  not  liable  there- 
after for  rent.  The  purchase  price  becomes  an  asset  of  the 
estate,  subject  to  the  payment  of  any  accrued  rent  secured 
by  a  lien  reserved  in  the  lease. 

If  the  trustee  elects  to  reject  the  contract  of  lease,  as  he  has 
a  right  to  do.  it  is  a  nullity  so  far  as  tlie  bankruptcy  proceed- 
ings are  concerned.  In  such  cases  future  rent,  although  made 
due  and  payable  at  once  by  the  terms  of  the  lease,  is  not  a 
provable  debt.  T]ic  landlord  may  prove  for  rent  due  prior  to 
bankruptcy  for  the  use  and  occupation  of  the  premises  either 
as  "a  fixed  liability  due  and  owing"  or  as  a  "debt  arising  in 
contract."  For  the  same  reason  he  may  prove  for  subsequent 
use  and  occupancy  of  the  premises  by  the  trustee  or  receiver.^'' 

" /;;    re    Pennewell     fC.    C.    A.  ■■" /»    re   Arnstein,    loi   Fed.   Rep. 

6tli  Cir.),  119  Fed.  Rep.  139,  9  Am.  706,  4  Am.  P..  R.  246. 

R.  R.  490.  ^*  Evans  v.  Lincoln  Co.,  204  Pa. 

'-/;;    rr    Shaffer,    124    I'^cd.    Rep.  St.  448,  10  Am.  B.  R.  401. 

in,  10  Am.  B.  R.  633;  In  re  Ells,  '^^' In    re    Hinckel    Brewing    Co., 

98  Fed.  Rep.  967,  3  Am.  B.  R.  564.  123    Fed.    Rep.   942,    10  .\m.    B.    R. 

4.S4. 


368  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

Where  the  state  la\v  entitles  the  landlord  to  a  Hen  upon  the 
goods  of  his  tenant  for  rent  the  court  of  bankruptcy  will  en- 
force such  lien  as  against  the  proceeds  of  such  goods  when 
sold  by  the  trustee." 

§  121.     Mutual  debts  and  credits. 

The  present  bankrupt  statute  provides  that  "In  all  cases 
of  mutual  debts  or  mutual  credits  between  the  estate  of  a 
bankrupt  and  the  creditor  the  account  shall  be  stated  and  one 
debt  shall  be  set  ofT  against  the  other,  ana  the  balance  only 
shall  be  allowed  or  paid.  A  set-off  or  counter-claim  shall  not 
be  allowed  in  favor  of  any  debtor  of  the  bankrupt  which  (1) 
is  not  provable  against  the  estate;  or  (2)  was  purchased  by 
or  transferred  to  him  after  the  filing  of  the  petition,  or  within 
four  months  after  such  filing,  with  a  view  to  such  use  and 
with  knowledge  or  notice  that  such  bankrupt  was  insolvent, 
or  had  committed  an  act  of  bankruptcy."  ^ 

Similar    provisions    are    contained    in    the    former    United 
States  bankrupt  acts  and  in  the  English  acts.'     The  opinions 

18 /n  re   Mitchell,    ii6  Fed.   Rep.  there  are  mutual   debts   or   mutual 

87,    8   Am.    B.    R.    324;    Wilson    v.  credits  between  the  parties,  the  bal- 

Penn.  Trust  Co.  (C.  C.  A.  3d  Cir.),  ance  only  shall  be  deemed  the  true 

114  Fed.  Rep.  742,  8  Am.  B.  R.  169.  debt   or   claim   between    them,   and 

^B.  A.   1898,    Sec.   68.  the  residue  shall  be  deemed  adjusted 

2  Act  of   1867 :     "In   all   cases   of  by  the  set-off."— Act  of  August  19, 

mutual  debts  or  mutual  credits  be-  1841,  5  Stat,  at  L.  445,  Sec.  5. 

tween  the  parties,  the  account  be-  Act  of  1800:     "And  he  it  further 

tween  them  shall  be  stated,  and  one  enacted,   That  where  it  shall  appear 

debt  set  off  against  the  other,  and  to  the  said  commissioners  that  there 

the  balance  only   shall  be   allowed  hath   been   mutual   credit   given   by 

or  paid,  but  no  set-off  shall  be  al-  the  bankrupt,  and  any  other  person, 

lowed  in  favor  of  any  debtor  to  the  or   mutual    debts   between   them   at 

bankrupt   of  a   claim   in   its   nature  any  time  before  such  person  became 

not  provable  against  the  estate,  or  bankrupt,  the  assignee  or  assignees 

of  a  claim  purchased  by  or  trans-  of  the  estate  shall  state  the  account 

ferred    to    him    after    the    filing    of  between  them,  and  one  debt  may  be 

the  petition." — R.  S.  Sec.  5073;  Act  set  off  against  the  other,  and  what 

of   March   2,    1867,    14    Stat,    at   L.  shall  appear  to  be  due  on  either  side 

526,  Sec.  20.  on  the  balance  of  such  account  after 

Act  of  184 1  :     '"In  all  cases  where  such  set-off,  and  no  more,  shall  be 


WHAT    DEBTS    ARE    PROVABLE.  369 

of  the  courts  construing  these  provisions  are  valuable  in 
determining  the  true  meaning  of  the  present  section. 

The  right  of  set-off  in  bankruptcy  does  not  rest  on  the 
same  principle  as  tlie  right  of  set-off  between  solvent  parties. 
The  latter  is  given  by  the  statutes  of  set-off  and  counterclaim 
to  prevent  cross  actions.  But  under  the  bankupt  statutes  the 
mutual  credit  clause  has  not  been  so  construed.  The  object 
of  this  clause  is  not  to  avoid  cross  actions,  for  none  would 
lie  against  trustees  in  bankruptcy,  and  one  against  the  bank- 
rupt would  be  unavailing,  but  to  do  substantial  justice  be- 
tween the  parties  where  a  debt  is  really  due  from  the  bank- 
rupt to  a  debtor  to  his  estate.'^ 

It  may  be  doubted  whether  this  mutual  credit  clause  ap- 
plies except  between  a  creditor  and  trustee.* 

§  122.     What  are  "mutual  debts"  and  "mutual  credits." 

The  words  "mutual  debts"  and  "mutual  credits"  appear 
in  all  of  the  bankrupt  acts.  The  word  "debt"  includes  any 
debt,  demand  or  claim  provable  in  bankruptcy  in  the  pres- 
ent act.^ 

claimed  or  paid  on  either  side  re-  section  to  claim  the  benefit  of  any 

spectiveb'." — Act   of   April   4,    1800,  set-off    against    the    property    of    a 

2  Stat,  at  L.  3S,  Sec.  42.  debtor  in  any  case  where  he  had  at 

English    Act    of    1883:      "Where  the    time    of    giving    credit    to    the 

there  have  been  mutual  credits,  mu-  debtor,   notice  of  an  act  of  bank- 

tual  debts,  or  other  mutual  dealings  rtiptcy    committed    by    the    debtor, 

between    a    debtor    against    whom  and  available  against  him." — 46  and 

a    receiving    order    shall    be    made  47  Vic,  Chap.  52,  Sec.  38.     This  is 

under  this  act,  and  any  other  per-  in     substance     a     re-enactment     of 

son  proving  or  claiming  to  prove  a  the    prior    English    statutes,    begin- 

debt  under  such  receiving  order,  an  ning  with  the  temporary  act  of  IV 

account   shall   be  taken   of  what   is  and   V   .^nne,   Chap.    17.     Each   act 

due  from  the  one  party  to  the  other  differs  slightly  from  the  others. 

in  respect  of  such  mutual  dealings,  '  Eorster  v.  Wilson,  12  M.  &  W. 

and  the  sum  due  from  the  one  party  203. 

shall    be    set    off   against   any    sum  *  Consult    New   Quebrada   Co.    v. 

due  from  the  other  party,  and  the  Carr,   4   L.    R.   C.    P.   651;    Turner 

balance    of    the    account,    and    no  v.  Thomas,  6  L.  R.  C.  P.  610;  In  re 

more,  shall  be  claimed  or  paid  on  Fort  Wayne  Electric  Corp.,  95  Fed. 

either  side  respectively;  but  a  per-  Rep.  264,  2  Am.  B.  R.  503. 

son  shall  not  be  entitled  under  this  ^  B.  A.   1898,  Sec.   i,  clause  11. 


•370  l-AW    AM)    I'KOi,  I:KI)1\c;S    IX    BANKRUPTCY. 

Pri(M-  to  the  Iculini;-  case  of  Rose  v.  Hurl,-  decided  in 
181 S,  tlie  words  "uuilual  creilit"  generally  received  a  very 
wide  interpretation,  much  more  extensi\-e  than  the  words 
"mutual  debt." "'  Tn  that  case  this  i)hrase  was  defined  in 
the  following  words:  "Something  more  is  certainly  meant 
here  bv  iiiiitiial  credits  than  the  words  iiniliuil  debts  import; 
and  yet,  upon  the  linal  settlement,  it  is  enacted  merely  that 
one  (/('/'/  shall  be  set  against  another.  We  think  this  shows 
that  the  legislature  meant  such  credits  only  as  must  in  their 
nature  terminate  in  debts,  as  wdiere  a  debt  is  due  from  one 
party,  and  credit  given  by  him  on  the  other  for  a  sum  of 
money  payable  at  a  future  day,  an;l  which  will  then  become 
a  debt,  or  where  there  is  a  (le])t  on  ore  side,  and  a  delivery 
of  property  with  directions  to  tur.n  it  into  money  on  the 
other;  in  such  case  the  credit  given  Iw  tlie  delivery  of  the 
property  must  in  its  nature  terminate  in  a  debt,  the  balance 
will  be  taken  on  the  two  debts,  and  the  words  of  the  statute 
will  in  all  respects  be  complied  with;  but  where  there  is  a 
mere  deposit  of  property,  without  any  authority  to  turn  it 
into  money,  no  debt  can  ever  arise  out  of  it,  and  therefore  it 
is  not  a  credit  within  the  meaning  of  the  statute."  *  The 
rule  established  in  this  case  as  to  the  nature  of  the  credits 
which  can  be  subject  of  set-off  has  been  declared'  in  other 
cases,^ 

In  the  case  of  Libby  v.  Hopkiiisf'  speaking  of  the  act  of 
1867,  which  is  almost  identical  with  the  present  statute  in  this 
respect,    the    supreme    court    said :      "In    our    act    the    terms 

2  8    Taunt.    499,    s.    c.    2    Smith's  c.  2  Smith's  Leading  cases.  Part  I, 

Leading  Cases,  Part   i,  308,  where  308,  and  note. 

the  doctrine  of  set-off  in  bankrupt-  ■•  Libby    v.    Hopkins,    104    U.    S. 

cy  is  considered  at  length  and  the  307,  26  L.   Ed.  769;   In  re   Caykts, 

English  and  American  cases  on  the  No.    2534   Fed.    Cas.,    i    Low.    550-; 

subject  collated  and  reviewed  in  a  Catlin  v.  Foster,  No.  2519  Fed.  Cas., 

note  at  the  end  of  the  opinion.  i  Saw.  37 ;  Easum  v.  Cato,  S  B.  & 

^  Ex    parte    Deeze,    i    Atk.    228;  Aid.  861 ;  Young  v.  Bank,  i  Moore, 

Murray  v.  Riggs,  15  John.   (N.  Y.)  P.  C.  150;  Palmer  v.  Day  (1895),  2 

571.  Q.  B.  618;   Smith  v.  Hodson,  4  T. 

*Rose  V.   Hart,  8  Taunt.   506,   s.  R.    212;    Goodrich    v.    Dobson,    43 

Conn.   576. 


WHAT    DEBTS    ARE    PROVABLE.  371 

'credits'  and  'debts'  are  used  as  correlative,  ^^'hat  is  a  debt 
on  one  side  is  a  credit  on  the  other,  so  that  the  term  'credits' 
can  have  no  broader  meaning  than  the  term  'debts.'  We  find 
no  warrant  in  the  language  of  this  section  or  its  contents  for 
extending  the  terms  so  as  to  include  trusts."  Having  in  mind 
the  definition  of  debts  as  used  in  the  bankrupt  law,  this  lan- 
guage would  not  seem  to  limit  the  rule  laid  down  in  Rose  v. 
Hart.~  But  "mutual  debts"  and  "mutual  credits"  would 
include  debts,  demands  or  claims  provable  in  bankruptcy 
which  must  in  their  nature  terminate  in  debts.  In  Rose  v. 
Hart,  the  word  "debt"  is  evidently  used  with  its  technical  legal 
meaning. 

A  claim  for  unliquidated  damages  provable  under  the  act 
can  not  be  set  off  against  the  debt  of  a  creditor  or  a  bankrupt 
until  it  has  been  put  into  the  shape  of  a  debt.^ 

In  order  that  a  debt  or  credit  may  be  set  off  it  Is  necessary 
that  four  things  concur.  First.  The  debts  or  credits  must 
be  mutual.  Second.  They  must  be  in  the  same  right.  Third. 
They  must  be  debts  or  credits  provable  in  bankruptc}-. 
Fourth.  They  must  be  debts  or  credits  which  were  not  pur- 
chased by  or  transferred  to  the  debtor  of  the  bankrupt  after 
the  filing  of  the  petition,  or  within  four  months  before  such 
filing  for  the  purpose  of  setting  them  off,  and  with  knowl- 
edge or  notice  that  the  bankrupt  was  insolvent  or  had  com- 
mitted an  act  of  bankruptcy.  If  any  one  of  these  elements 
is  wanting,  the  debt  or  credit  can  not  be  used  as  a  set-ofif. 
These  elements  will  be  considered  separately. 

§  123.     What  mutuality  is  necessary. 

The  debts  and  credits  which  are  to  be  set  ofif  one  against 
the  other  must  be  mutual.^      In    order    to    constitute    that 

'  104  U.  S.  309,  26  L.  Ed.  769.  Tjooth  v.  Hutchinson,  15  L.  R.  Eq. 

^8    Taunt.    499,    s.    c.    2    Smith's  30;  Palmer  v.  Day,  2  Q.  B.  618. 
Leading   Cases,    Part    i,   308.  ^  Libby    v.    Hopkins,    104    U.    S. 

^  In    re    Orne,    No.    10581    Fed.  307,  26  L.  Ed.  769 ;  Gray  v.  Rollo, 

Cas.,    s.    c.    I    Ben.    361;    Brown    v.  18  Wall.  632.  21  L.  Ed.  927;  Saw- 

Cuming,    2    Caines     (N.    Y.)     :i2>'<  y^^  v.    Hoag.    17   Wall.   622,   21    L. 


372 


LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 


nuituality  of  debts  or  credits  which  is  required  by  the  statute 
it  is  necessary  that  the  debt  or  credit  which  is  set  off,  and  the 
debt  or  credit  against  which  it  is  set  off,  should  be  between 
the  same  parties.  Thus  ordinarily  a  joint  debt  can  not  be 
set  off  against  a  separate  debt,  nor  a  separate  debt  against  a 
joint  de1)t.  ncM-  debt  due  from  three  persons  against  a  debt 
due  to  two  of  them,  or  the  like."  Where  the  joint  debt 
may  be  collected  from  the  property  of  either  of  the  joint 
debtors,  and  is  provable  in  bankruptcy  against  the  estate  of 
him  wlio  has  been  adjudged  a  bankrupt,  it  may  be  set  off 
against  any  claim  which  the  bankrupt  lias  against  the  cred- 
itor." A  debt  of  one  of  two  partners  to  the  other  partner  may 
be  set  off  against  a  balance  in  his  hands  arising  upon  the  set- 
tlement of  the  partnership  accounts.* 

The  question  whether  a  debt  payable  in  futuro  could  be  set 
off  against  a  debt  payable  iii  praesenti  was  one  of  the  earliest 
which  arose  under  the  English  bankrupt  act.  It  was  decided 
in  the  affirmative  on  the  ground  that,  though  there  might 
not  be  debts  mutually  payable  between  the  parties,  there 
were  mutual  credits,  and  that  the  case  came  within  the  equity 
of  the  statute.^  The  same  question  has  received  a  similar 
answer  in  the  United  States  in  cases  arising  under  the  former 
bankrupt  acts.'' 


Ed.  731 ;  Scovill  v.  Thayer,  105  U. 
S.  143,  26  L.  Ed.  968;  Wilson  v. 
Nat.  Bank,  3  Fed.  Rep.  391. 

2  In  re  Shults,  132  Fed.  Rep. 
573.  M  Am.  B.  R.  84;  Gray  v. 
Rollo,  18  Wall.  629,  21  L.  Ed.  927; 
Forsyth  v.  Woods,  11  Wall.  484, 
20  L.  Ed.  207:  Clark  v.  Sparhawk, 
Xo.  2836  Fed.  Cas.,  2  Weekly 
Notes.  Cas.  115;  In  re  Crystal 
Spring  Bottling  Co.,  100  Fed.  Rep. 
265,  4  Am.  B.  R.  55.  3  N.  B.  N. 
179;  In  re  Bingham,  94  Fed.  Rep. 
796,  2  Am.  B.  R.  223. 

Ex  farte  Twogood,  11  Ves.  517; 
Ex  parte  Ross,  Buck,  125 ;  Stani- 
forth  V.   Fellows,  I  Marsh,   184. 


■^  Tucker  v.  Oxley,  5  Cranch  34, 
3  L.  Ed.  29,  as  explained  in  Gray 
V.  Rollo,  18  Wall.  633,  21  L.  Ed. 
927;  Cosgrove  v.  Cosby,  86  Ind.  511. 

*  In  re  Voetter,  4  Fed.  Rep.  632 ; 
Clark  V.  Sparliawk,  No.  2836  Fed. 
Cas..   2   Weekly   Notes,   Cas.    115. 

^  Ex  parte  Prescott,  r  Atk.  230; 
Alsagar  v.  Currie,  12  M.  &  W.  751; 
Ex  parte  Wagstaff,  13  Ves.  65; 
Sheldon  v.  Rothschild,  8  Taunt.  156; 
Atkinson  v.  Elliott,  7  T.  R.  378. 

•^  Marks  v.  Barker,  No.  9096  Fed. 
Cas.,  I  Wash.  C.  C.  178;  Catlin 
V.  Foster,  No.  2519  Fed.  Cas.,  s.  c. 
I  Saw.  37;  Fort  v.  McCully,  59 
Barb.  (N.  Y.)  87;  In  re  City  Bank, 


WHAT    DEBTS    ARE    PROVABLE. 


373 


In  order  to  render  debts  and  credits  mutual,  it  is  not  neces- 
sary that  the  creditor  and  bankrupt  should  have  had  any 
intention  to  create  cross  demands/ 

It  is  not  necessary  that  the  demands  should  be  of  the  same 
nature.  They  may  be  different  in  their  nature.  Thus,  one 
may  be  founded  on  deed  and  the  other  on  simple  contract. 
A  loss  upon  a  policy  of  insurance  may  set  off  against  an 
indebtedness  for  money  borrowed  from  an  insurance  com- 
pany,'^ or  for  money  deposited  with  the  holder  as  a  banker.^ 
A  person  may  set  off  a  credit  on  deposit  in  a  bankrupt  bank 
against  his  indebtedness  on  notes  or  as  the  endorser  upon  a 
note  held  by  the  bank  which  has  been  protested. ^*^  A  check  is- 
sued by  a  bankrupt  may  be  set  off  against  a  note  due  the  bank- 
rupt's estate."     A  bank  may  set  off  a  regular  bank  balance 


No.  2742  Fed.  Cas.,  6  N.  B.  R.  71 ; 
Drake  v.  Rollo,  No.  4066  Fed.  Cas., 
3  Biss.  273. 

7  FTankey  v.  Smith,  3  T.  R.  507 ; 
Edmeads  v.  Newman,  i  B.  &  C. 
418. 

But  see  observation  of  Mr.  Jus- 
tice Bradlej'  in  Gray  v.  Rollo,  18 
Wall.  632,  21  L.  Ed.  927.  He  said: 
"Nor  does  tlie  case  present  on  of 
mutual  credit.  There  was  no  con- 
nection between  the  claims  what- 
ever, except  the  accidental  one  of 
the  complainant's  being  concerned 
in  both.  The  insurance  company, 
so  far  as  appears,  took  the  notes 
without  any  reference  to  the  poli- 
cies of  insurance;  and  Gray  Broth- 
ers insured  with  the  company  with- 
out any  reference  to  the  notes. 
Neither  transaction  was  entered 
into  in  consequence  of,  or  in  reli- 
ance on,  the  other;  and  no  agree- 
ment was  ever  made  between  the 
parties  that  the  one  claim  should 
stand  against  the  other.  There 
being  neither  mutual  debts  nor  mu- 


tual credits,  the  case  does  not  come 
within  the  terms  of  the  bankrupt 
law." 

^  Scammon  v.  Kimball,  92  U.  S. 
362,  23  L.  Ed.  483;  Drake  v.  Rol- 
lo, No.  4066  Fed.  Gas.,  3  Biss.  273 ; 
Commonwealth  v.  Shoe  Insurance 
Co.,  112  Mass.  131. 

^  In  re  Fornsworth,  No.  4673 
Fed.  Cas.,  5  Biss.  223;  Scammon 
V.  Kimball,  No.  12435  Fed.  Cas., 
S  Biss.  431;  In  re  Petrie,  No.  11040 
Fed.  Gas.,  5  Ben.  no;  Bank  v. 
Massey,  192  U.  S.  138,  48  L.  Ed. 
380,  II  Am.  B.  R.  42. 

1"/)!  re  Shults,  132  Fed.  Rep. 
573,  13  Am.  B.  R.  84;  Marks  v. 
Barker,  No.  9096  Fed.  Gas.,  i 
Wa.sh.  C.  C.  178;  Winslow  v.  Bliss, 
3  Lans.  (N.  Y.)  220;  In  re  Meyers, 
99  Fed.  Rep.  691,  3  Am.  B.  R.  760; 
In  re  Henry  L.  Meyer,  5  Am.  B. 
R-  593,  106  Fed.  Rep.  828.  P>ut  see 
Henry  L.  Meyer,  107  Fed.  Rep.  86, 
5  Am.  B.  R.  596. 

1'  O.t^lcn  V.  Cowley,  2  Johns.  (N. 
Y.)  274. 


374  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

ai;aiiist  a  note  oi  a  hankrupt  hckl  by  it,"  or  against  a  note 
i)u  which  the  hankrupt  was  an  endorser.'''  Where  a  bank 
transfers  all  its  assets  to  another  bank  which  agrees  to  pay 
all  the  liabilities  of  its  assignor,  the  right  of  set-off  existing 
in  the  assignor's  bank  inures  to  the  benefit  of  the  assignee 
bank." 

Where  bills,  money  or  chattels  are  deposited  with  the  cred- 
itor for  a  specific  purpose,  he  can  not  claim  to  set  off  a  debt 
owing  to  him  from  the  bankrupt  against  the  trustee  claiming 
such  bills  or  goods. ^^  Such  a  case  exists  where  goods  are  de- 
posited with  a  bailee  for  the  purpose  of  having  work  done 
upon  them,^''  or  where  money  is  deposited  for  a  specific  pur- 
pose.^" So  where  a  trustee  seeks  to  set  aside  a  preference 
the  defendant  can  not  set  ofif  notes  of  the  bankrupt."  But 
if  a  mutual  debt  or  credit  within  the  meaning  of  this  section 
is  once  established  a  temporary  suspension  of  it  has  been  held 
not  to  destroy  the  right  to  set  off  where  the  mutual  debt  or 
credit  afterwards  revives.^*^ 

Where  there  is  a  debt  on  one  side  and  on  the  other  a  de- 
livery of  property  with  power  to  turn  it  into  money,  he  may 
turn  it  into  money  and  the  two  debts  may  be  set  off  one 
against  the  other.  The  test  is  whether  the  credit  given  by 
tlie  delivery  of  the  property  must  in  its  nature  terminate  in 
a  debt.     Thus  a  creditor,  who  at  the  time  of  the  bankruptcy 

12  N.    Y.    County    Bank    v.    Mas-  Hoag.  17  Wall.  610.  21  L.  Ed.  721 ; 

sey,   192  U.  S.   138,  48  L.  Ed.  380.  Rose  v.  Hart,  8  Taunt.  499 ;  Jenkins 

11  Am.  B.  R.  42;  In  re  Geo.  M.  v.  Armour,  No.  7260  Fed.  Cas.,  6 
Hill  Co.  (C.  C.  A.  7th  Cir.).  130  Biss.  312;  Goodrich  v.  Dobson,  43 
Fed.  Rep.  315,  12  Am.  B.  R.  221;  Conn.  576;  In  re  Lane,  No.  8043 
In  re  Scherzer,   130  Fed.  Rep.  631,  Fed.    Cas.,   2    Low.    305. 

12  Am.  B.  R.  451.  I*"' Rose  v.  Hart,  8  Taunt.  499. 

"  In  re  Philip  Semmer  Glass  Co.  i"  Libby    v.    Hopkins,    104    U.    S. 

(C  .C.  A.  2d  Cir),   135  Fed.  Rep.  303,   26  L.   Ed.   769. 

77.    14  Am.   B.   R.  25.  i**  Fleming    v.    Andrews,    3    Fed. 

"  Frank    v.    Mercantile    National  Rep.  632. 

Bank,  100  Sup.  Ct.   (N.  Y.)  Appel-  !» Collins    v.    Jones,    10    B.    &    C. 

late    Div.    449.  777;    Boland   v.    Na.sh,   8    B.    &    C. 

I"'  Libby    v.    Hopkins,    104    U.    S.  105. 
303,    26    L.    Ed.    769;     Sawyer    v. 


WHAT    DEBTS    ARE    PROVABLE.  375 

has  in  his  hands  goods  or  chattels  of  the  bankrupt  with  a 
power  of  sale  or  choses  in  action  with  a  power  of  collection, 
may  sell  those  goods  or  collect  those  claims,  and  set  them 
off  against  the  debt  the  bankrupt  owes  him,  and  this  although 
the  power  to  sell  or  collect  were  revocable  by  the  bank- 
rupt before  his  bankruptcy."'' 

§  124.    The  debts  and  credits  must  be  in  the  same  right. 

In  order  that  debts  and  credits  may  be  set  off  they  must  be 
due  respectively  in  the  same  right.'  This  rule  is  subject  to 
a  few  exceptions  to  be  inentioned  presently.  It  is  evident 
that  there  is  a  distinction  between  debts  being  mutual  and 
debts  being  held  in  the  same  right.  Debts  may  be  mutual 
and  held  in  different  rights. 

Thus  it  has  been  held  that  a  debt  due  to  an  executor,  as 
executor,  can  not  be  set  off  against  a  debt  due  from  him  in 
his  own  right.-  But  wdiere  a  person  as  executor  and  resid- 
uary legatee  had  a  balance  in  the  hands  of  bankers  he  has 
been  allowed  to  set  off,  in  an  action  by  the  trustee  of  the 
bankers  for  a  debt  due  from  him  to  them,  the  balance  due 
him  as  executor  and  residuary  legatee,  it  appearing  that  he 
had  in  his  hands  more  than  sufficient  assets  to  pay  all  the 
testator's  debts  and  legacies  remaining  unpaid."^  It  has  also 
been  held  that  a  debt  due  for  stock  in  a  corporation  could  not 
be  set  off  against  a  debt  due  from   the  corporation.-*     The 

'^Ex  parte   Whiting,   No.    17573,  2  Bishop   v.    Church.   3   Atk.   691. 

Fed.    Cas.,    2    Low.    572;    Rose    v.  ^  Bailey  v.   iMiich,  7  L.   R.  Q.   B. 

Hart,  8  Taunt.  506,  2  Smith  Lead-  34.     See  observations  on  this  case 

ing   Cases,    Part    i,   330,   and   notes  in  Ex  parte  IMorier,  12  Chan.  Div. 

thereto;    Goodrich    v.    Dobson,    43  491. 

Conn.   576;   /;(   re  McVay,   13  Fed.  4  Sawyer  v.   Hoag,    77  Wall.  610, 

^ep.  443-  21   L.   Ed.    731;    Scovill   v.   Thayer. 

But  see  Brown  v.  New  Bedford  105    U.    S.     143.    26    L.    Ed.    968; 

Savings   Inst.,    137  Mass.  262.  Scammon  v.  Kimble,  92  U.  S.  362', 

1  Sawyer  v.   Hoag,   17  Wall.  622,  23   L.    Ed.   483;    Sanger   v.    Upton, 

21   L.   Ed.   731;   Liblty  v.    Hopkins,  91   U.   S.  56,  2^^  L.  Ed.  220;   Mor- 

104    U.    S.    303.    26    L.    Ed.    769;  gan  County  v.  Allen,  103  U.  S.  498, 

Wright  V.   Rogers,   No.    18090  Fed.  26   L.    Ed.    498;    In    re    Wiener   & 

Cas..     3     McLean,     229;     West     v.  Goodman    Shoe   Co.,  96   Fed.    Rep. 

Prycc,    2    Bing.    455.  949,    3    Am.    B.    R.   200. 


376  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

reason  lor  this  is.  that  the  debt  which  the  appeUant  owed  for 
his  stock  is  a  trust  fund  held  by  the  corporation,  for  the  bene- 
fit of  ah  creditors  of  the  company,  and,  therefore,  not  in  the 
same  right  as  a  debt  between  the  company  and  the  debtor. 
Where  a  creditor  of  a  bankrupt  knowing  him  to  be  in  faihng 
circumstances  agrees  to  open  a  new  account  irrespective  of 
the  old  indebtedness  he  can  not  set  off  the  amount  due  by 
him  on  the  new  account  against  the  amount  due  to  him  6n 
the  old  account.'^'  Where  an  agreement  between  a  bankrupt 
and  another  person  oljligates  the  latter  to  pay  laborers  after 
deducting  from  the  payrolls  amounts  furnished  laborers  by  the 
bankrupt  for  supplies  and  to  remit  to  the  bankrupt  the  amount 
of  such  deductions  irrespective  of  the  account  between  him 
and  tlie  bankrupt  is  not  a  case  of  mutual  credits  and  debts 
because  as  to  such  deductions  such  persons  stood  toward  the 
bankrupt  in  the  relation  of  a  trustee.'^ 

A  judgment  for  a  penalty  incurred  by  the  violation  of  a 
statute  against  usury  is  not  a  proper  set-off  against  a  claim 
of  the  judgment  debtor  against  the  bankrupt's  estate.^  It 
has  also  been  held  that  a  debt  owing  to  a  wife  when  sole 
can  not  be  set  off  against  a  debt  from  her  husband,^  or  a 
debt  owing  by  the  bankrupt's  wife  before  marriage  against  a 
debt  owing  to  him  "  unless  after  marriage  he  makes  the  wife's 
debt  his  own.^°  A  debt  due  to  or  from  the  trustee  in  bank- 
ruptcy and  arising  after  the  bankruptcy  in  the  management 
of  the  estate  can  not  be  set  off  against  a  debt  due  from  or  to 
the  bankrupt  before  the  bankruptcy." 

For  the  same  reasons  the  separate  debt  of  one  partner  can 
not  be  set  off  against  a  partnership  debt  or  vice  versa}-     But 

^  In    re   Troy    Woolen    Co.,    No.  lo  Wood  v.  Akers,  2  Esp.   594. 

14203  Fed.  Cas.,  8  N.  B.  R.  412.  "  Alloway  v.  Steere,  10  Q.  B.  D. 

"Western  Tie  &  T.  Co.  v.  Brown,  22;   West  v.   Pryce,  2  Bing.  455. 

196   U.   S.   502,   49  L.    Ed.   571,   13  1- Forsyth    v.    Woods,    11    Wall. 

Am.  B.  R.  447.  484,  20  L.  Ed.  207;  Gray  v.  RoUo, 


7 


Wilson  V.  National  Bank  of  Rol-  t8  Wall.  629,  21  L.  Ed.  927;  Clark 

la,  3  Fed.  Rep.  391.  v.    Sparhawk,    No.    2836    Fed.    Cas., 

^  Ex  parte  Blagden,   19  Ves.  465.  2    Weekly    Notes,    Cas.     115 ;     Ex 

» Yates  V.   Sherrington,    11   M.  &  parte      Twogood,      11      Ves.      517; 

W.  42;  s.  c.  12  AI.  &  W.  855.  Lanesborough    v.    Jones,    i    P.    W. 


WHAT   DEBTS   AI^E   PROVABLE.  Z17 

the  rule  excluding  a  set-off  as  between  joint  and  separate 
debts  does  not  apply  to  a  surviving  partner,  as  the  right  to 
sue  for  partnership  debts  survives  to  him  alone.^^  Neither 
does  it  apply  where  the  joint  debt  is  in  fact  a  security  for 
the  separate  debt,  as  where  one  partner  joins  in  a  bond  merely 
as  surety  for  another/"*  In  such  case  the  debt  on  the  joint 
security  is  in  reality  the  debt  of  the  principal  debtor  only, 
who  may  set  off  a  debt  owing  to  him  by  the  obligee.  It  has 
been  thought  that  the  mutual  credit  clause  does  not  apply  to 
partnership  debts  unless  all  the  members  of  the  firm  are 
bankrupt ;  for  it  was  intended  to  operate  only  in  respect  of 
demands  by  and  against  bankrupts.  Hence  it  would  not  ap- 
ply if  there  was  a  solvent  partner.^"'  If  it  should  be  held  to 
apply  in  such  cases,  it  is  manifest  that  it  would  not  release 
the  liability  of  the  solvent  partner.^'' 

There  are  a  few  exceptions  to  the  general  rule.  Thus,  in 
the  case  of  a  factor  selling  goods  as  his  own  without  disclos- 
ing his  principal  the  debtor  may  set  off  against  the  principal 
any  debt  which  he  could  have  set  off  against  the  factor.^' 
So  also  it  seems  that  by  special  agreement  debts  in  separate 
rights  may  be  set  off,  one  against  the  other. 


18 


§  125.    Set-offs  must  be  provable  debts. 

The  statute  expressly  provides  that  a  set-oft',  or  counter- 
claim, in  favor  of  any  debtor  of  the  bankrupt  must  be  provable 
against  the  estate.^  It  would  seem  that  any  debt  provable  in 
bankruptcy  might  be  set  oft"  against  any  mutual  del)t  held  in 

326;  Ex  parte  Ross,  Buck,  125;  Ab-  1^  See  Viilliany  v.  Noble,  3  Aler. 

bott  V.  Hicks*  5  Bing.,  N.  C.  5/8.  621;  Ex  parte  .Stephens,  11  Ves.  24. 

'■'Tucker  v.  Osley,  5  Cranch,  34,  i"  B.  A.    1898,  Sec.   16. 

3  L.  Ed.  29;  as  explained  in  Gray  v.  i^  George  v.  Clagett,  7  T.  R.  359. 

Rollo,  18  Wall.  633,  21  L.  Ed.  927;  ^^  Cuxon  v.   Chadley,    i    C.  &   P. 

Cosgrove   v.    Crosby,   86   Ind.    511;  174. 

French   v.   Andrade,   6  T.    R.   582;  1  B.   A.    1898,    Sec.    68/7;    Morgan 

Slipper  V.  Stidstone,  5  T.  R.  493.  v.  Wordell,  178  Mass.  350,  3  N.  B. 

" /:a-  parte  Hanson,  12  Ves.  346;  N.  513. 
s.  c.  18  Ves.  232;  In  re  Dillon,  100 
Fed.   Rep.  627,  4  Am.  H.   R.  63. 


378  LAW   AND   PROCEEHtfNGS   IN   BANKRUPTCY. 

the  same  right,  provided  it  was  not  purcliased  for  this  pur- 
pose within  the  time  Hmited  in  the  act.  What  constitutes  a 
provable  debt  is  the  subject  of  this  chapter,  and  does  not  re- 
quire further  explanation  at  this  point. 

It  was  held  formerly  that  the  liability  of  an  endorser  or 
surety  could  not  be  made  a  subject  of  set-off  unless  he  had 
actually  paid  the  debt.-  \\'here,  under  Section  57i,  such  claim 
is  pro\-able  it  would  seem  that  it  may  be  set  off  against  any 
claim  of  the  principal  debtor  ag'ainst  the  surety  to  the  extent 
that  the  endorser  or  surety  can  prove  his  claim.  So  also 
costs  provable  under  the  act  may  be  the  subject  of  set-off.^ 
Under  the  former  acts  untaxed  costs  were  not  provable,  and, 
therefore,  could  not  be  used  as  set-offs,  but  under  the  present 
act  they  are  provable,  and  consec[uently  can  be  the  subject  of 
set-oft'.-' 

If  the  claim  of  a  creditor,  who  is  also  a  debtor,  of  the 
estate  is  one  provable  in  its  nature,  the  fact  that  he  has  not 
proved  it  within  the  year  does  not  affect  his  right  to  plead  it 
as  a  set-oft"  or  counterclaim  in  an  action  by  the  trustee  to 
recover  his  indebtedness  to  the  estate  as  a  claim  "provable 
against  the  estate"  within  the  meaning  of  Section  6Sb.^ 

§  126.    Debts  acquired  by  purchase  as  set-offs. 

There  is  nothing  unlawful  in  purchasing  a  debt,  though  it 
be  for  the  purpose  of  using  it  as  a  set-off.^  Such  debts  may 
be  the  subject  of  set-off,  provided  they  were  not  purchased  by 
or  transferred  to  such  person  after  the  filing  of  the  petition,  or 

2  Abbott  V.  Micks,  5  Bing.,  X.  C.  'Mattocks    v.    Lovering,    3    Fed. 

578.  Rep.    2]2\    Lloyd    v.    Turner,     No. 

*  See    Staniforth    v.    Fellowes,    i  8436     Fed.     Cas.,     5     Saw.     463 ; 

Marsh,  184;  Tlioma.son  v.  Frere,  10  Hovey     v.     Home     Insurance     Co., 

East,  418.  No.   6743    Fed.    Cas.,    10   N.    B.    R. 

But  see  Robarts  v.  Bree,  8  Cha.  224;     Humphreys     v.     Blight,     No. 

Div.  198.  (^870   Fed.   Cas.,  4  Dall.  370;   /;;   re 

4  See  costs,  Sec.   118,  ante.  City   Bank,   No.   2742   Fed.    Cas..   6 

'Norfolk  &  W.  Ry.  Co.  v.  Gra-  X.  C.  R.  71. 
ham   (C.  C  .A.  4th  dr.),   145  Fed. 
Rep.   809,    16  Am.    B.   R.   610. 


WHAT   DEBTS   ARE   PROVABLE. 


379 


within  four  months  before  such  fihng,  with  a  view  to  such 
use,  and  with  knowledge  or  notice  that  such  bankrupt  was 
insolvent  or  had  committed  an  act  of  bankruptcy.'  A  claim 
purchased  after  insolvency  and  within  the  prohibited  period 
by  a  debtor  of  the  bankrupt  can  not  be  used  as  a  set-off.^ 
A  person  who  has,  within  four  months  of  bankruptcy 
and  with  knowledge  of  the  insolvency  of  the  bankrupt, 
acquired  claims  of  the  bankrupt  against  laborers,  can  not  use 
these  claims  by  way  of  set-off  against  a  debt  due  from  such 
person  to  the  bankrupt.* 

It  would  therefore  seem  that  a'  claim  or  debt  purchased 
more  than  four  months  prior  to  the  filing  of  the  petition 
may  be  used  as  a  set-off,  irrespective  of  whether  the  person 
purchasing  or  receiving  it  had  knowledge  or  notice  that  the 
bankrupt  was  insolvent  or  not." 

In  computing  the  four  months  the  first  day  is  excluded  and 
the  last  day  included  unless  the  last  day  falls  on  a  Sunday  or 
holiday,  in  which  event  the  last  day  included  shall  be  the 
next  day  thereafter  which  is  not  a  Sunday  or  a  legal  holiday/' 
Holidays  are  defined  by  tlie  act  to  include  Christmas,  the 
fourth  of  July,  the  twenty-second  of  February,  and  any  day 
appointed  by  the  President  of  the  United  States  or  the  Con- 
gress of  the  United  States  as  a  holiday  or  as  a  day  of  public 
fasting  or  thanksgiving." 


2B.  A.  1898,  Sec.  68b.  Compare 
R.  S.  Sec.  5073;  Mclver  v.  Wilson, 
Xo.  8833,  Fed.  Cas.,  i  Cranch  C. 
C.  423 ;  Smith  v.  Brinkerhoff,  2 
Seidell    (N.    Y.)    305. 

" /h  re  Shults,  132  Fed.  Rep.  582, 
r3  Am.  B.  R.  84;  In  re  Shults,  135 
Fed.   Rep.   623,    14  Am.   B.   R.   ^-8. 

*  Western  Tie  &  Timber  Co.  v. 
Brown,  196  U.  S.  502,  49  L.  Ed. 
571,  13  Am.  B.  R.  447,  reversing 
(C.  C.  A.  8th  Cir.).  129  Fed.  Rep. 
728.  12  Am.  B.  R.  TIT. 

"'  Mattocks  V.  Loveringf.  3  Fed. 
Rep.    212;    Lloyd    v.    Turner,    Xo. 


8436  Fed.  Cas.,  5  Saw.  463;  Hovey 
V.  Home  Insurance  Co.,  No.  6743 
Fed.  Cas.,  10  N.  B.  R.  224;  Hum- 
phreys V.  Blight,  No.  6870  Fed. 
Cas.,  4  Dall.  370.  But  see  Hitch- 
cock V.  Rollo,  No.  6535  Fed.  Cas., 
3  Biss.  276;  Rollins  v.  Twitchcll. 
Xo.  12027  Fed.  Cas.,  2  Hask.  66; 
Smith   V.    Hill,   8   Gray   572. 

"B.  A.  1898,  Sec.  31;  Dutcher 
V.  Wright,  94  U.  S.  553,  24  L.  Ed. 
1.30;  In  re  Lang,  No.  8056  Fed. 
Cas.,  s.  c.  2  N.  B.  R.  480. 

'  B.  \.   1898,   Sec.   T,  clause   14. 


3S0  LAW  x\ND   PROCEEDINGS  IN   BANKRUPTCY. 

§  127.    Rights  of  preferred  creditors  to  set-offs. 

Under  the  mutual  credit  clause  ^  a  creditor  having  a  pref- 
*erence  can  not  set  off  an  individual  debt  in  a  suit  by  the 
trustee  to  set  aside  such  preference.  The  reason  is,  that 
the  debts  are  not  mutual  nor  in  the  same  right.  The  prefer- 
ence which  is  being  avoided  is  a  debt  between  the  preferred 
creditor  and  the  general  creditors — not  the  bankrupt.  The 
individual  debt  is  between  the  preferred  creditor  and  the 
bankrupt.  The  trustee  holds  one  of  the  debts  as  the  rep- 
resentative of  the  general  creditors  and  the  other  as  the 
representative  of  the  bankrupt. 

But  the  act  expressly  provides  for  set-offs  in  such  cases,  as 
follows:  "If  a  creditor  has  been  preferred,  and  afterwards  in 
good  faith  gives  the  debtor  further  credit  without  security  of 
any  kind  for  property  which  becomes  a  part  of  the  debtor's 
estate,  the  amount  of  such  new  credit  remaining  unpaid  at 
the  time  of  the  adjudication  in  bankruptcy  may  be  set  off 
asrainst  the  amount  which  would  otherwise  be  recoverable 
from  him." 

Prior  to  the  amendment  of  1903  there  was  a  conf]^ict  in. the 
opinions  of  the  different  courts  as  to  the  construction  of  this 
provision  in  connection  with  Section  S7 g.^  The  controversy 
turned  upon  the  meaning  of  the  word  "recoverable."  It  is 
clear  that  only  preferences  voidable  under  Section  60&  need 
now  be  surrendered  before  having  a  claim  allowed.*  A  creditor, 
who  after  receiving  a  preference  from  a  debtor  extends  him 
credit  in  good  faith  without  security  and  the  money  or  prop- 
erty actually  passes  into  the  debtor's  possession,  is  entitled  to 
have  the  amount  of  such  credit  set  off  from  the  amount  re- 
coverable bv  the  trustee.'^  It  is  immaterial  what  the  debtor 
does  with  the  money  or  property  after  it  comes  into  his 
possession.  ■'"' 

IB.  A.  1898,  Sec.  68.  4  Western  Tie   &  Timber  Co.  v. 

2  B.   A.    1898,   Sec.   60;    Kaufman  Brown,    196   U.    S.    502,   49  L.   Ed. 

V.    Treadway,    195    U.    S.    271,    49  S7i.  i.3  Am.  B.  R.  447. 

L.  Ed.   190,  12  Am.  B.  R.  862.  "Kaufman   v.    Treadway,    195   U. 

''■In    re    Topliff,    114    Fed.    Rep.  S.   271,  49   L.   Ed.    igo,    12  Am.   B. 

323,  8   Am.    B.    R.    141,   where   the  R.  862;   In  re   Morrow  &  Co.,   134 

cases  are  collated.  Fed.   Rep.  686,   13   Am.   B.   R.  392. 


WHAT    DEBTS    ARE    PROVABLE.  381 

§  127a.     Waiver  of  set-off. 

If  a  claim  for  set-off,  or  counterclaim,  is  not  set  up  at 
the  time  of  proving  the  claim  in  bankruptcy  it  will  be  deemed 
as  waived.  It  has  been  held  that  the  creditor  could  not  main- 
tain a  suit  upon   such  a  debt  thereafter.^ 

§  128.     Torts. 

Under  the  former  bankruptcy  acts  unliquidated  damages 
for  torts,  such  as  assault,  slander,  deceit  or  personal  injury, 
were  not  provable  in  banki:uptcy.^  Where  damages  for  torts 
had  been  liquidated  and  reduced  to  judgment  prior  to  bank- 
ruptcy, such  judgments  were  provable  as  debts  under  former 
bankrupts  acts." 

The  same  rule  has  been  adopted  in  construing  the  act  of 
1898.  It  is  well  settled  that  an  unliquidated  claim  for  dam- 
ages ex  delicto  is  not  provable.^  The  courts  have  generally 
allowed  judgments  for  torts  to  be  proved  as  "a  fixed  liability, 
as  evidenced  by  a  judgment"  where  the  judgment  was  obtained 
prior  to  bankruptcy.* 

A  distinction  exists  in  case  a  demand  may  arise  upon  con- 
tract or  in  tort,  as  in  actions  for  negligence  against  carriers, 
or  in  actions  against  bailees  to  recover  the  pledge  after  the 
determination  of  the  bailment,  which  may  be  either  in  trover 
or  assumpsit.  It  is  now  well  settled  that  where  a  claim 
arises  e.v  delicto,  but  is  also  of  sucli  a  character  as  to  consti- 
tute a  claim  on  the  theory  of  a  quasi  contract,  the  debt  is 
provable   in   bankruptcy    under   section   63,    clause   4.^     The 

^  Brown     v.     Farmers'     Bank,     6  69,  4  Am.  B.  R.  715  ;  In  re  Morales, 

Bush.  (Ky.)   198;  Russell  v.  Owens,  105    Fed.    Rep.    761,    5    Am.    B.    R. 

61   Mo.   185.     See  also  In  re  State  425 ;    In    re    Brinckman,    103    Fed. 

Ins.  Co.,  16  Fed.  Rep.  756.  Rep.  65,  4  Am.  B.  R.  551 ;  Beers  v. 

"  Zimmer  V.  Schleehauf,  115  Mass.  Ilanlin,   99    Fed.    Rep.    695,   3    Am. 

52;  In  re  Hennocksburgh,  No.  6367  B.    R.    745;    In   re    Heinsfurter,   97 

Fed.  Cas.,  6  Ben.  150;  In  re  Schu-  Fed.   Rep.    198,   3   Am.    B.   R.    113; 

chardt,  No.  12483  Fed.  Cas.,  8  Ben.  In  re  United  Button  Co.,  140  Fed. 

585.  Rep.  495,  15  Am.  B.  R.  390. 

^  In  re  Comstock,  No.  3073  Fed.  *  See  observation  of  Judge  Brad- 

Cas.,  22  Vt.  642;  In  re  Book,  No.  ford  In  re  United  Button  Co.,   140 

1637  Fed.  Cas.,  3  McLean,  317;  In  Fed.   Rep.  495,    15  Am.   B.   R.   390, 

re    Hennocksburgh,   No.   6367   Fed.  406. 

Cas.,  6  Ben.   150.  "Crawford   v.    Burke,    195   U.    S. 

'//I  re  llirschman,  104  Fed.  Rep.  176,   193,  49  L.  Ed.   147,  12  Am.  B. 


38J  LAW    AND    I'KOCEEDINGS    IX     HAX  KKl '  I'TCY. 

right  to  prove  such  claims  is  not  waived  by  suinj;-  to  recover 
damages  for  the  torts." 

Claims  for  Infringement  of  PATENTS.^-The  infringe- 
ment of  a  patent  sounds'  in  tort  and  not  in  contract.  The  only 
remedies  provided  by  Congress,  wiiich  has,  under  the  con- 
stitution, exclusive  control  of  the  subject,  are  a  suit  in 
equity  and  trespass  on  the  case.  Assumpsit  will  not  lie. 
There  is  no  implied  contractional  relations  between  an  in- 
fringer and  the  owner  of  a  patent  right.  The  infringer  is  a 
tort  feasor.  For  this  reason  under  the  present  act  unliqui- 
dated damages  or  profits  arising  from  an  infringement  of  a 
patent  are  not  provable.  If  they  have  been  liquidated  by 
judgment,  decree  or  otherwise  prior  to  bankruptcy,  they  are 
provable,  as  in  other  cases  of  tort. 

This  was  the  rule  under  the  act  of  1867.^  In  England  a 
patentee  has  been  permitted  to  prove  for  the  amount  of  profits 
made  by  an  infringement  of  his  patent  as  money  had  and  re- 
ceived.*    This  rule  does  not  obtain  in  this  country. 

§  129.    Debts  barred  by  the  statutes  of  limitations. 

The  courts  of  the  United  States  recognize  generally  the 
statutes  of  limitations  of  the  several  states.^  Courts  of  bank- 
ruptcy recognize  such  statutes  of  limitations.  A  debt  other- 
wise provable  may  be  barred  by  a  state  statute  of  limitations 
so  that  the  debt  is  not  allowable,  but  is  such  a  debt  as  will  be 
released  by  a  discharge." 

In  order  to  be  barred  in  bankruptcy  a  debt  must  be  barred 
by  the  statute  of  the  state  in  wdiich  the  petition  in  bankruptcy 
is  filed.^     The  reason  for  this  is,  that  a  statute  of  limitation 

R.  659 ;  In  re  Filer,   125  Fed.  Rep.  ^  Watson    v.    Holiday,    20    L.    R. 

262,  5  Am.  B.  R.  835;  In  re  Hilde-  Chan.  D.  780. 

brandt,   120  Fed.  Rep.  992,  10  Am.  ^Bauserman  v.   Blunt,   147  U.   S. 

B.  R.   184;  In  re  Hirschmann,   104  652,  2;]  L.  Ed.  316,  and  cases  there 

Fed.    Rep.    69,   4   Am.    B.    R.    715;  collated. 

Johnson  V.  Spiller,  i  Douglass,  168;  "  Hargadine-M  c-K  i  tt  r  i  c  k    Dry 

Parker  v.  Norton,  6  T.  R.  695.  Goods  Co.  v.  Hudson  (C.  C.  A.  8th 

*  Crawford   v.    Burke,    195   U.    S.  Cir.),   10  Am.  B.  R.  225,   122  Fed. 

176,  193,  49  L.  Ed.  147,  12  Am.  B.  Rep.    232. 

R.    659.  ^  In  re  Resler,  95  Fed.  Rep.  804, 

''hi  re  Boston  &  Fairhaven  Iron  2  Am.  B.  R.  602;  In  re  Lipman,  2 

Works,  23  Fed.  Rep.  880,  reversing  Am.  B.  R.  46,  94  Fed  Rep.  353; 
29  Fed.  Rep.  783. 


WHAT   DEBTS   ARE    PROVABLE. 


383 


affects  the  remedy  and  not  the  right.  If  the  debt  is  not 
barred  at  the  time  the  petition  is  filed  it  is  a  provable  debt, 
because  bankruptcy  stops  the  running  of  the  statute."* 

It  may  be  observed,  however,  that  a  claim  may  be  barred 
by  limitations  contained  in  the  bankrupt  act,  which  provides 
that  claims  shall  not  be  pru\ed  against  a  bankrupt  estate  sub- 
sequent to  one  year  after  the  adjudication ;  or  if  they  are  liqui- 
dated by  litigation  and  the  final  judgment  therein  is  rendered 
within  thirty  days  before  or  after  the  expiration  of  such  time, 
then  within  sixty  days  after  the  rendition  of  such  judgment.' 

The  failure  of  a  lien  claimant  to  present  his  claim  or  lien 
for  recognition  or  enforcement  within  the  period  limited  by 
this  provision  bars  such  claim  as  effectually  as  an  omission 
to  prove  any  other  deljt.  provided  such  lien  is  determined  to 
be  incomplete  or  invalid.'"'  In  such  case  the  debt  may  be 
proved  in  bankruptcy  if  presented  within  the  time  limited  by 
this  provision. 


Hargadine-McKiUrick  Dr}-  Goods 
Co.  V.  Hudson  ( C.  C.  A.  8th  Cir.), 
ID  Am.  B.  R.  225,  122  fed.  Rep. 
2:^2 ;  /;;  re  Hardin,  No.  6048  Fed. 
Cas.,  s.  c.  I  Hask.  163;  In  re  Kings- 
ley,  No.  7819  Fed.  Cas.,  i  Low. 
216;  In  re  Reed,  No.  11635  Fed. 
Cas.,  6  Biss.  250;  In  re  Dot}-,  No. 
4017  Fed.  Cas.,  16  N.  B.  R.  202; 
In  re  Cornwall,  No.  3250  Fed.  Cas., 
Q  Blatch.  114;  In  re  Noesen,  No. 
10288  Fed.  Cas.,  6  Biss.  443. 

In  re  Ray,  No.  11 589  Fed.  Cas.. 
2  Ben.  53,  it  was  held  that  the  debt 
must  be  barred  throughout  the  lim- 
its  of   the   United    States. 

•♦  In  re  McBryde,  99  Fed.  Rep. 
(586,  3  Am.  B.  R.  729;  In  re  Mc- 
Kinney,  15  Fed.  Rep.  912;  In  re 
Waties  &  Co.,  39  Fed.  Rep.  264; 
Trustees  v.  Bosseiux,  3  Fed.  Rep. 
8t7.  4  Hughes  387;  In  re  Eldridge, 


No.  4331  Fed.  Cas.,  2  Hughes,  256; 
In  re  Wright,  No.  18068  Fed.  Cas., 
6  Biss.  317;  In  re  Graves,  9  Fed. 
Rep.  816.  But  see  contra,  In  re 
Shepard,  No.  12753  Fed.  Cas.,  i  N. 
B.  R.  439;  Nicholas  v.  Murray,  No. 
10223  Fed.  Cas.,  5  Saw.  320. 

■'  B.  A.  1898,  Sec.  57m;  In  re 
Rhodes,  105  Fed.  Rep.  231,  5  Am. 
B.  R.  197,  3  N.  B.  N.  112;  Bray  v. 
Cobb,  100  Fed.  Rep.  270,  3  Am.  B. 
R.  788,  2  N.  B.  N.  586;  In  re  Lei- 
bowitx,  108  Fed.  Rep.  617,  6  Am. 
B.  R.  628;  In  re  Moebius,  116  Fed. 
Rep.  47,  8  Am.  B.  R.  590.  See  also 
Sec.  132,  post. 

As  to  the  effect  of  amendment  of 
proof  of  claim  after  one  year,  see 
Hutchinson  v.  Otis,  190  U.  S.  552, 
47  L.  Ed.  1 1 79,  10  Am.  B.  R.  135. 

"  In  re  Brunquest,  No.  2055  Fed. 
Cas.,   s.   c.   7   Biss.  208. 


384 


LAW    AND    PROCEEDINGS   IN   BANKRUPTCY. 


CHAPTER  XIV. 


HOW    TO    PROVE   DEBTS. 


§  130.     Necessity  of  proof. 

Xo  creditor  is  entitled  to  participate  in  the  distribution  of 
a  bankrupt's  estate  or  to  obtain  a  dividend  upon  any  claim 
until  such  claim  or  debt  has  been  proved  and  allowed.  The 
proof  must  be  made  in  the  manner  prescribed  by  the  statute 
and  general  orders.^  It  is  immaterial  what  may  be  its  form, 
whether  it  consists  of  a  contract,  account,  promissory  note, 
bond  or  judgment."  Secured  and  unsecured  creditors  stand 
upon  the  same  footing  as  regards  proof  of  their  debts. ^ 

The  fact  that  the  debts  are  contained  in  the  debtor's  sched- 
ule is  not  proof  sufficient  to  entitle  a  party  to  participate  in 
the  distribution  of  the  estate.  It  may  be  stated  fraudulently, 
or  it  may  not  exist,  or  there  may  be  payments,  or  counter- 
claims, or  set-offs.  The  reason  for  rQquiring  proof  is  not 
merely  to  give  the  creditors  a  standing  in  court,  but  to  pro- 
tect the  estate  against  fraudulent  and  excessive  claims.  Even 
the  claims  of  petitioners  in  involuntary  proceedings  must  be 
proved  and  allowed  like  other  claims.*  The  trustee  and  the 
other  creditors  have  a  right  to  question  the  debt  in  part  or  in 
whole  upon  proof  subsequently  required  to  be  taken. '^     They 


IB.  A.  1898,  Sec.  57;  Gen.  Orel. 
21 ;  Official  Forms  Nos.  31  to  ZT^ 
see  Forms  54  to  60,  post;  In  re 
Dunn  Hardware  &  Furniture  Co., 
I3_'    Fed.    Rep.    719,    13   Am.    B.    R. 

147- 

"  In  re  Rosenberg,  144  Fed.  Rep. 
442,   16  Am.  B.  R.  465. 

"'  Davis  V.  Anderson,  No.  3623 
Fed.  Cas.,  s.  c.  6  N.  B.  R.  145,  ap- 
proved In  re  Anderson,  23  Fed. 
Rep.  500;  In  re  Davis,  No.  3618 
Fed.  Cas.,  2  N.  B.  R.  391  ;  In  re 
Hayward,    130    Fed.    Rep.    720,    12 


Am.  B.  R.  264.  But  see  Rights  of 
Secured   Creditors,    Sec.   202. 

^  In  re  Cleveland  Ins.  Co.,  22 
Fed.  Rep.  204.  See  also  Sec.  139, 
post. 

■'  See  the  dissenting  opinion  of 
Judge  Sanborn  in  Ayres  v.  Cone 
(C.  C.  A.  8th  Cir.),  138  Fed.  Rep. 
783,  14  Am.  B.  R.  746.  The  ma- 
jority of  the  court  in  that  case  held 
tliat  where  an  issue  was  made  and 
tried  as  to  the  validity  of  the  claim 
of    a    petitioning    creditor,    an    ad- 


HOW    TO    PROVE    DEBTS.  385 

therefore  have  the  right  to  demand  that  all  the  statements 
required  by  the  statute  shall  be  full  and  complete  in  making 
out  a  prima  facie  case  of  the  validity  of  the  claim  and  the 
good  faith  of  the  claimant. 

§  131.     Who  may  make  the  proof. 

The  proof  of  a  debt  against  a  bankrupt's  estate  should  be 
made,  if  possible,  by  the  creditor  testifying  of  his  own  knowl- 
edge.^ The  statute  and  the  general  orders  prescribed  by  the 
supreme  court  contemplate  proof  by  an  agent  or  attorney  of 
the  creditor.-  When  the  proof  is  made  by  an  agent  or  attor- 
ney the  reason  of  the  deposition  is  not  made  by  the  claimant  in 
person  must  be  stated.^  What  reason  is  sufficient  to  excuse 
the  creditor  and  to  entitle  an  agent  or  attorney  to  make  the 
proof  is  not  stated  in  the  act  or  general  orders.  The  act  of 
1867  provided  for  proof  by  an  agent  in  two  cases  only:  first, 
when  the  claimant  was  absent  from  the  United  States,  and. 
second,  when  he  was  prevented  by  some  good  reason  from 
testifying.* 

A  debt  due  a  partnership  may  be  proved  by  one  of  the 
partners,  but  it  must  appear  on  oath  that  the  deponent  is  a 
meniber  of  the  partnership.-"'  But  a  corporation  which  is  a 
partner  de  facto  in  a  bankrupt  firm  can  not  prove  a  claim 
against  the  estate  for  money  advanced  and  goods  sold  to  the 
firm,  for  the  reason  that  the  partnership  agreement  jwas 
tdtra  vires.^    A  debt  due  a  corporation  may  be  proved  by  the 

judication    was    res  judicata    as    to  'Gen.     Ord.    21;     Official     Form 

the   trustee  and  all  other  creditors  No.   35,    Form   No.   58,   post. 

so  tliat  the  claim  could  not  be  con-  *  R.   S.   Sec.   5078;   In  re  Whyte, 

tested  when  proved  before  the  ref-  No.    17606   Fed.    Cas.,   9    N.    B.    R. 

^•■^c-  267;  In  re  Watrous,  No.  17270  Fed. 

In    re    Cleveland    Insurance    Co.,  Cas.,   14  N.  B.  R.  258. 

22   Fed.   Rep.   204.  n  Qen.  Ord.  21  ;  Official  Form  No. 

But    see    Ulfelder    Clothing    Co.,  34,  Form  No.  57,  post. 

98  Fed.  Rep.  409,  3  Am.  B.  R.  425.  "Wallcnstein  v.   Irvin    (C.   C.  A. 

»B.  A.    1898,   Sec.   57a.  3d  Cir.),  112  Fed.  Rep.  124,  7  Am. 

^B.    A.    1898,    Sec.    I,    clause    9:  B.  R.  256. 
Gen.  Ord.  21. 


386  LAW    AND    PROCEEDINGS    IN    BANKRUPTCV. 

treasurer  or  by  the  officer  whose  (Uities  correspond  most 
nearly  to  those  of  the  treasurer."  This  rule  applies  to  munici- 
pal and  political  corporations." 

A  father  who  has  a  debt  may  prove  against  the  estate  of  his 
son."  Where  a  wife  can  contract  debts  under  the  laws  of  a 
state,  she  may  prove  against  her  husband's  estate.'"  Judgment 
creditors  whose  liens  are  invalidated  by  l)ankruptcy  proceed- 
ings are  entitled  to  prove  their  claims  as  otlier  creditors. '^  An 
assignee  for  the  benefit  of  creditors  is  entitled  to  prove  for 
services  rendered  in  the  state  proceedings  prior  to  and  after 
bankruptcy  so  far  as  they  were  beneficial  to  the  estate.'" 
Where  a  creditor  has  recovered  judgment  against  two  co- 
defendants  and  has  levied  upon  the  property  of  one  of  them, 
and  the  other  has  been  adjudged  bankrupt,  the  judgment 
creditor  may  prove  his  whole  claim  against  the  bankrupt  as  an 
unsecured  claim. ''^  A  creditor  of  a  corporation,  who  is  also 
a  subscriber  for  its  corporate  stock,  may  prove  his  claim 
against  the  estate  of  the  corporation  in  bankruptcy.'*  A  cus- 
tomer of  a  stock  broker,  between  whom  and  the  broker 
there  is  a  running  account,  may  prove  his  claims  against  the 
broker's  estate  as  any  other  creditor.'"^  A  person  who  is 
secondarily  liable  for  a  debt  of  a  bankrupt,  as  endorser  or 
surety,   may   prove   provided    the   principal   creditor    fails   to 

''Gen.  Ord.  21;  Official  Form  No.  ^^ /n    re    Richard,    94    Fed.    Rep. 

33,  Form.  No.  56,  post.  633,  2  Am.   B.  R.  506. 

8  Corn  Exchange  Bank,  No.  3243  ^-Randolph  v.  Scruggs,  190  U.  S. 

Fed.  Cas.,  15  N.  B.  R.  216.  533,  47  L.  Ed.   1165,   10  Am.  B.  R. 

^  In  re  Rider,  96  Fed.  Rep.  811,  3  t,    overruling    In     re     Peter     Paul 

Am.  B.  R.  192.  Book    Co.,    104    Fed.    Rep.    786,    5 

i°/«    re    Neiman,    log    Fed.    Rep.  Am.  B.  R.  105;  Stearn  v.  Flick,  103 

113,  6  Am.  B.  R.  329;  In  re  Chap-  Fed.  Rep.  919,  4  Am.  B.  R.  723. 

man,   105  Fed.   Rep.  901,   5  Am.   B.  '■"/«    re    Headley,    97    Fed.    Rep. 

R.   570;   In   re   Domenig,    128   Fed.  765,  3  Am.  B.  R.  272. 

Rep.  146,  II  Am.  B.  R.  552;  James  ^*  In  re  Weiner  &  Goodman  Shoe 

V.    Gray    (C.    C.    A.    ist    Cir.),    131  Co.,  96  Fed.  Rep.  949,  3  Am.  B.  R. 

Fed.  Rep.  401,   12  Am.   B.   R.  573 ;  200. 

In   re   Tucker,    131    Fed.    Rep.    647,  '" /ra    re    Gaylord,    113    Fed.    Rep. 

12  Am.   B.   R.   594;   In  re  Winkels,  131,  7  Am.  B.  R.  577. 

132   Fed.   Rep.   590,    12   Am.    B.    R.  i''  B.   A.    1898,   Sec.   57/;   see  Sec. 

696.  116,  ante. 


HOW    TO    PROVE    DEBTS.  387 

prove  his  debt/'''  He  is  subrogated  to  no  greater  right  to 
prove  than  his  principal  has.^'  A  secured  creditor  may  prove 
for  balance  due  on  a  secured  claim  after  the  security  has  been 
exhausted,  although  he  may  have  previously  proved  un- 
secured claims  against  the  same  estate.^**  A  creditor  of  a 
bankrupt,  who  after  the  l)ankruptcy  has  taken  a  new  promise 
based  on  the  original  debt,  is  not  thereby  precluded  from 
maintaining  his  proof  against  the  estate  in  bankruptcy,  and 
receiving  dividends  thereon,  and  at  the  same  time  proceeding 
against  the  bankrupt  on  the  new  obligation,  so  long  as  he 
receives  but  a  single  satisfaction  of  his  debt/'* 

The  trustee  of  one  bankrupt  estate  may  prove  claims  of 
the  estate  which  is  being  administered  in  bankruptcy  against 
any  like  estate  in  the  same  manner  and  upon  the  like  terms 
as  the  claims  of  other  creditors.""  Administrators,  executors, 
receivers  and  other  persons  who  are  assignees  by  mere  opera- 
tion of  law  may  prove  in  the  same  manner  as  the  parties 
whom  they  represent  could  have  done."^ 

Where  a  claim  has  been  assigned  in  good  faith  and  for  a 
valuable  consideration  the  assignee  may  prove  it  whether  the 
assignment  was  made  before  or  after  the  petition  is  filed. 
When  the  assignment  was  made  before  the  commencement  of 
the  proceedings  the  proof  is  made  by  the  assignee,  and  need 
not  be  supported  or  accompanied  by  the  affidavit  of  the  as- 
signor."" Claims  which  have  been  assigned  after  tlie  petition 
is  filed  and  before  proof  must  be  supported  by  a  deposition  of 

IT  Livingston  v.  Heineman  (C.  C.  -"  B.  A.  1898,  Sec.  57;;/. 

A.    6th    Cir.),    120    h\'d.    Rep.    786,  -1  In    re    Republic    Ins.    Co.,    No. 

10   Am.   B.   R.  39;   In   re  Lyon    (C.  11705    Fed.    Ca.s.,   8   N.    B.   R.    197; 

C.  A.  2d  Cir.),  121   Fed.  Rep.  723,  Hx  parte  Norwood,  No.  10364  Fed. 

10  .'\m.  B.  R.  25;  Swarts  v.  Fourll:  Cas.,  3  Biss.  304;  In  re  Woods,  133 

Nat.  Bank   (C.  C.  A.  8th  Cir.),   117  Fed.    Rep.    82,    13    Am.    B.    R.    240. 

Fed.    Rep.    i,    8    Am.    B.    R.    673;  22  Qg,-,     Qrd.    21;    par.    3;    In    re 

Swarts    V.    Siegel    (C.    C.    A.    8th  Murdock,    No.    9939    Fed.    Cas.,    i 

Cir.),   117  Fed.  Rep.   13,  8  Am.   B.  Low.   362;    In   re   Frank,   No.   5050 

R.  689.  I'^ed.  Cas.,  5  Ben.  164;  In  re  Strach- 

!**/«  re  Ball,   123  Fed.  Rep.   164,  an.    No.    13519    Fed.    Cas.,    3    Biss. 

10  Am.  B.  R.  564.  181 ;  Ex  parte  Davenport,  No.  3586 

'"/n  re  Sweetser,   128  I-'cd.  Rep.  Fed.  Cas.,  s.  c.   i   Low.  384;  In  re 

165,   affirmed    (C.    C.   A.    ist   Cir.),  Kenney  Co.,   136  Fed.   Kep.  451,    14 

130  Fed.   Rep.   103.  Am.    B.   R.   611. 


388  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

the  owner  at  the  lime  of  the  commencement  of  the  proceed- 
ings, setting-  forth  the  true  consideration  of  the  deht,  and 
that  it  is  entirely  unsecured,  or,  if  secured,  what  the  security 
is  as  requircil  in  proving-  secured  claims.-''  Where  a  person 
has  procured  an  assignment  of  claims  hy  fraud  he  will  not  be 
allowed  to  prove  them.-*  An  assignee  will  not  be  entitled  to 
have  a  claim  allowed  which  could  not  be  proved  and  allowed 
in  favor  of  his  assignor.-'^' 

The  claims  of  persons  contingently  liable  for  the  bankrupt 
may  be  proved  in  the  name  of  the  creditor  when  known  by 
the  party  contingently  liable.  When  the  name  of  the  cred- 
itor is  unknown,  such  claim  may  be  proved  in  the  name  of 
the  party  contingently  liable."'' 

Creditors  who  have  received  preferences  may  prove  claims, 
but  are  not  entitled  to  have  them  allowed,  unless  such  creditors 
shall  surrender  their  preferences.^^ 

The  United  States  may  prove  their  debts  in  the  same 
manner  as  other  creditors.-^  But  the  United  States  are  not 
required  to  prove  their  claims  in  bankruptcy.""  A  state  or 
municipality  is  not  required  to  prove  its  claim  for  taxes  as  an 
ordinary  creditor  must  do.'"' 

§  132,     The  time  -within  -which  debts  may  be  proved. 

Proof  of  claims  may  be  filed  at  any  time  after  the  com- 
mencement of  bankrupt  proceedings.  A  claim  may  be  filed 
and  proved  prior  to  the  first  creditors'  meeting.^     In  practice 

23  Gen.   Ord.  21,  par.  3.  15595   Fed.    Cas.,   13   N.   B.   R.   33; 

-*  In    re    State    Ins.    Co.,    16   Fed.  U.   S.   v.   Herron,  20  Wall.  251,  22 

Rep.  756.  L.   Ed.  275;   Harrison  v.   Sterry,   S 

-•'•  In  re  Wiener  &  Goodman  Shoe  Cranch.    289,    3   L.    Ed.    104,    R.    R. 

Co.,  96  Fed.  Rep.  949,  3  Am.  B.  R.  Sec.  3466;  In  re  Vetterlein,  20  Fed. 

200.  Rep.     109;    U.    S.    V.    Murphy,     15 

-"Gen.   Ord.  2T.  Fed.    Rep.    589,    and    note;    In    re 

2' B.  A.  1898,  Sec.  S7g,  as  amend-  Stoever,  127  Fed.  Rep.  394,  11  Am. 

ed  Fed.  5,  1903,  32  Stat,  at  L.  797.  B.   R.  345. 

See  also  Sec.  135,  post.  ■^"  In    re    Harvey,    122    Fed.    Rep. 

28 /n  r^  Bousfield  &  Poole  Manu-  745,    10    Am.    B.     R.    567;    In    re 

facturing   Co.,   No.    1704   Fed.   Cas.,  Prince    &    Walter,     131    Fed.    Rep. 

17    X.    B.    R.    153.  546,  12  Am.  B.  R.  675. 

29  Lewis  V.   United   States,  92   U.  '^  In  re  Patterson,  No.  10814  Fed. 

S.  618,  23  L.  Ed.  513;  affirming  No.  Cas.,  i  Ben.  448. 


HOW    TO    PROVE    DEBTS.  389 

no  claims  are  generally  proved  until  the  first  creditors'  meet- 
ing. Proof  of  claims  may  be  made  subsequent  to  the  first 
creditors'  meeting  at  any  time  within  one  year  after  the  ad- 
judication." But  claims  can  not  be  proved  against  a  bankrupt 
estate  subsequent  to  one  year  after  the  adjudication,  unless  they 
are  liquidated  by  litigation  and  the  final  judgment  therein  is 
rendered  within  thirty  days  before  or  after  the  expiration  of 
such  time,  then  within  sixty  days  after  the  rendition  of  such 
judgment:  Provided,  that  the  right  of  infants  and  insane 
persons  without  guardians,  without  notice  of  the  proceedings 
may  continue  six  months  longer.' 

Proof  of  claims  are  regfularlv  filed  with  the  clerk  or  referee. 
The  presentation  and  delivery  of  a  proof  of  claim  to  the 
trustee  in  bankruptcy  within  the  year  after  the  adjudication 
is  sufficient.-* 

It  has  been  uniformly  held  that  the  language  of  Section 
57n,  "that  claims  shall  not  be  proven  against  a  bankrupt  estate 
subsequent  to  one  year  after  the  adjudication,"  is  more  than 
a  limitation,  that  it  is  prohibitory  and  that  the  court  has  no 
power  or  discretion  to  extend  it.^  This  is  true  even  when  the 
creditor  did  not  know  of  the  bankruptcy  proceedings  within 
the  year,*  or  where  he  was  trying  to  enforce  a  security  which 
is  held  invalid  after  the  year.** 

If  the  proof  of  a  claim,  made  wnthin  the  year,  is 
defective,  it  may  be  amended  after  the  expiration  of  the 
year/  but  where  the  proof  of  claim  is  withdrawn  and  a 
like  claim  for  a  different  amount  filed  it  can  not  be  treated  as 

'  B.  A.   1898,  Sec.  57H.  144  Fed.  Rep.  439,  16  Am.  B.  R.  457. 

"  *  Orcutt  V.  Green,  204  U.  S.  96.  But    see    In   re    Fagin,    140    Fed. 

'Bray  v.  Cobb.  3  Am.  B.  R.  788,  Rep.  758,  15  Am.  B.  R.  520. 

100    Fed.    270;    In    re    Shaffer,    4  °  Hutchinson   v.    Otis,    190   U.    S. 

Am.  B.  R.  728,  104  Fed.  982;  In  re  552,  47  L.  Ed.   1179,  10  Am.  B.  R. 

Rhodes,  5  Am.  B.  R.  197,  105  Fed.  135;    In  re    Roebcr    (C.    C.    A.    2d 

231;  In  re  Leibowitz,  6  Am.  B.  R.  Cir.),    127   Fed.    Rep.    122,    11    Am. 

268,  ro8  Fed.  Rep.  617;  In  re  Moe-  B.    R.    464;    Buckingham    v.    Estes 

bius,  8  Am.  B.  R.  590,  116  Fed.  47.  (C.  C.  A.  6th  Cir.),   128  Fed.  Rep. 

*  In  re  Muskoka  Lumber  Co.,  127  584,    12  Am.   B.   R.    182. 

Fed.  Rep.  886,   11   Am.  B.  R.  761.  In    re    Robinson,    136    Fed.    Rep. 

See  also  Orcutt  v.  Green,  204  U.  994,  14  Am.  B.  R.  626,  proof  of  a 

S.     96,     reversing     In     re     Ingalls  note  drawing  usurious  interest  was 

Bros.   (C.  C.  A.  2d  Cir.),  137  Fed.  amended  to  prove  for  a  claim   for 

Rep.  517,  13  Am.  B.  R.  512.  money  fraudulently  obtained  by  the 

*  *  In   re   Kemper,    142   Fed.   Rep.  bankrupt. 
210.  15  Am.  B.  R.  675;  In  re  Noel, 


390  LAW     AND    I'KOCEEDINGS    IN    HANKKUPTCY. 

an  r.iiKMHlir.ont,''  or  where  it  cliaiig-es  a  claim  against  a  part- 
nership to  one  against  a  partner  as  endorsers/  Where  a 
crecUtor  has  been  prevented  from  proving  his  claim  within 
the  year  by  the  frand  of  the  debtor  he  may  prove  after  the 
expiration,  but  all  creditors  who  have  dnly  proved  their 
claims  are  to  be  paid  in  fnll  before  he  can  receive  anything/ 

Where  a  composition  has  been  effected  a  creditor  can  not 
prove  a  claim  more  than  one  year  after  the  date  of  adjudi- 
cation.'' 

There  is  a  provision  in  Section  57ii  that  where  claims  are 
liquidated  by  litig'ation  and  the  final  judgment  therein  is 
rendered  within  thirty  days  before  or  after  the  expiration 
of  the  one-year  period  that  they  may  be  proved  within 
sixty  days  after  the  rendition  of  such  judgment.  It  should 
be  observed  that  this  exception  relates  only  to  litigation  re- 
quired to  liquidate  a  claim/"  This  clause  evidently  refers 
to  claims  being  liquidated  pursuant  to  the  provisions  of 
Section  63b.  In  such  cases  the  time  is  extended  to  sixty 
days  after  the  final  judgment  is  entered  provided  such  judg- 
ment is  entered  after  thirty  days  before  the  expiration  of  the 
year  period.  If  the  judgment  is  entered  after  the  year  period 
he  still  has  sixty  days  within,  which  to  prove  his  claim. 

The  limitation  of  Section  57 ii  applies  onl}'  to  claims  sought 
to  be  asserted  in  the  bankruptcy  proceedings,  in  order  to 
share  in  the  distribution  of  the  estate,  but  failure  to  make 
such  proof  does  not  preclude  a  creditor  from  pleading  his 
claim  in  diminution  of,  or  to  defeat  the  claim  of  the  trustee, 
upon  the  debt  due  the  bankrupt  estate,  when  asserted  in  an 
independent  action. ^^ 

''•In     re    Thorrtpson's     Sons,     123  10 /„    ,.^    Thompson's    Sons,    12,3 

Fed.   Rep.   174,    10  Am.   B.   R.   581;  Fed.   Rep.    174,   10  Am.   B.   R.   581; 

In    re    Stevens,    107   Fed.    Rep.   243,  In   re    Rhodes,    105    Fed.    Rep.   235, 

5  Am.  B.  R.  806.  5  Am.   B.  R.    197. 

'/n    re    MacCallum    &    MacCal-  "Norfolk  &  W.   R.   Co.  v.   Gra- 

lum,    127    Fed.    Rep.    768,    11    Am.  ham   (C.  C.  A.  4th  Cir.),  145  Fed. 

B.  R.  447.  Rep.  809,  16  Am.  B.  R.  610;  In  re 

^In  re  Tovvnc,  122  Fed.  Rep.  313,  Mertens    Co.    (C.    C.   A.   2d   Cir.), 

10  Am.  B.   R.  284.  147  Fed.  Rep.   177. 

•'  In    re    Brown,     123    Fed.    Rep. 
336.   10  Am.  B.  R.  58S. 


HOW    TO    PROVE    DEBTS.  391 

§  133.     The  manner  of  making  the  proof. 

A  claim  or  debt  is  proved  by  a  statement  under  oath,  in 
writing,  signed  by  a  creditor  setting  forth  the  claim,  the  con- 
sideration therefor,  and  whether  any,  and,  if  so,  what  secu- 
rities are  held  therefor,  and  whether  any,  and,  if  so,  what 
payments  have  been  made  thereon,  and  that  the  sum  claimed 
is  justly  owing  from  the  bankrupt  to  the  creditor.^  No  other 
pleading   is   required." 

This  statement  is  referred  to  in  the  general  orders  and 
forms  as  a  deposition.^  It  seems  to  be  in  the  nature  of  an 
affidavit.  The  word  "deposition"  was  used  in  the  statute  of 
1867.*  In  construing  this  word  it  was  said  that  "a  deposition 
by  a  creditor  proving  his  claim  against  the  estate  of  a  bank- 
rupt is  neither  an  affidavit  nor  a  deposition,  as  known  in  the 
ordinary  practice  of  law.  It  is  the  result  of  an  examination 
of  the  creditor  made  by  the  officer  of  the  law  authorized 
to  make  it.  .  .  .  In  no  other  court  of  justice  is  such  testi- 
mony required  for  due  proof  of  debt,  but  it  is  evident  that  con- 
gress intended  that  the  court  and  its  officers  should,  by  a  care- 
ful examination  of  the  creditor  (which  examination  is  fre- 
quently in  the  absence  of  the  debtor),  purge  his  conscience 
and  ascertain  the  real  nature  of  his  claim,  and  that  no  fraud 
or  combination,  either  for  or  against  the  bankrupt,  existed.'^ 
The  statement  required  by  the  present  act  is  little  more  than 
such  a  ^•erification  as  is  required  by  the  laws  of  many  states 
to  the  claim  of  a  creditor  of  an  estate  of  a  decedent  or  of  a 
person  who  has  made  a  voluntary  assignment  for  the  benefit 
of  his  creditors. 

The  supreme  court  has  prescribed  a  form  of  proof  of  an 
unsecured  debt,"  of  proof  of  a  secured  debt."  of  proof  of  a 

1  B.   A.    i8gR,    Sec.   57a;   compare  Cas.,  2  X.  B.  R.  48;  see  also  In  re 

R.  .S.   Sec.  5077.  Stevens,    107  Fed.  Rep.  243,  5  Am. 

'-  In  re  Carter,  138  Fed.  Rep.  846,  B.  R.  806 ;  but  see  In  re  Merrick, 

15  Am.  B.  R.  126.  No.  9463  Fed.  Cas.,  7  N.  B.  R.  459. 

"  Gen.    Ord.    21 ;    Official    Forms  «  Official  Form  No.  31,  see  Form 

Nos.  31   to  36,  see   Forms  Nos.   54  No.  54,  post. 

to   59.   post.  ~  Official  Form  No.  2^,  see  Form 

••  R.   S.    Sec.   5077.  No.  55,  post. 

^  In   re    Strauss,    No.    13532    Fed. 


392 


LAW  AM)  1'R()c'i:ki)ings  in  bankruptcy. 


debt  due  a  corporation,"  of  proof  of  a  debt  by  a  partnership," 
of  proof  of  a  debt  by  an  agent  or  attorney/*^  of  proof  of  a 
secured  debt  by  an  agent."  Tiiese  forms  should  be  observed 
and  used  with  such  aherations  as  may  be  necessary  to  suit  the 
circumstances  of  any  particular  case.^" 

A  deposition  to  prove  a  claim  against  a  bankrupt  estate 
must  be  correctly  entitled  in  the  court  and  in  the  cause."  It 
should  set  forth  the  name  and  residence  of  the  deponent.  It 
should  give  one  full  Christian  name  of  the  creditor,  as  well 
as  his  surname.^*  It  should  state  the  amount  of  the  debt, 
which  should  not  include  the  interest,  but  sufficient  data  so 
that  the  computation  of  interest  may  be  made;^'^  that  the  debt 
was  due  at  the  time  of  filing  the  petition  and  is  still  due;  that 
no  part  of  it  has  been  paid,  or  if  payments  have  been  made 
such  fact  should  appear;  and  that  there  are  no  set-offs  or 
counterclaims,  or,  if  any,  such  as  there  are  should  be  stated. 

The  statement  or  deposition  must  set  forth  the  considera- 
tion of  the  debt  or  claim.^''  Neither  the  statute  nor  the  general 
orders  and  forms  prescribe  any  form  of  stating  the  considera- 
tion. The  principal  object  of  this  requirement  is  undoubtedly 
to  prevent,  or  at  least  check,  the  proof  of  fraudulent  and  ficti- 
tious claims,  as  well  as  to  show  that  the  claim  is  founded  upon 
a  legal  consideration  which  will  support  the  demand,  and  to 
afford  means  for  comparing  the  books  of  the  bankrupt  with 
the  proof.     The  deponent  should  therefore  give  such  a  par- 


8  Official  Form  No.  33,  see  Form 
No.  56,  post. 

0  Official  Form  No.  34,  see  Form 
^o.  S7,  post. 

"  Official  Form  No.  35,  see  Form 
No.  58,  post. 

"  Official  Form  No.  36,  see  Form 
No.  59,  post. 

"Gen.  Ord.  38. 

13  Gen.  Ord.  21 ;  In  re  Walther, 
No.    17126  Fed.  Cas.,   14  N.  B.  R. 

273- 

^*  In  re  Valentine,  No.  16812 
Fed.   Cas.,  4   Biss.   317. 


'^/j;  re  Port  Huron  Dry  Dock 
Co.,  No.  1 1293  Fed.  Cas.,  14  N.  B. 

R.  253. 

i6B.  A.  1898,  Sec.  57a;  In  re 
Stevens,  107  Fed.  Rep.  243,  5  Am. 
B.  R.  806;  In  re  Blue  Ridge  Pack- 
ing Co.,  125  Fed.  Rep.  619,  11  Am. 
B.   R.  36. 

In  re  Scott,  93  Fed.  Rep.  418,  I 
Am.  B.  R.  553.  "For  legal  ser- 
vices" was  held  an  insufficient  state- 
ment. 


HOW    TO    PROVE    DEBTS.  393 

ticular  and  definite  statement  of  the  consideration  as  will 
enable  other  creditors  to  trace  out,  discover  and  expose  any 
fraud  or  illegality  of  the  claim,  if  any  exist.  If  the  statement 
of  the  consideration  is  so  general  and  indefinite  as  to  afford 
no  aid  to  the  creditors  in  their  incjuiries  as  to  the  fairness 
and  legality  of  the  claim  it  does  not  fulfill  the  object  for 
which  it  is  required,  and  should  be  held  insufficient.  A  judg- 
ment duly  rendered  in  a  state  court  can  not  be  impeached 
collaterally,  nor  can  the  consideration  upon  which  it  is  found- 
ed be  required  into  in  the  absence  of  fraud. ^^  A  promissory 
note  is  prima  facie  evidence  of  a  consideration,  and  an  in- 
strument under  seal  always  imports  a  consideration.  It 
would  therefore  seem  that  a  reference  to  a  judgment,  prom- 
issory note  or  an  instrument  under  seal,  when  these  writings 
are  attached  to  the  proof  as  exhibits,  would  be  a  sufficient 
statement  of  consideration.  The  creditors  are  entitled  to 
show  that  there  was  no  consideration  of  a  promissory  note,^® 
and  the  decisions  intimate  that  the  creditor  ought  to  state  the 
consideration  of  a  note  in  his  proof  of  the  debt.^^  Where  the 
consideration  of  a  debt  is  goods',  wares  and  merchandise  sold 
and  delivered,  a  general  statement  is  not  sufficient.  The  kind 
of  goods,  the  quantity,  the  price  and  the  time  of  delivery,  if 
delivered  at  one  time,  or  if  delivered  continuously  through  a 
period  of  time,  that  period  should  be  stated.  This  is  fre- 
quently done  by  an  itemized  statement  of  such  goods,  wares 
and  merchandise  attached  as  an  exhibit  to  the  proof  of  claim, 
proper  reference  being  made  in  the  statement  of  the  consid- 
eration to  such  exhiljit.  Where  the  claim  is  for  contribution 
by  a  partner,  the  amount  paid  by  him  for  the  debt  on  account 
of  which  a  claim  is  made  must  be  set  forth." 

"£jr    parte    O'Neil,    No.     10527  7;^;    In    re    Loder,    No.    8456    Fed. 

Fed.    Cas.,    i    Low.    163;    McKin-  Ca.s.,  4   Ben.    125,   it  was  held  that 

sey  V.  Harding,  No.  8866  Fed.  Cas.,  an  omission  to  state  the  considera- 

4  N.  B.  R.  38;  see  also  discussion  tion    of    a    note    and    whether    any 

of   this   question    in    proving    judg-  payments  had  hecn  made  on  it  ren- 

ment  debts,   Sec.   115,  ante.  dcred   the   proof   defective. 

^^  In   re   Stevens,    107    Fed.    Rep.  '^'>  In  re  Stephens,  No.  13365  Fed. 

243,   5   Am.   B.   R.   806;   In   re   Dc-  Cas.,   3    Biss.    187;    see  also    B.    A. 

Metz,    No.    3781    Fed.    Cas.;    In    re  1898,  Sec.  57/. 
F,lder,   No.   4326  Fed.   Cas.,   i    Saw. 


394  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

The  assignee  of  a  chose  in  action  ninst  state  the  considera- 
tion that  passed  between  the  original  parties.""  Bnt  the  holder 
of  a  promissory  note,  or  other  negotiable  paper,  who  took  it 
for  value  in  good  faith  before  the  maturity  thereof,  need  not 
state  the  consideration  which  he  gave  for  it.'" 

In  all  cases  of  mutual  debts  or  mutual  credits  between  the 
estate  of  a  bankrupt  and  a  creditor  the  account  must  be  stated, 
and  one  debt  shall  be  set  off  against  the  other,  and  the  balance 
only  shall  be  allowed  or  paid."' 

Depositions  to  prove  debts  existing  in  open  account  shall 
state  when  the  debt  became  or  will  become  due;  and  if  it  con- 
sists of  items  maturing  at  different  dates  the  average  due  date 
shall  be  stated,  in  default  of  which  it  shall  not  be  necessary 
to  compute  interest  upon  it.  All  such  depositions  shall  contain 
an  averment  that  no  note  has  been  received  for  such  account, 
nor  any  judgment  rendered  thereon."""  It  should  be  observed 
that  the  forms  prescribed  by  the  supreme  court  do  not  con- 
tain a  clause  that  no  note  has  been  received  for  such  account, 
nor  any  judgment  rendered  thereon.  This  should  be  added 
in  cases  where  it  is  required  by  this  rule. 

The  deposition  should  also  state  that  no  security  has  been 
received  for  the  debt  if  such  is  the  fact.  If  there  have  been 
securities  received  they  should  be  described,  and  it  should 
appear  that  there  are  no  other  securities  than  those  men- 
tioned. Where  the  debt  is  proved  by  an  agent  or  attorney 
it  must  appear  in  the  deposition  that  he  is  authorized  to  make 
it. 

The  proof  against  a  firm  should  state  the  firm,  describing 
it  by  the  firm  name  and  the  individuals  that  compose  it,  and 
should  definitely  show  whetlier  the  demand  is  a  firm  debt  or 
a  joint  debt  against  individual  partners."^  Where  a  claim  has 
been  assigned  the  proof  should  set  forth  the  date  and  facts  of 
the  transfer  and  the  name  of  the  original  creditor."*     Two 

20 /«  re  Lake  Superior  Ship  Ca-  " /n   re  Walton.  No.   17129  Fed. 

nal,    R.    R.    &    Iron    Co..    No.    7998  Cas.,    Deady   510. 

Fed.  Cas.,   10  N.  B.  R.  76.  ^*  In   re   Fortune,   No.   3586   Fed. 

21  B.  A.   1898,  Sec.  68a.  Cas.,   1   Low.  384. 

22  Gen.  Ord.  21,  par.   i. 


HOW    TO    PROVE    DEBTS.  395 

distinct  debts  against  different  estates  can  not  be  included  in 
one  proof  or  statement."'' 

The  statement  should  be  signed  by  the  claimant  (jr  liis  duly 
appointed  agent.  The  statement  must  be  made  upon  oarh."" 
The  oath  may  be  administered  In'  a  referee,  any  officer  au- 
thorized to  administer  oaths  in  proceedings  before  the  courts 
of  the  Unit,-d  States,  or  under  the  laws  of  the  state  where  tlie 
same  are  to  he  taken,  or  a  diplomatic  or  consular  officer  of 
the  United  States  in  any  foreign  country."'  Any  person  con- 
scientiously opposed  to  taking  an  oath  may,  in  lieu  thereof, 
affirm.  Any  person  who  shall  affirm  falsely  shall  be  punished 
as  for  the  making  of  a  false  oath."'  An  oath  to  a  claim  is 
sufficiently  authenticated  by  the  official  signature  and  seal  of 
a  notary  pul^lic.'^ 

Whenever  a  claim  is  founded  upon  an  instrument  in  writ- 
ing, such  instrument,  unless  lost  or  destroyed,  must  be  filed 
with  the  proof  of  claim.-"''  If  such  instrument  is  lost  or  de- 
stroyed, a  statement  of  such  fact  and  of  the  circumstances  of 
such  loss  or  destruction  must  be  filed  under  oath  with  tlie 
claim.'''"  After  the  claim  is  allowed  or  disallowed  such  instru- 
nient  may  be  withdrawn  by  permission  of  the  court,  upon 
leaving  a  copy  thereof  on  file  with  the  claim.'"'^  The  exhiliits 
attached  to  the  proof  of  debt  form  one  paper  and  are  a  part 
of  the  deposition.  When  a  party  applies  for  leave  to  with- 
draw such  exhibits  he  must  show  what  interest  he  has  in  it 
and  the  purpose  for  which  he  desires  to  use  it.'^"  The  omission 
to  attach  a  note  to  a  proof  of  claim  will  be  deemed  waived  if 
no  objection  is  seasonably  made.^'^ 

23 /„   fc  Walton,   No.   17129  Fed.       Blue  Ridge  Packing  Co.,   125   Fed. 
Cas.,    Deady   510.  Rep.  619,  11   .Am.  B.  R.  36. 

^•'B.  A.   1898,  Sec.  57a.  •'"  B.    A.    1898,    Sec.    S7b;    Official 

27  B.  A.  1898,  Sec.  20 ;  In  re  Kim-       Form  No.  yj,  see  Form  No.  6o,  post. 
ball,   100  Fed.   Rep.  777,  4  Am.   B.  --^  B.    A.    1898.    Sec.    S7h ;    In    re 

R.  144,  2  N.  B.  N.  46,  the  attorney       Emison,   No.  4459  Fed.   Cas.,  2  N. 
of  the  creditor  acted  as  notary  public.       B.    R.    595. 

^Vh  re  Pancoast,   129  Fed.   Rep.  ■•- In   re   McNair,   No.   8908   Fed. 

64.3,   12   Am.    B.   R.  275.  Cas.,   2   N.    B.    R.    343. 

-•B.    A.    1898,    Sec.    S7h;    In    re  ""•' In    re    Carter,    138    Fed.    Rep. 

846,    15   Am.    B.    R.    126. 


396  LAW   AND   PROCEEDINGS   IN    BANKRUPTCY. 

g  134.    Proof  by  a  secured  creditor. 

A  secured  creditor  can  resort  to  one  of  three  remedies. 
First,  he  may  rely  upon  his  security;  second,  he  may  sur- 
render it  and  prove  the  whole  debt  as  unsecured ;  and,  third, 
he  may  be  admitted  only  as  a  creditor  for  the  balance  re- 
maining after  the  deduction  of  the  value  of  the  security.'  In 
the  first  case  he  makes  no  proof  before  the  referee.  In  the  sec- 
ond case,  after  abandoning  his  security,  he  becomes  a  general 
or  unsecured  creditor,  and  proves  his  claim  in  the  same  man- 
ner as  any  unsecured  creditor. 

It  is,  therefore,  the  third  remedy  of  a  secured  creditor  that 
requires  consideration.  A  deposition  according  to  Form  No. 
32  is  proof  of  such  a  claim.  In  such  deposition  proof  is 
made  of  the  whole  debt  as  in  the  case  of  an  unsecured  claim. 
To  this  proof  is  added  a  statement  of  all  the  securities  held 
bv  <-he  deponent  for  :he  debt  In  ccFcribing  these  sean^'Mes 
it  is  proper,  but  not  essential,  to  state  their  estimated  value. 
This  would  seem  to  be  especially  desirable  when  the  proof 
is  to  be  filed  for  the  purpose  of  enabling  the  creditor  to  par- 
ticipate in  the  proceedings  at  the  first  creditors'  meeting.^ 
Such  estimates  do  not  determine  the  value  of  these  securities. 

The  value  of  securities  held  by  secured  creditors  are  de- 
termined by  converting  the  same  into  money  according  to 
the  terms  of  the  agreement  pursuant  to  which  such  securities 
were  delivered  to  such  creditors  or  by  such  creditors  and  the 
trustee,  by  agreement,  arbitration,  compromise,  or  litigation, 
as  the  court  may  direct,  and  the  amount  of  such  value  shall 
be  credited  upon  such  claims,  and  a  dividend  shall  be  paid 
only  on  the  unpaid  balance."'^  Where  a  claim  is  secured  by  a 
mortgage  or  lien  on  property  exempt  under  a  state  statute  the 
secured  creditor  can  prove  only  for  the  balance  of  his  debt  not 

1  See   Rights  of   Secured   Credit-  Mertens    (C.    C.    A.    2d    Cir.),    144 

ors,    Sec.   202,   post.     In    re    Hines,  Fed.   Rep.  818,    15   Am.   B.   R.  362; 

144   Fed.    Rep.    543,    16   Am.    B.    R.  /;;  re  Lantzenheimer,  124  Fed.  Rep. 

^93.  716,   10  Am.  B.  R.  720;  /;;   re  Ball, 

2B.  A.  1898.  Sec.  S7C.  123   Fed.   Rep.    164,    10  Am.    B.    R. 

■^■B.    A.     1898.    Sec.    57/;;    In    re  564. 


HOW    TO    PROVE    DEBTS.  397 

secured  and  can  not  receive  a  dividend  on  his  entire  debt  and 
then  resort  to  his  security  to  satisfy  the  unpaid  balance.* 

The  proof  of  a  secured  debt  according  to  Form  No.  32 
does  not  invahdate  the  right  of  tlie  creditor  to  the  securities 
which  he  is  found  to  hold."'  One  owing  a  debt  secured  by  an 
insurance  policy  on  the  life  of  the  bankrupt  is  entitled  to 
prove  the  amount  of  the  debt  less  the  surrender  value  of  the 
jwlicy.*'  \Miere  the  security  is  the  property  of  the  bankrupt 
held  by  an  endorser,  or  a  person  secondarily  liable,  it  has  been 
held  not  necessary  that  the  creditor  should  prove  as  a  secured 
creditor  in  order  to  retain  his  rights  as  against  the  endorser.^ 

Where  a  creditor  of  the  bankrupt  is  secured  by  pledge, 
mortgage  or  other  security  on  property  of  a  person  other  than 
the  bankrupt  he  may  prove  as  an  unsecured  creditor  for 
the  full  amount  of  his  claim  against  the  estate  of  the  bank- 
rupt.^ He  is  not  a  secured  creditor  within  the  meaning  of 
the  bankrupt  law. 

Whenever  a  creditor,  whose  claim  against  a  bankrupt  estate 
is  secured  by  the  individual  undertaking  of  any  person,  fails 
to  prove  such  claim,  such  person  may  do  so  in  the  creditor's 
name,  and  if  he  discharge  such  undertaking  in  whole  or  in  part 
he  is  subrogated  to  that  extent  to  the  rights  of  the  creditor.* 

§  135.    Proof  by  creditors  who  have  received  preferences. 

The  statute  provides  that :  "The  claims  of  creditors  who  have 
received  preferences,  voidable  under  Section  sixty,  subdivision 
b,  or  to  whom  conveyances,  transfers,  assignments,  or  incum- 

*  In   re   Lantzenheimcr,    124   Fed.  '^  Merchants'    Bank   v.    Comstock, 

Rep.  716,  10  Am.  B.  R.  720.  55    N.   Y.  24. 

■'  In   re    Bigelovv,    No.    1396    Fed.  ^  Gorman  v.  Wright  (C.  C.  A.  4th 

Cas.,    2    Ben.    480;    King   v.    Bow-  Cir.),    136    Fed.    Rep.    164,    14   Am. 

man,  24  La.  Ann.  506;  In  re  Sne-  B.   R.   135;   Haas-Bariich  &  Co.  v. 

daker,  3  N.   B.   R.  629.  Portuondo,    138  Fed.    Rep.   949,    15 

"/m  re  Newland,  No.  10170  Fed.  Am.  B.  R.  130;  In  re  Mertens   (C. 

Cas.,    6    Ben.    342;    Consult    In    re  C.  A.  2d  Cir.),   144  Fed.   Rep.  818, 

Sauthoff,    No.    12379    Fed.    Cas..    7  15  Am.   B.   R.  362. 

Biss.    167.  np,    A.  1898,  Sec.  57/;  Gen.  Ord. 

21,  par.  4. 


398 


LAW   AND    PROCEEDINGS   IN    BANKRUPTCY. 


hiances,  voiel  or  voidable  under  Section  sixty-seven,  subdivision 
(',  ba\c  liecn  made  or  given,  shall  not  be  allowed  unless  such 
creditors  shall  surrender  such  |)references,  conveyances,  trans- 
fers, assignments,  or  incumbrances."  ^ 

Prior  to  the  amendment  of  Feb.  5,  1903,"  a  preference  re- 
ceived by  a  creditor  must  have  been  surrendered,  whether  it 
could  have  been  avoided  or  not,  before  the  claim  could  be  al- 
lowed." The  effect  of  the  amendment  is  to  require  a  surrender 
of  a  preference,  conveyance,  transfer  or  incumbrance  only 
when  it  may  be  avoided  by  the  trustee,  in  order  to  entitle  the 
creditor  to  an  allowance  of  his  claim.*  The  test  now  is,  can  the 
trustee  avoid  such  preference,  conveyance,  transfer  or  incum- 
brance, if  so,  it  must  be  surrendered ;  if  not,  the  creditor  may 
retain  what  he  has  received  and  have  his  claim  allowed  for  the 
balance  of  the  debt.  \Miat  constitutes  a  preference  or  lien, 
which  may  be  avoided  by  a  trustee,  is  considered  in  another 
place  and  need  not  be  repeated  here.°  The  amendment  does 
not  affect  the  surrender  of  preferences  in  proceedings  begun 
prior  to  Feb.  5,  1903."' 

Where  a  creditor  has  two  separate  and  distinct  debts,  a 
preferential  payment  on  one  of  them  must  be  surrendered' be- 


1  B.  A.  189S.  Sec.  S7S,  as  amend- 
ed Feb.  5,  1903.  T,2  Stat,  at  L.  797. 
In  re  Privett,  132  Fed.  Rep.  592, 
13  Am.  B.  R.  151  ;  In  re  Flynn,  126 
Fed.  Rep.  422,  11  Am.  B.  R.  318; 
In  re  Block  (C  C.  A.  2d  Cir.), 
142  Fed.  Rep.  674,  15  Am.  B.  R. 
748. 

-  .A-ct  of  Feb.  5,  1903,  32  Stat,  at 
L.  797. 

3  Pirie  v.  Chicago  Title  and 
Trust   Co.,   182   U.   S.  438,  45  Am. 

B.  R.  1171,  5  Am.  B.  R.  814;  In  re 
Abraham  Steers  Co.  (C.  C.  A.  2d 
Cir.),  112  Fed.  Rep.  406.  7  Am.  B. 
R.    332;    Dickson    v.    Wyman     (C. 

C.  .A.  1st  Cir.),  iir  Fed.  Rep.  726, 
7   \m.   B.    R.    186;    McKey   v.   Lee 


(C.  C.  A.  7th  Cir.),  105  Fed.  Re]). 
923,  5  Am.  B.  R.  267. 

That  there  was  no  four  months' 
limit  to  preferences,  which  must  be 
surrendered  prior  to  the  amendment 
of  Feb.  5,  1903,  see  In  re  Busby, 
124  Fed.  Rep.  469,  10  Am.  B.  R. 
650. 

■*  Western  Tie  &  Timber  Co.  v. 
Brown,  196  U.  S.  502.  49  L.  Ed. 
571,  13  Am.  B.  R.  447;  In  re 
Block  (C.  C.  A.  2d  Cir.),  142  Fed. 
Rep.  674,  15  Am.  B.   R.  748. 

'  See  Chapter  XVIII.  In  re  Pet- 
tingill    &    Co.,    135    Fed.    218. 

" /;/  re  Docker-Foster  Co.,  123 
Fed.  Rep.  190,  10  Am.  B.  R.  584. 


HOW    TO    PROVE    DEBTS. 


399 


lore  the  other  can  be  allowed."  But  where  the  payment  extin- 
guishes a  debt  it  need  not  be  surrendered  as  a  condition  prec- 
edent to  the  allowance  of  a  subsequent  independent  debt.^ 
Payments  made  on  a  running  account,  where  new  sales  succeed 
payments  and  the  net  result  is  to  increase  the  value  of  the 
estate,  do  not  constitute  preferences  which  must  be  surrendered 
before  a  claim  for  the  balance  due  on  the  account  may  be  al- 
lowed.^ ^^'here  the  last  transaction  is  the  payment  on  account 
it  must  be  surrendered  as  a  preference  before  the  balance  is 
allowed.^** 

A  creditor  having  a  claim,  on  wdiich  he  has  received  a  prefer- 
ential payment,  should  regularly  prove  his  claim  against  the 
estate  and  the  court  will  then  determine  the  amount  of  his 
preference,  if  any,  and  require  it  to  be  surrendered  before 
allowing  his  claim. ^^  The  "proof"  of  a  claim  must  not  be  con- 
fused with  the  "allowance"  of  the  claim.  Those  are  two  dis- 
tinct acts  or  proceedings,  and  the  allowance,  absolute  or  con- 
ditional, may  or  may  not  result  from  and  follow  the  proof  of 
the  claim. ^-     This  distinction  has  been  lost  sight  of  in  many 


"^  In  re  Meyer,  115  Fed.  Rep.  997, 
8  Am.  B.  R.  598;  Livingston  v. 
Hcincman  (C.  C.  R.  6th  Cir.),  120 
Fed.  Rep.  786,  10  Am.  B.  R.  39; 
Swarts  V.  Fourth  National  Bank 
(C.  C.  A.  8th  Cir.),  117  Fed.  Rep. 
1,  8  Am.  B.  R.  673;  In  re  Lyon 
(C.  C  A.  2d  Cir.),  121  Fed.  Rep. 
723,  10  Am.  B.  R.  25;  In  re  Del- 
ling,  T24  Fed.  Rep.  852,  10  Am.  B. 
R.  688;  Dunn  v.  Gan.s  (C.  C.  A.  3d 
Cir.),  120  I'cd.  Rep.  750,  12  Am. 
B.   R.  316. 

®  In  re  Abraham  Steers  Lumber 
Co.  (C.  C.  A.  2d  Cir.),  112  Fed. 
Rep.  406,  7  Am.  B.  R.  332,  affirm- 
ing 110  Fed.  Rep.  738,  6  Am.  B.  R. 
315;  In  re  Seay,  113  Fed.  Rep.  969, 
7  Am.  B.R.  700;  /;;  re  Bullock, 
116  Fed.  Rep.  667,  8  Am.  B.  R. 
646;  /;;  re  Wolf  &  Levy,  122  Fed. 
Rep.    127,    10   Am.    B.  *R.    153. 


»Jaquith  V.  Alden,  189  U.  S.  78, 

47  L.   Ed.   717,  9  Am.   B.   R.   773; 

Vaple  V.  Dahl-Milliken  Grocery  Co., 

193  U.  S.  526,  48  L.  Ed.  776,  ir 
Am.  B.  R.  596;  Dickson  v.  Wyman 

(C.  C.  A.  1st  Cir.),  Ill  Fed.  Rep. 
726,  7  Am.  B.  R.  186;  In  re  Sagor 
(C.  C.  A.  2d  Cir.),  121  Fed.  Rep. 
658,  9  Am.  B.  R.  361 ;  Cans  v..  Elli- 
son (C.  C.  A.  3d  Cir.),  114  Fed. 
Rep.  734,  8  Am.  B.  R.  153;  Kimball 
v.  Rosenham  (C.  C.  A.  8th  Cir.), 
114  Fed.  Rep.  85,  7  Am.  B.  R.  718. 

'"/h  re  Watkinson,  146  Fed.  Rep. 
142. 

^^  In  re  Hornstein,  122  Fed.  Rep. 
266,   10  Am.   B.   R.  308. 

1-  In  Hargadine-McKittrick  Dry 
Goods  Co.  V.  Hudson  (C.  C.  A.  8th 
Cir.),  122  Fed.  Rep.  232.  10  Am.  B. 
R.  225,  the  court  said :  Debts  are 
not    the    less    provable,    within    the 


400 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


of  the  cases  reported.  Section  S7g  does  not  prohibit  the  proof 
of  a  claim  by  a  preferred  creditor,  but  merely  the  allowance  of 
it  before  the  creditor  surrenders  a  recoverable  preference. 

§  136.    What  is  a  surrender  of  a  security  or  preference  ? 

.•\  secured  creditor  can  not  prove  his  secured  claims  until  he 
has  surrendered  his  security.^  A  creditor  who  has  received 
a  preference  can  not  have  his  claims  allowed  until  he  has  sur- 
rendered his  preference."  The  question,  therefore,  will  be 
frequently  presented,  what  constitutes  a  surrender  and  how  is 
it  to  be  made  ? 

There  can  be  no  question  of  the  intention  of  a  creditor 
who  files  in  the  court  or  with  the  referee  a  written  statement 
expressly  surrendering  his  securities  or  preferences. 


meaning  of  the  bankrupt  act,  be- 
cause the  statute  of  limitations  may 
be  successfully  pleaded  against  their 
allowance.  As  well  say  that  a  debt 
was  not  suable  because  the  statute 
of  limitations  might  be  pleaded  to 
an  action  upon  it." 

In  re  Hornstein,  122  Fed.  Rep. 
266,  10  Am.  B.  R.  308,  Judge  Ray 
uses  this  language :  "It  will  be 
noted  that  the  proof  of  a  claim  is 
one  thing,  and  the  allowance  of 
such  claim  is  quite  another  thing. 
Claims  may  be  proved,  but  not  al- 
lowed. They  may  be  provable,  but 
not  allowable.  They  may  be  prov- 
able, and  then  allowed  in  part  only, 
or  on  condition  only.  The  statute 
does  not  say  that  the  claims  of 
creditors  who  have  received  prefer- 
ences shall  not  be  proved ;  but  it 
does  say  that  such  claims  shall  not 
be  allowed,  unless  or  until  the  cred- 
itor surrenders  his  preference.  By 
plain  implication  the  proof  of  the 
claim  is  permitted.  The  claim  of 
a  creditor  who  has  received  a  pref- 
erence may  be  proved ;  but  it  can 
not  be  allowed,  unless  he  shall  sur- 


render the  preference.  Strange,  in- 
deed, is  that  construction  of  this 
law,  in  the  face  of  those  provisions, 
which  will  prevent  a  creditor  from 
coming  into  court  and  proving  his 
claim,  having  the  amount  of  the 
preference  received  by  him,  if  any 
(and  that  may  be  a  serious  and 
necessary  question  for  determina- 
tion, both  as  to  the  fact  of  prefer- 
ence and  its  amount),  determined 
by  the  court,  and  then  having  his 
proved  claim  allowed  on  surrender- 
ing the  preference.  Any  creditor 
has  the  right  to  come  into"  court  for 
that  very  purpose.  To  hold  other- 
wise will  logically  prevent  a  cred- 
itor who  has  in  fact  received  a 
preference,  by  way  of  lien  or  other- 
wise, for  only  a  small  part  of  his 
claim,  coming  into  court  and  prov- 
ing his  claim,  and  then  having  it 
allowed  on  surrendering  the  prefer- 
ence— a  mode  of  procedure  the 
statute  expressly  permits." 

'  See  Proof  by  Secured  Cred- 
itor, Sec.  134,  ante,  and  Rights  of 
Secured    Creditors,    Sec.    202,    post. 

=  B.  A.  1898,  Sec.  57^. 


HOW    TO    PROVE    DEBTS. 


401 


Where  a  creditor  in  proving  his  debt  fails  to  mention  his 
security  he  will,  as  a  general  rule,  be  deemed  to  have  elected 
to  prove  as  an  unsecured  creditor  and  to  have  surrendered  his 
security.^  The  courts  have  frequently  permitted  such  a  cred- 
itor to  amend  his  proof  to  change  it  from  unsecured  to  se- 
cured.* It  would  therefore  seem,  unless  mention  is  made  of 
the  security  in  the  proof  as  originally  filed  or  amended,  that 
proving  as  an  unsecured  creditor  operates  as  a  surrender  of  the 
security.  It  has  been  held  that  proving  without  mentioning 
the  security  does  not  operate  to  discharge  a  mortgage  security ; 
that  while  a  creditor  is  prevented  from  setting  up  the  same 
against  the  trustee,  no  one  but  the  trustee  can  avail  himself  of 
the  fact.^ 

A  referee  ought  not  to  reject  a  claim  for  failure  to  surren- 
der a  preference  or  property  fraudulently  transferred  to  him 
until  he  had  fixed  a  reasonable  time  within  which  to  make 
the  surrender.^ 

The  preferred  creditor  regularly  surrenders  his  preference 
to  the  trustee.  Property  fraudulently  transferred  belongs  to 
the  bankrupt's  estate.  Preferential  security  is  also  to  be  re- 
leased for  the  benefit  of  the  creditors  of  the  bankrupt.  The 
trustee  holds  the  title  to  all  the  bankrupt's  property. 

The  statute  does  not  determine  the  manner  in  which  the 
surrender  should  be  made.     It  is  usually  done  by  a  formal 


3  In  re  Bloss,  No.  1562  Fed.  Cas., 
4  N.  B.  R.  147;  In  re  Brand,  No. 
1809  Fed.  Cas.,  2  Hughes  334;  In 
re  Granger,  No.  5684  Fed.  Cas., 
8  N.  B.  R.  30;  Heard  v.  Jones, 
15  N.  B.  R.  402;  Hatch  v.  Seely, 
13  N.  B.  R.  383;  Ex  parte  Downs, 
1    Rose  96. 

*/h  re  Falls  City  Shirt  Mfg. 
Co..  98  Fed.  Rep.  592,  3  Am.  B. 
R.  437;  In  re  Wilder,  101  Fed.  Rep. 
104,  3  Am.  B.  R.  761  n. 

In  re  Cathcart  (southern  district 
of  Ohio)  mechanics'  lienholders 
proved  their  claims  as  unsecured 
creditors  and  voted  for  and  elected 


a  trustee,  who  reduced  the  estate 
to  money.  Thereafter  these  lien- 
holders  preferred  their  liens  and 
were  permitted  to  amend  their 
proof  of  claims  and  assert  their  se- 
curity and  were  awarded  priority 
over  mortgagees  under  a  mortgage 
j-ubordinate  to  the  mechanic's  lien. 
Judge  Thompson  affirmed  this  rul- 
ing of  the  referee  August  21,  1900 
(not  reported). 

°  Cook  V.  Farrington,  104  Mass. 
212. 

°  In  re  Oppeheimer,  140  Fed. 
Rep.  51,   15  Am.   B.  R.  267. 


40J  LAW    AM)    rKt)ei:EDINGS   IN    liAXKRlM'TCY. 

transfer  of  property  or  release  of  security,  either  voluntarily  or 
upon  a  judgment  of  recovery  obtained  by  the  trustee.  An 
agreement  that  other  creditors  may  share  in  the  proceeds  of 
a  sale  of  property  wliich  constitutes  a  preference  may  be 
treated  as  a  surrender." 

It  was  held  by  the  courts  of  bankruptcy  at  first  that  the 
surrender  must  be  voluntary,  and  that  if  the  trustee  is  com- 
pelled to  proceed  to  a  judgment  the  creditor  has  not  made  a  sur- 
render, and  is  therefore  not  entitled  to  have  his  claim  allowed.^ 
\Mien  the  quescion  came  before  the  supreme  court  it  decided 
that  a  creditor  of  a  bankrupt,  who  has  received  a  merely 
voidable  preference,  and  who  has  in  good  faith  retained  such 
preference  until  deprived  thereof  by  the  judgment  of  a  court 
upon  a  suit  of  the  trustee,  may  thereafter  prove  the  debt  so 
voidably  preferred.^ 

§  137.     Filing  proofs  of  debts. 

Claims  after  being  proved  may,  for  the  purpose  of  allow'- 
ance,  be  filed  by  the  claimants  in  the  court  where  the  pro- 
ceedings are  pending  or  before  the  referee  if  the  case  has  been 
referred.^  They  are  regularly  filed  witli  the  referee  after  a 
reference.  Proofs  of  debt  received  by  any  trustee  must  be 
delivered  to  the  referee  to  wdiom  the  cause  is  referred." 

The  debt  will  not  be  deemed  proved  and  can  not  be  allowed 
where  the  creditor  retains  possession  of  his  deposition  and 
does  not  file  it  wMth  the  referee  or  clerk.'''  It  is  the  duty  of  a 
referee  to  receive  a  proof  which  appears  on  its  face  to  have 
been  taken  by  a  proper  officer  and  to  be  correct  in  form  and 

'^  In    re    Detert.    No.    3829    Fed.  •' Keppel,  Trustee,   v.   Tiffin    Sav- 

Cas.,   11    X.   B.   R.  293.  ings  Bank.  197  U.  S.  356,  49  L.  Ed. 

«/;t  re  Greth,  112  Fed.  Rep.  978,  790.  13  Am.   B.  R.  552. 

7   .\m.    B.    R.    598;   In    re   Owings,  1  B.  A.  1898,  Sec.  57^;  Gen.  Ord. 

109    Fed.    Rep.    623,    6   Am.    B.    R.  20. 

454.  2  Gen.    Ord.    20,    par.    1. 

.See  also  In  re  Richard,  94  Fed.  ^  /„  ^g   Shepard,   No.   12753  Fed. 

Rep.  633,  2  Am.  B.   R.  506;  In  re  Cas.,  I  N.  B.  R.  439. 
Keller,   109   Fed.   Rep.    118,  6   Am. 
B.  R.  334. 


HOW    TO    PROVE    DEBTS.  403 

substance/  Upon  receipt  of  such  proof  the  clerk  or  referee 
must  endorse  thereon  the  day  and  hour  of  fihng  and  a  brief 
statement  of  its  character/  No  notice  to  the  other  creditors 
is  required.  Where  a  claim  has  been  duly  proved  it  should 
be  allowed  upon  receipt  by  or  upon  presentation  to  the  judge 
or  referee,  unless  objection  to  its  allowance  shall  be  made  by 
the  parties  in  interest  or  its  consideration  be  continued  for 
cause  by  the  court  upon  its  own  motion/ 

The  referee  is  entitled  to  a  fee  of  25  cents  for  every  proof  of 
claim  filed  for  allowance,  to  be  paid  from  the  estate,  if  any, 
as  a  part  of  the  costs  of  administration.' 

§  138.     Amendments  and  withdrawal  of  proof. 

The  judge  or  referee  has  power,  in  his  discretion,  to  allow 
proofs  of  debt  to  be  amended  or  withdrawn.^  In  cases  of 
mistake  or  ignorance,  whether  of  fact  or  of  law,  the  judge  or 
referee  will  exercise  that  power  in  the  absence  of  fraud,  and 
when  all  parties  can  be  placed  in  the  same  situation  they 
would  have  been  in  if  the  error  had  not  occurred,  and  where 
justice  seems  to  demand  that  it  should  be  done.^  There  are 
cases,  however,  which  hold  that  neither  the  debt  nor  the  dep- 
osition can  be  withdrawn,  but  the  party  ought  to  be  allowed 
and  required  to  amend  his  proof."  but  the  better  authority 
seems  to  be  as  stated  above.  Where  the  proceeding  is  in  any 
manner  tainted  with  fraud,  or  where  a  creditor  has  gained  any 
permanent  advantage  by  the  omission,  or  the  estate  has  been 

*B.    A.     1898,    Sec.    57J;    In    re  Fed.    Rep.   243,   5   Am.   B.    R.   806; 

Merrick,   Xo.  9463  Fed.   Cas.,  7  N.  In   re   Myers,  99  Fed.   Rep.   691.   3 

B.  R.  459.  Am.  B.   R.  760;  In  re  Wilder.   loi 

•''•Gen.    Ord.    2.  Fed.    Rep.    104,   3    Am.    B.    R.    761, 

«B.   A.   1898,   Sec.   Sid.  note. 

7  B.  A.   1898,   Sec.  40,  as  amend-  -  In    re    Lowree,    No.    8577    I-V<1. 

ed  Feb.  5,  1903;  32  Stat,  at  L.  797.  Cas.,  s.  c.   1   Ben.  406;  In  re  Emi- 

1  Hntcliinson   v.    Otis,    190  U.    S.  son,  No.  4459  Fed.  Cas.,  2  N.  B.  R. 

552,  47  L.  Ed.  1179,  10  Am.  B.  R.  595;  In  re  Mcintosh,  No.  8826  Fed. 

135;  /"  re  Scott,  93  Fed.  Rep,  418,  Cas.,  2  N.  B.  R.  506. 
I  Am.  B.  R.  533:  /;;  re  Stevens,  107 


404 


LAW    AND   PROCEEDINGS   IN    BANKRUPTCY. 


permanently  injured  thereby,  the  creditor  guilty  of  such 
omission  will  be  left  where  his  own  act  has  placed  him." 

The  referee  may  require  an  amendment/  or  the  party  may 
apply  for  leave  to  correct  or  withdraw  his  proof.  A  creditor 
may  be  permitted  to  amend  his  proof  to  correct  a  clerical 
omission  or  formal  defect,"'"'  or  to  cliange  his  proof  in  form 
from  unsecured  to  secured,"  or  to  enlarge  or  diminish  the 
amount  of  the  debt,''  or  withdraw  his  proof  for  the  purpose 
of  proceeding  against  a  dormant  partner  of  the  bankrupt* 
The  power  to  permit  amendments  extends  to  all  matters  con- 
tained in  the  proof.  After  the  claim  is  allowed  or  disallowed 
a  written  instrument  attached  to  the  proof  as  an  exhibit  may 
be  withdrawn  by  permission  of  the  court,  upon  leaving  a  copy 
thereof  on  file  with  the  claim.*' 

An  amendment  may  be  permitted  after  the  expiration  of  the 
vear  within  which  claims  may  be  proved.^**  Where  in  other 
respects  a  creditor  would  be  entitled  to  amend  his  proofs,  the 
mere  prior  receipt  of  dividends  is  no  objection,  as  they  can  be 


3  Stewart   v.    Isidor,    5    Abb.    Pr. 

(N.  S.)    (N.  Y.)  68;  In  re  Jaycox, 

7242    Fed.    Cas.,    8    N.    B.    R. 

241;   /;;   re   Parkes,   No.   10754  Fed. 

Cas.,  10  N.  B.  R.  82. 

*  In  re  Elder,  No.  4326  Fed.  Cas., 
1  Saw.  73. 

'-In  re  Myrick,  No.  10000  Fed. 
Cas.,  3  N.  B.  R.  156;  Hutchin- 
son V.  Otis,  190  U.  S.  552.  47  L. 
Ed.  1179,  10  Am.  B.  R.  135. 

6/h  re  Falls  City  Shirt  MTg. 
Co.,  98  Fed.  Rep.  592,  3  Am.  B.  R. 
437;  in  re  Wilder,  loi  Fed.  Rep. 
104,  3  Am.  B.  R.  761m. 

In  re  Cathcart  (southern  dis- 
fict  of  Ohio)  mechanics'  lienhold- 
ers  proved  their  claims  as  unse- 
cured creditors  and  voted  for  and 
elected  a  trustee,  who  reduced  the 
estate  to  money.  Thereafter  these 
licnholders  perfected  their  liens 
and  were  permitted  to  amend  their 
proof  of  claims  to  assert  their  se- 


curity and  were  awarded  priority 
over  mortgages  under  a  mortgage 
subordinate  to  the  mechancs'  lien. 
Judge  Thompson  affirmed  this  rul- 
ing of  the  referee  August  21,  1900 
(not  reportea). 

'  In  re  Montgomery,  No.  7929 
Fed.  Cas.,  3  Ben.   566. 

«/«  re  Hubbard,  No.  6813  Fed. 
Cas.,  I  Low.  190. 

0  B.  A.  1898,  Sec.  57&.  See  also 
In  re  McNair,  No.  8908  Fed.  Cas., 
2  N.  B.  R.  343;  In  re  Emison,  No. 
4459  Fed.  Cas-,  3  N.  B.  R.  595- 

'"  Hutchinson  v.  Otis,  190  U.  S. 
552,  47  L.  Ed.  1 179,  10  Am.  B.  R. 
135.  In  re  Roeber  (C.  C.  A.  2d 
Cir.),  127  Fed.  Rep.  122,  11  Am.  B. 
R.  464;  Buckingham  v.  Estes  (C. 
C.  A.  6th  Cir.),  128  Fed.,  Rep.  584. 
\2  Am.  B.  R.   182. 

But  see  In  re  MacCallum  &  Mac- 
Callum,  127  Fed.  Rep.  768,  11  Am. 
B.   R.  447- 


HOW    TU    PROVE    DEBTS.  405 

restored  to  the  trustee."  Amendments  have  been  frequently 
allowed  on  terms  of  repayment  of  dividends  already  received.^" 

Where  a  creditor  by  proof  of  his  debt  has  taken  part  in  the 
meetings  of  creditors  and  controlled  the  action  of  others  in 
the  choice  of  a  trustee,  or  influenced  the  question  of  the  bank- 
rupt's discharge,  he  has  been  held  precluded  from  any  subse- 
quent change  in  his  proof. '^  But  the  simple  fact  that  he 
participated  in  the  election  of  the  trustee,  when  there  is  no 
evidence  that  he  gained  any  advantage  thereby,  or  that  the 
other  creditors  have  been  in  anywise  prejudicial  in  conse- 
quence of  it,  or  that  he  was  influenced  by  any  fraudulent 
intent,  will  not  preclude  a  claimant  from  making  his  proof 
of  debt." 

It  has  been  held  that  where  a  creditor  has  filed  a  claim  for 
goods  sold  and  delivered  under  a  contract  of  sale  he  is  not 
entitled  subsequently  to  a  return  of  the  goods  in  the  possession 
of  the  trustee,^""'  for  the  reason  that  having  elected  to  affirm  his 
contract  of  sale  by  proving  his  claim,  he  is  estopped  to  after- 
wards disaffirm  it. 

Mere  formal  amendment  may  be  made  in  the  original 
proofs.  Where  a  change  is  made  by  adding  a  statement  of 
new  matter  or  facts  the  proof  must  be  resworn  after  such 
change. ^*^  Where  the  amendment  sought  to  be  made  relates 
to  a  new  and  different  claim  from  any  of  those  embraced  in 

"  £.r  parte  Baxter,  12  Fed.  Rep.  J.  25;  Stewart  v.  Isidor,  5  Abb.  Pr. 

72;   In  re   Parkes,    No.    10754   Fed.  (N.    S.)    (N.    Y.)    68,    i    N.    B.    R. 

Cas.,   10  N.  B.  R.  82.  48s;    !n    re    Bloss,    No.    1562    Fed. 

i2/){   re   Parkes,   No.    10754   Fed.  Cas.,  4  N.  B.  R.  147. 

Las.,  10  N.  B.  R.  82;  In  re  Baxter,  i*/m    re    McConnell,     No.     8712 

12  Fed.  Rep.  72;   Ex  parte  Capot,  Fed.  Cas.,  9  N.  B.  R.  387;  King  v. 

I    Atk.    218;    Ex    parte    Bielby,    12  Bowman,   24   La.   Ann.    506;    in   re 

Ves.  70 ;  E-x  parte  Waring,  19  Ves-  Cathcart,  reported  in  note  6  ante. 

345,    quoted    in    full    in    Powles    v.  '^■' In     re     Ilildebrant,     120     Fed. 

Hargreaves,  3  DeGex,  A.  M.  &  G.  Rep.  992,  10  Am.  B.  R.  184;  Stand- 

445;  Ex  parte  Bolton,  2  Rose  389;  ard    Varnish    Works    v.     Haydock 

In  re  uarned's  Banking  Co.,   10  L.  C.   C.  A.  6th   Cir.),    143   Fed.   Rep. 

R.  Chan.  Ap.  198,  s.  c.  5  H.  L.  157.  3i8,   16  Am.  B.  R.  286. 

i-*Nevv    Bedford,     etc.,     v.    Fair-  i«/n  re  Walther,  No.  17126  Fed. 

ham,    etc.,   9    Allen     (Mass.)     175,  Cas.,  s.  c.  14  N.  B.  R.  273. 
180 ;  Ex  parte  Solomon,  i  Glyn.  & 


406 


LAW    AXU    I'ROCEEDINGS    IN    BANKRUPTCY. 


the  existing  pniof  of  debt  the  proper  course  is  for  the  creditor 
to  prove  his  newly  discovered  del)t  independently.'' 


§  139.     Allowance  of  claims. 

The  formal  proof  of  the  del)t  makes  out  a  prima  facie  case 
which  entitles  the  claimant  to  have  his  claim  allowed.^  The 
statute  provides  that  "claims  which  have  been  duly  proved 
shall  be  allowed,  upon  receipt  by  or  upon  presentation  to  the 
coiirt,  unless  objection  to  their  allowance  shall  be  made  by 
parties  in  interest,  or  their  consideration  be  continued  for 
cause  by  the  court  upon  its  motion."  " 

A  trustee  is  a  party  in  interest.''  Any  defense  to  the  claim 
is  as  available  to  the  trustee  as  to  the  debtor  himself.* 

If  the  proof  of  claim  is  defective  the  referee  should  not 
allow  the  claim.  He  may  permit  it  to  be  filed  with  leave 
to  amend.  \\  here  an  objection  is  interposed  at  a  creditors' 
meeting-  by  parties  in  interest  it  is  the  duty  of  the  referee  to 
determine  the  controversy  at  once,  if  possible,  and  if  not,  as 
soon  as  he  conveniently  can  do  so.°  Where  the  referee  has 
a  substantial  doubt,  resulting  from  judicial  consideration  of 
the  inquiry  as  to  the  validity  of  the  claim  or  to  the  creditor's 
right  to  prove  it,  he  may  continue  the  allowance  upon  his 
own  motion." 

Where  an  objection  is  made  to  the  allowance  of  a  claim,  the 
objector,  though  not  required  to  disprove  the  claim,  must 
produce  evidence  whose  probative  force  shall  be  equal  to  or 
greater  than  the  evidence  ofi^ered  in  the  first  instance  by  the 


1'^  In  re  Montgomery,  No.  9731 
Fed.  Cas.,  s.  c.  3  N.  B.  R.  430. 

'  In  re  i>haw,  109  Fed.  Rep.  780, 
6  Am.  B.  R.  499 ;  Whitney  v.  Dres- 
ser, 200  U.  S.  532,  50  L.  Ed.  584,  15 
Am.  B.  R.  326;  In  re  Carter,  138 
Fed.  Rep.  846,  15  Am.  B.  R.  126; 
In  re  Castle  Braid  Co.,  145  Fed. 
Rep.  224. 

2B.  A.  1898,  Sec.  57J. 

3  Atkins  V.  Wilcox   (C.  C.  A.  5th 


Cir.),  T05  Fed.  Rep.  595,  5  Am. 
B.   R.   313,  3   N.  B.   N.  497- 

*In  re  Stern  (C.  C.  A.  8th  Cir.), 
144  Fed.  Rep.  956,  16  Am.  B.  R. 
510. 

^•B.   A.    1898,   Sec.   57/- 

''  In  re  Northern  Iron  Co.,  No. 
10322  Fed.  Cas.,  14  N.  B.  R.  356; 
In  re  Jackson,  No.  7123  Fed.  Cas., 
7  Biss.  280;  see  also  discussion  of 
this  question  in   Sec.   106,  ante. 


HOW    TO    PROVE    DEBTS. 


407 


claimant,  because  the  formal  proof  is  evidence  even  when  put 
in  issue.'  The  burden  of  proof  remains  on  the  creditor 
to  establish  his  debt  or  claim.  If  the  prima  facie  case  is  met 
by  evidence  by  the  objector  the  claim  must  be  disallowed. 
Witnesses  may  be  examined  orally  or  by  deposition  and  the 
hearing  may  be  postponed  for  the  purpose  of  obtaining  evi- 
dence in  relation  to  the  claim.^  The  trustee  may  call  the  credi- 
tor proving  the  claim  as  a  witness."  It  has  been  held  that  where 
a  respondent  denied  the  alleged  indebtedness  to  a  petitioning 
creditor  and  evidence  is  offered  and  the  court  finds  the  alle- 
gations of  the  petition  true  and  makes  an  adjudication  the 
same  question  can  not  be  tried  upon  the  petitioning  creditor 
making  proof  of  his  claim. ^"  It  is  doubtful  whether  creditors 
not  parties  to  that  proceeding,  but  who  subsequently  became 
parties,  are  estopped  to  question  the  validity  of  a  claim  of  a 
petitioning  creditor  or  whether  an  adjudication  o])erates  as 
res  judicata  of  any  other  question  than  was  then  put  in  issue.^^ 


''■  Whitney  v.  Dresser,  200  U.  S. 
532,  50  L.  Ed.  584,  15  Am.  B.  R. 
326,  affirming  In  re  Dresser,  135 
Fed.  Rep.  495,  13  Am.  B.  R.  747; 
In  re  Sumner,  4  Am.  B.  R.  123, 
loi  Fed.  Rep.  244;  In  re  Shaw,  6 
Am.  B.  R.  499,  109  Fed.  780;  In  re 
Cannon,  14  Am.  B.  R.  114,  133 
Fed.  837;  In  re  Carter,  15  Am.  B. 
R.  126,  138  Fed.  846;  In  re  Doty, 
5  Am.  B.  R.  58;  In  re  Castle  Braid 
Co.,   145  Fed.  Rep.  224. 

^  In  re  Sumner,  loi  Fed.  Rep. 
224,  4  Am.  B.  R.  123,  2  N.  B.  N. 
681  ;  in  re  Dreeben,  loi  Fed.  Rep. 
no,  4  Am.  V>.  R.  146;  In  re  Kal- 
denberg,  105  Fed.  Rep.  232,  5  Am. 
B.  R.  6. 

"  In  re  Castle  Braid  Co.,  145  Fed. 
Rep.  224. 

^"  In  re  Ulfelder  Clothing  Co., 
98  Fed.  Rep.  409,  3  Am.  B.  R. 
425;  .Ayres  v.  Cone  (C.  C.  A.  8th 
Cir.),  138  Fed.  Rep.  778,  14  Am. 
P..    R.  7.39. 


11  See  dissenting  opinion  of 
Judge  Sanborn  in  Ayres  v.  Cone 
(C.  C.  A.  8th  Cir.),  138  Fed.  Rep. 
7>^i,   14  Am.  B.  R.  746. 

In  re  Cleveland  Insurance  Co., 
22  Fed.  Rep.  204,  Mr.  Justice 
]\Iatthews  observes :  "It  can  not 
be  admitted  that  the  finding  that 
the  petitioning  creditors  has  a  valid 
provable  claim  to  the  amount  of 
$250,  which  is  all  that  is  necessary 
as  a  predicate  for  the  adjudication 
upon  the  alleged  act  of  bankruptcy, 
is  conclusive  upon  the  assignee  and 
creditors,  so  as  to  dispense  with 
proof  of  the  debt  of  the  petition- 
ing creditor  upon  the  distribution 
of  the  estate.  It  is  conclusive  so 
fas  as  necessary  to  uphold  the  ad- 
judication of  bankruptcy,  but  no 
further.  It  may  still  be  ques- 
tioned, in  part  or  in  whole,  upon 
the  proof  .subsequently  required 
and  taken,  so  that  it  might  con- 
sistently happen  that  a  claim  which 


108  LAW    AND   PROCEEDINGS  IN    BANKRUPTCY. 

The  allowance  or  disallowance  of  a  claim  is  largely  in  the 
discretion  of  the  referee  and  his  decision  on  the  qnestion  of 
fact  will  not  be  reversed  by  a  judge  unless  manifestly  con- 
trary to  the  weight  of  the  evidence/- 

In  practice  objections  are  not  frequently  made  at  the  time 
of  filing  the  proof.  Such  objections  may  be  made  in  writing 
or  orally.^'^  The  statute  and  general  orders  provide  for  a 
re-examination  of  a  claim  which  has  already  been  allowed.^* 
It  is  under  these  provisions  that  objections  to  creditors  being 
allowed  to  participate  in  the  distribution  of  the  bankrupt's 
estate  are  usually  filed. ^" 

A  claim  to  which  no  objection  is  made  and  no  cause  ap- 
pears for  postponing  the  allowance  is  regularly  allowed  when 
it  is  filed  with  the  referee.  He  should  endorse  upon  the 
claim  "filed  and  allowed,"  together  with  the  date  and  hour 
of  the  filing.^'''  At  the  close  of  the  first  creditors'  meeting  he 
should  file  in  his  record  a  list  of  creditors  who  have  proved 
their  debts  at  the  first  meeting,  together  with  their  resi- 
dences and  the  amount  of  each  creditor's  debt.^'^  A  similar 
list  is  subsequently  made  upon  which  to  base  dividends." 

Where  a  claim  has  been  disallowed  by  a  referee  on  claim- 
ant's proof  and  on  petition  to  review  the  judge  reverses  his 
ruling,  the  matter  should  be  remanded  to  enable  the  trustee  to 
produce  proof  tending  to  controvert  the  claim  and  not  direct 
the  allowance  of  the  claim."     If  the  trustee  had  put  in  his 

has   been    found    to    exist,    for   the  3  Am.  B.  R.  192,  3  N.  B.  N.  187. 

purpose    of    adjudging    bankruptcy  '^'■^  In    re    Cannon,    133    Fed.    Rep. 

against    the    defendant,    might    af-  837,  14  Am.  B.  R.  114. 

terwards  be  held  not  to   exist   for  1*  B.  A.   1898,   Sec.  S7k  and  Sec 

the  purpose  of  participating  in  the  2,  clause  2;   Gen.  Ord.  21,  par.  6. 

distribution  of  the  estate.     The  as-  i'>  See   Re-examination   of  Claims, 

signee    and    the    creditors    can    not  Sec.    140,   post. 

be  bound  as  to  their  own  interests  '''Gen.  Ord.  2. 

by  the  acts  or  default  of  the  bank-  ^^  Official  Form  No.  19,  see  Form 

rupt,    resulting    in    a    judgment    to  No.  38,  post. 

which  they  were  not  and  could  not  ^*  Official  Form  No.  40,  see  Form 

be    parties,    except    so    far    as    that  No.  98,  post. 

judgment   determines  the  status  of  ^^  In  re  Livingston  Co.   (C.  C.  A. 

the   bankrupt."  2d    Cir.),    144    Fed.    Rep.    971,    16 

''hi   re  Rider.  96   Fed.   Rep.  8ti,  Am.    B.    R.   385. 


HOW    TO    PROVE    DEBTS.  409 

proof  before  the  referee  the  judge  may  direct  the  allowance 
of  the  claim. 

§  140.    Reexamination  of  claims. 

Claims  which  have  been  allowed  may  be  reconsidered  for 
cause  and  reallowed  or  rejected  in  whole  or  in  part,  according 
to  the  equities  of  the  case,  before  but  not  after  the  estate  has 
been  closed.^ 

When  the  trustee  or  any  creditor  shall  desire  the  reexam- 
ination of  any  claim  filed  against  the  bankrupt's  estate,  he 
may  apply  by  petition  to  the  referee  to  whom  the  case  is 
referred  for  an  order  for  such  examination.-  Where  a  trus- 
tee has  been  appointed  he  must  file  the  petition  for  reexamina- 
tion of  a  creditor's  claim  and  not  another  creditor.^  If  the 
trustee  refuses  to  move  for  the  reconsideration  of  a  claim 
which  has  been  allowed,  when  he  ought  to  do  so,  he  may 
be  compelled  to  act  or  to  permit  objecting  creditors  to  act  in 
his  name.*  Where  no  trustee  has  been  appointed  the  bankrupt 
may  move  for  a  reexamination  and  expunction  of  a  claim 
proved  and  allowed  against  his  estate.^  The  referee  there- 
upon makes  an  order  fixing  a  time  for  hearing  the  petition,  of 
which  due  notice  must  be  gi\'en  by  mail  addressed  to  the  credi- 
tor.® If  the  creditor  is  unable  to  attend  at  that  time  he  shoul  1 
take  steps  to  procure  a  postponement.  Where  he  fails  to  appear 
the  claim  may  be  expunged  or  diminished  by  default."     In 

1  B.  A.   1898,  Sec.  SJk.  ^  In    re    Ankeny,    100    Fed.    Rep. 

'Gen.    Ord.    21,    par.    6;    In    re  614,  4  Am.   B.   R.   72,  2   N.   B.   N. 

Russell,   105  Fed.   Rep.  501,  5  Am.  249. 

B.  R.  566.  <'Gen.    Ord.    21,    par.    6;    In    re 

"In  re  Lewensohn    (C.   C.  A.   2d  Stoever,   105   Fed.   Rep.  355,  5   Am. 

dr.),  121  Fed.  Rep.  538,  9  Am.  B.  B.    R.    250. 

R.  368;  In  re  Sully,   15  Am.  B.  R.  ''In    re    Lount,     No.     8543     Fed. 

321,   142  Fed.   Rep.  895.                  •  Cas..   i.i   N.  B.  R.  315. 

*/n  re  Stern  (C.  C.  A.  8th  Cir.),  In     re     Docker-Foster     Co..     123 

144   Fed.   Rep.  956.    16  Am.   B.   R.  Fed.   Rep.    190,    10  Am.   B.   R.   584, 

510;    Chatfield   v.   O'Dwyer,   4   Am.  the  court  said:  "The  petition  is  not 

B.  R.  313,  loi  Fed.  797;  In  re  Lew-  before  me  and  I  am,  therefore,  un- 

ensohn,  9  Aril.  B.  R.  368,  121   Fed.  able  to   say  whether  its  averments 

538;   /)(    re   Baird    (D.   C.)i   7   Am.  on    the    subject    of    insolvency    are 

B.  R.  448,   112  Fed.  960.  sufficiently    precise    and    definite    to 


410 


LAW    AND    I'KOCEEDINGS   IN    BANKRUPTCY. 


case  it  shall  be  made  to  appear  that  any  creditor  whose  debt 
is  contested  can  not  personally  attend  to  be  examined  in  the 
district  where  the  proceedings  are  pending  without  hardship 
to  him.  owing  to  the  distance  of  his  residence,  or  other  similar 
reason,  the  ccnn-t  will  provide  by  order  for  the  taking  of  h'.^ 
examination  before  a  referee  of  the  district  in  which  he 
resides.** 

A  trustee  has  been  held  to  be  barred  by  laches  to  petition  for 
a  reexamination  of  a  claim  once  allowed.'* 

I'he  referee  may,  upon  application  of  the  trustee  or  any 
creditor,  require  any  designated  person  who  is  a  competent 
witness  under  the  laws  of  the  state  in  which  the  proceedings 
are  pending  to  appear  before  him  to  be  examined.^"  But  no 
person  shall  be  required  to  attend  as  a  witness  before  a  ref- 
eree at  a  place  outside  of  the  state  of  his  residence,  and  more 
than  one  hundred  miles  from  such  place  of  residence,  and 
only  in  case  his  lawful  mileage  and  fee  for  one  day's  attend- 
ance shall  be  first  paid  or  tendered  to  him.*^  The  creditor  is 
not  entitled  to  witness  fees  for  attendance/"  Witnesses  are 
summoned  by  a  subpoena  issued  out  of  court  under  the  seal 
thereof  and  tested  by  the  clerk. ^'"^  Blanks,  with  the  signature 
of  the  clerk  and  seal  of  the  court,  may  be  furnished  to  ref- 
erees.^^  The  subpoena  may  be  served  upon  a  witness  living 
without  the  district,  but  within  one  hundred  miles  of  place  of 
testifying.^*  A  person  who  disobeys  the  subpoena  may  be 
punished  for  contempt.  ^^ 


be  taken  as  true,  or  whether  they 
require  proof  to  be  offered  by  the 
petitioner.  This  matter  can  be  de- 
termined by  the  referee  and  his 
ruHng  reviewed,   if  necessary." 

s  In  re  Kyler,  No.  7956  Fed. 
Cas.,  2  Ben.  414;  In  re  Carley,  106 
Fed.  Rep.  862,  5  Am.  B.  R.  554. 

'-•  In  re  Hinckel  Brew.  Co.,  123 
Fed.  Rep.  942,  10  Am.  B.  R.  484. 

i"B.  A.  1898,  Sec.  21  and  Sec. 
41a. 

"  B.    A.    1898,    Sec.    41a.     As   to 


who  must  advance  such  fees,  see 
Gen.   Ord.    10. 

1-  In  re  Paddock,  No.  10658  Fed. 
Cas..  6  N.  B.  R.  396. 

1^-  Gen.  Ord.  3 ;  Official  Form  No. 
30,    see   Form    No.   49.   post. 

J'  R.  S.  Sec.  876;  B.  A.  1898,  Sec. 
41  a;  /;;  re  Woodward,  No.  18000 
Fed.  Cas.,  8  Ben.   112. 

15  B.  A.  1898,  Sec.  41  and  Sec.  2, 
clause  16.  See  Contempt,  Chap. 
XXII. 


HOW    TO    PROVE    DEBTS.  411 

At  the  time  appointed  the  hearing  is  had  for  the  purpose 
of  examining  the  creditor  and  any  witnesses  that  may  be 
called  by  either  party."'  The  testimony  before  a  referee,  is 
usually  taken  orally.  The  examination  of  witnesses  may  be 
conducted  by  the  party  in  person  or  by  his  counsel  or  at- 
torney, and  the  witnesses  shall  be  subject  to  examination  and 
cross-examination,  which  shall  be  had  in  conformity  with 
the  mode  now  adopted  in  courts  of  law.^'  A  witness  is  not 
entitled  to  be  attended  or  represented  by  counsel  during  his 
examination.^'^ 

The  referee  is  required,  upon  application  of  any  party  in 
interest,  to  preserve  the  evidence  taken  or  the  substance  there- 
of as  agreed  upon  by  the  parties  before  them  when  a  stenog- 
rapher is  not  in  attendance.""' 

The  evidence  taken  before  a  referee  is  usually  taken  down 
in  writing  by  him  or  under  his  direction  in  the  form  of  nar- 
rative, unless  he  determines  the  examination  shall  be  taken  bv 
question  and  answer.-"  Upon  the  application  of  the  trustee 
the  referee  may  authorize  the  employment  of  a  stenographer 
at  the  expense  of  the  estate  at  a  compensation  not  to  exceed  ten 
cents  per  folio  for  reporting  and  transcribing  the  proceedings.-^ 
AMien  a  deposition  is  completed  it  should  be  read  over  to  the 
witness  and  signed  by  him  in  the  presence  of  the  referee. " 
The  referee  must  note  upon  the  deposition  any  question  ob- 
jected to,  with  his  decision  thereon;  and  the  court  may  deal 
with  the  costs  of  incompetent,  immaterial,  or  irrelevant  deposi- 
tions, or  parts  of  them,  as  may  be  just.-^ 

Depositions  may  be  taken  when  witnesses  are  beyond  the 
reach  of  process.  The  right  to  take  depositions  is  determined 
and  enjoyed  according  to  the  United  States  laws  relating  to 
the  taking  of  depositions,  except  as  otherwise  provided  by  the 

i«Gen.  Ord.  21,  par.  6.  "'B.  A.  1898,  Sec.  .18.  clause  5. 

I'Gen.    Ord.   22.  ->  Ge„    Qrd.   22. 

'"fn     re     Comstock.      No.     3080  2"- B.   A.    1898.    Sec.    2\h:    R.    S. 

Fed.   Cas..  .1   Saw.   517.  Sees.   863   to   867;    Ex   parte    Fisk, 

'»B.   A.    T898.   Sec.   39,   clause  9.  113  U.  S.  713,  28  L.  Ed.   11 17. 
-'"  Gen.  Ord.  22. 


412  LAW    AM)    PROCEEDINGS   TN    BANKRUPTCY. 

Statute.  Notice  of  taking  depositions  must  be  filed  with  the 
referee  and  also  scr\cd  upon  the  claimant."*' 

Where  a  creditor  appears  he  need  only  offer  himself  for 
examination,  for  the  burtlen  of  proof  is  upon  the  trustee  or 
the  other  creditors  who  are  contesting  his  proof.'^  The  claim- 
ant is  entitled  to  call  witnesses  and  produce  counter  proofs 
in  support  of  his  claim. 

Upon  consideration  of  the  evidence  the  referee  makes  his 
ortler.  The  claim  may  be  re-allow'ed  or  rejected  in  whole  or 
in  part,  and  the  referee  may  order  the  claim  to  stand  allowed 
or  to  be  expunged  or  diminished  accordingly."" 

It  has  been  held  that  the  provision  relating  to  the  examina- 
tion of  claims  does  not  apply  to  claims  for  expenses  of  admin- 
istration, such  as  charges  and  expenses  of  a  receiver."  The 
burden  of  proof  is  upon  the  creditor  asking  the  reexamination 
to  establish  the  facts  which  he  alleges."^  An  objection  to  a 
petition  for  reexamination  on  the  ground  that  it  lacks  par- 
ticularity should  be  raised  by  a  motion  to  make  more  definite 
and  certain."''    An  inequitable  claim  has  been  expunged. ^'^ 

W'here  the  creditor  by  collusion  with  the  bankrupt  has 
fraudulently  enlarged  his  claim,  both  the  true  and  fictitious 
claims  should  be  disallowed,  because  fraud  vitiates  the  whole 
debt.'*^     A  claim  wdiich  has  been  purchased  with  the  bank- 

2*  B.  A.  1898,  Sec.  2ir.  "Vh    re   Howard,    100    Fed.    Rep. 

As    to    riglit    of    referee   to    limit  630,  4  Am.  B.  R.  69. 

time     for     taking     deposition,     see  "**  In   re   Ankeny,    100   Fed.    Rep. 

Dressel  v.  North  State  Lumber  Co.,  614,   4  Am.   B.   R.   72,  2   N.    B.   N. 

119  Fed.  Rep.  531,  9  Am.  B.  R.  541.  148. 

-•'In    re     Robinson,     No.     11938  ''"/«  re  Knox,  98  Fed.   Rep.  585, 

Fed.  Cas.,  8  Ben.  406 ;  In  re  Lount,  3   Am.   B.   R.   371 ;    see  also   In   re 

No.   8543    Fed.    Cas.,    11    N.    B.    R.  Flick,  105  Fed.  Rep.  503,  5  Am.  B. 

315.     In  re  Howard,   100  Fed.  Rep.  R.  465. 

630,  4   hm.   B.   R.   69.  "1  In    re    Elder,    No.     4326     Fed. 

2G  B.  A.  1898,  Sec.  57/.';  Gen.  Ord.  Cas.,    i    Saw.    72>;    Marrett    v.    At- 

21,  par.  6.     Official  Forms  Nos.  38  terbury.    No.    9102    Fed.     Cas.,     3 

and  39,  see  Forms  Nos.  70  and  71,  Dill.  444;  In  re  State  Ins.  Co.,   16 

post.  Fed.  Rep.  756;  in  re  Stephens,  No. 

-~  In    re    Reliance     Storage    and  13365   Fed.   Cas.,  3  Biss.   187, 
Warehouse  Co.,  100  Fed.  Rep.  619, 
4  .Am.   B.   R.  49. 


HOW    TO    PROVE    DEBTS. 


413 


riipt's  money  will  be  expunged;'''  but  a  friend  of  the  bankrupt 
may  purchase  with  his  own  money  in  good  faith  all  the  claims 
against  the  bankrupt  with  the  intention  of  putting  an  end  to 
bankruptcy  proceedings.  If  he  fails  in  such  attempt  he  may 
prove  the  debt  so  purchased  and  assigned  to  him.''^  The  claims 
of  creditors  who  have  received  preferences  should  be  disal- 
lowed where  such  creditors  have  not  surrendered  their  pref- 
erences.^* Where  a  secured  creditor's  debt  is  expunged  he 
does  not  surrender  his  security.^^.  Whenever  a  claim  shall  have 
been  reconsidered  and  rejected,  in  whole  or  in  part,  upon 
which  a  dividend  has  been  paid,  the  trustee  may  recover  from 
the  creditor  the  amount  of  the  dividend  received  upon  the 
claim  if  rejected  in  whole,  or  the  proportional  part  thereof  if 
rejected  only  in  part. 


36 


§  141.    How  to  review  the  final  allowance  or  rejection  of  a 
claim. 

If  the  trustee  or  the  creditor  is  dissatisfied  with  the  ruling 
of  the  referee,  he  should  take  proper  steps  to  have  it  reviewed 
by  the  judge. 

Any  creditor  whose  claim  is  rejected  in  whole  or  in  part, 
or  a  trustee  who  is  dissatisfied  with  the  allowance  of  a  claim, 
may  file  with  the  referee  a  petition  that  the  order  may  be 
reviewed  by  the  judge. ^  The  petition  should  be  entitled  in  the 
cause  and  set  forth  the  error  complained  of.^  It  is  the  duty 
of  the  referee  forthwith  to  certify  to  the  judge  the  question 
presented,  a  summary  of  the  evidence  relating  thereto,  and 
the  finding  and  order  of  the  referee  thereon."     When  com- 


32 /n  re  Lathrop,  No.  8103  Fed. 
Cas.,   3    Ben.  490. 

•*3  In  re  Pease,  No.  10880  Fed. 
Cas.,  6  N.  B.  R.  173;  In  re  Stra- 
chan,  No.  135 19  Fed.  Cas.,  s.  c.  3 
Biss.  181. 

3-tB.  A.  1898,  Sec.  S7g;  Pirie  v. 
Chicago  Title  and  Trust  Co.,  182 
U.  S.  438,  45  L.  Ed.  1 171,  5  Am. 
B.  R.  814;  In  re  Busby,  124  Fed. 
Rci>,  469,  16  .\in.  Pi.  R.  650;  McKey 


V.  Lee  (C.  C.  A.  7th  Cir.),  105 
Fed.  Rep.  923,  5  Am.  B.  R.  267. 

'^■'  Dallas  V.  Flues,  No.  3544  Fed. 
Cas.,    19   Pitts.   Leg.   J.    173. 

38  B.  A.    1898,   Sec.  57/. 

1  Gen.  Ord.  27. 

As  to  the  practice  on  petition  to 
review  an  order  or  ruling  of  a 
referee,  see  Sec.  32a,  ante. 

^  Gen.  Ord.  27 ;  Official  Form  No. 
56,  sec   Form   No.   136,  post. 


414  LAW    AXD  rR()ri:i:i>i.\(;s  i.\  uaxkrii'ihy. 

plclcil  the  ciMurKato  is  sii^iicd  In  Uic  rcl'crcc  aiul  traiisniiUcd 
to  the  court. 

If  the  jiul.i;o  is  uol  satisl'idl  with  tlic  c\iik'iKX'  i-ortilicd  by 
the  referee,  lie  may  allow  further  e\  ideuce  to  he  (akeu  hefore 
hiiu  or  refer  the  cause  to  the  referee  for  further  ])roofs.  lie 
UYd\  hear  art;uuieuts  of  couusel  upon  the  (|uestiou  certihed. 
The  practice  is  for  hiui  to  .^ixe  his  opiuiou  upou  the  poiut 
and  direct  an  (^nler  or  jud^nieut  to  he  entered  u])on  the  joiu"- 
nal  oi  the  ccnit.  If  the  ([uestion  is  cerlilied  improperly  the 
court  ma\'  decline  to  i^ixe  an  opinion.'' 

The  jutlsiiient  of  the  court  allow ini;-  or  rejecting'  a  debt  or 
claim  of  five  hundred  dollars  or  over  may  he  reviewed  in  an 
appellate  court  upon  an  appeal  taken,  as  in  ecjuity  cases/  Such 
appeal  must  he  taken  wi-thin  ten  days  after  the  jutlgment  has 
been  rendered.* 

3/«    ;v   Wripht.    No.    t8o6q   Fed.  ■*  n.   A.   1898,  Sec.  250.     See  Sec. 

Cas.,    I    N.   B.    I\.   393;    In   re   Slur-       31J,  jwst. 
geon,  No.  13564  Fed.  Cas.,  i   N.  B. 
R.  498. 


TRUSTEES.  4 1 


CllAPTl'K    W. 

TRUSTEES. 

§  142.     Appointment  and  qualifications.' 

IMie  ollicc  o\  trustee  is  created  hv  statute."  Trustees  are 
othcers  of  the  court  of  bankrinicty.  C'Jno  trustee  or  tliree 
trustees  are  rci^'tilarly  a|>i>oiiite(l  1\\-  the  creiHlors  oi  the  hank- 
rupt  estate  whose  chiinis  lia\e  been  aUowed."' 

Such  trustees  are  ai)i)oinie(.l  at  the  first  uieetinj;-  of  the  cred- 
itors after  au  atljiuHcation,  or  after  a  vacaucy  has  occiumtiI  iu 
the  oftice  of  trustees,  or  after  an  estate  has  been  reopened,  or 
after  a  composition  has  liecn  set  aside,  or  a  ihschars^-e  revoked, 
or  if  there  is  a  vacancx'  in  the  ofVice  of  trustee."  Such  appoint- 
ment by  the  cretUtors  is  subject  to  be  appro\ ed  or  ihsa]"ipro\ed 
by  the  referee  or  l)y  the  judge.^  The  selection  of  a  trustee 
by  the  creditot's  will  not  be  disappro\ed  by  the  coiu"t  luiless 
it  clearl\-  imperils  the  fair  and  efficient  ailministratiou  o\  the 
estate."  The  referee  can  only  disapproxe  o\  the  appoint- 
ment.  the  judge  alone  having  power  to  reject.'"     If  the  cred- 

'  See  also  Sees.  105  and  106.  ante.  8ti;    In    rr    Dayville    Woolen    Co., 

-  n.  .\.   i8()H.   See,  33.  114  Fed.  Rop.  074.  t^  Am.  B.  R.  85; 

'  B.    .\.     1898,    Sees.    44    to    50;  In  rr  Morton.  118  Fed.  Rep.  oti8.  g 

Creditors'    Meetings,    Chap.    XII.:  Am.   H.   R.  508;  see  also  (j»i/t-,  Sec. 

In    re   Eagles,  99   Fed.   Rep.   6g^,  ,^  lod;  compare  R.  S.  Sec.  5034. 

.Am.  B.  R.  733.  J  N.  B.  N.  46J;  7u  'hi    ;v    McGill     (C.    C.    A.    6tli 

rt'  Lewensolm,  08  I'ed.   Rep.  $~t>,  3  Cir.),    lod    l-Vii.   Rep.   57,   5   .\m.    B. 

.•\m.   B.    R.   299,  2   N.    B.    N.   315.  R.    155:    In    rr    Mangan.    133    l\-d. 

In  re  Malino.   118   I'ed.   Rep.  3(>S,  Rep.  1000,  13  .Vm.  B.  R.  303;  In  re 

8  .\m.  B.  R.  J05.  I'.astlaek,  145  Fed.  Rep.  (x^.  16  .\m. 

■•Gen.    Ord.    13;    Falter   v.    Rein-  5J0,  and  the  cases  cited  in  the  opin- 

ard,  104  Fed.  Rep.  J92,  4  .\ni.  15.  R.  ion:     /'(     '  i'     l>lue     Ridge     Packing 

78J,  2  N.   B.  R.    II 19.  atlirmed   (C.  Co..   u?   l\d.  Rep.  619,  11    Am.   !>. 

C.   .\.  6th   Cir.).  siih   nom.      In   rr  R.  ^^(\ 

McGill,    106    I<\hI.    Rep.    57,    3    .Vni.  ''In   re  ll;ire.   no  I-Vd.  Rep.  J4(\ 

B.   R.    155:    In   re   llcnschel    (C.  C.  0  Am.  B.  R.  sjo:  In  re  Mackellar, 

A.  2d   Cir.").    109   Fed.   Rep.  861,  6  116    Fed.    Rep.    547.    8    Am.    B.    R. 

Am.   B.    R.   305;   In   re   Rekersdres,  OU);  Gen.  Ord.   ij. 
108    l-ed.    Rep.    J06.    5    Am.    B.    R. 


416  LAW    AND   PROCEEDINGS  IN    BANKRUPTCY. 

itors  fnil  to  appoint  a  trustee  or  trustees,  the  judge  or  referee 
must  do  S(.>/  The  judge  or  referee  should  exercise  this  power 
onlv  when  the  creditors  have  had  full  opportunity  to  elect  a 
trustee  and  have  failed  to  do  so.**  Where  the  creditors  elect 
two  trustees  instead  of  three,  as  required  by  law,  it  has  been 
held  that  the  referee  should  call  another  meeting  of  creditors 
■Aud  not  himself  appoint  the  third  trustee."  The  court  can 
not  appoint  an  official  trustee  or  any  general  trustee  to  act 
in  classes  of  cases. ^" 

A  trustee  should  ordinarily  be  appointed,  although  no  cred- 
itor appears  to  prove  a  debt,  or  although  there  are  apparently 
no  assets.''  But  if  the  schedule  of  a  voluntary  bankrupt  dis- 
closes no  assets,  and  if  no  creditor  appears  at  the  first  meeting, 
the  court  may,  by  order  setting  out  the  facts,  direct  that  no 
trustee  be  appointed ;  but  at  any  time  thereafter  a  trustee  may 
be  appointed,  if  the  court  shall  deem  it  desirable.'- 

Any  individual  who  is  competent  to  perform  the  duties  and 
resides  or  has  an  office  in  the  judicial  district,  or  a  corpora- 
tion authorized  by  its  charter  or  by  law  to  act  in  such  capac- 
ity, and  having  an  office  in  the  judicial  district,  may  be  a  trus- 
tee."   A  creditor  of  a  bankrupt  or  the  attorney  of  the  creditor 

'B.    A.    1898,    Sec.    44;    Sec.    2,  In   re   Newton     (C.     C.    A.    8th 

clause    17,    and    Sec.    i,    clause    7;  Cir.),   107  Fed.  Rep.  429.  6  A.  M. 

Official  Form  No.  24,  see  Form  No.  B.   R.   52,   it  was  held  that  on  re- 

43,  post;  In  re  Kuffler,  97  Fed.  Rep.  opening  an   estate  the   court  could 

187,  3  Am.  B.  R.   162,  2  N.  B.  N.  not    appoint    a    trustee     until     the 

29;    In    re    Brooke,    100    Fed.    Rep.  creditors  had  failed  to  do  so.     See 

432,  4  Am.   B.   R.   50,  2   N.   B.   N.  also    Fowler  v.  Jenks,  90  Minn.  74, 

680;  In  re  Lewensohn,  98  Fed.  Rep.  11  Am.  B.  R.  255. 

576,  3  Am.  B.  R.  299,  2  N.  B.  N.  ^  In  re  Wm.   F.   Fisher   Co.,   135 

315.  Fed.  Rep.  223,  14  Am.  B.  R.  366. 

In  Clark  v.  Pidcock  (C.  C.  A.  3d  ^^  Gen.  Ord.  14. 

Cir.),    129   Fed.   Rep.   745,    12  Am.  " /w  re  Cogswell,  No.  2959  Fed. 

B.  R.  309,  a  trustee  was  appointed  Cas.,  s.  c.  i  Ben.  388;  Anonymous, 

by    the    court    more    than    a    year  No.  457  Fed.  Cas.,  i  N.  B.  R.  122. 

after   the   first   creditors'    meeting.  "Gen.  Ord.   15;  In  re  Levy,   loi 

*/w  re  Hare,   119  Fed.  Rep.  246,  Fed.  Rep.  247,  4  Am.  B.  R.   108. 

9  Am.  B.  R.  520;  In  re  Mackellar,  ^^  b.  A.  1898,  Sec.  45.     See  In  re 

116    Fed.    Rep.    547,   8   Am.    B.    R.  Havens,  No.  6231   Fed.  Cas.,   i    N. 

669;    In    re    Lewensohn,    98    Fed.  B.  R.  485. 
Rep.   576,  3  Am.  B.   R.  299. 


TRUSTEES.  417 

is  competent.^*  But  a  near  relation,  an  attorney,  or  a  confi- 
dential clerk  of  the  bankrupt  is  not  competent  to  serve  as  trus- 
tee/^ Under  the  bankrupt  law  of  1867  a  preferred  creditor 
was  not  eligible  to  be  an  assignee/"  The  present  act  has  no 
such  restriction. 

It  is  the  duty  of  the  referee  immediately  upon  the  appoint- 
ment and  approval  of  the  trustee  to  notify  him  in  person  or 
by  mail  of  his  appointment.^'  The  notice  must  require  the 
trustee  forthwith  to  notify  the  referee  of  his  acceptance  or 
rejection  of  the  trust,  and  shall  contain  a  statement  of  the 
penal  sum  of  the  trustee's  bond.^'  A\'hen  the  trustee  accepts 
the  trust  he  must  qualify  by  giving  a  bond  to  the  Unitefl 
States  within  ten  days  after  his  appointment,  or  within  such 
further  time,  not  to  exceed  five  days,  as  the  court  may  per- 
mit.^® If  he  declines  to  accept  the  trust  a  vacancy  occurs, 
which  must  be  filled  at  the  next  meeting  of  the  creditors." 

§  143.     Bonds  of  trustees. 

Before  entering  upon  the  performance  of  his  duty  a  trustee 
within  ten  days  after  his  appointment,  or  within  such  further 
time,  not  to  exceed  five  days,  as  the  court  may  permit,  shall 
enter   into  bond  to  the   United    States,   conditioned   for  the 
faithful  performance  of  his  duties.^ 

The  amount  of  the  bond  is  fixed  by  the  creditors."  If  they 
fail  to  fix  the  amount  of  the  bond  the  court  shall  do  so.-"* 
Joint  trustees  may  give  joint  or  several  bonds.*     A  separate 

^*  Fn    re   Barrett,    No.    1043    Fed.  In    re   Whetmore,    No.    17466    Fed. 

Cas.,   2    Hughes   444;    In    re    Clair-  Cas.,   16  N.  B.   R.  514;   In  re   Mal- 

mont,  No.  2781  Fed.  Cas.,  i   N.  B.  lory,   8990,    Fed.   Cas.,  4   N.    ?>.    R. 

R.  276;  In  re  Lewensohn,  98  Fed.  153. 

Rep.  576,  3  Am.  B.  R.  299,  2  N.  B.  t- R.  S.  Sec.  5035. 

N.    315;    In    re    Lazoris,    120    Fed."  i"  Gen.  Ord.   16. 

Rep.  716,   10  Am.  B.  R.  31;  In  re  "  B.    A.    1898,    Sec.    50/?;    Official 

Blue   Ridge   Packing  Co.,   125   Fed.  Form    No.    25,    see    Form    No.    44, 

Rep.  619,   II   Am.  B.  R.  36.  post. 

^■' In   re  Gordon   Supply  Co.,   129  ^-^  B.  A.   1898,   Sec.  44- 

Fed.    Rep.   622,    12   Am.    B.   R.   94;  ^  B.   A.    1898.    Sec.    50&. 

In  re  Powell,  No.   11354  Fed.  Cas.,  -  B.   A.    1898.   Sec.   50f. 

2    N.    B.    R.   45;    In    re   Zinn,    No.  •' B.  A.   1898.  Sec.  soc 

18216   Fed.   Cas.,  4    N.    B.    R.   370;  ^  B.  A.  1898,  Sec.  50/. 


418  LAW     AND    PROCEEDINGS   IN    BANKRUPTCY. 

bond  must  be  given  in  each  case."  If  the  trustee  fails  to  give 
bond  within  the  time  prescribed,  he  is  deemed  t(j  have  dechned 
the  appointment,  and  there  is  a  vacancy  in  iiis  oi'fice." 

There  must  be  at  least  two  sureties  upon  each  bond,  who 
shall  qualify  in  a  sum  equal  at  least  to  the  amount  of  the  bond.' 
The  court  must  require  evidence  as  to  the  actual  value  of  the 
property  of  sureties.''  Corporations  organized  for  the  pur- 
pose of  becoming  sureties  on  bonds  are  authorized  by  law  to 
do  so,  and  may  be  accepted  as  sureties.''  The  court,  judge  or 
referee  must  require  evidence  as  to  the  actual  value  of  the 
property  of  the  sureties."  The  sureties  are  approved  by  the 
judge  or  referee." 

Such  bonds  should  be  filed  of  record  in  the  office  of  tlic 
clerk  of  the  court,  and  may  be  sued  upon  in  the  name  of  tlie 
United  States  for  the  use  of  any  person  injured  by  a  breach 
of  their  conditions."  Such  suits  must  be  brought  within  two 
years  after  the  estate  has  been  closed.^-  A  pending  suit  is  not 
abated  by  the  death  or  removal  of  a  trustee. ^^  • 

Trustees  are  not  liable,  personally  or  on  their  bonds,  to  the 
United  States,  for  any  penalties  or  forfeitures  incurred  by 
the  bankrupts  under  this  act,  of  whose  estates  they  are  re- 
spectively trustees. 


14 


§  144.    Duties  of  a  trustee. 

The  duties  of  a  trustee  in  a  general  way  are  similar  to  those 
of  a  receiver  appointed  l^y  a  circuit  court  in  a  creditor's  suit. 
He  is  an  officer  of  the  court/  It  is  his  duty  to  take  the  prop- 
erty of  the  bankrupt,  reduce  it  to  money  and  distribute  the 
proceeds  among  the  creditors  as  directed  1:)y  the  court." 

-In  re  McFadden,  No.  8785  Fed.  '"' B.  A.   1898.  Sec.  som. 

Cas.,  s.  c.  3  N.  B.  R.  104.  ''^  B.  A.   1898,  Sec.  46. 

«B.  A.   1898,  Sec.  50/c.  i^B.   A.    1898,   Sec.   50/. 

■^  B.  A.  1898,  Sec.  soe,  f.  ^  McLean  v.  Mayo,  113  Fed.  Rep. 

8B.   A.    1898,   Sec.   50c?.       "  106,  7  Am.  B.  R.  115;  United  States 

»  B.  A.  1898,  Sec.  sog.  V.  Dewey,  39  Fed.  Rep,  251:  In  re 

"^  B.   A.    i8g8,    Sec.   50  h  and   d,  Howard,    130    Fed.    Rep.    1004.    12 

Official    Form    No.    26,    see    Form  Am.   B.   R.  462. 

No.  45,  post.  -In    re    Howard,    130    Fed.    Rep 

11  B.  A.  1898,  Sec.  50/1.  .     1004.  12  Am.  B.  R.  462. 


TRUSTEES.  419 

As  the  representative  of  the  estate,  he  is  bound  to  exercise 
his  judgment  and  to  act  for  the  best  interests  of  all  concerned, 
but  subject  to  the  supervising  power  of  the  referee  and  the 
district  judge.  He  does  not  act  judicially,  but  only  admin- 
istratively,^ 

As  to  everything  except  fraudulent  conveyances  and  fraud- 
ulent preferences  under  the  bankrupt  law  he  takes  the  prop- 
erty of  the  bankrupt  with  notice  of  all  outstandmg  rights  and 
equities.  Whatever  the  bankrupt  could  do  to  make  his  prop- 
erty available  for  the  general  creditors  the  trustee  may  do, 
but  nothing  more,  except  that  he  may  sue  for  and  recover  that 
which  was  conveyed  in  fraud  of  the  rights  of  the  creditors, 
and  set  aside  all  fraudulent  preferences.  In  this  he  represents 
the  general  or  unsecured  creditors,  and  his  duties  relate  chiefly 
to  their  interests.  Thus  it  is  seen  that  the  trustee  represents 
the  bankrupt  for  some  purposes  and  the  unsecured  creditors 
for  other  purposes.*  He  must  deal  fairly  between  them.^  The 
court  wnll  not  permit  the  trustee  to  be  governed  by  any  cred- 
itor or  group  of  creditors,  but  will  direct  him  to  report  at  a 
meeting  of  all  the  creditors  and  be  governed  by  tliem  and  will 
appoint  independent  counsel  to  advise  him.*'' 

*  In  re  Stern  (C.  C.  A.  8th  Cir.),  "In  all  matters  between  creditors 
144  Fed.  Rep.  956,  16  Am.  B.  R.  and  bankrupt  he  should  stand  in- 
510.  different.     His  sole  care  should  be 

*  See  Dudley  v.  Easton,  104  U.  to  make  the  most  out  of  the  estate, 
S.  9Q,  26  L.  Ed.  668;  Chubb  v.  Up.  and  that  primarilj-  in  the  interest 
ton,  95  U.  S.  665,  24  L.  Ed.  523;  of  the  creditors.  When  he  goes 
Glenny  v.  Langdon,  98  U.  S.  20,  25  beyond  that,  and  .seeks  to  aid  the 
L.  Ed.  43;  In  re  Kansas  City  Mfg.  bankrupt  at  the  expense  of  the 
Co.,  No.  7610  Fed.  Cas.,  9  N.  B.  R.  creditors,  and  by  concealment  or 
76;  Buckingham  v.  McLean,  3  Mc-  by  false  representations  induces 
Lean,  185,  13  How.  151,  14  L.  Ed.  creditors  to  act  contraj-y  to  their 
91;  Bradshaw  v.  Klein,  No.  1790  interest,  he  violates  his  duly,  and 
Fed.  Cas.,  2  Biss.  20;  Bristol  v.  should  be  removed  from  the  trui^t 
Sandford,  No.  1893  Fed.  Cas.,  12  to  which  he  has  been  false." 
Blatch.  341 ;  In  re  Price,  92  Fed.  That  a  trustee  represents  all  t!-c 
Rep.  987  at  989,  I  Am.  B.  R.  606  creditors  and  not  any  class  or 
at  609.  group  of  them,  see  In  re  Columbia 

'■/«  re  Wrisley  Co.   (C.  C.  A.  7th       Iron    Works,     142    Fed.    Rep.    234, 
Cir.),    133    Fed.    Rep.    388,    390,    13       14  Am.   B.   R.   526. 
Am.  B.  R.  193,  196,  the  court  said:  "  In    re    .'\rnctt,    112     I'^ed.     Rep. 


4J0  LAW   AND   PROCEEDINGS  IN    BANKRUPTCY. 

Ininiediatcly  upon  entering  his  duties  the  trustee  should 
prepare  a  complete  inventory  of  all  the  property  of  the  bank- 
rupt that  conies  into  his  possession."  In  practice  the  trustee 
usually  tiles  as  his  inventory  the  report  of  the  appraisers  ap- 
pointed to  appraise  the  real  and  personal  property  of  the  bank- 
rupt/^ He  must  make  a  report  to  the  court  within  twenty 
days  after  receiving  the  notice  of  his  appointment  of  the  arti- 
cles set  off  to  the  bankrupt  by  him,  according  to  the  provisions 
of  the  forty-seventh  section  of  the  act,  witii  the  estimated  value 
of  each  article,  and  any  creditor  may  take  exceptions  to  the 
determination  of  the  trustee  within  twenty  days  after  the  fil- 
ing of  the  report.^  The  referee  may  require  the  exceptions  to 
be  argued  before  him,  and  shall  certify  them  to  the  court  for 
final  determination  at  the  request  of  either  party/"' 

The  trustee  must  keep  regular  accounts  showing  all  amounts 
received  and  from  what  sources,  and  all  amounts  expended 
and  on  what  accounts."  A  trustee  of  a  partnership  is  required 
to  keep  separate  accounts  of  the  partnership  property  and  of 
the  property  belonging  to  the  individual  partners.^"  The  trus- 
tee must  report  to  the  court  in  writing  the  conditions  of  the 
estate,  and  the  amount  of  money  on  hand,  and  such  other 
details  as  may  be  required  by  the  courts,  within  the  first  month 
after  his  appointment,  and  every  two  months  thereafter,  unless 
otherwise  ordered  by  the  court. ^"^  All  accounts  of  trustees  are 
referred  as  of  course  to  the  referee  for  audit,  unless  otherwise 
specially  ordered  by  the  court.^* 

The  trustee  must,  within  thirty  days  after  the  adjudication, 
file  a  certified  copy  of  the  decree  of  adjudication  in  the  office 


770,  7  Am.'B.  R.  522;  In  re  Colum-  133    Fed.   Rep.   798,    13   Am.   B.    R. 

bia  Iron  Works,  142  Fed.  Rep.  234,  352. 

14    Am.    B.    R.    526;    see    also    In  ^  Gen.    Ord.    17.      Form   of   trus- 

rc  Riisch,  105  Fed.  Rep.  607,  5  Am.  tec's  return,   see  Official  Form  No. 

B.  R.  565.  47,    Form    No.   91,   post. 

^Gen.  Ord.   17.  i»  Gen.  Ord.  17. 

8B.    A.     1898,    Sec.    7oh,   Official  ^^  B.   A.    1898,    Sec.   47,   clause  6. 

Form  No.    13,   Form   No.  37,  post;  ^-  B.  A.   1898,   Sec.  5^. 

In    re    Gordon    Sup.    &    Mfg.    Co.,  i3  B.  A.   189X,   Sec.  47,  clause   10. 


"Gen.  Ord.    i 


/• 


TRUSTEES.  421 

where  conveyances  of  real  estate  are  recorded  in  every  county 
where  the  bankrupt  owns  real  estate  not  exempt  from  execu- 
tion, and  pay  the  fee  for  such  filing.^^ 

In  case  the  trustee  neglects  to  file  any  report  or  statement 
which  it  is  made  his  duty  to  file  or  make  by  the  act  or  by  any 
general  order  in  bankruptcy  within  five  days  after  the  same 
shall  be  due,  it  is  the  duty  of  the  referee  to  make  an  order 
requiring  the  trustee  to  show  cause  before  the  judge,  at  a 
time  specified  in  the  order,  why  he  should  not  be  removed  from 
ofiice/'^  The  referee  must  cause  a  copy  of  the  order  to  be 
served  upon  the  trustee  at  least  seven  days  before  the  time 
fixed  for  the  hearing,  and  proof  of  the  service  thereof  to  be 
delivered  to  the  clerk. ^^ 

He  must  also  furnish  such  information  concerning  the  es- 
tate of  wdiich  he  is  trustee,  aad  his  administration,  as  may  be 
requested  by  the  parties  in  interest.^'  If  he  secretes  or  destroys 
any  documents  belonging  to  a  bankrupt's  estate  which  came 
into  his  charge  as  trustee,  he  is  liable  to  imprisonment.^^ 

As  soon  as  the  trustee  receives  any  money  belonging  to 
the  estate  he  must  deposit  it  in  one  of  the  designated  depos- 
itories.^**  This  money  is  withdrawn  and  disbursed  only  by 
check  or  draft  on  such  depository.-^  The  courts  of  bank- 
ruptcy designate  by  order  banking  institutions  as  depositories 
of  the  money  of  bankrupt  estates  as  convenient  as  may  be  to 
the  residences  of  trustees,  and  must  require  bonds  to  the 
United  States,  subject  to  their  approval,  to  be  given  by  such 
banking  institutions,  and  may,  from  time  to  time  as  occasion 
may  require,  by  like  order  increase  the  number  of  deposit- 
ories or  the  amount  of  any  bond,  or  change  any  such  depos- 

i"' P).  A.  tRqR.  Sec.  47r.  as  amend-  and  6t  ;  In  re  Cobb.  T12  Fed.  Rep. 

cd  Feb.  5,  1903,  32  Stat,  at  L.  797.  655,  7  Am.  B.  R.  202 ;  In  re  Carr, 

i«Gen.  Ord.  17.  117    Fed.    Rep.    572,   9   Am.    B.    R. 

"  B.   A.    1898,    Sec.   47,   clause   5,  58.     See  In  re  Burt,  27  Fed.  Rep. 

and  Sec.  49.  548;  In  re  Thorp.   No.   14002  Fed. 

i^B.  A.  1898,  Sec.  29fl.     PTe  may  Cas.,  2  Ware  294. 

be    prosecuted    in    a    circuit    court  20  3    ^     1898,   Sec.  47,  clause  4 ; 

or    a    court   of.  bankruptcy ;    B.    A.  In   re   Cobb,    112   Fed.    Rep.   655,    7 

1898,  Sec.  2.'5r,  and  Sec  2,  clause  4.  Am.  B.  R.  202. 

•°B.    A.    1898,    Sec.   47,   clau.se   3, 


422  LAW   AND  PROCEEDINGS  IN    BANKRUPTCY. 

itories.-^  It  is  probable  that  the  court  has  power  to  direct  the 
temporary  investment  of  the  money  belonging  to  such  estate, 
or  to  authorize  the  same  to  be  deposited  in  any  convenient 
bank  upon  interest." 

The  trustee  may,  under  the  direction  of  the  court,  submit 
to  arbitration  any  controversies  arising  in  the  settlement  of 
the  estate.-^  He  may  also,  with  the  approval  of  the  court, 
compromise  any  controversy  arising  in  the  administration  of 
the  estate  upon  such  terms  as  he  may  deem  for  the  best  inter- 
ests of  the  estate."* 

The  court  will  not  ordinarily  give  the  trustee  direction  as  to 
whether  he  should  employ  an  attorney.  He  must  exercise  his 
own  discretion.-^  The  trustee,  and  not  the  creditors,  regularly 
selects  his  attorney,""  but  he  will  not  be  allowed  to  employ  the 
same  counsel  that  represents  interests  in  conflict  with  other 
interests  represented  by  the  trustee.-^  A  trustee  is  not  re- 
quired to  litigate  every  question  brought  to  his  notice  by  a 
creditor,  nor  can  he  in  every  case  require  indemnity  for  costs 
from  the  creditor.  He  must  act  reasonably  and  in  doubtful 
cases  apply  to  the  court. -^ 

The  trustee  must  pay  upon  an  order  by  the  court  all  legal 
taxes  due  and  owing  by  the  bankrupt  to  the  United  States, 
state,  county,  district  or  municipality,  in  advance  of  the  pay- 
ment of  dividends  to  creditors,  and  upon  filing  the  receipts 

21  B.  A.   1898,  Sec.  6ia.  Lean  v.   Mayo,   113   Fed.  Rep.   106, 

22  This  power  was  especially  an-      7  Am.  B.  R.  115;  In  re  Baber    119 
thorized    under    the    act    of     1867,       Fed.   Rep.   520,  9  Am.   B.   R.   406 

R.    S.    Sec.    5060.     See   also    B.    A.  -^' In   re   Columbia    Iron    Works.. 

1898,  Sec.  47fl,  clause  i,  where  it  is  142    Fed.   Rep.   234,    14  Am.   B   .R. 

provided  that  the  trustee   shall   ac-  526. 

count   for  and   pay  over  to  the   es-  But  .see  In  re  Lit^^le  River  Lum- 

tate   under   his   control   all    interest  ber  Co.,   loi   Fed.   Rep    552,  3   Am. 

received  by   him   upon   property   of  B.    R.    682. 

such  estate.  -'  In  re  Rusch,  105  Fed.  Rep  607, 

23  B.  A.  1898,  Sec.  26a;  Gen.  Ord.  5   Am.   B.   R.   565;   In   re  Columbia 
22,.  Iron  Works,   142  Fed.  Rep.  234,   14 


-^  B.  A.  1898,  Sec.  27a;  Gen.  Ord.       Am.   B.    R.   526. 


23- 


-^  In  re  Baird,  112  Fed.  Rep.  960, 


In    re   .'\bram,    103     Fed.     Rep.       7  Am.   B.   R.  448. 
272,  4  Am.  B.  R.  575 ;  see  also  Mc- 


TRUSTEES.  423 

of  the  proper  public  officer  for  such  payment  he  shall  be  cred- 
ited with  the  amount  thereof.  In  case  any  question  arises  as 
to  the  amount  or  the  legality  of  such  taxes,  the  same  shall  be 
heard  and  determined  by  the  court. "^ 

It  is  the  duty  of  the  trustee  to  collect  and  reduce  to  money 
the  property  of  the  estate  for  which  he  is  trustee  under  the 
direction  of  the  court,  and  to  close  up  the  estate  as  expedi- 
tiously as  is  compatible  with  the  best  interests  of  the  parties  in 
interest.^"  The  duty  of  the  trustee  in  collecting  and  distrib- 
uting the  estate  is  treated  more  fully  in  subsequent  chapters. ^^ 

To  this  end  he  is  authorized  to  prove  a  claim  of  the  estate 
which  he  is  administering  against  any  like  estate  in  the  same 
manner  as  the  claims  of  other  creditors  are  proved ;  ""  to  re- 
claim and  recover  for  the  benefit  of  the  creditors  any  prop- 
erty conveyed,  transferred  or  assigned,  or  incumbered  by  a 
person  adjudged  to  be  a  bankrupt,  within  four  months  prior 
to  the  filing  of  the  petition  against  the  bankrupt  and  while 
insolvent;  where  such  conveyance,  transfer,  assignment  or 
incumbrance  was  made  with  intent  to  hinder,  delay  or  defraud 
creditors  or  is  void  as  against  creditors  by  the  law  of  the 
state,  territory  or  district  in  which  the  property  is  situate,''^  to 
cause  to  be  set  aside  levies,  judgments,  attachments  or  other 
liens  obtained  through  legal  proceedings  against  a  person  who 
is  insolvent  at  any  time  within  four  months  prior  to  the  filing 
of  the  petition  in  bankruptcy,  except  where  a  title  is  acquired 
by  a  bona  fide  purchaser  for  value,  who  shall  have  acquired 
the  same  without  notice  or  reasonable  cause  for  inquiry ;  ^'^ 
and  to  recover  the  property  or  its  value  in  case  the  bankrupt 
has  given  a  preference  within  four  months  prior  to  the  filing 


2«  B.  A.  1898.  Sec.  64a;  In  re  Til-  ^2  b.  A.  1898.  Sec.  57m. 

den,   91    Fed.    Rep.    500,    i    Am.   B.  ^^  B.  A.   1898,  Sec.  G/c.     He  has 

R.   300 ;    New  Jersey  v.   Anderson,  all    the    rights    of   creditors   to    at- 

203   U.    S.   .     Sec.   267,   post.  tack    such    conveyances,    Sec.    161, 

30  B.   A.   1898,  Sec.  47,  clause  2;  post;     Crooks    v.    Stuart,    7    Fed. 

fn   re  Pierce,  in   Fed.  Rep.  516,  6  Rep.  800. 

Am.  B.   R.  747.  '^B.  A.   1898,  Sec.  67/;  Sees.  192 

"  Chapters     XXIV.     and     XXV.,  ct  scq.   post. 

t'OSt. 


424 


LAW    AND   TKOCEEDINGS   IN    BANKRUPTCY. 


of  the  petition,  or  after  the  filing  of  the  petition  and  before 
the  adjudication,  and  the  person  receiving-  it  or  to  be  benefited 
thereby,  or  his  agent  acting  therein,  shall  have  h.ad  reasonable 
cause  to  believe  that  it  was  intended  thereby  to  give  a  prefer- 


35 


ence 

The  trustee  is  authorized,  tipon  a  petition  filed  by  himself 
or  a  creditor,  to  reco\er  for  the  benefit  of  the  estate  any  excess 
of  fees  paid  to  an  attorney  in  contemplation  of  bankruptcy 
over  and  above  a  reasonable  fee  to  be  determined  by  the 
court.^** 

The  trustee  is  subrogated  to  and  may  enforce  the  rights  of 
a  creditor  for  the  benefit  of  the  estate  where  such  creditor  is 
prevented  from  enforcing  his  rights  as  against  a  lien  created 
or  attempted  to  be  created  by  his  debtor,  who  afterwards 
becomes  a  bankrupt.''^ 

The  trustee  must  pay  dividends  within  ten  days  after  they 
are  declared  by  the  referee.^^  But  he  is  entitled  to  recover 
from  the  creditor  the  amount  of  a  dividend  received  upon  a 
claim  which  has  been  reconsidered  and  rejected.  He  can  re- 
cover the  whole  dividend  if  the  claim  is  rejected  in  whole, 
or  the  proportional  part  thereof  if  rejected  only  in  part."'"  The 
trustee  is  required  to  pay  into  court  all  dividends  which  remain 
unclaimed  for  six  months  after  the  final  dividend  has  been 
declared.'*" 

When  three  trustees  have  been  appointed,  the  concurrence 
of  at  least  two  of  them  will  be  necessary  to  the  validity  of  any 
act  concerning  the  administration  of  the  estate.*^ 


^B.  A.  1898,  Sec.  60b;  Sees.  194 
et  seq.,  and  Sees.  204  et  seq.  post. 

3"  B.  A.  1898,  See.  6od.  See  See. 
416,  ante. 

•'•■  B.  A.  1898,  Sec.  67b;  First 
National  Bank  v.  Staake,  202  U.  S. 
14T,   50  L.   Ed.  967,   15  Am.   B.   R. 

639- 

^B.   A.    1898,   Sec.  47,   clause  9. 
^^  B.  .\.  1898,  Sec.  57/. 
4"  B.  A.  1898,  Sec.  66a. 
"B.  A.    1898,  Sec.  47fo. 


In  re  Wm.  F.  Fisher  &  Co..  135 
Fed.  Rep.  223,  14  Am.  B.  R.  366, 
it  was  held  that  where  the  credi- 
tors of  a  bankrupt  appointed  two 
trustees  at  their  first  meeting,  wlio 
applied  for  a  sale  of  the  bankrupt's 
assets,  pending  which  a  third  trustee 
was  elected,  who  qualified,  and 
joined  in  the  petition  for  sale,  the 
fact  that  the  petition  was  presented 
by  two  trustees  only  in  the  first 
instance   was   no   objection   tliereto, 


TRUSTEES. 


425 


§  145.    Removal  of  trustees. 

Upon  application  of  creditors  trustees  may  be  removed  by 
the  court  for  cause  upon  hearing  after  notice  to  them.^ 

What  constitutes  sufficient  cause  for  removal  depends  very 
largely  upon  the  circumstances  of  each  particular  case.  He 
may  probably  be  removed  if  he  proves  to  be  incompetent  or 
neglects  his  proper  duties,"  or  if  his  relationship  to  the  bank- 
rupt is  such  as  to  prevent  a  fair  administration  of  the  trust,^ 
or  if  he  shows  partiality  to  one  class  of  creditors.*  The  power 
of  removal  is  discretionary  with  the  court.'' 

The  application  to  remove  a  trustee  must  be  made  to  the 
judge  and  not  to  a  referee.''  The  application  is  made  in  the 
form  of  a  petition."  The  petition  should  be  entitled  in  the 
court  and  cause  and  addressed  to  the  judge.  It  should  state 
the  name  of  the  petitioning  creditor,  and  that  it  is  for  the 
interest  of  the  estate  of  the  bankrupt  that  the  trustee  be  re- 
moved, and  then  set  forth  the  causes  for  wliich  the  removal 
is  requested  and  pray  that  notice  may  be  served  upon  the 
trustee  to  show  cause  whv  an  order  should  not  be  made  re- 


since,  if  title  to  the  bankrupt's  es- 
tate was  not  vested  in  the  two 
trustees  on  their  appointment  and 
qualification  it  became  vested  in  the 
three  on  the  appointment  and  qual- 
ification of  the  third. 

1  B.  A.   i8g8,  Sec.  2,  clause  17. 

2  Gen.  Ord.  17;  In  re  Morse,  No. 
9852  Fed.  Cas.,  7  N.  B.  R.  56;  £.1- 
parte  Perkins,  No.  10982  Fed.  Cas., 
5  Biss.  254;  In  re  Prouty,  24  Fed. 
Rep.   554. 

Erroneous  legal  advice,  where 
the  errors  are  so  gross  and  fre- 
quent as  to  be  evidence  of  the  in- 
competency of  his  legal  adviser, 
may  be  cause  for  ordering  him  to 
employ  other  counsel,  but  not  nec- 
essarily for  removing  the  trustee. 
Sec  In  re  Blodgett,  No.  1552  I'cd. 
Cas.,  5  N.  B.  R.  472. 

'In    re    Wrislev     (C.    C.    A.    2(1 


Cir.),  133  Fed.  Rep.  388,  13  Am. 
B.  R.  193;  In  re  Powell,  No.  11354 
Fed.  Cas.,  2  N.  B.  R.  45 ;  In  re 
Zinn,  No.  18216  Fed.  Cas.,  4  N.  B. 
R.  370;  in  re  Whetmore,  No.  17466 
Fed.  Cas.,  16  N.  B.  R.  514;  In  re 
Mallory,  No.  8990  Fed.  Cas-,  4  N. 
B.  R.   153- 

*£.r  parte  Perkins,  No.  T0982 
Fed.  Cas.,  5  Biss.  254;  In  re  Colum- 
bia Iron  Works,  142  Fed.  Rep.  234, 
14  Am.   B.   R.   526. 

■"'  In  re  Blodgett,  No.  1552  Fed. 
Cas.,  5  N.  B.  R.  472;  In  re  Adler, 
No.  82  Fed.  Cas.,  2  Woods  571 ;  In 
re  Mallory,  No.  8990  Fed.  Cas.,  4 
N.  B.  R.  153;  In  re  Sacchi,  No. 
1 2201  Fed.  Cas.,  6  N.  B.  R.  398. 

"Gen.  Ord.  13;  In  re  Stokes,  No. 
1347.  5  Fed.  Cas.,  I  N.  B.  R.  489. 

'  Official  Form  No.  52,  see  Form 
No.  150,  post. 


42()  LAW    AXD    PROCEEDINGS   IN    RAN  KRU I'TCY, 

moving  him.  The  petition  is  filed  in  the  clerk's  office.  A 
notice  in  the  natnre  of  a  rule  to  show  cause  is  issued  by  the 
clerk  in  the  form  prescribed  '^  and  served  upon  the  trustee. 

Upon  the  day  named  in  the  notice  the  trustee  must  appear 
and  answer  the  allegations  of  the  petition.  If  he  fails  to  ap- 
pear he  may  be  committed  for  contempt.  A  hearing  is  had, 
as  upon  a  rule  to  show  cause,  either  upon  aftidavits  or  testi- 
mony in  open  court,  and  counsel  for  the  creditors  and  for  the 
trustee  are  heard.  The  court  thereupon  makes  an  order  of 
removal  if  a  proper  case  is  made."  The  removal  of  a  trustee 
rests  in  the  sound  discretion  of  the  court.  It  should  be  exer- 
cised to  remove  a  trustee  only  when  sufficient  cause  is  shown 
rendering  such  removal  necessary  for  the  best  interests  of  the 
estate.  The  order  for  removal  is  entered  upon  the  journal 
of  the  court.  When  a  party  is  removed  for  cause  the  court 
may  compel  him  to  pay  all  costs  of  the  proceedings,^"  or  direct 
in  a  proper  case  that  the  costs  be  paid  out  of  the  estate.^^ 

When  a  trustee  has  been  removed  by  order  of  the  court, 
the  creditors  of  the  bankrupt  estate  should,  at  their  first  meet- 
ing after  such  order  has  been  entered,  appoint  a  new  trustee.^^ 
The  referee  regularly  serves  notice  at  once  for  a  hieeting  to 
be  held  for  that  purpose. ^'^  11ie  creditors  must  have  at  least 
ten  days'  notice  by  mail  to  their  respective  addresses  as  they 
appear  in  the  list  of  creditors  of  the  bankrupt,  or  as  after- 
wards filed  with  the  papers  in  the  case  by  the  creditors,  unless 
they  waive  notice  in  writing  of  such  meeting."  The  new 
trustee  is  elected  in  tlie  same  manner  as  the  first  one.^^     The 

"Official  Form  No.  53,  see  Form  "  B.   A.   1898,   Sec.   i,  clause   18; 

No.    151,  post:   B.  A.   1898,   Sec.  2,  In  re  Mallory,  No.  8990  Fed.  Cas., 

clause    17,    Gen.    Orel.    17    requires  4  N.  B.  R.   153;  Official  Form  No. 

seven  days'  notice  in  case  of  a  re-  54,  see  Form  No.   152,  post. 

moval    for    neglecting    to     file    re-  ^-  B.  A.   1898,  Sec.  44. 

ports.                                                          ■  ^^  Official  Form  No.  55,  see  Form 

» Official  Form  No.  54,  see  Form  No.    loi,   post;    Gen.    Ord.    25. 

No.  152,  post.  '*B.  A.    1898,   Sec.  580. 

10  B.   A.    1898,   Sec.    T,   clause   18;  i' See    How    to    conduct    a    cred- 

Jn    re   Morse,    No.   9852    Fed.   Gas.,  itors'    meeting,    Sec.    106. 
7   N.   B.   R.   56;   Official   Form   No. 
54;   see  Form  No.   152,  post. 


TRUSTEES.  427 

same  memorandum  of  election  should  be  made  as  in  the  case 
of  the  first  election. ^*^ 

Vacancies  caused  by  death,  or  after  an  estate  has  been  re- 
opened, or  after  a  composition  has  been  set  aside,  or  a  dis- 
charge revoked,  are  filled  in  the  same  manner  as  when  caused 
by  an  order  of  removal.  They  are  appointed  by  the  creditors 
at  a  regular  meeting.  If  the  creditors  do  not  appoint  a  new 
trustee  or  trustees  at  such  meeting  the  judge  or  the  referee 
must  do  so.^' 

The  death  or  removal  of  a  trustee  does  not  abate  any  suit 
or  proceding  which  he  is  prosecuting  or  defending  at  the  time 
of  his  death  or  removal,  but  the  same  may  be  proceeded 
with  or  defended  by  his  joint  trustee  or  successor  in  the  same 
manner  as  though  the  same  had  been  commenced  or  was  being 
defended  by  such  joint  trustee  alone  or  by  such  successor.'' 

Although  there  is  no  special  provision  for  the  resignation 
of  a  trustee,^'  the  judge  has  undoubtedly  power  to  accept  the 
resignation  of  a  trustee  and  discharge  him  from  his  trust. 

§  146.     Suits  which   may  be   prosecuted   or  defended    by 
trustees. 

The  court  may  order  the  trustee  to  enter  his  appearance 
and  defend  any  pending  suit  against  the  bankrupt.  A  trus- 
tee may,  with  the  approval  of  the  court,  be  permitted  to  pros- 
ecute as  trustee  any  suit  commenced  by  the  bankrupt  prior 
to  the  adjudication  with  like  force  and  effect  as  though  it  had 
been  commenced  by  him.'  A  judgment  against  a  substituted 
trustee  is  not  entitled  to  be  paid  in  full,  but  may  be  proved 
and  receive  dividends  pro  rata  with  other  claims.^  Costs  in 
such  cases  have  been  allowed  in  full.^ 

Inofficial  Form  No.  22,  see  Form  47   L.   Ed.    128,   9   Am.    B.    R.   47; 

^''-  ■^''  ^"'*-  Price  V.   Price,  48  Fed.  Rep.  823. 

1^  B.  A.   1898,   Sec.  44.  2  Norton    v.    Switzer,    93    U     S 

;«B.  A.    1898,  Sec.  46.  355,   23   L.    Ed.   903;   In   re   Neely, 

See   R.   S.   Sec.   5038.  108    Fed.    Rep.    371,    5   Am.    B.    R. 

B.  A.  1898,  Sec.  II  b  and  r;  see  836. 

Pickens    V.    Dent    (C.     C.     A.    4th  •'  fn  re  Neelv,   108  Fed.  Rep.  371. 

Cir.).    106    Fed.    Rep.    653.    5    Am.  5  Am.  B.  R.  836. 
!'•    R.  644;   affirmed    187   U.   S.    177, 


428 


LAW    AND   PROCEEDINGS  IN    BANKRUPTCY, 


A  trustee  nuist  therefore  obtain  leave  of  the  court  of  bank- 
ruptcy to  appear  and  cither  prosecute  or  defend  a  suit  pend- 
ing by  or  against  the  bankrupt  at  the  time  of  fihng  the  pe- 
tition in  l)ankruptcy.  Under  the  act  of  1867  the  statute  pro- 
vided expressly  that  the  assignee  might  prosecute  or  defend 
any  pending  action  to  which  the  bankrupt  was  a  party.*  If 
the  trustee  does  not  enter  his  appearance  to  prosecute  or  de- 
fend such  pending  suits  they  may  proceed  to  final  judgment 
or  decree.'  The  cases  under  the  act  of  1867  established  the 
doctrine  that  under  that  law  the  validity  of  a  pending  suit  or 
of  the  judgment  or  decree  thereon  was  not  affected  by  the 
intervening  bankruptcy  of  one  of  the  parties ;  that  the  as- 
signee might  or  might  not  be  made  a  party ;  and  whether  he 
was  so  or  not  he  was  ecjually  bound  wnth  any  other  party 
acquiring  an  interest  pendente  Htc.^  The  same  rule  is  un- 
doubtedly applicable  to  the  law  of  1898,  except  where  the 
case  is  stayed  under  the  first  paragraph  of  section  11.^ 

If  a  suit  in  the  name  of  the  bankrupt  is  settled  and  dis- 
missed after  bankruptcy  proceedings  are  instituted  the  trustee 
may  move  to  have  the  case  reinstated.^  It  was  held  uiider 
the  former  acts  that  the  bankrupt  might  sue  out  a  writ  of 
error  to  take  an  appeal  to  review  a  judgment  or  decree  ren- 
dered against  him  after  the  commencement  of  bankruptcy  pro- 


4R.    S.    Sec.     5047;     Norton     v.       Co.,  117  U.   S.  565,  29  L.  Ed.  994; 


Switzer,  93  U.  S.  355,  23  L.  Ed. 
903 ;  Hill  V.  Harding,  107  U.  S. 
631,  2-/  L.  Ed.  493;  Thatcher  v. 
Rockwell,  105  U.  S.  467,  26  L.  Ed. 
949;  Boynton  v.  Ball,  121  U.  S. 
457,  30  L.  Ed.  985. 

5  In  Nat.  Distilling  Co.  v.  Seidel 
(Wis.),  79  N.  W.  R.  744.  it  was 
held  discretionary  with  state  court 
whether  it  will  permit  trustee  to 
intervene. 

^  Thatcher  v.  Rockwell,  105  U.  S. 
467,  26  L.  R.  D.  949;  Davis  v. 
Friedlander,  104  U.  S.  570,  26  L. 
Ed.  818;  Dimock  v.  Revere  Copper 


Claflin  V.  Houseman,  93  U.  S.  134, 
23  L.  Ed.  833 ;  Eyster  v.  Gaff,  91 
U.  S.  521,  23  L.  Ed.  403. 

"  Pickens  v.  Roy,  187  U.  S.  177, 
47  L.  Ed.  128,  9  Am.  B.  R.  47; 
Metcalf  V.  Barker,  187  U.  S.  165, 
47  L.  Ed.  122,  9  Am.  B.  R.  2>^;  In 
re  Gerdes,  102  Fed.  Rep.  318,  4  Am. 
B.  R.  346;  Reed  v.  Equitable  Trust 
(Sup.  Ct.  Ga.),  8  Am.  B.  R.  242. 

*  Home  Ins.  Co.  v.  Hollis,  53  Ga. 
659.  See  also  Herdnon  v.  Howard, 
9  Wall.  664,  19  L.  Ed.  809;  Knox 
v.  Exchange  Bank,  12  Wall.  379, 
20  L.  Ed.  287. 


TRUSTEES. 


429 


ceediiigs.^  Where  the  judgment  or  decree  is  rendered  before 
the  bankruptcy  proceedings  are  begun,  the  trustee  is  the 
proper  person  to  prosecute  or  defend  the  suit  in  an  appellate 
court/'^ 

In  the  course  of  the  administration  of  an  estate  in  bank- 
ruptcy the  trustee  may  be  obliged  to  resort  to  a  suit  foi  the 
purpose  of  collecting  or  reducing  to  money  the  property  of 
the  estate  for  which  he  is  trustee.^^  or  for  the  purpose  of  re- 
claiming or  recovering  property  or  the  value  of  such  property 
as  has  been  fraudulently  conveyed/-  or  to  set  aside  a  fraud- 
ulent preference/^  That  the  trustee  has  authority  to  bring 
and  prosecute  such  suits  can  not  be  questioned.  It  is  not 
necessary  for  him  to  apply  to  the  court  for  leave  to  institute 
such  suits.  It  is  his  duty  to  invoke  a  court  of  justice  for 
these  purposes  if  he  can  not  obtain  possession  of  the  assets  in 
any  other  way. 

Prior  to  the  amendment  of  February  5,  1903.  the  trustee 
Avas  compelled  to  resort  to  the  state  courts  for  the  purpose 
of  collecting  and  reducing  to  money  the  property  of  the  estate 
of  which  he  was  trustee,  if  a  suit  was  necessary  for  that  pur- 
pose. Since  the  amendment  a  trustee  may  at  his  option  bring 
the  suit  in  a  state  court  or  in  the  court  of  bankruptcy.  This 
subject   has  been  considered   elesewhere.^* 

Suits  against  the  trustee  begun  after  bankruptcy  proceed- 
ings have  been  instituted  are  regularly  prosecuted  in  the 
court  of  bankruptcy,  especially  where  that  court  has  posses- 


•Dormire  v.  Cogly.  8  Blackf. 
Clnd.)  177;  O'Neil  v.  Dougherty, 
46  Cal.  575;  Collins  v.  Marshall, 
10   Rob.    (La.)    112. 

'"  Herndon  v.  Howard,  9  Wall. 
664,  19  L.  Ed.  8og;  Knox  v.  Ex- 
change Bank.  12  Wall.  379;  20  L. 
Ed.  2S7;  Day  v.  Laflin,  47  Mass. 
280;  Sandford  v.  Saiidford,  58  N. 
Y.  67;  Vnirin  v.  Edmonson,  9  111. 
120;  Moffit  V.  Cruise,  7  Cold. 
(Tenn.)    137. 

"  B.  A.   1898,  Sec.  47,  clause  2 


12  B.  A.  1898.  Sec.  7or  and  Sec. 
d'je.  See  also  Sees.  203  et  scq., 
post. 

'■■'  B.  A.  1898,  Sec.  60/7.  See  also 
Sees.  203  ct  seq.,  post. 

i-*  As  to  jurisdiction  of  court  of 
bankruptcy,  see  Sees.  i6a  to  2). 
(iiifv.  As  to  intervention,  see  Sees. 
152  ct  seq.,  post.  As  to  suits  to  re- 
cover property  as  a  preference  and 
as  fraudulently  transferred,  see 
Sees.  203  ct  scq.,  post. 


430 


LAW   AND   PROCEEDINGS  IN    BANKRUPTCY. 


sion  of  the  property.^''^  A  trustee  may  be  sued  in  another  court 
in  an  action,  as  for  trover  or  trespass,  not  involving  the  posses- 
sion or  seizure  of  property  in  the  custody  of  the  court  of 
bankruptcy.^"  An  action  for  rei)levin  will  be  stayed. ^^  It  is 
not  necessary  to  first  obtain  leave  of  the  court  of  bankruptcy 
before  bringing  a  suit  against  the  trustee  or  receiver.^^  When 
a  judgment  or  decree  has  been  obtained  in  a  court  other  than 
that  having  custody  of  the  property  it  can  not  be  executed 
without  application  to  the  court  of  bankruptcy.^'*  For  this 
reason  the  common  practice  is  to  intervene  in  the  bankruptcy 
proceedings  and  litigate  the  questions  of  title  to  property  in 
the  possession  of  the  trustee  in  that  court.'-' 

A  suit  on  the  bond  of  a  trustee  may  be  prosecuted  in  a  dis- 
trict court  -^  or  in  a  state  court.^" 


15  White  V.  Schloerb,  178  U.  S. 
542,  44  L.  Ed.  1 183,  4  Am.  B.  R. 
178;  Hewitt  V.  Berlin  Mach.  Wks., 
194  U.  S.  296,  48  L.  Ed.  986,  II 
Am.  B.  R.  709;  First  Nat.  Bank  v. 
Chicago  Title  &  T.  Co.,  198  U.  S. 
280,  49  L.  Ed.  1051,  14  Am.  B.  R. 
102;  Whitney  v.  Wenan,  198  U.  S. 
539,  49  L.  Ed.  1157,  14  Am.  B.  R. 
45 ;  Keegan  v.  King,  96  Fed.  Rep. 
758,  3  Am.  B.  R.  79 ;  In  re  Russell 
(C.  C.  A.  2d  Cir.),  loi  Fed.  Rep. 
248,  3  Am.  B.  R.  658;  In  re  Cham- 
bers, Calder  &  Co.,  98  Fed.  Rep. 
865,  3  Am.  B.  R.  537.  2  N.  B.  N. 
388;  In  re  Corbcft,  104  Fed.  Rep. 
872,  5  Am.  B.  R.  224;  In  re  Emslie 
(C.  C.  A.  2d  Cir.),  102  Fed.  Rep. 
291,  4  Am.  B.  R.  126,  2  N.  B.  N. 
992;  In  re  Whitener  (C.  C.  A. 
5th  Cir.),  105  Fed.  Rep.  180,  5  Am. 
B.  R.  198,  3  N.  B.  N.  316;  Fisher 
V.  Cushman  (C.  C.  A.  '  ist  Cir.), 
103    Fed.    Rep.    867,    4    Am.    B.    R. 

654- 

i"/m    re    Spitzer    (C.    C.    A.    2d 


Cir.),  130  Fed.  Rep.  879,  12  Am. 
B.  R.  346;  In  re  Russell  (C  C.  A. 
2d  Cir.),  loi  Fed.  Rep.  248,  3  Am. 
B.  R.  658;  In  re  Kanter  &  Cohen 
(C.  C.  A.  2d  Cir.),  121  Fed.  Rep. 
984,  9  Am.  B.  R.  ^/2. 

^' In  re  Rus.sell  (C  C.  A.  2d 
Cir.),  101  Fed.  Rep.  984,  3  Am. 
B.   R.  658. 

18  In  re  Smith,  121  Fed.  Rep. 
10T4,  9  Am.  B.  R.  603 ;  In  re  Kan- 
ter &  Cohen  (C.  C.  A.  2d  Cir.), 
121    Fed.    Rep.    984,   9    Am.    B.    R. 

372. 

^'•>  McFarland  Carriage  Co.  v. 
Solanus,  108  Fed.  Rep.  532,  6  Am. 
B.  R.  221 ;  In  re  Neely,  108  Fed. 
Rep.  371,  5  Am.   B.   R.  836. 

■"  See   Sec.    152,  post. 

-1  U.  S.  V.  Union  Surety  and 
Guaranty  Co.,  118  Fed.  Rep.  482, 
9   Am.   B.   R.    114. 

--  Alexander  v.  Union  Surety 
and  Guaranty  Co.  (N.  Y.  Sup.  Ct., 
App.  Div.),  II  Am.  B.  R.  52. 


TRUSTEES.  431 

§  147.     Limitations  of  actions  by  or  against  trustees. 

The  statute  provides  that  "suits  shall  not  be  brought  by 
or  against  a  trustee  of  a  bankrupt  estate  subsequent  to  two 
years  after  the  estate  has  been  closed."  ' 

This  limitation  applies  to  suits  at  law  and  in  equity,-  and 
to  suits  brought  in  a  state  or  federal  court.'  The  limitation 
applies,  although  the  suit  is  brought  in  the  name  of  the  trus- 
tee for  the  use  of  another  person.*  The  time  is  to  be  reckoned 
from  the  final  decree.  The  filing  of  a  bill  or  petition,  al- 
though it  is  necessary  to  afterwards  amend  it.  prevents  the 
running  of  the  statute."  But  inability  to  serve  process  on  a 
defendant  has  ne\'er  been  deemed  an  excuse  for  not  com- 
mencing an  action  within  the  prescribed  period." 

In  order  to  avail  of  the  advantage  of  the  limitation  it  must 
be  pleaded  in  some  form."  Where  the  bill  or  petition  shows 
that  the  cause  of  action  is  barred  by  the  statute  it  may  be 
raised  by  demurrer.^  Otherwise  it  must  be  set  up  by  plea  or 
answer. 

§  148.     Compensation  and  expenses  of  trustees. 

The  compensation  of  the  trustees  in  suits  which  were  com- 
menced prior  to  Feb.  5,  1903,  is  fixed  by  the  statute  as  fol- 
lows :^ 

"Trustees  shall  receive,  as  full  compensation  for  their  serv- 
ices, payable  after  they  are  rendered,  a  fee  of  five  dollars 
deposited  with   the  clerk  at  the  time  the  petition  is  filed  in 

IB.  A.   1898,  Sec.   iid.  ^GormlcN'   v.    Bunyan.    138   U.   S. 

'Bailey   v.   Glover,   21    Wall.   342,  623.  630,  34   L.   Ed.    ro86;   Lyon   v. 

22   L.    Ed.   638.  Bertram,   20    How.    149,    15    L.    Ed. 

^Comegys    v.    McCord,    11    Ala.  847;    Rctzer    v.    Wood,    109    U.    S. 

932;   Archer  v.   Duval,    i    Fla.  219;  187,  27  L.   Ed.  900;   Upton  v.   Mc- 

Friedlander  v.    Ilolloman,   9   B.    R.  Laiighlin,  105  U.  S.  640,  26  L.  Ed. 

.331;    Peiper    v.    Hanner,    5    B.    R.  1197. 

252.  8  Harris  v.  Collins,  13  Ala.  388. 

'«  Pike   V.   Lowell,   :i2   Me.   245.  '  B.     A.     1898.     Sec.    48;     In    re 

••  Bank    v.    Shcnrian,     loi    U.    S.  Screws,   147   Fed.   Rep.  989. 

405,  25  L.   Ed.  866.  1  B.  A.   1898,  Sec.  48. 

".Amy    V.    Watertown     (No.    2), 
130  U.  S.  320. 


432  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

each  case,  except  when  a  fee  is  not  required  from  a  N-ohnitary 
bankrupt,  and  from  estates  whicli  they  have  administered, 
such  commissions  on  sums  to  be  paid  as  dixidends  and  com- 
missions as  may  be  allowed  by  the  courts,  not  to  exceed  three 
per  centum  on  the  first  five  thousand  dollars  or  less,  two  per 
centum  on  the  second  i\\c  thousand  dollars  or  part  thereof, 
and  one  per  centum  on  such  sum.s  in  excess  of  ten  thusand 
dollars." 

Whether,  under  this  provision,  a  trustee  should  be  allowed 
a  commission  upon  claims  of  secured  creditors  which  passed 
through  his  hands  depended  upon  whether  such  payments  were 
considered  dividends  within  the  meaning  of  the  statute.  In 
one  case  it  was  held  to.  be  a  dividend  and  a  referee  was  al- 
lowed commissions  on  secured  debts."  The  courts  generally 
held  that  the  referee  and  trustee  were  not  entitled  to  com- 
missions on  claims  of  secured  creditors.^  This  question  was 
definitely  settled  by  the  amendment  of  Feb.  5,  1903.*  Sec. 
48(7  was  amended  to  read :  "Trustees  shall  receive  for  their 
services,  payable  after  they  are  rendered,  a  fee  of  five  dollars 
deposited  with  the  clerk  at  the  time  the  petition  is  filed  in 
each  case,  except  when  a  fee  is  not  required  from  a  voluntary 
bankrupt,  and  from  estates  which  they  have  administered 
such  commissions  on  all  moneys  disbursed  by  them  as  may  be 
allowed  by  the  courts,  not  to  exceed  six  per  centum  on  the 
first  five  hundred  dollars  or  less,  four  per  centum  on  moneys 
in  excess  of  five  hundred  dollars  and  less  than  fifteen  hundred 
dollars,  two  per  centum  on  moneys  in  excess  of  fifteen 
hundred  dollars  and  less  than  ten  thousand  dollars,  and  one 


^  In  re  Barber,  97  Fed.  Rep.  547,  800,    3    Am.     B.     R.     135;     In    re 

3  Am.  B.  R.  306.  Epstein,   109  Fed.  Rep.  878,  6  Am. 

3  In     re     Anders     Push     Button  B.  R.   191 ;  In  re  Hinckel  Brewing 

Tel.     Co.,      136     Fed.      Rep.     995,  Co.,  124  Fed.  Rep.  702,  10  Am.  B. 

14    Am.    B.    R.    643 ;    In    re    Fort  R.  692 ;  Jn  re  Mammoth  Pine  Lum- 

Wayne  Electric  Corp.,  94  Fed.  Rep.  ber  Co.,   116  Fed.  Rep.  731,  8  Am. 

109,   I   Am.   B.   R.   706;  In   re   Utt  B.   R.  651;    see  also  In   re   Kaiser, 

(C.  C.  A.  7th  Cir.),  105  Fed.  Rep.  112  Fed.  Rep.  955,  8  Am.  B.  R.  108. 

754,  5  Am.  B.  R.  383,  2  N.  B.  N.  ^  ^2  Stat,  at  L.  797. 
386;   In   re   Fielding,  96  Fed.   Rep. 


TRUSTEES.  433 

per  centum  on  moneys  in  excess  of  ten  thousand  dollars.  And 
m  case  of  the  confirmation  of  a  composition  after  the  trustee 
has  quahfied  the  court  may  ahow  him,  as  compensation,  nut 
to  exceed  one-half  of  one  per  centum  of  the  amount  to  be 
paid  the  creditors  on  such  composition." 

Under  this  provision  a  trustee  is  entitled  to  the  same  com- 
missions on  moneys  disbursed  to  secured  creditors  as  on  that 
paid  to  unsecured  or  general  creditors.'^  \Mien  property  sub- 
ject to  liens  is  sold  by  the  consent  of  the  lien-holders,  the  trus- 
tee IS  entitled  to  commissions  on  the  purchase  price  in  full, 
even  when  the  lien-holder  is  the  purchaser.*^  Trustees  are 
not  entitled  to  additional  compensation  for  carrying  on  the 
business  of  the  bankrupt." 

In  the  event  of  an  estate  being  administered  by  three  trus- 
tees mstead  of  one  trustee  or  by  successive  trustees,  the  court 
shall  apportion  the  fees  and  commissions  between  them  ac- 
cording to  the  services  actually  rendered,  so  that  there  shall 
not  be  paid  to  trustees  for  tlie  administering  of  any  estate 
a  greater  amount  than  one  trustee  would  be  entitled  to.^ 

The  court  may,  in  its  discretion,  withhold  all  compensa- 
tion from  any  trustee  who  has  been  removed  for  cause.^ 

The  trustee  must  within  thirty  days  after  the  adjudication, 
file  a  certified  copy  of  the  decree  of  adjudication  in  the  office 
where  conveyances  of  real  estate  are  recorded  in  every  county 
where  the  bankrupt  owns  real  estate  not  exempt  from  execu- 
tion, and  pay  the  fee  for  such  filing,  and  he  shall  receive  a 
compensation  of  fifty  cents  for  each  copy  so  filed,  which,  to- 
gether with  tlie  filing  fee,  shall  be  paid  out  of  the  estate  of 
the  bankrupt  as  a  part  of  the  cost  and  disburser.ients  of  the 
proceedings.' " 

"In  re  Cramond.  145  Fed.  Rep.  136  Fed.  Rep.  983,  14  Am.  B.  R. 
566;  In  re  Sandford  Inirnfturc  168;  In  re  Richards.  127  Fed  Rep 
Mfg.  Co.,  126  Fed.  Rep.  888,  11  y~2,  u  Am.  P..  R.  s8t  ;  In  re  Kirk- 
Am.    B.    R.   414.  p.,t,.ic,,    (C     C.    A.    6th    Cir.),    148 

"/u    re    .Sanford    Furniliire    MtV.  |'"od.   Rep.  . 

Co.,  126  Fed.  Rep.  888.   11   Am.   H.  Ml   A.    1898,  Sec.  48^. 

^    4T4.  0  B.   A.   1898.   Sec.  48^. 

'^  In   re   Cambridge    I.umhcr    Co.,  1"  B.  A.   1898.  Sec.  47^. 


434  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

The  conipensalion  allowcil  to  trustees  1)\'  the  act  is  in  full 
compensation  for  the  services  performed  by  them.  A  trustee, 
who  is  an  attorney,  is  not  entitled  to  additional  compensation 
lor  professional  ser\ices  rendered  the  estate."  The  act 
provides  that  neither  the  referee  nor  the  trustee  shall  in  any 
from  or  guise  receixe,  nor  shall  tlie  court  allow  them,  an\' 
other  or  further  com[)ensation  for  their  services  than  tha't 
expiessly  authorized  and  prescribed  by  this  act.^"  But  this 
compensation  does  not  include  expenses  necessarily  incurred 
in  the  performance  of  their  duties  and  allowed  upon  the  set- 
tlement of  their  accounts.^'"' 

In  any  case  in  which  the  fees  of  the  trustee  are  not  required 
by  the  act  to  be  paid  by  a  debtor  before  filing  his  petition  to 
be  adjudged  a  bankrupt,  the  judge,  at  any  time  during  the 
pendency  of  the  proceedings  in  bankruptcy,  may  order  those 
fees  to  be  paid  out  of  the  estate ;  or  may.  after  notice  to  the 
bankrupt,  and  satisfactory  proof  that  he  then  has  or  can  ob- 
tain the  money  with  which  to  pay  those  fees,  order  hini  to 
pay  them  within  a  time  specified,  and  if  he  fails  to  do  so, 
may  order  his  petition  to  be  dismissed.^* 

"/w  re  Screws,  147  Fed.  Rep.  989;  In  re  George  Halbert  Co-,  134  Fed. 

In  re  McKenna,  137  Fed.  Rep.  611,  Rep.  236,  13  Am.  B.  R.  399. 

15  Am.  B.  R.  4;  In   re  Felson,   139  ''Gen.    Ord.    35,    par.    3;    B.    A. 

Fed.  Rep.  281,   15  Am.  B.   R.   185;  1898,  Sec.  62;  /;;  re  Carolina  Coop- 

In    re   Carolina    Cooperage    Co.,   96  erage  Co..  96  Fed.  Rep.  950,  3  Am. 

Fed.  Rep.  950,  3  Am.  B.  R.   154.  B.  R.   154,  2  N.  B.  N.  23. 

^'Sec.   72    added    by    the    act    of  "Gen.    Ord.    35,   par.   4. 
Feb.    5,    1903,    2>-i    Stat,    at    L.    797. 


WHAT    PASSES    TO    THE    TRUSTEE. 


435 


CHAPTER  XVI. 

WHAT    PASSES    TO    THE    TRUSTEE. 

§  149.     Title  to  bankrupt's  property. 

The  title  to  the  property  of  the  bankrupt,  whatever  it  may 
he,  remains  in  the  bankrupt  until  a  trustee  is  appointed  and 
qualified.^  Thus  where  no  trustee  is  appointed  the  title  of 
the  bankrupt  is  not  divested."  It  has  been  held  that  afier  a 
petition  filed,  and  before  a  trustee  was  appointed,  a  bankrupt 
might  redeem  land  sold  for  taxes.^  So  also  a  bankrupt  has 
been  permitted  to  institute  a  suit  in  his  own  name  for  in- 
fringement of  a  copyright  after  the  filing  of  "a  petition  and 
prior  to  the  appointment  of  a  trustee.*  But  a  bankrupt  can 
not  maintain  a  suit  in  his  own  name  in  relation  to  his  prop- 
erty, not  exempt,  pending  bankruptcy  proceedings  after  the 
appointment  of  a  trustee.^ 

The  title  of  the  bankrupt  in  the  interval  between  the  ad- 
judication and  the  appointment  of  the  trustee  is  defeasible, 
and  when  the  trustee  is  appointed  is  divested  as  of  the  date 
of  the  adjudication  of  bankruptcy.^     During  this  period  the 


^  Conner  v.  Long,  104  U.  S.  228, 
26  L.  Ed.  723 ;  Eyster  v.  Gaff,  91 
U.  S.  521,  23  L.  Ed.  403;  Hampton 
V.  Rouse,  22  Wall.  263,  275,  22  L. 
Ed.  755 ;  Rand  v.  Iowa  Central  Ry. 
Co.,  186  N.  Y.  58,  16  Am.  B.  R. 
692;  Fuller  V.  N.  Y.  Fire  Insurance 
Co.,    184  Mass.    12. 

'  Rand  v.  Iowa  Central  Ry.  Co., 
186  N.  Y.  58.  16  Am.  B.  R.  692; 
Robinson  v.  Hall,  No.  11592  Fed. 
Cas.,  8  Ben.  61. 

^  Hampton  v.  Rouse,  22  Wall. 
263,  22  L.  Ed.  755. 

■•  Myers  v.  Callaghan,  5  Fed.  Rep. 
726. 


'Pickens  v.  Dent  fC.  C.  A. 
4th  Cir.),  106  Fed.  Rep.  653,  5 
Am.  B.  R.  644;  affirmed  sub  nom. 
Pickens  v.  Roy,  187  U.  S.  177,  47 
L.  Ed.   128,  9  Am.  B.  R.  47. 

•'' B.  A.  1898,  Sec.  70a:  Conner 
V.  Long,   104  U.   S.  230,  26  L.  Ed. 

723. 

In  Carpenter  Bros.  v.  O'Con- 
nor, 16  O.  C.  C.  526,  an  application 
was  made  to  the  state  court  for  an 
order  directing  a  receiver  appoiiUod 
by  that  court  after  an  adjudication 
in  a  court  of  bankruptcy,  to  deliver 
property  of  the  bankrupt  in  his 
possession  to  a  trustee,  subsequent- 


430 


LAW   AND  PROCEEDINGS  IN    BANKRUPTCY. 


bankrupt  occupies  a  sort  oi  fiduciary  relation  to  his  creditors." 
All  titles  derived  under  and  tln'ough  the  bankrupt  originating 
during  this  interval  are,  by  force  of  law,  and  without  regard 
to  the  knowledge  or  motive  of  the  claimant,  defeated  by  the 
appointment  of  a  trustee.'"* 

Transfers  made  by  the  bankrupt  after  the  Ijling  of  the  peti- 
tion and  before  the  adjudication  are  to  l)c  considered  in  the 
same  class  with  those  made  within  four  months  prior  to  the 
commencement  of  the  bankruptcy  proceedings.  A  bona  iide 
sale  for  value  is  valid.  But  as  the  filing  of  a  petition  in  bank- 
ruptcy is  deemed  notice  to  all  the  world,"  it  would  appear 
that  no  bona  fide  sale  could  be  made  during  this  interval. 
A  lienor  or  pledgee  may,  however,  perfect  any  title  during 
this  period  which  the  nature  of  his  lien  permits.^" 

The  trustee,  or  his  successor,  upon  his  appointment  and 
Cjualification  is  vested  by  operation  of  law,  without  a  deed  of 
conveyance,  with  the  title  of  the  bankrupt  as  of  the  date  he 
zvas  adjudged  a  bankrupt}'^     In  this  respect  the  act  of  1898 


1\'  appointed  by  the  creditors  in 
the  proceedings  in  bankruptcy,  on 
the  ground  that  the  trustee's  title 
vested  as  of  the  date  of  adjudica- 
tion and  prior  to  the  property 
coming  into  the  possession  of  the 
receiver.  The  appHcation  was 
granted. 

"  March  v.  Heaton,  No.  9061  Fed. 
Cas.,  I  Lowell  278;  Williams  v. 
Merritt,   103  Alass.   187. 

8  Bank  v.  Sherman,  loi  U.  S. 
403,  25  L.  Ed.  866;  Taylor  v.  Rob- 
ertson, 21  Fed.  Rep.  209;  In  re 
Randall,  No.  11552  Fed.  Cas.,  i 
Saw.  56 ;  Carpenter  Bros.  v.  O'Con- 
nor,   16    O.    C.    C.    526. 

»  Mueller  v.  Nugent,  184  U.  S. 
I,  46  L.  Ed.  405,  7  Am.  B.  R.  224; 
Bank  v.  Sherman,  loi  U.  S.  406,  25 
L.  Ed.  866. 

'"/)!  re  Mcrtens  (C.  C.  A.  2d 
Cir.),    144   Fed.    Rep.   818,    15   Am. 


B.  R.  362,  the  court  said:  "It  was 
intended,  we  think,  to  permit  all 
legitimate  business  transactions  be- 
tween a  debtor  and  those  dealing 
with  him  to  be  carried  out  and 
consummated  as  freely,  until  he  has 
been  adjudicated  a  bankrupt,  as 
though  no  proceeding  were  pend- 
ing. In  many  cases  the  proceeding 
against  an  alleged  bankrupt  is  un- 
founded, and  for  this  and  other 
reasons  never  culminate  in  an  ad- 
judication. While  the  filing  of  a 
petition  in  bankruptcy  is  a  caveat 
to  all  the  world,  the  notice  ought 
not  to  have  the  effect  of  paralyzing 
all  buisness  dealings  with  the  debt- 
or, or  to  prevent  lienors  or  pledgees 
from   enforcing  their  contracts." 

11  B.  A.  1898,  Sec.  700;  In  re  En- 
gle,  105  Fed.  Rep.  893,  5  Am.  B.  R. 
372. 


WHAT    PASSES    TO    THE    TRUSTEE.  437 

differs  from  the  act  of  1867,  which  provided  for  a  deed  of 
conveyance  from  the  register  to  the  assignee,  and  that  such 
assignment  should  relate  back  to  the  commencement  of  the 
proceedings   in   bankruptcy.'" 

A  certified  copy  of  the  order  approving  the  bond  of  a  trus- 
tee is  conclusive  evidence  of  the  vesting  in  him  of  the  title 
to  the  property  of  the  bankrupt,  and  if  recorded  miparts  the 
same  notice  that  a  deed  from  the  bankrupt  to  the  trustee  if 
recorded  would  have  imparted  had  no  bankruptcy  proceed- 
ings intervened/'^ 

The  trustee  must  within  thirty  days  after  the  adjudication, 
file  a  certified  copy  of  the  decree  of  adjudication  in  the  ofifice 
where  conveyances  of  real  estate  are  recorded  in  every  county 
where  the  bankrupt  owns  real  estate  not  exempt  from  execu- 
tion, and  pay  the  fee  for  such  filing,  and  he  shall  receive  a 
compensation  of  fifty  cents  for  each  copy  so  filed,  v/hich,  to- 
gether with  the  filing  fee,  shall  be  paid  out  of  the  estate  of 
the  bankrupt  as  a  part  of  the  cost  and  disbursements  of  the 
proceedings/* 

The  trustee  takes  the  title  to  all  the  bankrupt's  property  in 
this  country  wherever  situated,  even  though  it  be  in  a  state 
other  than  that  in  which  the  bankruptcy  proceedings  are  pend- 
ing/'^ 

A  statutory  conveyance  can  have  no  extra  territorial  efifect 
upon  real  estate,  and  will  not.  therefore,  convey  title  to  prop- 
erty situated  in  a  foreign  country.^''  .  The  statute,  however, 
provides  that  the  bankrupt  shall  "execute  to  his  trustee  trans- 
fers all  of  his  property  in  foreign  countries."  ^^     In  this  way 

"R.  S.  Sec.  5044.'  '•'B.   A.   1898,   Sec.  47c,  32  Stat. 

^3  B.  A.  i8g.S,  Sec.  21c;  see  Shaw-  at  L.  797. 
han    V.    Wherritt,    7    How.   627,    12  i"' /»    re    Wilka,    131    Fed.    Rep. 

L.    Ed.   847;    llerndon   v.    Howard,  1004,  12  Am.  B.  R.  727,  affirmed  .?»& 

9  Wall.  664,    19  L.  Ed.  809;  Alex-  nom;  In  re  Granite  City  Bank  (G. 

andcr  v.   McGullough,   2,2  Leg.   Int.  G.  A.  8th  Gir.).    137  I'cd  Rep.  818, 

?,^(>;    Gove   V.    Piircell.     56    N.     Y.  14  Am.  B.  R.  404. 
649;   Dambmann   v.   White,  48   Gal.  '"Oakey  v.  Bennett,   11   How.  a, 

4.19;   Burk  V.   Winters,  28  Ark.  6;  13  L.  Ed.  593;  Barnett  v.  Pool,  23 

Rogers  v.  Stevenson,   16  Minn.  68;  Tex.  517. 
Zantzinger  v.   Ribhic,  36   Md.   32.  '''  B.   A.    1898,   Sec.   7,  clause  5. 


438 


LAW   AND  PROCEEDINGS  IN    BANKRUPTCY. 


the  trustee  becomes  vested  with  the  title  to  all  the  property 
of  the  bankrupt  situated  in  foreign  countries  as  well  as  that 
in  the   United  States. 

The  trustee  is  vested  by  operation  of  law  "with  the  title 
of  the  bankrupt."  ^'^  He  does  not  occupy  the  position  of  a 
purchaser.^'-'  It  was  held  by  many  courts  that  the  trustee,  by 
virtue  of  the  bankruptcy  proceedings,  became  vested  with 
the  rights  of  an  attachment  or  execution  creditor,-"  but  the 
supreme  court  overruled  this  theory.-^  It  is  now  settled  that 
the  trustee  takes  no  greater  interest  in  or  better  title  to  the 
property  than  the  bankrupt  or  his  creditors  had  at  the  time 
when  his  title  accrues.""-  He  is  vested  with  the  rights  of  cred- 
itors to  recover  property  transferred  in  fraud  of  the  act."^^ 
\Miere  the  bankrupt  would  be  estopped  the  trustee  is  estopped, 
except  when  he  is  subrogated  to  rights  of  creditors.^*  So  also 
it  has  been  held  that  where  a  state  statute  gives  to  the  party 
paying  usurious  interest  the  right  to  recover  it,  the  trustee 
may  do  so,"''  but  not  otherwise.-'^     Where  a  bankrupt  is  a 


''B.  A.  1898,  Sec.  70a. 

"Hewit  V.  Berlin  Mach.  Wks., 
194  U.  S.  296,  48  L.  Ed.  986,  II  Am. 
B.  R.  709. 

""/n  re  Ducker  (C.  C.  A.  6th 
Cir.),  134  Fed.  Rep.  43.  13  Am. 
B.  R.  760;  In  re  Pekin  Plow  Co. 
(C.  C.  A.  8th  Cir.),  112  Fed.  Rep. 
308,  7  Am.  B.  R.  369;  Chesapeake 
Shoe  Co.  V.  Seldner  (C.  C.  A.  4th 
Cir.),    122   Fed.    Rep.    593,    10  Am. 

B.  R.  466;  In  re  First  Nat.  Bank 
(C.  C.  A.  6th  Cir.),  135  Fed.  Rep. 
62,   14  Am.  B.  R.   180. 

=^York  Mfg.  Co.  v.  Cassell,  201 
U.  S.  344,  50  L.  Ed.  782,  15  Am.  B. 
R.  633. 

^-  Hewit  V.  Berlin  Mach.  Wks., 
194  U.  S.  296,  48  L.  Ed.  986,  ir 
Am.  B.  R.  709;  York  Mfg.  Co.  v. 
Cassell,  201  U.  S.  344,  50  L.  Ed. 
782,  15  Am.  B.  R.  633,  Southern 
Pine  Co.  v.  Savannah  Tru.st  Co.  (C. 

C.  A.  5th  Cir.),  141  Fed.  Rep.  802, 
i5  Am.  B.  R.  618;  First  Nat.  Bank 


V.  Staake,  202  U.  S.  141,  50  L.  Ed. 
967,  15  Am.  B.  R.  639. 

'^  Sec.   157  ei  scq.,  post. 

'*  First  Nat.  Bank  v.  Staake,  202 
U.  S.  141,  50  L.  Ed.  967,  15  Am. 
B.  R.  637;  Hewit  v.  Berlin  Machine 
Works,  194  U.  S.  296,  48  L.  Ed. 
986,  II  Am.  B.  R.  709;  York  Mfg. 
Co.  V.  Cassell,  201  U.  S.  344,  50  L. 
Ed.  782,  15  Am.  B.  R.  633. 

-^  Moore  v.  Jones,  2^  Vt.  739 ; 
Wheelock  v.  Lee,  10  B.  R.  363 ;  In 
re  Kellogg  (C.  C.  A.  2d  Cir.),  121 
Fed.  Rep.  333,  10  Am.  B.  R.  7,  af- 
firming 113  Fed.  Rep.  120,  7  Am. 
B.  R.  623. 

-"Tiffany  v.  Boatman's  Savings 
Institution,  18  Wall.  375,  21  L.  Ed. 
868;  Bromley  v.  Smith,  No.  1922 
Fed.  Cas.,  s.  c.  2  Biss.  511 ;  National 
Bank  v.  Gish's  assignee,  72  Penn 
13;  Nichols  V.  Bellows,  22  Vt.  581; 
Sparhawk  v.  Cochran,  No.  13203 
Fed.  Cas.,  s.  c.  30  Leg.  fnt,  233. 


WHAT    PASSES    TO    THE    TRUSTEE. 


439 


beneficiary  subject  to  the  discretion  of  a  trustee  under  a  will, 
he  has  no  interest  which  ma}-  be  enforced  by  his  trustee  in 
bankruptcy."' 
The  trustee  takes  the  title  of  the  bankrupt  subject  to  all  eq- 
uities, liens  or  incumbrances,  whether  created  by  operation  of 
law  or  by  the  act  of  the  bankrupt,  which  existed  against  the 
property  in  the  hands  of  the  bankrupt,"^  except  in  cases  of 
levies,  judgments,  attachments  or  other  judicial  liens  created 
against  the  property  within  four  months  preceding  the  com- 
mencement of  proceedings  in  bankruptcy,-''  and  except  in  cases 
where  the  disposition  of  property  by  the  bankrupt  is  declared 
by  law  to  be  fraudulent  and  void.^*'  Another  exception  is 
where,  as  in  unrecorded  conditional  sales  and  chattel  mort- 
gages, the  bankrupt's  title  is  not  good  against  some  third 
person,  but  because  of  state  laws  is  good  in  favor  of  creditors. 
In  such  cases  the  trustee  is  given  the  right  of  the  creditors  and 
gets  title  to  the  goods. ^ 


31 


"  Nichols  V.  Eaton,  91  U.  S.  716, 

23  L.  Ed.  254. 

^  Hevvit  V.  Berlin  IMachine 
Works,  194  U.  S.  296,  48  L.  Ed. 
986,  II  Am.  B.  R.  708;  York  Mfg. 
Co.,  201  U.  S.  344.  50  L.  Ed.  782, 
15  Am.  B.  R.  633;  Yeatman  v. 
Savings    Institution,   95    U.    S.    764, 

24  L.  Ed.  589:  .Metcalf  v.  Barker, 
187  U.  S.  165,  47  L.  Ed.  122,  9 
Am.  B.  R.  36;  Hinnphrey  v.  Tat- 
man,  198  U.  S.  91,  49  L.  Ed.  956,  14 
Am.  B.  R.  74;  Tliompson  v.  Fair- 
banks, 196  U.  S.  516,  49  L.  Ed.  577, 
13  Am.   B.   R.  437. 

''  B.  S.  1898,  Sec.  67f;  First  Nat. 
Bank  v.  Staake,  202  U.  S.  141,  50 
L.  Ed.  967,  15  Am.  B.  R.  639; 
Clarke  v.  Larremore,  188  U.  S. 
48O,  47  L.  Fd.  555,  9  Am.  B.  R. 
476;  Cox  V.  State  Bank,  125  Fed, 
Rep.  654,  IT  Am.  B.  R.  112;  In  re 
Hymes  Buggy  &  Implement  Co., 
1.30  I-ed.  Rep  977,  12  Am,  B.  R. 
47";   see   Sec     192,  post. 


="•6.  A.  1898.  Sec.  6oh;  Pirie  v. 
Trust  Co.,  182  U.  S.  438,  45  L.  Ed. 
1 171,  5  Am.  B.  R.  814;  Kaufman 
V.  Tredway,  195  U.  S.  271,  49  L. 
Ed.  190,  12  Am.  B.  R.  862;  see 
Sec.  194,  post- 

=*'B.  A.  1898,  Sec.  670;  In  re 
Garcewich  (C.  C.  A.  2d  Cir.),  115 
Fed.  Rep.  87,  8  Am.  B.  R.  149; 
In  re  New  York  Economical  Print- 
ing Co.  (C.  C.  A.  2d  Cir.),  no 
Fed.  Rep.  514,  6  Am.  B.  R.  615; 
In  re  Gait,  120  Fed.  Rep.  443.  9 
Am.  B.  R.  682;  Chesapeake  Shoe 
Co.  V.  Seldner  (C.  C.  A.  4th  Cir.), 
122  Fed.  Rep.  593,  10  Am.  B.  R. 
466;  In  re  Hull,  115  Fed.  Rep.  858, 
8  \m.  B.  R.  302. 

The  trustee,  however,  takes  the 
title  only  to  the  extent  of  the  claims 
ot  those  again.st  whom  tlie  title 
of  the  third  party  would  not  be 
good;  In  re  Ducker  (C.  C.  A.  6th 
Cir.),  134  Fed.  Rep.  43,  13  Am.  B. 
R.  7O0;  //;  re  Garcewich   (C    C.  A. 


440 


LAW    AND    I'ROCKliDlNC.S   IN    BANKRUPTCY. 


Where  property  on  whieli  there  is  a  xahd  h'en  is  sold  by  a 
receiver  in  a  foreclosure  suit  brought  by  the  lienor  the  title 
to  the  proceeds  passes  to  the  trustee  after  satisfying  the  lien 
and  costs. 

The  title  remains  in  the  trustees,  unless  conveyed  to  a  pur- 
chaser;'- until  the  estate  is  linally  distributed  by  direction  of 
the  court. 

Upon  the  confirmation  of  a  composition  offered  by  a  bank- 
rupt the  title  to  his  property  revests  in  him.""''  But  w^herever 
a  composition  is  set  aside  or  a  discharge  revoked  the  trustee 
is,  upon  his  appointment  and  qualification,  vested  with  the 
title  to  all  of  the  property  of  the  bankrupt  as  of  the  date  of 
the  final  decree  setting  aside  the  composition  or  revoking  the 
discharge.^* 

§  150.     The  possession  of  the  bankrupt's  property. 

As  soon  as  a  trustee  is  appointed  and  qualified  he  is  vested 
with  the  title  to  the  bankrupt's  property.  Property  on  which 
there  is  a  mortgage  or  other  lien  passes  to  the  trustee,  and  it  is 
therefore  in  the  custody  of  the  court  of  bankruptcy.'^ 

The  vesting  of  the  title  gives  him  constructive  possession 
of  the  property  the  instant  the  title  passes."  Such  property 
is  thereby  brought  into  the  bankruptcy  court  and  placed  in 
its  custody  and  under  its  protection  as   fully  as  if  actually 


2(1  Cir.),  115  Fed.  Rep.  87,  8  Am. 
B.  R.  149;  In  re  N.  Y.  Econ.  Print- 
ing Co.  (C.  C.  A.  2d  Cir.),  no 
Fed.  Rep.  814,  6  Am.  B.  R.  615. 

'-B.  A.  1898,  Sec.  70c. 

^B.  A.  1898,  Sec.  7of.  See  Ste- 
vens V.  Earles,  25  Mich.  40.  See 
King  V.  Remington,  36  Minn.  15; 
Herndon  v.  Davenport,  75  Tex. 
462;  Oliver  v.  Sanborn,  60  Mich. 
346. 

^B.  A.   1898,   Sec.  yod. 

'In  re  Rochford  (C.  C.  A.  8th 
Cir.),  124  Fed.  Rep.  182,  10  Am. 
B.  R.  608;  In  re  Kellogg  (C.  C.  A. 


2d  Cir.),  121  Fed.  Rep.  2>2)Z,  10 
Am.  B.  R.  7 ;  In  re  Jersey  Island 
Packing  Co.  (C.  C.  A.  gtli  Cir.), 
138  Fed.  Rep.  625,  14  Am.  B.  R. 
689;    O'Dell    V.    Boyden,    148    Fed. 

Rep.  . 

"In  re  Granite  City  Bank  (C.  C. 

A.  8th  Cir.),  137  Fed.  Rep.  818, 
14  Am.  B.  R.  404;  In  re  Weinger, 
Bergman  &  Co.,  126  Fed.  Rep.  875, 
II  Am.  B.  R.  424;  In  re  Jersey 
Island  Packing  Co.  (C.  C.  A.  9th 
Cir.),    138   Fed.    Rep.   625,    14  Am. 

B.  R.  689. 


WHAT    PASSES    TO    THE    TRUSTEE. 


441 


brought  into  the  visible  presence  of  the  court.  Being  in  the 
custody  of  the  bankruptcy  court,  no  other  court  and  no  per- 
son acting  under  any  process  from  any  other  court  can,  with- 
out permission  of  tiie  bankruptcy  court,  interfere  with  it,  and 
ro  so  interfere  is  a  contempt  of  the  bankruptcy  court."  This  is 
true,  even  if  the  trustee  is  not  in  manual  possession  of  the 
property.* 

The  filing  of  a  petition  in  bankruptcy  is  a  cai^caf  to  all  the 
world  and  in  effect  an  attachment  and  injunction.'"'  The  effect 
of  filing  such  a  petition  is  to  place  the  property  of  the  bank- 
rupt constructively  in  the  custody  of  the  court  of  bankruptcy. 
Especially  if  the  petition  is  subsequently  sustained  by  the 
court.®  Where  the  petition  is  dismissed  it  may  be  doubted 
if  the  mere  filing  of  a  petition  will  be  held  such  custody  as  to 
render  void  dealings  with  such  property  pending  an  adjudica- 
tion. 


'White  V.  Schloerb,  178  U.  S. 
542,  44  L.  Ed.  1 183,  4  Am.  B.  R. 
178.     See  also   Sec.   18,  ante- 

A  trustee  is  an  officer  of  the 
court,  and  his  possession  is  the 
possession  of  the  court,  and  the 
famihar  cases  turning  upon  the 
relations  of  marshal  and  receivers 
are  applicable  with  equal  force  to 
the  protection  of  the  trustee.  Tay- 
lor V.  Carryl,  20  How.  583,  15  L. 
Ed.  1028;  Freeman  v.  Howe,  24 
How.  450,  16  L.  Ed.  749 ;  Shields  v. 
Coleman,  157  U.  S.  168,  39  L.  Ed. 
660;  Porter  v.  Sabin,  149  U.  S- 
473.  37  L.  Ed.  815;  McLean  v. 
.Mayo,  113  Fed.  Rep.  106,  7  Am. 
B.   R.   115. 

*  See    Sec.    23,    ante,    and    cases 
there  cited. 

In   O'Dell  V.   Boydcn    (C.   C.   A. 

r)th    Cir.),    148   Fed.    Rep.   ,   in 

speaking  of  a  membership  in  a 
stock  exchange  as  an  asset  which 
passed  to  the  trustee,  Judge  Lurtoij 
said :   ''It  was  as  much   in  his  cus- 


tody and  possession  as  such  a 
specie  of  property  is  capable  of.  To 
deny  the  trustee's  possession  would 
be  to  deny  the  capability  of  posses- 
sion of  a  chose  in  action  or  other 
incorporal  right  or  equity.  The 
possession  may  be  constructive  and 
not  manual,  but  it  is  only  so  be- 
cause such  property  is  not  capable 
of  a  more   tangible  custody." 

''Mueller  v.  Nugent,  184  U.  S. 
I,  7  .A.m.  B.  R.  224. 

"  In  re  Weinger,  Bergman  &  Co., 
126  Fed.  Rep.  875,  11  Am.  B.  R. 
424;  In  re  Jersey  Island  Packing 
Co.  (C.  C.  A.  9th  Cir.).  138  Fed. 
Rep.  625,  14  .^.m.  B.  R.  689.  Con- 
sult White  V.  Schloerb,  178  U.  S. 
542,  44  L.  Ed.  1 183,  4  Am.  B.  R. 
178;  In  re  Brooks,  91  Fed.  Rep. 
508,  I  Am.  B.  R.  531 ;  Wayne  Knit- 
ting Mills  Co.  V.  Nugent,  104  Fed. 
Rep.  530,  4  Am.  B.  R.  747,  s.  c. 
184  U.  S.  I,  46  L.  Ed.  405,  7  Am. 
B.  R.  224. 


442 


LAW    AND   TROCEEDINGS   IN    BANKRUPTCY. 


It  is  the  duty  of  the  bankrupt  to  prepare,  make  oath  to  and 
rile  in  court  within  ten  days,  unless  further  time  is  granted, 
after  the  adjudication,  if  an  involuntary  bankrupt,  and  with 
the  petition  if  a  voluntary  bankrupt,  a  schedule  of  his  prop- 
erty, showing  the  amount  and  kind  of  property,  the-  location 
thereof,  its  money  value  in  detail.'  The  bankrupt  should 
surrender  to  the  trustee  the  actual  possession  of  all  of  his 
property,  whether  included  in  the  schedule  or  not.^  The  trus- 
tee must  himself  be  active.  He  should  assert  his  right  to  the 
property  if  the  bankrupt  does  not  voluntarily  surrender  it.^ 
A  certified  copy  of  the  order  approving  his  bond  is  sufficient 
authority  for  a  trustee  to  demand  actual  possession.^"  If  the 
bankrupt  fails  or  refuses  to  deliver  any  part  of  the  property 
in  his  possession  the  trustee  may  procure  an  order  of  court 
to  compel  him  to  do  sc ."  The  court  will  enforce  such  an  or- 
der b}-  commitment  if  ^lecessary.^" 

Where  an  officer  ot  a  court  has  possession  of  the  property 
the  court  will  direct  him  to  deliver  it  to  the  trustee  as  soon  as 
he  is  appointed  and  qualified. ^^ 

It  has  been  held  that  a  referee  may  enjoin  the  interference 
with  the  property  which  has  come  into  his  possession 


14 


'B.   A.    1898,    Sec.   7.   clause  8. 

''  In  re  Kaplan,  144  Fed.  Rep. 
159,  16  Am.  B.  R.  267;  In  re 
Knight,  125  Fed.  Rep.  2>S  ■  n  Am. 
B.  R.  I ;  In  re  McKtniK.,  9  Fed. 
Rep.  29;  In  re  Smith,  93  Ved.  Rep. 
791,  2  Am.  B.  R.  \(ji .  (jee  also 
In  re  Mayer  (C.  C.  A.  J  3  Cir.), 
108  Fed.  Rep.  599,  6  Am.  B.  R. 
117. 

■  It  was  held  in  England  that  the 
mere  fact  that  the  trustee  had  not 
taken  possession  of  a  debtor's  prop- 
erty for  two  months  after  the  date 
of  his  appointment,  but  had  al- 
lowed the  debtor  to  continue  trad- 
ing as  before,  was  not  sufficient  to 
destroy  his  right  to  the  property. 
^x  parte  Cooper,  39  L.  T.  260. 

'"B.  A.   1898,  Sec.  2ie. 


^^  In  re  Kurtz,  125  Fed.  Rep.  992, 
II  Am.  B.  R.  129;  Schweer  v. 
Brown  (C.  C.  A.  8th  Cir.),  130 
Fed.  Rep.  328,  12  Am.  B.  R.  178; 
In  re  Henderson,  130  Fed.  Rep. 
385,  12  Am.  B.  R.  351 ;  In  re  How, 
No.  6747  Fed.  Cas.,  s.  c.   18  N.  B 

R.  565. 

'-Mueller  v.  Nugent,  184  U.  S. 
I,  46  L.  Ed.  405,  7  Am.  B.  R.  224; 
In  re  Rosser  (C.  C.  A.  8th  Cir.), 
loi  Fed.  Rep.  562,  4  Am.  B.  R. 
153;  In  re  Wilson,  116  Fed.  Rep. 
419,  8  Am.  B.  R.  612;  Schweer  v. 
Brown  (C.  C.  A.  8th  Cir.),  130 
Fed.  Rep.  328,  12  Am.  B.  R.   178. 

"  Carpenter  Bros.  v.  O'Conner, 
16  O.   C.   C.   526. 

"  In  re  Adams,  134  Fed.  Rep. 
142,   14  Am.   B.   R.  2^. 


WHAT    PASSES    TO    THE    TRUSTEE.  443 

§  151.    Trustees  not  bound  to  take  incumbered  interest. 

Since  the  property  passes  to  the  trustee  subject  to  equities 
it  may  be  so  burdened  with  hens  and  incumbrances  as  to  be 
without  value  to  the  estate.  In  such  case  it  can  not  be  con- 
sidered a  real  asset  of  the  bankrupt. 

It  has  long  been  a  recognized  principle  of  bankrupt  law  that 
a  trustee  is  not  bound  to  take  property  of  an  onerous  or  un- 
profitable character,  or  property  which  will  be  a  burden  in- 
stead of  a  benefit.^  A  trustee  in  this  respect  is  regarded  as 
being  in  a  very  different  position  from  that  of  an  executor  of  a 
deceased  person.  The  former  takes  the  property  by  operation 
of  law,  but  the  latter  claims  title  through  his  testator,  and  is 
bound  to  perform  his  obligations  to  the  extent  of  his  assets. 
The  trustee  in  such  cases  is  required  to  elect  within  a  reason- 
able time,"  and  if  he  refuses  to  elect  when  required  to  do  so 
it  is  deemed  an  election  to  reject  the  estate.^  Where  the  trus- 
tee elects  not  to  take  the  property  or  right  of  the  bankrupt 
and  charge  the  estate  with  it,  the  property  and  right,  whatever 
it  is,  remains  in  the  bankrupt.*  When  a  trustee  once  rejects 
property  as  onerous  he  can  not  later  claim  it  if  it  turns  out  to 
be  valuable.^    But  where  a  trustee  is  kept  in  ignorance  of  the 

^  Sessions  v.  Romadka,  145  U.  S.  iner,    2   La.    Ann.    1005 ;    Lawrence 

39.    36    L.    Ed.    609;    Sparhawk    v.  v.    Knowles,    5    Bing.    N.    C.    399; 

Ycrkes,  142  U.  S.  i,  35  L.  Ed.  915;  Tuck    v.      Fyson,     6     Bing.     321; 

American  File  Co.   v.   Garrett,    no  Graham    v.    Van    Dieman's    Land 

U.   S.  295,  28  L.  Ed.    149;   Glenny  Co.,  11  Exch.   loi. 
V.  Langdon,  98  U.  S.  30,  31,  25  L.  *  Sparhawk  v.  Yerkes,   142  U.   S. 

Ed.  43;   DiiShane  v.  Beall,   161   U.  i,  35  L.  Ed.  915;  First  Nat.  Bank 

S.   513,  40  L.   Ed.   791;   Fir.st   Nat.  v.  Lasater,  196  U.  S.  115,  49  L.  Ed. 

Bank  v.  Lasater,  196  U.  S.  115,  49  408,    13  Am.   B.  R.  698;   Taylor  v. 

L.  Ed.  408,  13  Am.  B.  R.  698;  In  re  Trwin,  20  Fed.   Rep.  615;   Smith  v. 

Chambers,  98  Fed.  Rep.  865.  3  Am.  Gordon.    No.     13052    Fed.    Cas.,    6 

B.  R.  537,  2  N.  B.   N.  3S8;   In   re  Law.   Rep.   313. 
Cogley,    107    Fed.    Rep.    y2i>   5   Am.  ^Meyers  v.  Josephson   (C  C.  A. 

B.  R.  731.  .Sth    Cir.),    124    Fed.    Rep.    734.    10 

"See   Leaseholds,   p.    165,   post.  Am.  B.   R.  687,  affirming   121    Fed. 

'  Sessions  v.  Romadka,  145  U.  S.  Rep.  142,  9  Am.  B.  R.  345,  in  which 

39,   36  L.    Ed.   609;    Taylor   v.    Ir-  case  it  was  also  held  that  a  trustee 

win.  20  Fed.  Rep.  615,  620;  Amory  having   rejected   an    insurance    pol- 

V.    Lawrence,    No.    336    Fed.    Cas.,  icy  as  onerous,   although  he   could 

s.  c.  3  Clif.   523;   Oakley   v.   Gard-  not  claim  the  proceeds,  could  claim 


444 


LAW    AND   TROCEEDINGS   IN    BANKRUPTCY. 


existence  of  certain  property  and  has  no  opportunity  to  make 
an  election,  the  bani<rupt  can  not,  after  his  estate  in  bankruptcy 
has  been  finally  closed,  assert  title  to  the  property  on  the  ground 
that  the  trustee  had  never  taken  any  action  in  respect  to  it.'' 

§  152.  Property  of  other  persons  in  the  possession  of  the 
bankrupt,  and  the  right  to  recover  the  same  by 
intervention — Reclamation. 

The  statute  contemplates  that  the  trustee  shall  take  all  the 
property  of  the  bankrupt  which  may  be  applied  to  the  pay- 
ment of  his  debts.  The  property  of  other  persons  forms 
no  part  of  tiie  bankrupt's  estate  for  this  purpose.^ 

Property  in  the  possession  of  the  bankrupt,  which  is  claimed 
by  another  person,  regularly  passes  to  the  trustee  until  its 
ownership  is  determined.  If  there  is  a  controversy  with  ref- 
erence to  the  ownership  of  such  property  it  is  for  the  court 
of  bankruptcy  to  determine  it."  The  trustee  may  decline  to 
take  property  which  is  of  no  value  or  benefit  to  the  estate.^ 
For  the  same  reason  the  trustee  may,  when  there  is  no  con- 
troversy with  respect  to  it,  decline  to  take  property  in  the 
possession  of  the  bankrupt  which  is  claimed  by  a  third  per- 
son, or  he  may  return  it  to  such  claimant  after  having  taken 
possession  of  it,  without  an  order  of  court.  It  is  safer  prac- 
tice in  all  cases  to  have  the  judge  or  referee  direct  its  return 
by  order  of  court.  A  receiver  has  no  power  to  return  to  a 
claimant  property  in  his  possession  as  receiver  without  an 
order  of  court.* 


the  amount  of  the  cash  surrender 
value. 

"  First  National  Bank  v.  Lasater, 
196  U.  S.  115,  49  L.  Ed.  408,  13  Am. 
B.  R.  698. 

^Hewit  V.  Berlin  Mach.  Wks.,_ 
194  U.  S.  296,  48  L.  Ed.  986,  II 
Am.  B.  R.  709;  Donaldson  v.  Far- 
well,  93  U.  S.  641,  23  L.  Ed.  993; 
Cook  V.  Tullis,  18  Wall.  332,  21 
L.  Ed.  933 ;  Tennessee,  etc,  R.  Co. 


529;  Porter  v.  Lazear,  109  U.  S. 
84,  27  L.  Ed.  856;  Clark  v.  Iselin, 
21  Wall.  360,  22  L.  Ed.  568 ;  Thomp- 
son V.  Fairbanks,  196  U.  S.  516; 
49  L.  Ed.  577,  13  Am.  B.  R.  437; 
York  Mfg.  Co.  v.  Cassell,  201  U.  S. 
344,  50  L.  Ed.  782,   15  Am.  B.  R. 

^  See  Sec.  1520,  fiost. 

'See  Sec.  151,  ante. 

*  Whitney  v.  Wenman,  198  U.  S. 


V.  East  Alabama  Ry.  Co.,  75  Ala.      539,  49  L.  Ed.  11 57,  14  Am.  B.  R.  45. 


WHAT    PASSES    TO    THE    TRUSTEE.  445 

Whether  a  person  can  recover  propert}^  in  the  possession  of 
the  trustee  depends  upon  the  title  of  such  claimant  as  against 
the  bankrupt  and  his  creditors.  It  may  be  stated  as  a  general 
rule  that  if  his  title  to  the  property  was  good  as  against  the 
bankrupt  and  his  creditors  at  the  time  the  trustee's  title  accrued 
he  is  entitled  to  have  the  property  restored  to  him/'  or  if  it  has 
been  sold,  the  proceeds  of  the  sale  in  place  of  the  property."  If 
his  title  is  invalid  as  against  the  bankrupt  or  his  creditors,  the 
property  passes  to  the  trustee  as  a  part  of  the  bankrupt  estate.^ 
It  is  a  question  of  title  including  the  right  of  possession.  It 
may  be  observed  that  a  person  may  have  a  valid  legal  title  to 
property  in  the  possession  of  a  bankrupt  and  have  parted 
with  the  right  of  possession,  as  in  the  case  of  a  lease  ^  or  a 
pledge."  In  such  cases  his  title  is  not  good  as  against  the 
l>ankrupt,  and  he  may  not  be  entitled  to  the  return  of  the 
property.  Whatever  right  the  bankrupt  may  have  in  such 
property  passes  to  the  trustee  if  of  any  value  to  the  estate. 

The  character  and  validity  of  title  is  to  be  determined  by  the 
local  law.^''  Where  a  sale  is  made  in  one  state,  which  con- 
templates or  expressly  provides  that  the  property  is  to  be  de- 

=  Hewitt  V.  Berlin  Alach.  Wks.,  194  ''  First   Nat.   Bank  v.    Staake,  202 

U.  S.  296,  48  L.  Ed.  986,  II  Am.  B.  U.   S.    141,  50  L.   Ed.  967,    15  Am. 

R.  709;    York   Mfg.   Co.  v.  Cassell,  B.  R.  639;  In  re  Ducker  (C.  C.  A. 

201    U.    S.   344.   50  L.   Ed.   782,    i5  6th  Cir.),  134  Fed.  Rep.  43,  13  Am. 

Am.  B.  R.  633;  First  Nat.  Bank  v.  B.    R.    760;    In    re    Patterson,    125 

Staake,  201  U.  S.  141,  50  L.  Ed.  967,  Fed.  Rep.  562,.  10  Am.  B.  R.  748, 

15  Am.  B.  R.  039.  *See    Sec.    165,   post. 

*  In  First  National  Bank  v.  Title  "  See  Sec.    198,  post. 

&  Trust  Co.,   198  U.  S.  291,  49  L.  "  Hewit    v.    Berlin    Mach.    Wks., 

Ed.    1051,    14   Am.    B.   R.    102,    the  194  U.    S.   296,   48   L.    Ed.   986,    11 

supreme    court    say:    "The    sale    in  Am.    B.    R.    709;    In    re    Miller    & 

the    circumstances    did    not    change  Brown    (ist   case),    135    Fed.    Rep. 

the  situation.     The  proceeds  stood  868,  14  Am.  B.  R.  439;  In  re  Legg, 

in   the    place    of   the    property    and  96  Fed.  Rep.  326;  In  re  Miller  and 

the    order    returning    the    proceeds  Brown,   135  Fed.  Rep.  871,   14  Am. 

was  equivalent  to  an  order  return-  B.    R.   443;    In    re   Gait    {C.   C.   A. 

ing     the     property.       This     it     was  7th  Cir.),  120  Fed.  Rep.  64,  13  Am. 

proper    to    do,    whether    the    court  B.  R.  575;  In  re  Tice,  139  Fed.  Rep. 

had  held  that  it  lacked  jurisdiction,  52,  15  Am.  B.  R.  97. 
or  ruled  in  favor  of  the  petitioners 
on  the  merits.' 


D 


4-16 


LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 


livered  or  used  in  another  state,  the  law  of  the  latter  state 


governs.'^ 


Applyins;-  these  princ'iples,  it  is  clear  that  a  claimant  is  en- 
titled to  recover  his  property,  first,  where  his  title  has  never 
passed  from  him  to  the  bankrupt,  as  where  the  bankrupt  holds 
such  property  as  bailee,^"  consignee,^-  or  trustee,^''  or,  second, 
if,  having  been  induced  by  fraud  to  part  with  his  title,  as  in  the 
case  of  a  fraudulent  sale,  he  may  become  revested  with  his  title 
and  recover  his  property,"  or.  ////;'(/,  where  the  bankrupt  has 
conveyed  title  to  the  claimant  prior  to  bankruptcy,  and  retamed 
possession  of  the  property,  such  possession  not  being  in  fraud 
of  creditors.'''  But,  if  the  claimant's  title  has  passed  to  the 
bankrupt  as  by  gift  or  sale,^"^  or  being  valid  against  the  bank- 
rupt is  invalid  as  against  the  creditors,  as  where  a  chattel 
mortgage  or  conditional  sale  has  not  been  registered  or  re- 
corded according  to  local  law,"  or  for  any  other  reason  the 


"  In  re  Legg,  96  Fed.  Rep.  326 ; 
In  re  Hess,  138  Fed.  Rep.  954,  14 
Am.   B.   R.  635. 

^' In  re  jMiller  &  Brown  (2d 
case),    13s   Fed.   Rep.  871,    14  Am. 

B.  R.  443;  in  re  Flanders  (C.  C. 
A.  7th  Cir.),  134  Fed.  Rep.  560, 
14  Am.  B.  R.  2"/;  In  re  Carpenter, 
125  Fed.  Rep.  831,  11  Am.  B.  R. 
147;  In  re  Columbus  Buggy  Co.  (C. 

C.  A.  8th  Cir.),  143  Fed.  Rep.  859. 
"See    Sec.    173,    post;    Welch    v. 

Polle}',  197  N.  Y.  117,  II  Am.  B. 
R.  2x5;  In  re  Gaskell,  130  Fed. 
Rep.  235,   12  Am.  B.  R.  251. 

"  Donaldson  v.  Farwell,  93  U.  S. 
631,  23  L.  Ed.  993;  In  re  Weil, 
III  Fed.  Rep.  897,  7  Am.  B.  R.  90; 
Bloomingdale  v.  Empire  Rubber 
Co.,  114  Fed.  Rep.  1016,  8  Am.  B. 
R.  74;  In  re  Patterson,  125  Fed. 
Rep.  562,   10  Am.  B.  R.  748. 

^^In  re  McDonald,  138  Fed.  Rep. 
463,  14  Am.  B.  R.  797;  Allen  v. 
Hollander,  128  Fed.  Rep.  159,  it 
Am.  B.  R.  753. 


^"/n  re  Miller  &  Brown  (ist 
case),    135    Fed.   Rep.   868,    14  Am. 

B.  R.  439;  In  re  Wood,  140  Fed. 
Rep.  964,  15  Am.  B.  R.  411;  In  re 
Martin-Vernon  Music  Co.,  132 
Fed.  Rep.  983,  13  Am.  B.  R.  276; 
/;;  re  Rabenau,  118  Fed.  Rep.  471, 
9  Am.   B.   R.   180. 

"  in  re  Smith  &  Shuck,  132  Fed. 
Rep.  301,  13  Am.  B.  R.  103;  In  re 
Press  Post  Printing  Co.,  134  Fed. 
Rep.  998,  13  Am.  B.  R.  797;  In  re 
Butterwich,  131  Fed.  Rep.  371,  12 
Am.  B.  R.  536;  In  re  Ducker   (C. 

C.  A.  6th  Cir.),  134  Fed.  Rep.  43, 
13  Am.  B.  R.  760;  In  re  Dunn 
Hardw.  &  Furniture  Co.,  132  Fed. 
j^ep.  719,  13  Am.  B.  R.  147;  In  re 
Tweed.  131  Fed.  Rep.  355,  12  Am. 
B.  R.  648;  In  re  Tatem,  Mann  & 
Co.,  no  Fed.  Rep.  519,  6  Am.  B. 
R.  426;  In  re  Fraizer,  117  Fed. 
Rep.  746,  9  Am.  B.  R.  21. 

So  far  as  these  cases  are  based 
on  the  theory  that  the  trustee  oc- 
cupies   the    position    of    an    attach- 


WHAT    PASSES    TO    THE    TRUSTEE. 


447 


transaction  is  fraudulent  as  to  creditors,^-  he  is  not  entitled  to 
recover  such  property  as  against  the  trustee,  who  is  vested  with 
the  title  of  the  bankrupt  plus  the  rights  of  creditors  at  the  time 
when  his  title  accrues/^ 

In  actual  practice  the  difficulty  is  usually  to  determine  the 
nature  of  the  transaction  from  the  facts  and  circumstances  of 
each  case;  that  is,  whether  it  is  a  sale,  bailment,  consignment 
or  a  conditional  sale,  in  which  the  title  to  the  property  in 
question  passes  or  not.  The  difficulty  must  be  solved  by  the 
ascertainment  of  the  real  intent  of  the  contracting  parties  as 
found  in  their  agreement.  There  are,  however,  certain  dis- 
criminating earmarks,  so  to  speak,  by  wdiich  they  are  dis- 
tinguished. These  are  not  peculiar  to  bankruptcy,  but  are 
determined  by  the  general  law.  A  few  instances  arising  in 
bankruptcy  may,  howe\er,  be  of  assistance. 

Where  a  simple  sale  is  made  with  delivery  and  acceptance  '" 
of  the  goods,  there  can  be  no  question.  The  title  passes  to  the 
debtor.  An  option  to  return  a  purchase  (sale  and  return) 
if  he  should  not  like  is  essentially  different  from  an  option 
to  purchase  if  he  liked.  In  the  first  case  the  property  passes 
at  once,  subject  to  the  right  to  rescind  and  return.'"^  In  the 
other  case  the  title  will  not  pass  until  the  option  is  deter- 
mined."" 


ment  or  judgment  creditor  by  vir- 
tue of  the  bankruptcy  proceedings, 
they  must  be  held  to  be  overruled 
by  York  Mfg.  Co.  v.  Cassell,  2or 
U.  S.  344  50  L.  Ed.  782,  15  Am.  B. 

R.  633. 

'''Ill  re  Garcewich  (C  C.  A. 
2d  Cir.),  115  Fed.  Rep.  87,  8  Am. 
B.  R.  149;  In  re  Carpenter,  125 
Fed.  Rep.  831,  11  Am.  B.  R.  147; 
In  re  1  lowland,  109  Fed.  Rep.  869, 
6  Am.  B.  R.  495 ;  In  re  Ramussen's 
Estate,  136  Fed.  Rep.  704,  13  Am. 
B.  R.  462. 

'"Ilewit  V.  Berlin  Machine 
Works,  194  U.  S.  296,  48  L.  Ed. 
0^(\   ri    .\m.  B.   R.  708;    First   Na- 


tional   Bank   v.    Staake,   202   U.    S. 
141.  50  L.  Ed.  967,   15  Am.   B.   R. 

639. 

"'°  As  to  what  constitutes  an  ac- 
ceptance of  machinery  guaranteed 
to  work  satisfactorily,  see  In  re 
Simpson  Mfg.  Co.  (C.  C.  A.  7th 
Cir.),  130  Fed.  Rep.  307,  12  Am. 
B.  R.  212;  In  re  Geo.  M.  Hill  Co. 
(C.  C.  A.  7th  Cir.),  123  Fed.  Rep. 
8^:6,  12  Am.  B.  R.  213,  note. 

'-'In  re  Miller  &  Brown  (ist 
case).  135  F""ed.  Rep.  868,  14  Am. 
B.  R.  439;  In  re  Froehlich  Rubber 
Co.,  15  Am.  P..  R.  '/2. 

'"in  re  Miller  &  Brown  (2d 
case),    135    Fed.    Rep.  871,    14   .Am. 


448 


l.AW     AND    PROCEEDINGS   IN    r.ANKKUPTCY. 


Tlie  recognized  distinction  l)et\veen  a  l)ailment  and  sale  is 
when  the  identical  article  is  to  be  returned  in  the  same  or  some 
altered  form,  tlie  contract  is  one  of  bailment,  and  the  title 
to  the  property  is  not  changed.  On  the  other  hand,  when 
there  is  no  obligation  to  return  the  sjjecific  article,  and  the 
receiver  is  at  liberty  to  return  another  thing  of  value,  he 
becomes  a  debtor  to  make, the  return,  and  the  title  to  the  prop- 
erty is  changed.  The  transaction  is  a  sale.  This  distinction 
or  test  is  recognized  by  the  courts."^ 

The  consignment  of  goods  to  an  agent  to  sell  and  return 
the  proceeds  or  the  specific  goods  if  not  sold  stands  upon  pre- 
cisely the  same  footing  as  any  other  bailment,  and  does  not 
involve  a  change  of  title."* 

§  152a.     Conditional  sales. 

\Miether  property  in  the  possession  of  the  bankrupt  under 
a  conditional  sale,  by  which  the  title  is  reserved  in  the  vendor 
until  the  property  is  paid  for,  passes  to  the  trustee,  depends 
upon  whether  the  arrangement  with  regard  to  such  property 
is  good  as  against  creditors  under  the  law  of  the  state  in 
which  such  sale  is  made.^     Where  a  conditional  sale  is  made 


B.  R.  443;  In  re  Froehlich  Rubber 
Refining  Co.,  139  Fed.  Rep.  201, 
15  Am.  B.  R.  72. 

"^  Powder  Co.  v.  Burkhardt,  97 
U.  S.  no,  24  L.  Ed.  973;  Sturm  v. 
Boker,  150  U.  S.  312,  2>7  L.  Ed. 
1093;  In  re  Gait  (C.  C.  A.  7th 
Cir.),    120    Fed.    Rep.    64,    13    Am. 

B.  R.    575;    In    re    Flanders     (C. 

C.  A.  7th  Cir.),  134  Fed.  Rep. 
560,  14  Am.  B.  R.  27 ;  In  re  Rabe- 
nau,  118  Fed.  Rep.  471,  9  Am.  B. 
R.  180 ;  In  re  Martin-Vernon  Music 
Co.,  132  Fed.  Rep.  983,  13  Am.  B. 
R.  276;  In  re  Taft  (C.  C.  A.  6th 
Cir.),  133  Fed.  Rep.  511,  13  Am.  B. 
R.  417;  Troy  Wagon  Wks.  v.  Vast- 
binder,  130  Fed.  Rep.  232,  12  Am. 
B.  R.  352;  In  re  Wells,  15  Am.  B. 


R.  419,  140  Fed.  Rep.  752;  In  re 
Heckathorn,  144  Fed.  Rep.  499,  16 
Am.  B.  R.  467. 

''In  re  Taft  (C.  C.  A.  6th  Cir.), 
133  Fed.  Rep.  511,  13  Am.  B.  R. 
417;  In  re  GaU  (C.  C.  A.  7th 
Cir.),  120  Fed.  Rep.  64,  13  Am.  B. 
R-  575;  In  re  Flanders  (C.  C.  A. 
7th  Cir.),  134  Fed.  Rep.  560,  14  Am. 
B.  R.  27;  Deere  Plow  Co.  v.  Mc- 
David  (C.  C.  A.  8th  Cir.),  137 
Fed.  Rep.  802,  14  Am.  B.  R.  653; 
In  re  Columbus  Buggy  Co.    (C.  C. 

A.  8th  Cir.),  143  Fed.  Rep.  859. 

^  Hewit  V.  Berlin  Mach.  Wks., 
194  U.  S.  296,  48  L.  Ed.  986,  II 
Am.  B.  R.  709,  affirming  In  re 
Kellogg,    112  Fed.   Rep.  52,  7  Am. 

B.  R.  270,  and  118  Fed.  Rep.  1017; 


WHAT     PASSES    TO    THE    TRUSTEE. 


449 


in  one  state,  which  contemplates  or  expressly  provides  that 
the  property  is  to  be  delivered  or  used  in  another  state,  the 
law  of  the  latter  state  governs.- 

Where  the  arrangement  between  the  vendor  and  the  debtor 
with  respect  to  such  property  was  good  as  against  the  debtor 
and  his  creditors  at  the  time  the  petition  in  bankruptcy  was 
filed,  the  vendor's  lien  or  claim  to  the  property  will  be  sus- 
tained.'' The  vendor  may  reclaim  such  property  or  recover 
the  contract  price  from  the  proceeds  of  a  sale  of  it,  or  if  the 
trustee  elects  to  take  such  property  it  passes  to  him  subject 
to  the  claim  or  lien  of  the  seller,  ^^'here  such  agreement  is 
good  as  against  the  debtor  and  a  part  of  his  creditors,  but  in- 
valid as  to  other  creditors,  a  court  of  bankruptcy  has  mar- 
shalled the  several  claims  accordingly,  preserving  to  each 
claimant  his  right  of  priority  in  the  distribution.* 

A\'here  the  arrangement  between  the  vendor  and  the  debtor 
is  invalid  under  the  state  law  as  to  creditors  for  want  of 
record,  it  is  invalid  as  against  the  trustee,  and  the  property 
passes  to  the  trustee  for  the  benefit  of  the  general  creditors.^ 


York  Mfg.  Co.  v.  Cassell.  201  U.  S. 
344,  50  L.  Ed.  782,  15  Am.  B.  R. 
633;  In  re  Ducker  (C.  C  A. 
6th  Cir.),  134  Fed.  Rep.  43,  13 
Am.  B.  R.  760;  In  re  BuUerwick, 
131  Fed.  Rep.  371,  12  Am.  B.  R. 
536;  Chesapeake  Shoe  Co.  v.  Seld- 
ner  (C.  C.  A.  4th  Cir.),  122  Fed. 
Rep.  593,  10  Am.  B.  R.  466 ;  In  re 
Miller  &  Brown  (i),  135  Fed.  Rep. 
868,  14  Am.  B.  R.  439 ;  In  re  Tice, 
139  Fed.  Rep.  52,  15  Am.  B.  R.  97. 

-In  re  Legg,  96  Fed.  Rep.  326; 
In  re  Hess,  138  Fed.  Rep.  954,  14 
Am.  B.  R.  635. 

'York  Mfg.  Co.  v.  Cassell,  201  U. 
S.  344,  50  L.  Ed.  782,  15  Am.  B.  R. 
633,  affirming  In  re  Kellogg,  112 
Fed.  Rep.  52,  7  Am.  B.  R.  270  rnd 
118  Fed.  Rep.  1017;  In  re  Shirley 
(C.  C.  A.  6th  Cir.),  112  Fed.  Rep. 
301,    7    Am.    B.    R.    299;    Bradley 


Clark  &  Co.  v.  Benson  (Sup.  Ct.. 
Minn.),  100  N.  W.  Rep.  670,  13 
Am.   B.  R.   170. 

'In  re  Ducker  (C.  C  A.  6th 
Cir.),  134  Fed.  Rep.  43,  13  Am. 
B.   R.   760. 

'B.  A.  1898,  Sec.  (i-]a.  In  re 
Smith  &  Shuck,  132  Fed.  Rep.  301, 
13  Am.  B.  R.  103  ;  /;;  re  Press  Post 
Printing  Co.,  134  Fed.  Rep.  998,  13 
Am.  B.  R.  797;  in  re  Butterwich, 
131  Fed.  Rep.  371,  12  Am.  B.  R. 
536;  In  re  Ducker  (C.  C.  A.  6th 
Cir.),  134  Fed.  Rep.  43,  13  Am.  B. 
R.  760;  in  re  Dunn  Hardw.  &  Fur- 
niture Co.,  132  Fed.  Rep.  719,  13 
Am.  B.  R.  147;  In  re  Tweed,  131 
Fed.  Rep.  355,  12  Am.  B.  R.  648; 
In  re  Tatem  Mann  &  Co.,  no  Fed. 
Rep.  519,  6  Am.  B.  R.  426;  In  re 
Fraizer,  117  Fed.  Rep.  745,  9  Am. 
B.  R.  21. 


450 


LAW     AM)    l'Kt)Ci:i;i)li\eiS    J.\     1!A.\KKU1''1'CY. 


Ill  icspocl  to  such  property  the  trustee  was  held  in  the 
carHer  cases  to  oecu])y  the  position  of  a  judg-inent  or  attaching 
creditor  from  the  date  of  the  lihng  of  the  petition  in  Ijank- 
ruptcy.  which  had  the  effect  of  an  attachnienl  or  seizure  under 
legal  process."  This  theory,  however,  w^as  overruled  by  the 
supreme  court  in  the  case  of  York  Mfg.  Co.  v.  Casscll.''  The 
conditional  sale  contract  in  that  case  was  good  under  the 
state  law  as  against  creditors  who  had  not  actually  seized  the 
property  by  legal  process.  There  \vas  no  seizure  unless  the 
institution  of  bankruptcy  proceedings  had  that  effect.  The 
supreme  court  held  that  the  filing  of  the  petition  in  bank- 
ruptcy does  not  operate  to  give  the  trustee,  in  respect  to  such 
property,  the  rights  of  an  attaching  creditor  ^  or  a  subsequent 
purchaser." 

In  respect  to  this  kind  of  property  the  bankrupt  act  vests 
the  trustee  with  the  same  right  or  title  to  the  bankrupt's 
property  that  belongs  to  the  bankrupt  or  to  his  creditors  at  the 
time  when  the  trustee's  title  accrues,  and  with  no  greater  title 
or  right.  The  act  contemplates  that  a  lien  good  at  that  time 
as  against  the  debtor  and  as  against  all  his  creditors  shall  re- 
main undisturbed.  If  it  is  one  w^hich  has  been  obtained  in  con- 
travention of  some  provision  of  the  act,  which  is  fraudulent  as 
to  creditors,  or  invalid  as  to  creditors  for  want  of  record,  it 
may  be  avoided  by  the  trustee.^*^ 


"/»  re  Ducker  (C.  C.  A.  6th 
Cir.),  134  Fed.  Rep.  43,  13  Am.  B. 
R.  760;  In  re  Rodgers  (C.  C.  A.  7th 
Cir.),  125  Fed.  Rep.  169,  11  Am. 
B.  R.  79;  Chesapeake  Shoe  Co.  v. 
Seldner  (C.  C.  A.  4th  Cir.),  122 
Fed.  Rep.  593,  10  Am.  B.  R.  466; 
A.  4th  Cir.),  122  Fed.  Rep.  593; 
In  re  Pekin  Plow  Co.  (C.  C.  A. 
8th  Cir.),  112  Fed.  Rep.  308,  7 
Am.  B.  R.  369;  In  re  Press  Post 
Printing  Co.,  134  Fed.  Rep.  998,  13 
Am.  B.  R.  797 ;  In  re  Butterwich, 
131    Fed.    Rep.   371,    12  Am.    B.    R. 


536;  In  re  Hes.s,  138  Fed.  Rep. 
954,    14   Am.    B.    R.   635. 

'201  U.  S.  344,  SO  L.  Ed.  782, 
15  Am.  B.  R.  633. 

^  York  Mfg.  Co.  V.  Cassell,  201 
U.  S.  344,  50  L.  Ed.  782,  15  Am. 
B.-  R.  633. 

*  Hewit  V.  Berlin  Mach.  Wks., 
194  U.  S.  296,  48  L.  Ed.  986,  II 
Am.  B.  R.  709. 

'"Hewit  V.  Berlin  Mach.  Wks., 
194  U.  S.  296,  48  L.  Ed.  986,  II  Am. 
B.  R.  709;  First  Nat.  Bank  v. 
Staake,  202  U.  S.  141,  50  L.  Ed. 
967,  IS  Am.  B.  R.  639. 


WHAT    PASSES    TO    THE    TRUSTEE. 


451 


When  the  property  is  delivered  to  the  vendee  for  consump- 
tion or  sale,  or  to  be  dealt  with  in  an}-  way  inconsistent  with 
the  ownership  of  the  seller,  or  so  as  to  destroy  his  lien  or 
right  of  property,  the  transaction  will  not  be  upheld  as  a  con- 
ditional sale,  because  it  is  a  fraud  upon  the  creditors  of  the 
vendee,  and  such  property  passes  to  the  trustee  of  the  ven- 
dee."    It  has  been  held  that  a  sale  with  privilege  of  return  of 
the  goods  if  not  satisfactory  can  not  be  upheld  as  a  condi- 
tional sale  when  the  goods  are  placed  in  stock  for  sale,  and 
that  such  property  as  remained  unsold  can  not  be  reclaimed 
as  against  the  trustee  of  the  vendee.^'     It  has  been  held  that 
machinery,  sold  on  condition  that  it  shall  be  made  to  work 
satisfactorily  and  bankruptcy  intervenes  pending  repairs,  is  the 
property  of  the  bankrupt,  and  can  not  be  recovered  on  the 
ground  that  it  was  a  conditional  sale,  and  that  the  title  had 
not  passed   by   reason  of  not  having  been  accepted   by  the 
bankrupt.  ^^ 


§  152b.     Fraudulent  sales. 

WHienever  a  bankrupt  has  goods  in  his  possession,  obtained 
by  purchase  from  a  person  who  has  been  fraudulently  induced 
to  make  the  sale  prior  to  bankruptcy,  such  vendor  is  entitled 
to  disafifirm  the  sale  and  recover  such  property  from  the  ven- 
dee's trustee  in  bankruptcy.^ 

The  most  usual  species  of  fraud  by  a  vendee  consists  in  mis- 
statements as  to  his  ability  to  pay,  or  means  of  payment,  such 

"/«  re  Garcewich  (C.  C.  A.  2d 
Cir.),  115  Fed.  Rep.  87,  8  Am.  B. 
R.  149;  In  re  Carpenter,  125  Fed. 
Rep.  831,  II  Am.  B.  R.  147;  In  re 
T  lowland,  109  Fed.  Rep.  869,  6  Am. 
B.  R.  495 ;  In  re  Ramussen's  E.s- 
tate,  136  Fed.  Rep.  704,  13  Am.  B. 
R.  462. 

"/m  re  Miller  &  Brown  (r),  1,35 
Fed.  Rep.  868,  14  Am.  B.  R.  439. 

"/n  re  Simpson  Mfg.  Co.  (C.  C. 
A.  7th  Cir.),  130  Fed.  Rep.  307,  12 
Am.  B.  R.  212. 


But  see  In  re  Geo.  M.  Hill  Co. 
(C.  C.  A.  7th  Cir.),  123  Fed.  Rep. 
866,  12  Am.  B.  R.  213,  note. 

^Donaldson  v.  Farwell,  93  U.  S. 
631,  23  L.  Ed.  993 ;  In  re  Gany.  103 
Fed.  Rep.  930.  4  Am.  B.  R.  576; 
Bloomingdale  v.  Empire  Rubber 
Co.,  114  Fed.  Rep.  1016,  8  Am.  B. 
R.  74;  In  re  Weil,  11  r  Fed.  Rep. 
897,  7  Am.  B.  R.  90;  In  re  Patter- 
son &  Co.,  125  Fed.  Rep.  562,  10 
Am.  B.  R.  748:  /;(  re  Burkle,  116 
Fed.   Rep.  766,  8  Am.  B.  R.  542. 


452  LAW     AM)    l'R()(.  i:i:i)lXGS   in    IJA.N  KUUI'TCV. 

as  false  statcnicnls  as  tn  wliat  propcrl}'  he  owns,  or  debts  he 
owes,  what  aiiiount  df  business  he  is  doing-,  that  his  property 
is  imencnnibcred,  and  the  hke.  In  order  to  authorize  the  re- 
scission of  an  executed  sale  of  goods  to  one  who  subsequently 
becomes  a  bankrupt  on  the  groiuid  that  he  obtained  the  same 
by  false  and  fraudulent  representations,  it  must  be  shown  that 
he  made  such  representations,  knowing  them  to  be  false, 
and  thev  must  have  induced  the  seller  to  consummate  the 
sale  when  he  would  otherwise  not  have  done  so."  It  is  not 
necessary  that  the  false  representations  should  be  the  sole 
and  exclusive  consideration  for  the  credit ;  but  only  that  they 
were  a  material  consideration  without  which  in  all  probability 
the  credit  would  not  have  been  given. ^  The  vendor  must  have 
relied  upon  the  statements  of  the  vendee  as  an  inducement  to 
make  the  sale.*  A  promise  to  pay  cash  when  the  goods  are  de- 
livered and  failure  to  do  so  is  not  a  fraudulent  representation. '^ 
A  scheme  to  defraud  creditors  generally  is  not  sufficient  evi- 
dence of  fraud  to  justify  one  creditor  to  disaffirm  his  con- 
tract of  sale.'''  The  mere  omission  of  a  purchaser  of  goods 
to  disclose  his  insolvency  to  the  vendor  is  not  regarded  as 
fraudulent  in  itself."  There  is  a  distinction  between  with- 
holding information  and  making  false  statements  with  refer- 
ence to  one's  financial  condition. 

A  statement  made  by  a  person  to  a  mercantile  agency, 
which  statement  has  been  shown  to  the  vendor  prior  to  the 
sale,  and  upon  which  he  relied  in  giving  such  person  credit, 
md.y  be  considered  a  statement  of  the  vendee  made  to  the  ven- 
dor, and,  if  false  in  fact,  will  amount  to  a  false  representation 

-In  re  Patterson  &  Co.,  125  Fed.  */m    re    Epstein,    109    Fed.    Rep. 

Rep.  562;  10  Am.  B.  R.  748;  In  re  878,  6  Am.  B.  R.  60;  In  re  Davis, 

Gany,  103  Fed.  Rep.  930,  4  Am.  B.  112    Fed.    Rep.  '294,    7    Am.    B.    R. 

R.  576;  In  re  Roalswick,   no  Fed.  276. 

Rep.  639,  6  Am.  B.  R.  752;  In  re  "In  re  Lewis,  125  Fed.  Rep.  143. 

O'Conner,  114  Fed.  Rep.  777,  7  Am.  10  Am.  B.  R.  741. 

B.  R.  428;  Bloomingdale  v.  Empire  ^  In    re   O'Conner,    114   Fed.   Rep. 

Rubber  Co.,   114  Fed.  Rep.   iot6,  8  777.  7  Am.  B.  R.  428. 

Am.  B.  R.  74.  '^»  ''^  Davis,  112.  Fed.  Rep.  294, 

^In  re  Gany,   103  Fed.  Rep.  930,  7  Am.  B.  R.  276. 
4  Am.  B.  R.  576. 


WHAT     PASSES    TO     THE    TRUSTEE.  453 

with  reference  to  his  financial  condition.*'  On  the  other  hand, 
the  report  of  a  mercantile  agency  derived  from  other  sources 
than  the  person  seeking  credit,  is  not  such  a  fraudulent  rep- 
resentation as  to  justify  rescission.** 

Another  ground  of  rescission  of  an  executed  sale  is  that  the 
vendee  purchased  the  goods  with  a  positive  intention  not  to 
pay  for  them.  The  supreme  court  says  :^°  "The  doctrine  is 
now  established  by  a  preponderance  of  authority,  that  a  party 
not  intending  to  pay,  who  induces  the  owner  to  sell  him 
goods  on  credit  by  fraudulently  concealing  his  insolvency  and 
his  intent  not  to  pay  for  them,  is  guilty  of  a  fraud,  which  en- 
titles the  vendor,  if  no  innocent  third  party  has  acc[uired  an 
interest  in  them,  to  disaffirm  the  contract  and  recover  the 
goods."  In  some  states  it  is  held  that  even  a  positive  inten- 
tion not  to  pay.  if  unaccompanied  with  any  "artifices  intended 
and  fitted  to  deceive"  will  not  avoid  a  sale."  The  courts 
of  bankruptcy  will  follow  the  state  rule  in  this  respect. 

In  the  case  of  a  fraudulent  sale  the  title  passes  to  the  ven- 
dee, subject  to  be  defeated  at  the  option  of  the  vendor.^-  He 
may  affirm  or  rescind  the  sale,  but  he  can  not  do  both.  If 
he  elects  to  affirm  the  contract  by  some  positive  action,  or  un- 
reasonably delays  to  disaffirm  it,  he  is  not  entitled  to  a  return 
of  the  goods  in  the  possession  of  the  trustee.  Proving  a  claim 
in  bankruptcy  for  the  total  amount  of  the  goods  sold  has 
been  held  an  election  to  affirm  the  contract  of  sale,  and  that 
the  vendor  was  not  entitled  afterwards  to  the  return  of  the  un- 
sold goods  in  tlie  possession  of  the  trustee. ^^ 

*  Consult  In  re  Epstein,  109  Fed.  "/n  re  Lewis,  125  Fed.  Rep.  143, 

Rep.  878,   6  Am.    B.   R.   60:   In   re  10  Am.  R.  R.  741. 

Patterson,    125    Fed.    Rep.    562;    lO  ^"Benjamin  on   Sales,   Sec.  433. 

Am.    B.    R.    74S:    hi    re   Weil,    tii  "  Standard  Varnish  Wks.  v.  ITay- 

Fcd.  Rep.  897.  7  Am.  B.  R.  90.    See  dock  (C.  C.  A.  6th  Cir.),  143  Fed. 

American    Lumber    Co.    v.    Taylor  Rep.  31S,   16  Am.  B.  R.  286;  In  re 

(C.  C.   .'\.  3(1   Cir.),    137   Fed.   Rep.  Ilildebrant,    120    Fed.    Rep.   992,    10 

321,  14  Am.  B.  R.  231.  Am.    B.    R.    184;    Ormsby   v.   Dear- 

"  Consult    In    re    Roalswick,     no  born,     116    Mass.    386;     Scavey    v. 

Fed.  Rep.  639,  6  Am.   B.   R.  752.  Potter,  121   Mass.  297. 

'"  Donaldson  v.  Farwell,  93  U.  S. 
63 1,  23  L.  Ed.  993. 


454  LAW    AND    PROCEEDINGS   IN    BANKRUPTCY. 

§  152c.    Confusion  of  goods. 

In  ovdQY  to  recover  property  in  the  possession  of  the  bank- 
rui)t.  the  claimant  must  l)e  able  to  clearly  identify  the  spe- 
ciiic  property  belonging  to  him.  If  the  property  has  become 
commingletl  or  confused  with  other  property  of  the  bank- 
rupt so  that  it  possess  no  indicia  or  earmarks  by  which  it 
may  be  distinguished  from  all  other  property  of  the  same 
description,  it  is  conceived  to  be  the  property  of  the  bankrupt, 
and  as  such  passes  to  the  trustee.^  In  such  cases  the  per- 
son who  owns  the  property  is  interested  only  as  a  general 
creditor  of  the  estate. 

Where  the  property  can  be  distinguished  from  other  prop- 
erty of  the  bankrupt  it  does  not  pass  to  the  trustee.  Thus, 
where  a  commission  merchant  kept  the  proceeds  of  a  sale  for  . 
a  customer  separate  from  his  other  funds,  it  does  not  pass  to 
his  trustee  in  bankruptcy."  So  also  an  incomplete  vessel  con- 
structed under  a  contract  providing  for  payments  as  the 
work  progressed  which  the  trustee  declined  to  complete,  does 
not  pass,  but  the  title  remains  in  the  person  for  whom  it  was 
being  built.^  Goods  having  been  sold  by  the  bankrupt  and 
separated  from  other  goods  belonging  to  him  do  not  pass  to 
his  trustee,  but  may  be  recovered  by  the  purchaser.* 

Where  a  debtor  obtains  the  possession  of  goods  and  pro- 
ceeds to  commingle  them  with  his  own  before  bankruptcy 
the  courts  will  acord  a  lien  to  the  owner  upon  the  mass  for 
the  value  of  the  things  converted,  on  the  ground  that  where 
a  tort  feasor  has  mingled  the  property  of  the  owner  with 
his  own  a  lien  attaches  to  the  mass  pro  tanto,  and  the  mass 
passes  to  the  trustee  subject  to  such  lien."'     Where  a  com- 

'Wood  II.  &  R.  Co.  V.  Broke,  9  'Jn  re  Taft   (C.  C.  A.  6th  Cir.), 

R.   R.   395;   Adams  v.   Meyers,   No.  133   Fed.    Rep.    511,    13   Am.    B.    R. 

62    Fed.    Cas.,    s.    c.    i    Saw.    306;  417. 

Rahilly  v.   Wilson,   No.    11532   Fed.  '-'In  re  MacDonald,  138  Fed.  Rep. 

Cas.,  3  Dill.  420;   Deere  Plow  Co.  463,  14  Am.  B.  R.  797. 

V.    McDavid    (C.   C    A.   8th   Cir.),  *  Allen    v.    Hollander,    128    Fed. 

137   Fed.   Rep.  802,   14  Am.   B.   R.  Rep.   \Sg,   11   Am.  B.  R.  753. 

653;  American  Lumber  Co.  v.  Tay-  "^  Erie   R.   R.   Co.  v.   Dial    (C.   C. 

lor    (C.    C.   A.   3d    Cir.),    137   Fed.  A.  6th  Cir.),  140  Fed.  Rep.  689,  15 

Rep.  321,   14  Am.  B.  R.  231.  Am.  B.  R.  559 ;  Willoughby  v.  Wein- 


WHAT    PASSES    TO    THE    TRUSTEE. 


455 


mission  agent  sold  goods  of  his  principal  after  notice  not 
to  sell  particular  goods,  and  commingled  the  funds  with  his 
other  moneys,  the  court  held  that  the  principal  could  equitably 
follow  the  moneys  received  from  the  sale  of  such  goods  into 
the  hands  of  any  person  who  had  received  them  with  knowl- 
edge of  their  trust  character.*' 


§  I52d.     Proceedings  to  recover  property  in  the  possession 
of  the  trustee. 

A  person  claiming  to  own  property  in  the  possession  of  the 
bankrupt  at  the  time  of  the  filing  of  the  petition  in  bankruptcy 
regularly  asserts  his  claim  in  the  court  of  bankruptcy.  Sec- 
tion 2  of  the  Bankrupt  Act  confers  upon  these  courts  ample 
power  to   determine  all   such  controversies.^ 

A  state  court  has  concurrent  jurisdiction, of  an  action  of 
trover  to  determine  the  title  to  property  in  possession  of  the 
trustee  in  bankruptcy  as  a  part  of  the  bankrupt's  estate."    But 


berger,  79  Pac.  Rep.  "/"/" ;  Southern 
Pile  Co.  V.  Savannah  Trust  Co. 
(C.  C.  A.  5th  Cir.).  141  Fed.  Rep. 
802,  15  Am.  B.  R.  618;  Smith  v. 
Au.  Gres  (C.  C.  A.  6th  Cir.), 
148  Fed.  Rep.  ;  Smith  v.  Mot- 
ley (C.  C.  A.  6th  Cir.),  149  Fed. 
Rep.  . 

"Bills  V.  Schhep  (C.  C.  A.  2d 
Cir),  127  Fed.  Rep.  103,  il  Am. 
B.  R.  607. 

'  In  Whitney  v.  Wenman,  198  U. 
S.  539,  49  L.  Ed.  1 157,  14  Am.  B. 
R.  45,  Mr.  Justice  Day.  speaking 
for  the  supreme  court,  said :  "We 
think  the  result  of  these  cases  is, 
in  view  of  the  broad  powers  con- 
ferred in  Section  2  of  the  bank- 
rupt act,  authorizing  the  bankrupt- 
cy court  to  cause  the  estate  of  the 
bankrupt  to  be  collected,  reduced 
to  money  and  distributed,  and  to 
determine  controversies  in  relation 
thereto,  and  bring  in  and  .substi- 
tute additional   i)arties  when  neces- 


sar\'  for  the  complete  determination 
of  a  matter  in  controversy,  that 
when  the  property  has  become  sub- 
ject to  the  jurisdiction  of  the  bank- 
ruptcy court  as  that  of  the  bank- 
rupt, whether  held  by  him  or  for 
him,  jurisdiction  exists  to  deter- 
mine controversies  in  relation  to 
the  disposition  of  the  same  and  the 
extent  and  character  of  iens  there- 
on and  rights  therein." 

See  also  In  re  Whitener  (C.  C. 
A.  5th  Cir.),  105  Fed.  Rep.  180, 
5  .^m.  B.  R.  198;  Fisher  v.  Cush- 
man  (C.  C.  A.  ist  Cir.),  103  Fed. 
Rep.  867,  4  Am.  B.  R.  646;  In  re 
Kellogg  (C.  C.  A.  2d  Cir.),  121 
Fed.  Rep.  333,  10  Am.  B.  R.  7; 
/;;  re  Antigo  Screen  Door  Co.  ( C. 
C.  A.  7th  Cir.),  123  Fed.  Rep. 
■249,  10  .\m.  B.  R.  359;  In  re  Mc- 
r^Iahon  (C.  C.  A.  6th  Cir.),  147 
Fed,    Rep.   685. 

■In  re  Spitzer  (C.  C.  A.  2d 
Cir.),  130  Fed.  Rep.  S79,  12  .\m.  B. 


456  LAW    AND   PROCEEDINGS   IN    BANKRUPTCY. 

the  possession  of  such  property  can  not  be  recovered  by  re- 
plevin instituted  in  the  state  court.^  The  reason  is  that  the 
petition  in  bankruptcy  is  in  effect  an  attachment,  and  a  court 
of  bankruptcy  acquires  constructive  custody  of  all  property 
in  the  possession  of  the  debtor  from  the  filing  of  the  petition. 
If  the  claimant  desires  to  recover  specific  property  he  must 
apply  to  the  court  of  bankruptcy. 

A  court  will  not  determine  the  right  of  a  claimant  to  such 
property  by  a  summary  proceeding,  as  upon  rule  to  show 
cause.*  The  proceeding  should  be  plenary  in  its  nature.  A 
claimant  of  such  property  may  bring  an  original  suit  against 
the  trustee  or  receiver  in  a  court  of  bankruptcy  for  the  recov- 
ery of  the  specific  property  claimed  to  be  owned  by  him. 

The  usual  practice,  however,  is  to  file  an  intervening  peti- 
tion in  the  bankruptcy  proceedings.^  The  courts  of  bank- 
ruptcy will  enforce  in  the  bankruptcy  proceedings  such  agree- 
ments with  the  bankrupt,  as  absolute  or  conditional  sales,  bail- 
ments, pledges,  leases,  liens,  and  the  like,  which  are  valid 
under  the  local  law,  and  will  avoid  such  as  are  invalid.     In 

R.  346;  Kanter  v.  Cohen,  121  Fed.  R.   198,  3   N.  B.   N.  316,  the  court 

Rep.  984,  9  Am.  B.  R.  yj- !  Tiuda  said :     "The  property  being  in   the 

V.  Osgood,  71  N.  H.  185;  Weeks  v.  custody  of  the  district  court  sitting 

Fowler,  71   N.   H.  518.  in   bankruptcy,   that   court   had   ju- 

^  White    V.    Schloerb,    178    U.    S.  risdiction  to  entertain  the  interven- 

542,  44   L.   Ed.    1 183,   4  Am.   B.   R.  tion  filed  by  Ramseur,  claiming  the 

178;    In   re    Russell    (C.    C.    A.    2d  property,    and    to    hear    and    deter- 

Cir.),  loi  Fed.  Rep.  248,  3  Am.  B.  mine    the    issues   presented   by    the 

R.  658;  In  re  Weinger-Bergman  &  intervention,    not    only    on    general 

Co.,  126  Fed.  Rep.  875,  11  Am.  B.  principles    (see    Morgan's   L.   &   T. 

R.   424;    Crosby   v.    Spear,   98    Me.  R.  &  S.  S.  Co.  v.  Texas  Cent.  Ry. 

542,   II   Am.   B.   R.  613;   Weeks  v.  Co.,  137  U.  S.  171),  but  under  the 

Fowler,  71  N.  H.  221 ;  Cox  v.  State  specific  provisions  of  Sec.  2  of  the 

Bank,    125   Fed.   Rep.  654,    11    Am.  bankruptcy  act  of  1898." 
B.  R.  112.  In  Fisher  v.  Cushman   (C.  C.  A. 

^In  re  Mundle,  139  Fed.  Rep.  691,  ist  Cir.),  103  Fed.  Rep.  S67,  4  Am. 

14  Am.  B.  R.  680.  B.    R.    646,    the    court    said:    "The 

°  Hewit    v.    Berlin    Mach.    Wks.,  rule  is  settled  beyond  all  doubt  that 

194  U.  S.  296,  48  L.  Ed.  986,  II  Am.  any    person    claiming    an    equitable 

B.  R.  709.  or  legal   interest  in  a   fund  in  the 

/n    re    Whitener    (C.    C.    A.    5th  registry  of  a  court  is  entitled  to  in- 

Cir.),  105  Fed.  Rep.  180,  5  Am.  B.  tervene   in   that   behalf." 


WHAT    PASSES    TO    THE    TRUSTEE.  457 

this  way  the  rights  of  persons  cleaHiig  with  the  bankrupt 
prior  to  his  bankruptcy  and  his  general  creditors,  as  they  ex- 
isted at  the  date  of  the  fihng  of  the  petition  in  bankruptcy,  may 
be  preserved  and  enforced  in  the  bankruptcy  proceedings  with- 
out resort  to  a  separate  suit  for  that  purpose.  In  other  words, 
the  courts  of  bankruptcy  will  administer  the  debtor's  property, 
having  respect  to  all  claims  against  it  which  are  not  invalid 
under  the  bankrupt  law  and  are  valid  under  the  state  law  at  the 
time  of  filing  the  petition  in  bankruptcy  and  avoiding  such 
as  are  invalid  under  the  state  law  to  the  same  extent  as  state 
courts  having  jurisdiction  to  determine  the  controversy. 

The  Petition. — i\n  intervening  petition  should  be  entitled 
in  the  district  court  and  the  bankruptcy  proceedings  and  ad- 
dressed to  the  judge.     It  may  be  as  follows :    "The  District 

Court  of  the  United  States  for  the District  of In  re 

A.  B.,  bankrupt.  Intervening  Petition  of  the  X  Y  Company, 
Petitioner.  The  Honorable  S.  M.,  Judge  of  the  District  Court 
of  the  United  States  for  the District  of ."  The  trus- 
tee or  receiver,  if  one  has  been  appointed,  is  the  proper  re- 
spondent. The  bankrupt  and  the  creditors  are  not  necessary 
or  proper  parties  to  the  petition. 

The  petition"  should  state  the  date  of  filing  the  petition  in 
bankruptcy,  the  adjudication,  the  appointment  of  the  trustee  or 
receiver,  and  that  the  property  in  question  is  in  the  possession 
of  the  trustee  or  receiver  as  a  part  of  the  bankrupt's  estate. 
It  should  set  forth  the  petitioner's  claim  of  title  to  the  specific 
property  which  is  sought  to  be  recovered,  and  pray  that  the 
property  specified  may  be  returned  to  the  petitioner,  or  if  it 
has  been  sold  that  the  proceeds  of  such  sale  may  l)e  paid  to 
him,  or  for  such  relief  as  may  be  desired.  The  petition  should 
be  signed  and  verified  "  by  the  ]:)etitioner  or  some  person  who 
is  able  of  his  own  knowledge  to  swear  positively  to  the  facts 
stated  in  the  petition. 

"  For  form  of  petition  and  orders       Am.  P>.  R.  760.     See  Form  No.  34b, 
thereon,    sec    In    he    ilemstreet,    8       f^osf. 

■  P..  A.  1898,  Sec.  i8r. 


458  LAW    AXn    I'ROCEEDINGS   IN    BANKUUPTCY. 

.  Proceedings  on  Intervening  Petition. — An  intervention 
of  this  character,  sometimes  called  a  reclamation  proceeding, 
is  really  an  eqnitable  intervention  and  a  "controversy  arising 
in  hankrniitc)"."  as  distinguished  from  proceedings  in  bank- 
ruptcy." The  practice  is  ^•ery  similar  to  that  u])on  an  inter- 
vening pclilion  filed  in  a  suit  in  e(|uity. 

The  petition  should  be  tiled  by  leave  of  court  with  the 
clerk,  and  not  with  the  referee.  The  judge  may  hear  and 
determine  the  controversy  or  refer  the  matter  to  the  referee  in 
charge  of  the  bankruptcy  proceedings.  The  latter  course  is 
usually  pursued,  and  in  that  case  all  subsequent  proceedings 
are  had  before  the  referee. 

The  court  may  permit  the  petitioner  to  take  possession  of  the 
property  in  controversy  before  the  trial  upon  giving  a  forth- 
coming bond.^ 

It  is  not  necessary  to  issue  a  subpoena  for  the  trustee.  He 
must,  however,  have  notice  of  filing  the  intervening  petition 
and  a  reasonable  time  within  which  to  put  in  his  defense. 
It  is  common  practice  for  the  judge  to  enter  an  order  requir- 
ing the  trustee  to  show^  cause  on  a  day  fixed  in  the  order  why 
the  prayer  of  the  petitioner  should  not  be  granted.  A  copy 
of  this  order  and  the  petition  is  served  upon  the  trustee  or  his 
attorney.  Proof  of  service  is  made  by  filing  a  copy  of  -the 
order  w'ith  service  accepted  by  the  trustee  or  his  attorney,  or 
by  an  affidavit  of  any  person  serving  the  papers.  No  notice 
to  creditors  is  required. 

The  trustee  may,  before  the  day  fixed  in  the  order,  demur, 
plead  or  answer  to  the  petition.  When  the  issues  are  prop- 
erly joined  a  trial  is  regularly  held  before  the  referee,  who 
has  power  to  try  the  rights  of  the  intervening  petitioner,  sub- 
ject to  review  by  the  judge. ^^    The  trial  may  be  had  before  the 


"Hewit    V.    Berlin    j\Iach.    Wks.,  Rubber  Refining  Co.,  139  Fed.  Rep. 

194  U.    S.   296,   48  L.    Ed.   986,    II  201,    15  Am.   B.   R.  82. 

Am.  B.  R.  709;  In  re  Mueller   (C.  '"/n   re   Drayton.    135    Fed.    Rep. 

C.  A.  6th  Cir.),  135  Fed.  Rep.  711,  883.  13  Am.  B.  R.  602;  In  re  Had- 

14  Am.  B.  R.  256;  Smith  v.  Means  den  Rodee  Co.,   135   Fed.   Rep.  886, 

fC.  C.  A.  7th    Cir.).  148  Fed.  Rep.  89.  13  Am.  B.  R.  604. 

*As    was    done    In    re    Froelich 


WHAT     PASSES    TO    THE    TRUSTEE.  459 

judge  in  the  first  instance.  A  claimant  waives  his  common- 
law  rig-ht  to  a  trial  by  jury  by  intervening  in  a  bankruptcy 
proceeding  for  the  reason  that  bankruptcy  is  governed  by  the 
same  rules  as  apply  to  equity  cases.^^  The  right  to  a  trial  by 
jury,  considered  as  an  absolute  right,  does  not  extend  to 
cases  of  ec|uity  jurisdiction.^" 

At  the  trial  evidence  may  be  introduced  by  oral  testimony 
or  by  deposition.  ^^  Witnesses  may  be  compelled  to  appear  and 
testify,  and  if  books  or  papers  are  required  a  subpoena  duces 
tecum  may  be  issued.  The  subpoena  for  a  witness  must  be 
issued  out  of  the  court  under  the  seal  thereof,  and  be  tested 
by  the  clerk.'*  Blanks  with  the  signature  of  the  clerk  and 
the  seal  of  the  court  may  be  furnished  to  the  referees  upon 
application.'^  A  witness  can  not  be  compelled  to  attend  a 
hearing  more  than  one  hundred  miles  from  his  residence.'*^ 
The  petitioner  is  entitled  to  an  inspection  of  all  accounts 
and  papers  of  the  trustee,  and  to  be  furnished  with  any  infor- 
mation concerning  the  bankrupt's  estate  which  the  trustee 
has,  although  the  trustee  may  be  resisting  the  petitioner's 
claim."  The  burden  of  proof  is  on  the  claimant  to  establish 
his  claim  to  the  property.'^  The  referee  will  usually  hear  ar- 
guments of  counsel,  and  thereupon  enter  an  order  either 
restoring  the  property,  or  dismissing  the  petition,  or  as  the 
rights  of  the  parties  may  require. 

This  order  of  the  referee  may  be  reviewed  by  the  judge  as 
in  other  cases,  and  the  order  of  the  judge  may  be  reviewed 

"Dokken  V.  Page   (C.  C.  A.  8th  '^Gen.  Orel.  3. 

Cir.),   147  Fed.   Rep.  438.  '» B.  A.  1898,  Sec.  41.    In  jr  Ilcm- 

"B.  A.  1898,  Sec.  igr.     Flippin  v.  street.  117  Fed.  Rep.  568,  8  Am.  B. 

Kimball    (C.    C.    A.    4tli    Cir.),    87  R.  760. 

Fed.   Rep.   258;    Kennedy   v.   R.   R.  ''In  re  Saur,  122  Fed.  Rep.   loi, 

Co.,  3  Fed.  Rep.  97.  10  Am.  B.  R.  353. 

"B.  A.   1898,  Sec.  21,  as  amend-  "Vw    re    Heckathorn,     144     Fed. 

ed    Feb.    5,    1903,    32    Stat,    at    T..  Rep.  499,  16  Am.  B.  R.  467;  In  re 

797  \  R.  R.  Sees.  863  to  866.  Wood.    140  F'ed.    Rep.  964,   15  Am. 

"Gen.  Ord.  3;  Official  Form  No.  ]>,.  R.  411. 
30.  see   Form  No.  40,   pnst;    R.   S. 
Sec.  911. 


460  I. AW    AXn    I' ROC  rjiOINGS    IN    UAN  KUri'lCV. 

by  a  circuit  court  of  appeals  under  Section  6  of  the  act  of 
March  3,  1891,  on  appeal  hut  not  on  a  [)etition  to  review.'" 

§  153.     What  property  passes  to  the  trustee  generally. 

It  may  be  stated  as  a  general  rule  that  all  goods,  property 
and  rights  of  action  properly  a\-ailable  for  the  payment  of  the 
bankrupt's  obligations  or  debts  pass  to  the  trustee  in  bank- 
ruptcy. Property  subject  to  exemption  under  the  state  law 
does. not  pass.^  The  claim  of  a  wife  for  alimony  is  not  a  prop- 
erty right  and  property  awarded  her  as  alimony  after  her 
bankruptcy  does  not  pass  to  her  trustee  in  bankruptcy." 

With  this  exception  the  statute  enumerates  six  classes  of 
property,''  the  title  of  which  shall  be  vested  in  the  trustee, 
namely,  to  all,  first,  documents  relating  to  his  property ;  second, 
interests  in  patents,  patent  rights,  copyrights,  and  trademarks  ; 
third,  powers  which  he  might  have  exercised  for  his  own  ben- 
efit, but  not  those  which  he  might  have  exercised  for  some 
other  person;  fourth,  property  transferred  by  him  in  fraud 
of  his  creditors;  fifth,  property  which  prior  to  the  filing  of 
the  petition  he  could  by  any  means  have  transferred  or  which 
might  have  been  levied  upon  and  sold  under  judicial  process 
against  him;  and,  sixth,  rights  of  action  arising  upon  con- 
tracts or  from  the  unlawful  taking  or  detention  of,  or  injury 
to,  his  property. 

These  provisions  relate  only  to  the  property  of  the  bankrupt 
or  property  in  his  possession,  and  do  not  include  any  other 
property.*     They  embrace  all  the  real  and  personal  property 

^^  26    Stat,    at    L.    862 ;    Hewit    v.  wherein  they  have  had  their  donii- 

Berlin  IMach.  Wks.,   194  U.   S.  297,  cile    for    the    six    months    or    the 

48  L.   Ed.  986,    II   Am.   B.   R.   709;  greater  portion  thereof  immediately 

In  re  Mueller   (C.  C.  A.  6th  Cir.),  preceding  the  filing  of  the  petition." 

135  Fed.  Rep.  711,  14  Am.  B.R.  256.  "In  re  Le  Claire,   124  Fed.  Rep. 

'  See  Exemption,   Chap.   XVII.  654,  10  Am.  B.  R.  72>3- 

B.  A.   1898,  Sec.  6.  provides  that  '  B.  A.  1898,  Sec.  70a. 

"This   act    .shall    not    affect   the   al-  '  Porter  v.  Lazear,   109  U.  S.  84, 

lowance  to  bankrupts  of  the  exemp-  27  L.   Ed.  865 ;  Tennessee,  etc.,  R. 

tions  which   are  prescribed  by   the  R.    Co.   v.   East   Alabama   Ry.   Co., 

state  laws  in   force   at   the   time   of  75    Ala.    529;    In    re    Angier,    388 

the  filing  of  the  petition  in  the  state  Fed.  Cas.,  4  N.  B.  R.  619. 


WHAT    PASSES    TO    THE    TRUSTEE.  461 

situated  in  the  United  States,  but  do  not  include  that  situated 
in  foreign  countries.''  A  bankrupt  may  be  compelled  to  exe- 
cute a  transfer  of  his  real  estate  situated  in  foreign  countries." 
Vessels  upon  the  high  seas  are  deemed  within  the  jurisdiction 
of  the  nation  and  the  proper  court  of  bankruptcy.'  All  per- 
sonal property,  wherever  it  is,  passes  under  these  provisions  * 
for  the  reason  that  personal  property  is  deemed  to  follow  the 
domicile  of  the  owner.  Citizens  of  foreign  countries  in  which 
the  personal  property  may  be  situated  are  not  bound  by  the 
bankrupt  law  of  the  United  States.  It  has  no  extra-terri- 
torial effect.  Although  such  property  passes  to  the  trustee 
as  of  the  date  of  adjudication,  it  may  be  deemed  not  to  have 
passed  to  affect  rights  acquired  by  foreign  creditors  in  for- 
eign forums  prioj-  to  the  actual  possession  of  the  trustee.  This 
seems  to  be  the  rule  in  the  United  States  with  reference  to 
foreign  bankruptcy.  The  American  courts  have  upheld  at- 
tachments of  resident  creditors  of  foreign  bankrupts  upon 
property  situated  in  this  country  against  a  foreign  assignee 
who  had  not  actually  taken  possession  of  such  property.** 

Such  property  passes  to  the  trustee  whether  named  in  the 
schedule  of  the  bankrupt  or  not.^'^ 

^  Oakey  v.  Bennett,   it    How.  33,       in  1814.     For  an  exhaustive  discus- 

13  L.  Ed.  593;   Barnett  v.   Pool,  2;^       sion    of    this    sul)ject,    see    Story's 
Tex.  517.  "  Conflict  of  Laws,   Sees.  403  to  421. 

Property  in  states  other  than  "  Blake  v.  Williams.  6  Pick, 
that  in  which  bankruptcy  proceed-  (Mass.)  286;  Milne  v.  Moreton,  6 
ings  are  pending  passes  to  the  trus-  Binn.  (Pa.)  353;  Dawes  v.  Boyls- 
tee.  See  In  re  Wilka,  131  Fed.  ton,  9  Mass.  2>37\  Osgood  v.  Ma- 
Rep.  1004,  12  Am.  B.  R.  727;  af-  guire,  61  N.  Y.  529;  Willitts  v. 
firmed  In  re  Granite  City  Bank  (C.  Waite,  25  N.  Y.  583;  Abraham  v. 
C.  A.  8th  Cir.),  137  Fed.  Rep.  818,  Plestoro,    3    Wend.    (N.    Y.)    338; 

14  Am.   B.   R.  404.  Saunders  v.  Williams.  5  N.  11.  213; 
'  Sec.   7,  clause   5,   of  the  act'  of  Blanchard   v.    Russell,    13  Mass.  i ; 

July  I,  1898,  30  Stat,  at  L.  Fox    v.    .Adams.    5     Greenl.    (Me.) 

^  Crapo    V.    Kelly,    16    Wall.    610,  245 :    Tngraham   v.   Cioyer,    13   Mass. 

21    L.   Ed.  430.  146;    Harrison   v.   .Stcrry,   5   Cranch 

"Cannon    v.    Wellford,    22    Grat.  289,  3  L.  Ed.  104;  Zacher  v.  Fidelity 

(Va.)  195;  Crapo  V.  Kelly,  t6  Wall.  Trust    and    Safety    Vault    Co.    (C. 

610,  21  L.  Ed.  430;  Selkrig  v.  Da-  C.  .\.  (;th  Cir.).  106  Fed.  Rep.  593, 

vies  &  Salt,  2  Dow  230,  s.  c.  2  Rose  45   C.   C.  A.  480. 

97;  decided  by  the   I  louse  of  Lords  '"llolhrook  v.  Coney,  25  111.  447; 


4(>J 


LAW     AND    PROCEEDINGS   IN    BANKRUPTCY. 


§  154.     Documents. 

All  documents  relating-  to  the  bankrupt's  property  pass  to 
the  trustee.*  These  include  "'  deeds  or  other  muniments  of  title, 
contracts,  securities  (as  bonds,  mortgages,  etc.),  bills  receiv- 
able, notes,  bank  books,  bills  of  exchange,  account  books, 
and  all  papers  and  books  relating  to  his  business.  While, 
strictly  speaking,  a  document  is  a  written  or  printed  paper, 
it  may  also  include  anything  bearing  a  legible  or  significant 
inscription,  as  a  stencil-plate  or  marking  and  cancelling  stamp 
or  a  seal.'' 

Where  a  bankrupt  has  transferred  his  documents  or  any  of 
them  to  another  person  before  bankruptcy  proceedings  were 
instituted,  such  documents  can  not  be  recovered  by  the  trus- 
tee until  such  transfer  is  shown  to  be  fraudulent  under  the 
act.^  Where  such  papers  and  documents  may  tend  to  in- 
criminate a  bankrupt  it  has  been  intimated  that  he  will  not 
be  required  to  turn  them  over  to  his  trustee.'^ 

§  155.     Patents,  copyrights  and  trade-marks. 

All  interests  in  patents,  patent  rights,  copyrights  and  trade- 
marks pass  to  the  trustee.*  But  the  trustee  takes  no  greater 
interest  in  these  rights  than  the  bankrupt  had."     Under  this 


Jewett  V.  Preston,  27  Me.  400 ;  Bur- 
ton V.  Lockert,  9  Ark  41 1  ;  In  re 
Schumpert,  No.  12491  Fed.  Cas.,  s. 
c.  8  N.  B.  R.  415. 

^B.  A.   1898,  Sec.  70,  clause   i. 

"  The  act  defines  a  document  to 
"include  any  book.  deed,  or  instru- 
ment in  writing."  B.  A.  1898,  Sec. 
I,  clause   13. 

"  See  Century  Dictionary,  sub- 
ject,  Document. 

*  Rogers  v.  Winsor,  No.  12023 
Fed.  Cas.,  6  N.  B.  R.  246;  In  re 
West,  46  L.  T.  823. 

^In  re  Hess,  134  Fed.  Rep.  109, 
14  Am.  B.  R.  559,  s.  c.  136  Fed. 
Rep.  988,  14  Am.  B.  R.  826. 

*  B.  A.  1898,  Sec.  70.  clause  2. 


As  to  the  nature  of  creditor's 
remedies  for  reaching  book  royal- 
ties, see  Lord  v.  Hart,  ir8  Mass. 
271 ;  Stephens  v.  Cady,  14  How. 
531,  14  L.  Ed.  528. 

As  to  trade-marks,  see  Helmbold 
V.  Helmbold  Manufacturing  Co., 
53  1  low.  Prac.  453 ;  Warren  v.  War- 
ren Thread  Co.,  134  Mass.  247; 
Sohicr  V.  Johnson,  in  Mass.  238; 
Leather  Cloth  Co.  v.  Cloth  Co.,  11 
H.  L.  523;  Kidd  V.  Johnson,  100 
U.  S.  617,  25  L.  Ed.  769;  Royal 
Baking  Powder  Co.  v.  .Sherell,  93 
N.  Y.  334. 

"In  re  McBride  &  Co.,  132  Fed. 
Rep.  285,   12  Am.   B.  R.  81. 


WHAT    PASSES    TO    THE    TRUSTEE.  463 

provision  the  interest  of  the  l^ankrupt  as  a  patentee,  assignee 
or  a  hcensee  passes  to  his  trustee  in  bankruptcy.  The  title 
passes  by  operation  of  law,  and  no  instrument  need  be  re- 
corded in  the  patent  office."  It  is,  however,  proper  for  a  trus- 
tee to  record  the  order  approving  his  bond  in  the  patent  office. 

The  trustee  is  not  bound  to  take  the  interest  of  the  bankrupt 
in  the  patents,  copyrights  or  trade-marks  if  it  is  conceived  to 
be  worthless  or  would  prove  to  be  a  burden  or  unprofitable.* 
If  he  declines  to  take  the  right  it  remains  in  the  bankrupt.''  If 
he  elects  to  take  it,  the  trustee  may  maintain  a  suit  for 
infringement  of  the  patent,  copyright,  or  trade-marks  in  such 
courts  as  the  bankrupt  could  have  instituted  it,  but  he  is  not 
obliged  to  bring  such  a  suit.^ 

It  has  been  held  that  the  trustee  is  not  entitled  to  patents 
issued  after  an  adjudication,  for  which  application  had  been 
made  prior  to  the  filing  of  the  petition  in  bankruptcy.*'  It  may 
be  observed  that  in  such  cases  the  bankrupt  owns  an  interest 
in  the  future  patent  which  may  be  transferred  before  the 
patent  issues.^  It  would  therefore  appear  that  the  property 
in  the  patent  should  pass  to  the  trustee  under  Sec.  70,  clauses 
2  or  5,  of  the  act.  If  he  elects  to  take  it,  he  should  record  the 
order  approving  his  bond  in  the  patent  office  with  a  request 
that  the  patent  issue  to  him  as  trustee. 

Where  an  author  has  assigned  his  rights  under  a  copyright 
absolutely,  the  interest  in  the  copyright  passes  to  the  trustee 
of  the  assignee.^     Where  the  contract  between  an  author  and 

^  Prime  v.  Brandon  Manufactur-  of  an  assignee  in  bankruptcy  to  in- 

ing    Co.,    No.    I1421    Fed.    Cas.,    16  stitute    suits    for    the    infringement 

Blatch.    453.      Compare    Gordon    v.  of  a  patent  owned  by  the  bankrupt, 

Anthony,    No.    5605    Fed.    Cas.,    16  and  that  his  failure  to  do  so  is  neg- 

P)latch.     453.       Compare     Ager     v.  ligence." 

^^urray,   105  U.   S.   131,  26  L.   Ed.  "/»  re  McDonnell,  loi  Fed.  Rep. 

942;    Ashcroft    V.    Walworth,    580  239,  4  Am.   B.   R  92;   In  re   Dann, 

Fed.  Cas.,  I    Holmes  132.  129  Fed.  Rep.  495.  12  Am.  B.  R.  27. 

*  Sessions  v.  Romadka,  145  U.  S.  ''  R.    S.    Sec.     4895 ;    Hendrie     v. 

29.  36  L.  Ed.  609.  Sayles,    9^    U.    S.    546,    25    L.    Ed. 

■■"Kittle  V.  Hall,  29  Fed.  Rep.  512,  176;  Walker  on  Patents,  Sec.  171. 

where  the  court  said:     "It  can  not  ^ In   re  FIowley-Dresser   Co.,    132 

be   maintained    that    it    is   the    duty  Fed.  Rep.  1002,  13  Am.  B.  R.  94. 


4C)4  LAW    AND   PROCEEDINGS   IN    BANKRUPTCY. 

publisher  for  copyrighting,  pnbHshing  and  selling  by  the  lat- 
ter of  books  under  a  royalty,  which  contract  expressly  pro- 
vided that  it  should  not  be  transferred  without  the  consent 
of  the  author,  the  trustee  of  the  publisher  can  not  sell  as  an 
asset  this  interest  in  the  copyright,  but  should  assign  it  to  the 
author," 


§  156.    Powers  of  appointment,  etc. 

A  power  ^  is  distinct  from  property.  It  is  not  an  interest 
in  property  which  can  be  transferred  to  another  or  sold  on 
execution  or  devised  by  will;  nor  is  it  a  chose  in  action.  It 
was  therefore  held  under  the  act  of  1867  that  a  power  of 
appointment  did  not  pass  to  an  assignee  in  bankruptcy  of  the 
person  in  whom  the  power  resided." 

The  act  of  1898  expressly  provides  that  powers  which  a 
bankrupt  might  have  exercised  for  his  own  benefit  pass  to 
the  trustee.*  But  those  which  he  might  have  exercised  for 
some  other  person  do  not  pass."  The  English  bankrupt  laws 
have  for  many  years  contained  a  similar  provision.*  The  test 
of  whether  the  power  passes  or  not  depends  upon  whether  the 
power  may  be  exercised  by  the  bankrupt  for  his  own  benefit, 
or  whether  he  can  exercise  it  only  in  behalf  of  some  other 
person.     In  the  former  case  it  passes  to  the  trustee.^     In  the 

^  In   re   McBride,    132    Fed.    Rep.  And  the  bankruptcy  act  of  1869,  32 

285,  12  Am.  B.  R.  81.  and  33  Vic.  c.  71  s.   15,  par.  4,  en- 

^  As    to     powers     generally,     see  acted,  and  the  act  of   1883,  46  and 

Sugden     on     Powers ;     Chance     on  47   Vic.   c.   52,   s.   44,   provides   that 

Powers;     Farwell     on     Powers,     4  the    property    of    the    bankrupt    di- 

Kent's  Com.  351,  et  seq.  visible    among    his    creditors    shall 

^  Jones  V.   Clifton,   loi   U.   S.  225,  comprise   (i  i)   "the  capacity  to  ex- 

25  L.  Ed.  908.  ercise  and  to  take  proceedings   for 


^  B.   A.   1898,   Sec.   70,  clause  3.  exercising   all   such   powers   in   and 

*  The  statutes  13  Eliz.,  c.  7,  s.  2,  over  or   in   respect  of  property   as 

21   Jac.   I  c.   19  s.   12,  provided  that  might   have   been   exercised  by   the 

every    interest,    power,   or    possibil-  bankrupt  for  his  own  benefit  at  the 

ity  which  the  bankrupt  could  have  commencement    of    his    bankruptcy 

departed  withal,  or  could  have  de-  or  before  his  discharge." 

stroyed     by     recovery     of     fine,     is  ^  Doe  v.  Britian,  2  B.  &  Aid.  93 ; 

transferred    under    the    bankruptcy.  Badham  v.  Mee,  7  Ding.  695 ;  Coop- 


WHAT    PASSES    TO    THE    TRUSTEE,  465 

latter  case  it  does  not.  A  power  of  general  appomtment  may 
be  exercised  for  the  benefit  of  himself,  and  therefore  passes/' 
But  it  seems  that  the  appointment  must  be  exercised  prior  to 
the  death  of  the  bankrupt/ 

This  provision  in  bankruptcy  law  is  similar  to  a  rule  in 
equity.  The  trustee  for  this  purpose  represents  the  creditors. 
Mr.  Justice  Gray,  in  Clapp  v.  Ingraham,^  said :  "It  was  set- 
tled in  the  English  court  of  chancery,  before  the  middle  of 
the  last  century,  that  where  a  person  has  a  general  power  of 
appointment,  either  by  deed  or  by  will,  and  executes  this 
power,  the  property  appointed  is  deemed  in  equity  part  of  his 
assets,  and  subject  to  the  demands  of  his  creditor^  in  prefer- 
ence to  the  claims  of  his  voluntary  appointees  or  legatees.  The 
rule  perhaps  had  its  origin  in  a  decree  of  Lord  Somers,  af- 
firmed by  the  House  of  Lords,  in  a  case  in  which  the  person 
executing  the  power  had  in  effect  reserved  the  power  to 
himself  in  granting  away  the  estate. °  But  Lord  Hardwicke  re- 
peatedly applied  it  to  cases  of  the  execution  of  a  general  power 
of  appointment  by  will  of  property  of  which  the  donee  had 
never  had  any  ownership  or  control  during  his  life;  and,  while 
lecognizing  the  logical  difficulty  that  the  power  when  executed 
took  effect  as  an  appointment,  not  of  the  testator's  own  as- 
sests,  but  of  the  estate  of  the  donor  of  the  power,  said  that 
the  previous  cases  before  Lord  Talbot  and  himself  (of  which 
very  meager  and  imperfect  reports  have  come  to  us)  had 
established  the  doctrine,  that  when  there  was  a  general  power 
of  appointment,  which  it  was  absolutely  in  the  donee's  pleas- 
ure to  execute  or  not,  he  might  do  it  for  any  purpose  what- 
ever, and  might  appoint  the  money  to  be  paid  to  his  exec- 
utors if  he  pleased,  and,  if  he  executed  it  voluntarily  and 
without  consideration,  for  the  benefit  of  third  persons,  the 
money  should  be  considered  part  of  his  assets,  and  his  cred- 

er  V.  Slight,   27  L.   R.   Clian.   Div.  102   Fed.   Rep.   290,   4   Am.    B.   R. 

565;  Ford  V.  Belmont,  7  Rob.    (N.  335,  3  N.  B.  N.  143. 

Y.)  97.  ^126  Mass.  201. 

'Doe  V.  Britian,  2  B.     &Ald.  93.  "Thompson  v.  Towne,   Prec.  Ch. 

'Nichols     V.     Nixey,     29    L.     R.  52;  s.  c.  2  Vein.  319. 
Chan.   Div.    1005;    In   re   Wetmorc, 


466 


LAW  A\n  puo(-Ki:niX(;s  ix  i;  \\  kri'I'icn'. 


itors  should  have  the  benefit  of  it/"    Tlie  doctrine  has  been  up- 
held to  the  full  extent  in  England  ever  since."  " 

§  157.     Property  fraudulently  transferred  by  the  bankrupt. 

The  bankrupt  statute  vests  in  the  trustee  and  authorizes  him 
to  recover  property  fraudulently  transferred/  A  transfer,  as 
ilefined  by  the  act.  includes  "the  sale  and  every  other  and  dif- 
ferent mode  of  disposing  of  or  parting  with  property,  or  the 
possession  of  property,  absolutely  or  conditionally,  as  a  pay- 
ment, pledge,  mortgage,  gift,  or  security." 

Transfers  which  are  deemed  fraudulent  in  bankruptcy  may 
be  classified  as  follows :  First,  those  which,  independently  of 
any  legislative  system  of  bankruptcy,  w^ould  have  been  fraudu- 
lent at  common  law,  or  under  a  statute  of  frauds.^  Second, 
those  which,  in  the  absence  of  a  legislative  system  of  bank- 
ruptcy, would  have  been  unobjectionable,  but  are  made  void  by 
the  bankrupt  act,  as  against  its  manifest  policy  of  equal  and 
speedy  distribution.*  This  distinction  between  conveyances 
and  transfers  involving  moral  turpitude  and  which  are  fraud- 
ulent in  fact  and  preferential  transfers  where  the  fraud  is 
constructive  or  technical  is  well  recognized.'^ 

Section  70a,  clause  4,  gives  the  trustee  the  title  of  the  bank- 


"  Townshend  v.  Windham.  2 
Ves.  Sen.  i,  9,  10 ;  Ex  parte  Cas- 
wall,  I  Atk.  559.  560;  Bainton  v. 
^^'ard,  7  Ves.  503,  note ;  s.  c.  cited 

2  Ves.    Sen.   2,   and   Belt's    Supplt. 
243;  2  Atk.  172;   Pack  V.  Bathurst, 

3  Atk.  269. 

^^  Chance  on  Powers,  Chap.  15, 
Sec.  2;  2  Sugden  on  Powers  (7th 
ed.),  27;  Fleming  v.  Buchanan; 
DeG.,  M.  &  G.  976;  III  re  Harvey's 
Estate,  13  L.  R.  Chan.  Div.  216. 

'■  B.  A.  1898,  Sees.  60,  67e.  See 
70a,  clause  4,  and  see  70^,  as  amend- 
ed by  the  act  of  Feb.  3.  1903,  32 
Stat,  at  L.  797;  B.  A.  1898  Sees. 
158,  159,  203  and  203a,  post. 

For    a    historv    and    construction 


of  these  sections,  see  Judge  Low- 
ell's opinion,  In  re  Mullen,  loi  Fed. 
Rep.  413,  4  .\m.  B.  R.  224. 

-B.  A.  1898,  Sec.  I,  clause  25. 

^  B.  A.  1898,  Sec.  70,  clause  4,  and 
Sec.  67^;  see  also  Sees.  158,  160, 
203  and  203fl,  post. 

*B.  A.  1898,  Sec.  60  and  Gye, 
par.  2;  see  also  Sees.  159,  203  and 
203a,  post. 

^  In  re  Maher,  144  Fed.  Rep.  503, 
16  Am.  B.  R.  340;  In  re  Arm- 
strong, 145  Fed.  Rep.  202,  210,  16 
Am.  B.  R.  583;  Githens  v.  Shiffler, 
112  Fed.  Rep.  505,  7  Am.  B.  R. 
453;  In  re  Mullen,  loi  Fed.  Rep. 
413.  4  Am.  B.  R.  224. 


WHAT    PASSES    TO    THE    TRUSTEE.  467 

nipt  to  all  property  transferred  by  him  in  fraud  of  creditors, 
but  this  vesting  of  the  trustee  with  certain  rights  and  with  a 
certain  title  was  not  intended  to  make  absolutely  void  a 
transfer  hitherto  held  to  be  only  voidable.  The  other  sections 
relating  to  property  transferred  in  fraud  of  creditors  pro- 
vide that  it  may  be  recovered  by  the  trustee,  which  plainly  im- 
plies that,  as  against  the  trustee  as  against  the  creditor,  the 
transferee's  title  is  not  void,  but  voidable — voidable  at  law 
as  well  as  in  equity,  but  still  voidable.  These  transfers  and 
the  right  of  the  trustee  to  avoid  them  are  considered  more  at 
length  in  the  next  few  sections. 

§  158.     Transfers  in  fraud  of  creditors. 

All  property  transferred  by  the  bankrupt  in  fraud  of  his 
creditors  vests  in  the  trustee.^  There  is  no  four  months'  lim- 
itation on  this  class  of  transfers.^ 

This  provision  includes  fraudulent  conveyances,  which  are 
so  by  common  law,  by  statute  law  and  by  any  other  recognized 
rule  of  law,  other  than  the  special  provisions  of  the  bankrupt 
statute.''  They  are  for  the  most  part  made  fraudulent  and 
void  by  statutes  founded  upon  the  statute  of  13  Elizabeth, 
chap.  5,  enacted  in  1570.  and  perpetuated  in  29  Elizabeth,  chap. 

^B.    A.    1898,    Sec.    70,    clause   4-  Tn  Smith  v.  Ely,  No.  13044  Fed. 

Consult  Sec.  157,  ante,  for  the  dif-  Cas.,    10   N.    B.    R.   553,   the   court, 

ferent  clauses  of  fraudulent  trans-  speaking  of  the   act  of   1867,   said: 

fers,  and  Sees.   159  to  161   for  fur-  "Although  no  transfer  made  more 

ther  treatment  of  same.  than  six  months   (four  months  un- 

=  /n  re  Gray  (N.  Y.  Sup.  Ct.  App.  der  the  present  statute)  before  the 

Div.),  3  Am.  B.  R.  647.  filing  of  the  petition  can  be  made 

="  Allen  V.   Massey,   17  Wall.   351,  the    ground     of     adjudicating     the 

21    L.   Ed.   542;    Pearsall   v.    Smith,  debtor  a  bankrupt,  it  in  no  sort  fol- 

149  U.  S.  231,  37  L.  Ed.  713;  Brad-  lows  that  when  the  debtor  has.  up- 

shaw  V.  Klein,  No.  1790  Fed.  Cas.,  on  lawful  ground  therefor,  been  de- 

2    Biss.    20;    Hyde   v.    Sontag,    No.  creed  a  bankrupt,  the  assignee  can 

6974  Fed.  Cas.,   i   Saw.  249;  Allen  not    impeach    any    conveyance    and 

V.     Montgomery,     48     Miss.     loi ;  recover   any    property   which,   were 

Southard  v.  Benner,  72  N.  Y.  424;  there   no  bankrupt   law,   the   credi- 

Knowlton    v.    Moseley,    105    Mass.  tors    (having    first    obtained    judg- 

1.36;    Cady    V.    Whaling,    No.    2285  ment)    might  impeach  and   recover 

Fed.  Cas.,  7  Biss.  430.  on    the    ground    that    it    was    con- 


468 


LAW   AND   PROCEEDINGS   IN    BANKRUPTCY. 


5,  passed  in  1587.'  This  statute  is  merely  a  legislative  declar- 
ation of  the  principles  of  the  common  law  on  this  subject." 
"It  declared  all  gifts  or  conveyances  of  goods  and  chattels  as 
well  as  of  lands  and  tenements  made  in  fraud  of  creditors  to 
be  void  as  against  them."  "'  Speaking  of  this  statute,  Judge 
Story  observed  that  it  has  been  "universally  adopted  in  Amer- 
ica as  the  basis  of  our  jurisprudence  on  the  subject."  ^  It  is 
not  within  the  province  of  this  work,  however,  to  determine 
what  conveyances  are  in  fraud  of  creditors  under  the  various 
statutes  and  recognized  rules  of  law.  The  reader  is  referred 
to  general  works  on  that  subject.** 

An  action  to  recover  property  fraudulently  conveyed  by  the 


vcned  or  transferred  to  defraud 
them.  On  the  contrary,  the  14th 
section  expressly,  and  the  general 
rules  of  equity  with  equal  cer- 
tainty, do  permit  it." 

For  transfers  void  under  the 
bankrupt  act  if  made  within  four 
months,  see  Sees.  159,  160  and  161, 
post. 

*  Although  this  statute  of  Eliza- 
beth is  usually  referred  to  as  the 
foundation  statute  for  avoiding 
fraudulent  conveyances,  the  same 
principles  are  to  a  greater  or  less 
extent  embodied  in  earlier  statutes. 
The  act  of  50  Edward  III.,  Chap. 
6  (1376)  provided  that  "Divers 
people  *  *  *  do  give  their  ten- 
ements and  chattels  to  their  friends, 
by  collusion  to  have  the  profits  at 
their  will,  and  after  do  flee  to  the 
franchise  of  Westminster  of  St. 
Martinle-Grand  of  London,  or  oth- 
er such  privileged  places,  arid  there 
do  live  a  great  time  witli  an  high 
countenance  of  another  man's 
goods  and  profits  of  the  said  ten- 
ements and  chattels,  till  the  said 
creditors  shall  be  bound  to  take  a 
small  parcel  of  their   debt  and   re- 


lease the  remnant,  it  is  ordained 
and  assented,  that  if  it  be  found 
that  such  gifts  be  so  made  by  col- 
lusion, that  the  said  creditors  shall 
have  execution  of  the  said  tenants  • 
and  chattels  as  if  no  such  gift  had 
been  made."  See  also  statute  of  2 
Richard  II.,  Chapter  3  (1379);  3 
Henry    VII.,    Chap.    4    (1487)- 

^  In  Cadogan  v.  Kennett,  2  Cow- 
per,  434,  Lord  Mansfield  said : 
"The  principles  and  rules  of  the 
common  law,  as  now  universally 
known  and  understood,  are  so 
strong  against  fraud  in  every 
shape  that  the  common  law  would 
have  attained  every  end  proposed 
by  the  statutes  13  El.  c.  5  and  27 
El.  c.  4."  The  same  rule  is  laid 
down  in  Clements  v.  Moore,  6 
Wall,  312. 

"  Mr.  Justice  Gray,  in  Drake  v. 
Rice,   130   Mass.  412. 

^  Story's   Eq.  Jur.,   Sec.  253. 

"  As  to  what  constitutes  such 
fraudulent  conveyances  generally, 
see  Wait  on  Fraudulent  Convey- 
ances; Bump  on  Fraudulent  Con- 
veyances ;  Worthington  on  Fraud- 
ulent Conveyances. 


WHAT    PASSES    TO    THE    TRUSTEE. 


469 


bankrupt  must  be  instituted  by  the  trustee."  The  trustee  for 
this  purpose  represents  the  general  or  unsecured  creditors. 
The  fraudulent  debtor  has  no  right  to  set  aside  a  conveyance 
made  by  him  in  fraud  of  his  creditors.  It  is  valid  between  the 
parties.  By  operation  only  of  the  express  terms  of  the  act  the 
right  which  before  the  adjudication  in  bankruptcy  belonged 
to  the  creditors  was  taken  from  them  and  given  to  the  trustee.^" 
When  he  asserts  such  rights  he  claims  under  them  and  not 
under  the  bankrupt.^"  The  negligence  or  refusal  of  a  trustee 
to  bring  a  suit  to  set  aside  such  a  conveyance  is  not  sufficient 
to  entitle  a  creditor  to  maintain  a  suit  in  his  own  name.^^  The 
proper  remedy  in  such  a  case  is  an  application  to  the  court  to 
compel  the  trustee  to  take  requisite  steps  for  the  full  and  com- 
plete protection  of  the  rights  of  his  creditors.^" 

Fraud  is  a  necessary  element  to  give  the  trustee  in  bank- 
ruptcy a  right  of  action."  Insolvency  of  itself,  or  the  fact  that 
the  property  conveyed  constituted  more  in  value  than  the 
grantor  could  rightfully  withdraw  from  the  reach  of  cred- 
itors, does  not  vest  such  a  right  of  action  in  the  trustee. 


14 


*  As  to  where  such  suits  may  be 
prosecuted,  see  Sec.  203,  post,  and 
as  to  pleadings  and  procedure,  see 
Sec.  203a,  post.  Trimble  v.  Wood- 
head,  102  U.  S.  647,  26  L.  Ed.  290; 
Glenny  v.  Langdon,  98  U.  S.  20,  25 
L.  Ed.  43;  Allen  &  Co.  v.  Mont- 
gomery, 48  Miss.  lor ;  In  re  Meyers, 
No.  9518  Fed.  Cas.,  2  Ben.  424; 
Thurmond  v.  Andrews,  10  Bush 
(Ky.)  400;  In  re  Gray  (N.  Y.),  47 
App.  Div.  554,  3  Am.  B.  R.  647; 
Falco  V.  Kaupisch  Creamery  Co. 
(Ore.),  70  Pac.  Rep.  286. 

"  Crooks  V.  Stuart,  7  Fed.  Rep. 
800;  Jones  V.  Smith,  38  Fed.  Rep. 
380;  Trimble  v.  Woodhead,  102  U. 
S.  647,  26  L.  Ed.  290;  Dudley  v. 
Easton,  104  U.  S.  99,  26  L.  Ed.  668; 
In  re  Metzger,  No.  9510  Fed  Cas., 


2  N.  B.  R.  355;  Pratt  v.  Curtis, 
No.  1 1375  Fed.  Cas.,  2  Lowell  87. 

"  Moyer  v.  Dewey,  103  U.  S.  301, 
26  L.  Ed.  394;  Glenny  v.  Langdon, 
98  U.  S.  20,  25  L.  Ed.  43 ;  King  v. 
Ditz,  12  Penn.  St.  156;  Lane  v. 
Nickerson,  99  111.  284. 

^"  See  Glenny  v.  Langdon,  98  U. 
S.  20,  25  L.  Ed.  43. 

'•''  Bush  V.  Export  Storage  Co., 
T36  P^cd.  Rep.  918,  14  Am.  B.  R. 
138;  In  re  Schenck,  116  Fed.  Rep. 
554,  8  Am.  B.  R.  727. 

"Warren  v.  Moody,  122  LT.  S. 
133,  30  L.  Ed.  1 128;  Adams  v.  Col- 
lier, 122  U.  S.  382,  30  L.  Ed.  1207; 
Metropolitan  National  Bank  v. 
Rogers,  53  Fed.  Rep.  776,  s.  c.  3 
C.  C.  A.  666;  In  re  Schenck,  ti6 
Fed.    Rep.   554,  8   Am.    B.   R.   727; 


470  \.\\y    AND    PROCEEDINGS    IN     BANKRUPTCY. 

The  statute  provides  that  the  transfer  shall  be  in  fraud  of  his 
creditors/^ 

"The  trustee  may  avoid  any  transfer  by  the  bankrupt  of  his 
property  which  any  creditor  of  such  bankrupt  might  have 
avoided,  and  may  recover  the  property  so  transferred,  or  its 
value,  from  the  person  to  \yhom  it  was  transferred,  unless  he 
was  a  bona  fide  holder  for  value  prior  to  the  date  of  the  ad- 
judication. Such  property  may  be  recovered  or  its  value  col- 
lected from  whomever  may  have  received  it,  except  a  bona  fide 
holder  for  value.  ^" 

It  seems,  therefore,  that  a  trustee  may  pursue  the  property 
or  proceeds  of  property  to  whomever  may  have  received  it 
until  he  reaches  a  bona  fide  purchaser.^^  Thus  if  A,  in  fraud 
of  his  creditors,  transfers  the  property  to  B,  who  afterwards 
sells  it  to  C,  with  notice,  who  afterwards  sells  it  to  D,  a 
bona  fide  purchaser  for  value,  the  trustee  in  bankruptcy  of  A 
may  hold  C  liable  in  damages  for  the  value  of  the  property. 
The  trustee,  however,  has  no  greater  rights  in  this  respect 
than  the  creditors  would  have  under  the  state  laws.^^ 

Where  a  fraudulent  transferee  and  the  trustee  rescind  the 
transaction  and  the  transferee  turns  the  property  over  to  the 
trustee  the  trustee  takes  the  title  the  bankrupt  had  and  does 
not  take  as  the  grantee  of  the  fraudulent  transferee.^" 

.  When  a  fraudulent  conveyance  or  transfer  is  set  aside  the 
court  will  order  the  property  turned  over  to  the  trustee  in 


In    re    Toothaker    Bros.,    128    Fed.  "Sedgwick   v.    Place,    No.    12621 

Rep.   187,  12  Am.  B.  R.  99.  Fed.    Cas.,    12    Blatch.    163;    In    re 

''B.  A.  1898,  Sec.  70,  clause  4-  Mullen,   loi   Fed.   Rep.  413.  4  Am. 

'«B.   A.    1898.   Sec.   /oe:   Bush  v.  B.  R.  224. 

Export  Storage  Co.,   136  Fed.  Rep.  '^  In    re    Mullen,    loi     Fed.    Rep. 

918,  14  Am.  B.  R.  138.  413.  4  Am.   B.  R.  224,  2  N.  B.   N- 

As  to  what  constitutes  a  bona  fide  70T. 

holder,    see    Marsh    v.    Armstrong,  '" /«    re    Kellogg    (C.    C.    A.    2d 

20  Minn.   81;    Murray  v.   Jones,   50  Cir.),    r2i    Fed.    Rep.    333,    lo   Am. 

Ga.  109;   Harrell  v.  Beal,  17  Will.  B.    R.    7.    affirming    113    Fed.    Rep. 

590,    21    L.    Ed.    692;    Sedgwick    v.  120,  7  Am.  B.  R.  623. 
Place,     No.     12621     Fed.     Cas.,     12 
Blatch.  163. 


WHAT    PASSES    TO    THE    TRUSTEE. 


471 


bankruptcy,-"  but  will  preserve  rights  under  the  local  exemp- 
tion lavvs."^ 

§  159.     Transfers  to  prefer  creditors. 

The  act,  as  amended  February  5,  1903,  provides  that  a  per- 
son shall  be  deemed  to  have  given  a  preference  if,  being  insol- 
vent, he  has,  within  four  months  before  the  filing  of  the 
petition,  or  after  the  filing  of  the  petition  and  before  the 
adjudication,  made  a  transfer  of  any  of  his  property,  and  the 
effect  of  such  transfer  will  be  to  enable  any  one  of  his  cred- 
itors to  obtain  a  greater  percentage  of  his  debt  than  any  other 
of  such  creditors  of  the  same  class.  Such  period  of  four 
months  shall  not  expire  until  four  months  after  the  date  of 
the  recording  or  registering  of  the  transfer,  if  by  law  such 
recording  or  registering  is  required/  If  a  bankrupt  shall  have 
given  a  preference  and  the  person  receiving  it.  or  to  be  bene- 


™  In  Keating  v.  Keefer,  No.  7635 
Fed.  Cas.,  5  N.  B.  R.  133,  the  court 
.said : 

"The  circumstances  of  this  case 
are  such  as  to  force  the  conviction 
upon  my  mind  that  the  transfers 
to  defendant,  and  the  placing  of  the 
title  to  the  land  in  question  in  her 
name,  were  made  and  done  with 
intent  to  hinder,  delay  and  defraud 
not  only  the  then  existing  credi- 
tors of  Henry  M.  Keefer,  but  his 
future  creditors  also.  A  decree 
must  he  entered  in  accordance  with 
the  foregoing  conclusions,  and  de- 
claring the  said  farm,  together  with 
all  the  stock,  grain  and  other  per- 
.sonal  property  upon  it,  except  such 
as  the  law  excepts, -assets  of  the 
.said  bankrupt,  Henry  M.  Keefer, 
and  subject  to  be  disposed  of  and 
distributed  under  the  bankrupt  act 
for  the  payment  of  his  debts  and 
the  expenses  of  the  bankruptcy 
proceedings,  and  for  delivery  and 
surrender    up    to    the    complainant 


as  assignee  of  the  said  bankrupt,  of 
the  possession  of  all  said  property, 
except  as  aforesaid,  for  the  ac- 
counting by  the  defendant  of  all 
personal  property  on  said  farm  at 
the  time  the  bankruptcy  proceed- 
ings were  commenced  (adjudica- 
tion), sold,  disposed  of  or  convert- 
ed by  her,  other  than  for  the  nec- 
essary keep  of  the  live  stock,  and 
for  the  preservation  of  said  proper- 
ty, and  requiring  the  defendant  to 
execute  and  deliver  ;dl  convey- 
ances, releases,  assignments,  trans- 
fers or  acquittances  neces.sary  to 
carry  said  decree  into  ftdl  force  and 
effect,  and  for  costs  to  the  com- 
plainant." 

See  also  Sands  v.  Cod  wise,  4 
Johns    (N.  Y.)    536. 

^  B.  A.  i8g8.  Sec.  7.  ;  McFar- 
land  v.  Goodman.  No.  8789  Fed. 
Cas.,  6  Biss.  11 1;  In  re  Detert,  No. 
3829  Fed.  Cas.,  11  N.  B.  R.  293. 

*  See   Sec.    194^,   post 


472 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


lited  thereby,  or  his  agent  acting  therein,  shall  have  had  rea- 
sonable cause  to  believe  that  it  was  intended  thereby  to  give  a 
preference,  it  shall  be  voidable  by  the  trustee,  and  he  may 
recover  the  property  or  its  value  from  such  person." 

Before  the  amendment  the  act  made  any  transfer  by  an  in- 
solvent, the  effect  of  which  was  to  enable  any  creditor  to  obtain 
a  greater  percentage  of  his  debt  than  any  other  creditor  of  the 
same  class,  a  preference,  and  allowed  the  trustee  to  avoid  a 
preference  made  within  four  months  of  the  filing  of  the  peti- 
tion if  the  person  receiving  it  had  reasonable  cause  to  believe 
a  preference  was  intended.  Since  the  amendment  the  transfer 
must  be  made  within  four  months  of  the  filing  of  the  petition 
in  order  to  be  a  preference,  and  the  trustee  may  avoid  any 
preference  if  the  person  receiving  it  had  reasonable  cause  to 
believe  a  preference  was  intended.  In  regard  to  the  recovery 
of  property  by  the  trustee  the  effect  is  the  same. 

This  provision  evidently  refers  to  property  transferred  to 
or  for  the  benefit  of  a  creditor  for  the  purpose  of  creating  a 
preference.  Though  a  preference  of  creditors  by  a  transfer 
or  assignment  of  property  by  an  insolvent  may  sometimes  be 
unjust  to  the  other  creditors,  it  was  not  forbidden  by  the  com- 
mon law  and  is  not  forbidden  by  many  of  the  states.  It  is, 
however,  made  invalid  by  the  bankrupt  act,  providing  three 
things  concur.'*  First,  At  the  time  of  the  transfer  the  bank- 
rupt must  be  insolvent.*  A  person  is  deemed  insolvent  within 
the  provisions  of  this  act  whenever  the  aggregate  of  his  prop- 


=  B.  A.  1898,  Sec.  60,  32  Stat,  at 
L.  797.     See  Sees.  194  et  seq.,  post. 

"  The  section  here  under  consid- 
eration corresponds  with  R.  S.  Sec. 
5128,  embracing  a  part  of  Sec.  35 
of  the  act  of  1867.  The  two  sec- 
tions differ  in  some  particulars'. 
For  cases  construing  Sec.  35  of  the 
act   of   1867,   see   Tiffany   v.   Lucas, 

15  Wall.  410,  21  L.  Ed.  198;  Bar- 
tholow  V.  Bean,  t8  Wall.  635,  21 
L.    Ed.    866;    Buchanan    v.    Smith, 

16  Wall.  277,  21  L.  Ed.  280;  Toof 


V.  Martin,  13  Wall.  40,  20  L.  Ed. 
481;  West  Phil.  Bank  v.  Dickon, 
95  U.  S.  180,  24  L.  Ed.  407;  Mays 
V.  Fritton,  20  Wall.  414,  22  L. 
Ed.  389;  Michaels  v.  Post,  21 
Wall.  398,  22  L.  Ed.  520;  Judson 
V.  The  Courier  Co.,  8  Fed.  Rep. 
422. 

*  B.  A.  1898,  Sec.  I,  clause  15; 
In  re  Eggert  (C.  C.  A.  7th  Cir.), 
102  Fed.  Rep.  735,  4  Am.  B.  R, 
449.     See   Sec.    194a,  post. 


WHAT    PASSES    TO    THE    TRUSTEE. 


473 


erty,  exclusive  of  any  property  which  he  may  have  conveyed, 
transferred,  concealed  or  removed,  or  permitted  to  be  con- 
cealed or  removed,  with  intent  to  defraud,  hinder  or  delay 
his  creditors,  shall  not,  at  a  fair  valuation,  be  sufficient  in 
amount  to  pay  his  debts.  Second,  The  transfer  must  be  made 
within  four  n:!onths  before  the  filing  of  the  petition.^  Third, 
effect  of  the  transfer  must  be  to  enable  any  creditor  to  obtain 
a  grea<-er  percentage  of  his  debt  than  other  creditors  of  the 
same  class.*^  Fourth,  The  person  to  be  benefited  must  have  had 
reasonable  cause  to  believe  that  it  was  intended  thereby  to 
give  a  preference."  The  existence  of  the  required  reasonable 
cause  for  belief  may  be  inferred  from  the  circumstances  of 
the  transaction.^  When  these  things  concur  the  trustee  is  en- 
titled to  recover  the  property  so  transferred. 

Every  case  of  this  kind  must  be  decided,  however,  on  its 
own  facts  and  it  will  never  be  possible  to  lay  down  any  gen- 
eral formula  applicable  to  all  cases.  The  intent  to  receive  a 
preference  necessarily  involves  the  idea  of  an  expectation  of 
the  debtor  paying  some  others  less  than  their  whole  debt.® 

All  levies,  judgments,  attachments  or  other  liens,  obtained 
through  legal  procedings  within  four  months  prior  to  the  fil- 
ing of  the  petition  are  void  and  the  property  so  levied  on 
passes  to  the  trustee ;  ^"  but  where  property  levied  on  has 
been  sold  to  an  innocent  purchaser  for  value,  such  purchaser 


^  S,ee  Sec.  I94(/,  post;  In  7V  Kindt, 
loi  Fed.  Rep.  107,  4  Am.  B.  R. 
148. 

'  See  Sec.  ig^h,  post. 

''  See  Sec.    194c,  post. 

*  Tiffany  v.  Lucas,  i5  Wall.  410, 
2  J  L.  Ed.  198;  In  re  Eggert  (C.  C. 

A.  7th  Cir.),  T02  Fed.  Rep.  735,  4 
Am.  B.  R.  449,  2  N.  B.  N.  390; 
In  re  Blair,  102  Fed.  Rep.  987,  4 
Am.  B.  R.  220,  2  N.  B.  N.  890;  In 
re  Kenney,  97  Fed.  Rep.  554,  3  Am. 
P..  R.  353;  Taft  V.  Fourth  Nat. 
Bank    (Sup.    Ct.    Cincinnati),   2   N. 

B.  N.  1 145;  Hackney  v.  Raymond 
Bros.    Co.    rNeb.),"io   Am.    B.    R, 


213;  Stedman  v.  Bank,  117  Fed. 
Rep.  2T,7,  9  Am.  B.  R.  4;  Crit- 
tenden V.  Barton  (N.  Y.),  5  Am. 
B.  R.  775;  Lyon  v.  Clark,  129  Mich. 
381;  In  re  Soudan  Mfg.  Co.  (C.  C. 
A.  7th  Cir.),  113  Fed.  Rep.  804,  8 
Am.  B.  R.  45;  Brown  v.  Guichard 
(N.  Y.).  7  Am.  B.  R.  515. 

'  I'or  ilhistration  of  what  consti- 
tutes a  preferential  transfer,  con- 
sult   Preferences,   Chap.   XVII  f. 

'"B.  A.  1898,  Sec.  67f:  In  re 
Francis- Valentine  Co.,  93  Fed.  Rep. 
953.  2  Am.  B.  R.  188;  Sec.  192, 
post 


474  LAW     AND     rRUCEEDlxVGS    IN     BANKRUPTCY. 

has  a  good  title.     The  proceeds  of  such  sale  go  to  the  trustee 
and  not  to  the  judgment  creditor." 

§  i6o.     Property    transferred   to  hinder,  delay  or  defraud 
creditors. 

The  bankrupt  act  provides  "That  all  conveyances,  transfers, 
assignments,  or  incumbrances  of  his  property,  or  any  part 
thereof,  made  or  given  by  a  person  adjudged  a  bankrupt 
under  the  provisions  of  this  act  subsequent  to  the  passage  of 
ihis  act  and  within  four  months  prior  to  the  filing  of  the  peti- 
tion, with  the  intent  and  purpose  on  his  part  to  hinder,  delay, 
or  defraud  his  creditors  or  any  of  them,  shall  be  null  and  void 
as  against  the  creditors  of  such  debtor,  except  as  to  purchasers 
in  good  faith  and  for  a  present  fair  consideration;  and  all 
property  of  the  debtor  conveyed,  transferred,  assigned,  or  en- 
cumbered as  aforesafd  shall,  if  he  be  adjudged  a  bankrupt, 
and  the  same  is  not  exempt  from  execution  and  liability  for 
debts  by  the  law  of  his  domicile,  be  and  remain  a  part  of  the 
assets  and  estate  of  the  bankrupt  and  shall  pass  to  his  said 
trustee,  whose  duty  it  shall  be  to  recover  and  reclaim  same 
by  legal  proceedings  or  otherwise  for  the  benefit  of  the  cred- 
itors." ^ 

In  order  to  avoid  a  transfer  under  this  provision  three 
things  must  concur.  First,  The  debtor  must  have  been  adjudi- 
cated a  bankrupt  under  the  provisions  of  this  act.  Second,  The 
transfer  must  have  been  made  subsequent  to  the  passage  of 
the  act  and  within  four  months  prior  to  the  filing  of  the  peti- 
tion. The  day  on  which  the  transfer  is  made  is  excluded  in 
computing  the  four  months."     The  date  from  which  the  four 

'V;!    re    Kenney,     95     Fed.     Rep.  Cir.).   T07  Fed.  Rep.  669,  6  Am    B. 

427,  2  Am.  B.  R.  494;  in  re  Frank.s,  R.    f  8 ;    /;;    ir    Schullcr,     108     Fed. 

93  Fed.  Rep.  635,  2  Am.  B.  R.  634.  Rep.  591.  6  Am.   B.   R.   278:   Slier- 

^  B.  A.  1898.  Sec.  67c.     This  sec-  man  v.   Luckhardt    (Sup.  Kan.),   il 

tion  corresponds  to  R.  S.  Sec.  5129,  Am.    B.    R.    26,    overruling   9    Am. 

embracing  a  part  of  Sec.  35  of  the  B.  R.  312,  65  Kan.  610. 
act  of  1867;    Pollock  V.  Jones    (C.  "  B.  A.   1898,  Sec.  31;  In  re  Hill, 

C.  A.  4th  Cir.).  124  Fed.  Rep.  163,  140   Fed.    Rep.   984,    15   Am.    B.   R 

10  Am.  B.   R.  616;   In   re   Steinin-  499;   Dutcher  v.   Wright,  94  U.   S. 

ger  Mercantile   Co.    (C.   C.   A.   5th  533,  24  L.  Ed.  130. 


WHAT    PASSES    TO    THE    TRUSTEE. 


475 


months  begins  to  run  is  the  date  the  transfer  was  actually 
made  and  not  the  date  when  the  deed  or  mortgage  was  re- 
corded. This  is  the  general  rule  which  was  applied  to  pref- 
erence prior  to  the  amendment  of  1903  fixing  the  date  of 
recording."  Third,  The  existence  of  an  intent  and  purpose  on 
the  part  of  the  bankrupt  to  hinder,  delay  or  defraud  his  credi- 
tors, or  any  of  them.  If  any  of  these  elements  are  wanting 
the  transfer  can  not  be  avoided  under  this  provision. 

The  transfer  of  property  "with  intent  to  hinder,  delay  and 
defraud  creditors,"  as  used  in  the  bankrupt  act,  is  none  other 
than  the  like  fraudulent  transfer  made  void  by  Stat.  13  Eliz., 
which  is  itself  simply  declaratory  of  the  common  law  and 
should  have  the  same  construction  and  effect  as  have  for  a 
long  period  of  time  been  attributed  to  these  words.*  The 
test  of  the  transfer  intended  by  this  section  is  that  of  the  bona 
fides  of  the  transfer.^  If  the  transfer  is  one  which  would  be 
fraudulent  at  common  law  it  may  be  avoided  by  the  trustee.® 
That  is  to  say.  the  transaction  must  involve  actual  fraud  involv- 
ing moral  turpitude.  Transfers  made  in  good  faith,  for  an  an- 
tecedent or  present  consideration,  are  not  within  this  provision 
notwithstanding  the  effect  may  be  that  it  hinders  or  delays 


^See  Sec.  194^,  post.  Humphrey 
V.  Tatman,  198  U.  S.  91.  49  L-  Ed- 
956,  14  Am.  B.  R.  74;  Rogers  v. 
Page  (C.  C.  A.  6th  Cir.),  140  Fed. 
Rep.  596.  15  Am.  B.  R.  502;  Little  v. 
Holly-Brooks  Hardware  Co.  (C.  C. 
A.  5th  Cir.),  133  Fed.  Rep.  874, 
13  Am.  B.  R.  422. 

Sec  also  Wood  v.  Owings,  i 
Cranch.  239,  2  L.  Ed.  94,  where  a 
deed  signed,  sealed  and  delivered 
May  30,  1800,  and  acknowledged 
June  14,  1800,  was  held  to  have 
been  made  before  the  act  of  1800 
took  effect,  wln'cli  was  on  June  i, 
1800. 

*  Lansing  Boiler  &  Eng.  Wks.  v. 
Ryerson  (C.  C.  A.  6th  Cir.),  128 
Fed.   Rep.  701,   n   Am.   B.  R.  558; 


Githens  v.  Shififler,  112  Fed.  Rep. 
505,  7  Am.  B.  R.  453. 

'^  Lansing  Boiler  &  Eng.  Wks.  v. 
Ryerson  (C.  C.  A.  6th  Cir.),  128 
Fed.  Rep.  701,  11  Am.  B.  R.  558; 
In  re  Bloch  (C.  C.  A.  2d  Cir.).  142 
Fed.  Rep.  674,  15  Am.  B.  R.  748. 

In  Cadogan  v.  Kennett,  2  Cow- 
pcr  435,  Lord  Mansfield  said :  "The 
question  therefore  in  every  case  is 
whether  the  act  done  is  a  bona  fide 
transaction  or  whether  it  is  a  trick 
or  contrivance  to  defeat  creditors." 

"In  re  Pease,  129  Fed.  Rep.  446, 
12  Am.  B.  R.  66;  In  re  Benjamin, 
140  Fed.  Rep.  320,  i?  Am.  B.  R. 
35i;  Walbrun  v.  Babbitt,  16  Wall. 
577,  21  L.  Ed.  489;  in  re  Knopf, 
144   Fed.    Rep.   245,    16  Am.   B.   R. 


476 


LAW     AND     PROCEEDINGS    IN     BANKRUPTCY. 


creditors  by  removing  from  their  reach  assets  of  the  debtor.' 
Such  a  transfer  may  be  preferential  without  being  fraudulent/ 
The  intent  to  defraud  is  essential  to  a  fraudulent  transfer 
under  Section  67(\  An  intent  to  prefer  is  not  sufficient." 
The  purpose  must  be  to  defraud  the  entire  body  of  creditors. 
The  conversion  of  the  property  of  a  single  creditor  is  not 
sufficient."*  The  intent  of  the  bankrupt  only  is  essential. ^^ 
lliis  may  be  determined  from  the  circumstances  connected 
with  the  transaction,  because  a  person  is  presumed  to  intend 
the  necessary  consequence  of  his  acts.^-  The  issue  as  to 
whether  or  not  a  bankrupt  had  made  a  transfer  of  his  prop- 
erty with  intent  on  his  part  to  hinder,  delay  or  defraud  his 
creditors  is  a  question  for  the  jury."  The  intent  of  the  trans- 
feree is  immaterial,  but  he  must  be  shown  to  have  knowledge 
of  or  have  participated  in  the  fraud. ^* ,  The  fact  that  he  had 
reasonable  cause  to  inquire  into  the  nature  of  the  transaction 
is  sufficient,  although  he  may  not  have  had  actual  knowledge 
of  the  fraud  involved  in  the  transaction.^^ 


432,  s.  c.  146  Fed.  Rep.  109;  John- 
ston V.  Forsyth,  127  Fed.  Rep.  845, 
II  Am.  B.  R.  669. 

'  Lansing  Boiler  &  Eng.  Wks.  v. 
Ryerson  (C.  C.  A.  6th  Cir.),  128 
Fed.  Rep.  701,  11  Am.  B.  R.  558; 
Jacobs  V.  Van  Sickle  (C  C.  A.  3d 
Cir.),  127  Fed.  Rep.  62,  11  Am. 
B.  R.  470;  In  re  Duffey,  118  Fed. 
Rep.  926,  9  Am.  B.  R.  358:  Githens 
V.  Shiffler,  112  Fed.  Rep.  505,  7 
Am.  B.  R.  453;  In  re  Maher,  144 
Fed.  Rep.  503,  16  Am.  B.  R.  340; 
In  re  Armstrong,  145  Fed.  Rep. 
202,   16  Am.  B.  R.  583- 

^Githens  v.  Shiffler,  112  Fed. 
Rep.  505,  7  Am.  B.  R.  453;  In  re 
Maher,  144  Fed.  Rep.  503.  16  Am. 
B.  R.  340;  In  re  Armstrong,  145 
Fed.  Rep.  202,  t6  Am.  B.  R.  583- 

"Githens  v.  Shiffler,  112  Fed. 
Rep.  505,  7  Am.  B.  R.  453;  Jn  re 
Maher,   144  Fed.   Rep.  503,   16  Am. 


B.  R.  340;  In  re  Armstrong,  145 
Fed.  Rep.  202,  16  Am.  B.  R.  583. 

^"In  re  Berry  &  Co.,  146  Fed. 
Rep.  623,   15  Am.  B.  R.  360. 

"/m  re  Hill,  140  Fed.  Rep.  984, 
15  Am.  B.  R.  499;  In  re  McLam, 
97  Fed.  Rep.  922,  3  Am.  B.  R.  245; 
In  re  Bloch  (C.  C  A.  2d  Cir.), 
142  Fed.  Rep.  674,  15  Am.  B.  R. 
748. 

''Toof  V.  Martin,  13  Wall.  40, 
20  L.  Ed.  481 ;  in  re  Knopf,  146 
Fed.  Rep.  109;  In  re  Benjamin, 
140   Fed.    Rep.  320,    15   Am.   B.   R. 

351- 

"  Sherman  v.  Luckhardt,  96  Mo. 

App.  320,  9  Am.  B.  R.  307. 

"Jacobs  V.  Van  Sickle  (C.  C  A. 
3d  Cir.),  127  Fed.  Rep.  62,  11  Am. 
B.   R.  470. 

"Walbrun  v.  Babbitt,  t6  Wall. 
577,  21  L.  Ed.  489;  In  re  Moody, 
134   Fed.   Rep.   628,    14  Am.   B.   R. 


WHAT    PASSES    TO    THE    TRUSTEE. 


477 


Transfers  made  in  good  faith  for  a  present  fair  considera- 
tion and  transfers  of  property  exempt  from  execution  and  lia- 
bility for  debts  by  the  law  of  the  debtor's  domicile  can  not  be 
avoided  under  this  provision.  They  are  expressly  excluded 
in  terms.  The  object  of  this  provision  is  not  to  reach  prop- 
erty honestly  sold  for  a  fair  price.  It  should  be  observed  that 
though  a  present  fair  consideration  was  given  for  property 
transferred  to  hinder,  delay  or  defraud  creditors,  it  alone  will 
not  save  the  conveyance.  A  sale  may  be  void  for  bad  faith 
though  the  buyer  pays  the  full  value  for  the  property  bought.^" 
This  is  the  consequence  where  his  purpose  is  to  aid  the  seller 
in  perpetrating  a  fraud  upon  his  creditors  and  where  he  buys 
perpetrating  a  fraud  upon  his  creditors  and  where  he  buys 
recklessly  with  guilty  knowledge.^'  Where  a  fraudulent  trans- 
fer is  alleged  and  a  purchaser  claims  that  the  purchase  was 
made  in  good  faith  for  a  present  fair  consideration,  the  bur- 
den is  upon  him  to  establish  that  fact  to  bring  him  within 
the  protection  of  this  section. ^^ 

An  attaching  creditor  can  not  be  deemed  a  purchaser  in 
good  faith  for  value.  But  where  property  conveyed  in  fraud 
of  creditors  is  first  attached  by  creditors  of  the  transferee  who 
have  no  knowledge  of  the  fraud,  their  attachment  will  pre- 
vail as  against  tlie  rights  of  the  defrauded  creditors  of  the 
grantor,  or  his  trustee  in  bankruptcy.^''  This  ruling  was 
made  in  a  case  arising  under  Section  70c.  In  view  of  the  con- 
struction placed  upon  Section  67c  the  result  would  be  the  same 
were  the  transfer  made  with  intent  to  hinder,  delay  or  de- 
fraud creditors. 


272;  In  re  Knopf,  146  Fed.  Rep. 
109;  Dokken  v.  Page  (C.  C.  A. 
8th    Cir.),    147    Fed.    Rep.    438. 

"/u  re  Pease,  129  Fed.  Rep.  446, 
12  Am.  B.  R.  66. 

"  In  re  Pease,  129  Fed.  Rep.  446, 
12  Am.  B.  R.  66;  Clements  v. 
Moore,  6  Wall.  312;  Cadogan  v. 
Kennett,  2  Cowper  432;  Walbrun 
V.  Babbitt,  t6  Wall.  581,  21  L.  Ed.  489. 

"  Lawrence   v.    Lowrie,    133    Fed. 


ReP-  995.  13  Am.  B.  R.  297;  ^Tc- 
Nulty  V.  Wiesen,  130  Fed.  Rep. 
1012,  12  Am.  B.  R.  341 ;  In  re 
Knopf,  144  Fed.  Rep.  245,  16  Am. 
B.  R.  432,  s.  c.  146  Fed.  Rep.  109; 
In  re  Moody,  134  Fed.  Rep.  628, 
14  Am.  B.  R.  272 ;  Dokken  v.  Page 
(C.  C.  A.  8th  Cir.),   147  Fed.  Rep 

438. 

'"  In  re  ^Mullen,  Toi  Fed.  Rep.  4135 
4  .Am.  B.  R.  224. 


478  LAW      AND     I'ROCEEDINGS    IN     BANKRUPTCY. 

A  transfer  fraudulent  nntler  the  statute  of  frauds  may  be 
set  aside  under  this  section  if  made  within  the  time  specified,^" 
as  well  as  under  the  provisions  relating  to  transfers  in  fraud 
of  creditors."' 

§  i6i.     Transfers  void  as  to  creditors  under  state  laws. 

The  bankrupt  act  provides  that  "All  conveyances,  transfers, 
or  incumbrances  of  his  property  made  by  a  debtor  at  any  time 
within  four  months  prior  to  the  filing  of  the  petition  against 
him,  and  while  insolvent,  which  are  held  null  and  void  as 
against  the  creditors  of  such  debtor  by  the  laws  of  the  state, 
territory  or  district  in  which  such  property  is  situate,  shall 
be  deemed  null  and  void  under  this  act  against  the  creditors 
of  such  debtor  if  he  be  adjudged  a  bankrupt,  and  such  prop- 
erty shall  pass  to  the  assignee  [trustee]  and  be  by  him  re- 
claimed and  recovered  for  the  benefit  of  the  creditors  of  the 
bankrupt.^ 

By  this  provision  congress  has  adopted  the  state  laws  for 
the  purpose  of  determining  whether  a  transfer  is  void  as 
against  creditors.  The  provision  is  not  confined  to  any  par- 
ticular class  of  transfers.  Any  conveyance  or  transfer  of  his 
property  made  by  a  bankrupt  within  four  months  before  the 
filing  of  the  petition  may  be  held  null  and  void  as  against  the 
creditors  of  the  bankrupt,  provided  it  could  have  been  set 
aside  by  the  creditors  under  the  local  law.  The  failure  to 
reg'ster  or  properly  record  a  deed  or  bill  of  sale  or  mortgage, 
as   1-equired  by  the  local   statute,'  or  to  give  possession   of 


'■"Andrews    v.    Graves,    No.    376  20   L.    Ed.    rgo;    In   re   Leland.    10 

Fed.   Cas.,   i   Dill.   108.  Blatch.    503,    No.    8234    Fed.    Cas. ; 

^  B.  A.   1898,   Sec  7oe.     See  also  In   re  Wynne,  4  N.   B.   R.  22,,   No. 

Sec.   158,  ante.  181 17  Fed.   Cas.;   Allen  v.   Massey, 

'B.   A.    1898,   Sec.  67e.  4  N.  B.  R.  231,  No.  231   Fed.  Cas. 

^/m  re  Leigh,  96  Fed.  Rep.  806;  and   17   Wall.  352,   21   L.   Ed.   542; 

In   re   Hull,    115   Fed.    Rep.   858,   8  Harvey    v.     Crane,     5     N.     B.     R. 

Am.    B.    R.    302.      See    Sawyer    v.  218,    No.    6178   Fed.    Cas.,   and   see 

Turpin,    91    U.    S.    114,    23   L.    Ed.  note;    Edmonson  v.    Hyde,  2   Saw. 

235;    Bank   v.    ilnnt.    ii    Wall.   391,  205,  No.  42S5  Fed.  Cas. 


WHAT    PASSES    TO    THE    TRUSTEE.        '  479 

personal  property,"'  are  familiar  examples.  In  most  states 
such  a  transfer  is  valid  between  the  parties,  but  may  be  avoided 
where  rights  of  creditors  are  concerned.  In  such  case  the 
trustees  in  bankruptcy  may  recover  for  the  creditor's  property 
so  transferred,  provided  there  has  been  an  adjudication  of 
bankruptcy. 

Adopting"  the  state  laws  as  a  rule  of  decision  does  not  vio- 
late the  constitutional  provision  with  reference  to  uniformity. 
The  uniformity  required  relates  to  the  national  legislation 
only.  It  is  well  settled  that  the  laws  of  tlie  several  states 
regulating  exemptions  may  be  left  in  force  so  long  and  to 
such  an  extent  as  congress  may  see  fit.*  The  same  reasoning 
may  be  applied  to  state  statutes  relating  to  the  rights  of  cred- 
itors. 

§  162.     Real  and  personal  property. 

The  title  to  all  property  whicli  prior  to  the  filing  of  the 
petition  the  bankrupt  could  by  any  means  have  transferred,  or 
which  might  have  been  levied  upon  and  sold  under  judicial 
process  against  him,  passes  to  the  trustee.^ 

The  test  as  to  whether  property  is  of  such  a  character  as  to 
pass  or  not  depends  upon  whether,  under  the  local  law  where 
the  property  has  its  situs,  the  bankrupt  could  have  transferred 
it^  or  whether  it  could  have  been  levied  upon  and  sold  under 
judicial  process  against  him.  If  it  is  of  such  a  character  it 
passes.  If  not.  it  does  not  pass  to  the  trustee.  Such  ques- 
tions are  determinable  only  by  local  law  where  the  property 
has  its  situs.-    The  situs  of  real  property  is  the  state  in  which 

^In  re  Taylor,  95  Fed.  Rep.  956;  dan,   No.   7514   Fed.   Cas.,  8   N.    B. 

Spencer    v.    Duplan    Silk    Co.,    112  R.    180;    In    re    Jordan,    No.    7515 

Fed.   Rep.   638,    7   Am.    B.    R.    563,  Fed.    Cas..    16    N.    B.    R.    427;    In 

rcver.sed     (C.    C.    A.    3d    Cir.),    8  re    Kean,    No.    7630    Fed.    Cas..    2 

Am.  B.  R.  367,   115  Fed  Rep.  689,  flughes,  322. 

s.  c.  191  U.  S.  526,  48  L.  Ed.  287;  '  B.    A.    1898,    Sec.    70,   clause    5; 

In  re  Portuondo  Co.,  135  Fed.  Rep.  In   re   Burka,   104  Fed.  Rep.  326,  5 

592,    14   Am.    B.    R.   337.  Am.  B.  R.  12. 

*  Darling  v.   Berry,   13  Fed.   Rep.  ^Spindle    v.    Shreve,    in    U.    S. 

668;    In    re    Beckerford,    No.    1209  546.  28  L.  Ed.  512,  Nichol  v.  Levy, 

Fed.    Cas.,    i    Dill.    45;    In    re   Jor-  5  Wall.  433,  18  L.  Ed.  596;  Mason 


480 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


it  is  situated.'    The  situs  of  personal  property  is  the  domicile 
of  the  bankrupt."' 

The  effect  of  this  provision  is  to  transfer  the  greater  part  of 
the  assets  of  the  bankrupt.  They  include  a  large  number  of 
different  classes  of  property,  which  will  be  more  particularly 
discussed  under  separate  heads. 

§  163.    Interest  in  real  estate. 

The  title  to  all  real  estate  within  the  United  States  held 
by  the  bankrupt  at  the  time  of  filing  the  petition  is  vested  in 
the  trustee.^  But  as  a  title  vested  by  law  can  have  no  extra 
territorial  operations,  lands  situated  in  foreign  countries  do 
not  pass  except  by  deed.^  The  bankrupt  should  therefore 
execute  a  transfer  of  his  real  estate  situated  in  foreign  coun- 
tries." 

Any  interest  in  real  estate  which  is  alienable  or  subject  to 
levy  and  execution  passes  to  the  trustee.  Thus  it  has  been 
held  that  an  equity  of  redemption,^  property  devised,*  a 
vested  remainder,^  a  reversion  with  rent  incident  thereto,"  a 


V.  Beebee,  44  Fed.  Rep.  558;  in  re 
McKenna,  9  Fed.  Rep.  27.  See  also 
Nichols  V.  Eaton,  91  U.  S.  729,  23 
L.  Ed.  254.  Raynolds  v.  Hanna,  55 
Fed.  Rep.  795. 

^Oakey  v.  Bennett,  11  How.  S3y 
13  L.  Ed.  593.  See  also  In  re  Bug- 
bee,  No.  21 15  Fed.  Cas.,  9  N.  B.  R. 
258. 

^Oakey  v.  Bennett,  n  How.  33, 
13  L.  Ed.  593;  Barnett  v.  Pool,  23 
Tex.  517. 

'B.  A.   1898,   Sec.  7,  clause  5. 

*  Barron  v.  Newberry,  No.  1056 
Fed.  Cas.,  i  Biss.  149;  Robinson  v. 
Denny,  57  Ala.  492.  See  also  4 
Kent's  Com.  160;  Ex  parte  Ames, 
No.  323  Fed.  Cas.,  i  How.  561 ;  In 
re  Novak,  in  Fed.  Rep.  161,  7  Am. 
B.  R.  27. 


■*  Sanford  v.  Lackland,  No.  12312 
Fed.  Cas.,  2  Dill.  6;  Ex  parte  Ful- 
ler,   No.    5147    Fed.    Cas.,    2    Story 

327. 

'"In  re  Wood,  98  Fed.  Rep.  972, 
3  Am.  B.  R.  572,  3  N.  B.  N.  141; 
In  re  Twaddell,  no  Fed.  Rep.  145, 
6  Am.  B.  R.  539 ;  In  re  Shenber- 
ger,  102  Fed.  Rep.  978,  4  Am.  B.  R. 
487;  In  re  McHarry  (C.  C.  A.  7th 
Cir.),  Ill  Fed.  Rep.  498,  7  Am. 
B.  R.  83;  Belcher  v.  Burnett,  126 
Mass.  230;  Woods  v.  Little  (C.  C. 
A.  4th  Cir.),  13  Am.  B.  R.  742,  134 
Fed.  Rep.  229;  see  also  Putnam  v. 
Story,   132  Mass.  205. 

'  Evans  v.  Hamrick  &  Co.,  61 
Penn.    St.    19. 


WHAT    PASSES    TO    THE    TRUSTEE. 


481 


fee  subject  to  -an  easement/  accretions  to  land  by  alluvion/ 
an  estate  of  the  husband  by  courtesy  or  dower/  a  resulting 
trust,/"  or  an  equitable  title  conveyed,  to  bankrupt  subject  to  a 
trust  imposed  by  a  will/'  or  any  vested  interest/-  is  such  prop- 
erty as  vests  in  a  trustee.  It  has  been  held  on  the  other  hand 
that  a  contingent  interest  in  an  estate  in  remainder/^  the  in- 
come of  a  life  estate  under  a  will/*  or  Indian  lands  under  an 
allotment  act  of  congress''  do  not  pass  to  the  trustee.  Whether 
an  equitable  interest  in  real  estate  will  pass  to  a  trustee 
depends  upon  the  local  law  where  the  property  has  its  situs.'"' 
The  trustee  of  a  bankrupt  mortgager  is  ordinarily  entitled 
to  take  as  a  part  of  the  estate  the  rents  for  mortgaged 
property  which  comes  into  his  possession  accrued  up  to  the 
time  that  the  mortgagee  enters  and  brings  his  right  of  entry  or 
his  bill  of  foreclosure,  or  takes  such  action  as  entitles  him  to 
possession  of  the  property.'" 


§  164.     Dower  and  curtesy. 

Real  estate  of  the  bankrupt  passes  to  the  trustee  subject  to 
his  wife's  right  of  dower.  A  right  of  dower  by  a  w^'fe  is  no 
part  of  the  ])ankrupt's  property,  and  it  can  not  be  barred  by 


'  Banks  v.  Ogclen,  2  Wall.  57,  17 
L.  Ed.  818. 

"  Banks  v.  Ogden,  2  Wall.  57,  17 
L.  Ed.  818. 

'  In  re  McKenna,  9  Fed.  Rep.  27 ; 
Hesseltine  v.  Prince,  95  Fed.  Rep. 
802.  802,  2  Am.  B.  R.  600. 

'"/n  re  Dunavant,  96  Fed.  Rep. 
542,  3  Am.  B.  R.  41. 

"/w  re  Gailey  (C.  C.  A.  7th 
Cir.),  127  Fed.  Rep.  538,  il  Am.  B. 

^■539- 

^^  In  re  Hosier,  ir2  Fed.  Rep. 
138.  7  Am.  B.  R.  268. 

"/n  re  Wetmore,  102  Fed.  Rep. 
290,  4  Am.  B.  R.  335,  3  N.  B.  N. 
143.    affirmed    (C.    C.    A.    3d   Cir.), 


108  Fed.  Rep.  520;  In  re  Hoadlcy, 

2  N.  B.  N.  704. 

"Monroe  v.  Dewey  (Mass.),  2 
N.  B.  N.  840.  But  see  In  re  Bau- 
donine,  96  Fed.  Rep.  536,  3  Am.  B. 
R.  55 ;  In  re  St.  John,  105  Fed.  Rep. 
234,  5  Am.  B.  R.  190,  3  N.  B.  N. 
114. 

"^/«  re  Russie,  96  Fed.  Rep.  609, 

3  Am.   B.   R.  6. 

"Spindle  v.  Shreve,  in  U.  S. 
542,  28  L.  Ed.  512;  In  re  Goldman, 
ro2  Fed.  Rep.  122,  4  Am.  B.  R.  100, 
2  N.  B.  N.  818. 

"/jj  re  Dole,  no  Fed.  Rep.  926, 
7  Am.  B.  R.  21 ;  In  re  Chase,  133 
Fed.   Rep.  79,   13  .Am.   B.   R.  294. 


482 


LAW      AM)     I'ROCKKDIXGS    IN     BANKRUPTCY. 


a  sale  by  the  trustee  in  bankruptcy  under  order  of  the  court.^ 
The  same  rule  is  applied  in  England." 

The  present  statute  recognizes  this  right  of  the  widow  when 
it  provides  that  in  case  of  the  death  of  the  bankru])t  the  widow 
and  children  shall  be  entitled  to  all  rights  of  dower  and  al- 
lowance allowed  by  the  law  of  the  state  of  the  bankrupt's  resi- 
dence.^ The  wife  is  not  estopped  to  claim  dower  by  reason 
of  having  joined  her  husband  in  a  deed  which  is  fraudulent 
as  against  creditors,  and  \vhich  for  this  reason  has  been  set 
aside  by  the  trustee.*  In  what  property  the  wife  has  a  right 
of  dower  and  the  nature  of  the  dower  depends  upon  the  local 
law.  Where  the  local  law  gives  a  wife  dower  in  property 
"whereof  the  husband  died  seized  and  possessed,"  it  has  been 
held  that  the  widow  is  not  entitled  to  dower  in  property  which 
has  passed  to  her  husband's  trustee  by  virtue  of  bankruptcy 
before  his  death. ^  The  wife  of  a  bankrupt  has  no  inchoate 
right  of  dower  in  real  estate  which  has  vested  in  a  trustee  as 
assets  of  a  partnership.'" 

An  estate  by  curtesy  in  a  wife's  property  does  not  pass  to 
the  trustee  of  her  husband  during  her  life.^  The  wife's  right 
of  dower  in  her  husband's  estate  does  not  pass  to  her  trustee 
durine  the  life  of  the  husband.^ 


^  Porter  v.  Lazear,  109  U.  S.  84, 
27  L.  Ed.  865 ;  In  re  Shaeffer,  103 
Fed.  Rep.  352,  5  Am.  B.  R.  248; 
In  re  Slack,  in  Fed.  Rep.  523,  7 
Am.  B.  R.  121 ;  In  re  Angier,  No. 
388  Fed.  Cas.,  4  Am.  B.  R.  619;  In 
re  Hester,  No.  6437  Fed.  Cas.,  5  N. 
B.  R.  285.  But  see  Hill  v.  Bow- 
ers, 4  Heisk.  (Tenn.)  272;  Bos- 
tick  V.   Jordan,   7   Tenn.   370. 

-Smith  V.  Smith,  £  Ves.  189; 
Squire  v.  Compton,  Vin.  Ab.  Dow- 
er G.  pi.  60. 

'B.  A.  1898,  Sec.  8. 

*Cox  V.  Wilder,  No.  3308  Fed. 
Cas.,  2  Dill.  45;  In   re  Detert,  No. 


3829  Fed.  Cas.,  11  N.  B.  R.  293; 
McFarland  &  Goodman,  No.  8789 
Fed.  Cas.,  6  Biss.   in. 

''  In  re  McKenzie,  132  Fed.  Rep. 
986,  13  Am.  B.  R.  227;  affirmed 
(C.  C.  A.  8th  Cir.).  142  Fed.  Rep. 
383,  15  Am.  B.  R.  679. 

"  Hiscock  V.  Jaycox,  No.  6531 
Fed.   Cas.,   12   N.   B.  R.  507. 

■^  Hesseltine  v.  Prince,  95  Fed. 
Rep.  802,  2  Am.  B.  R.  600;  In  re 
McKenna,  9  Fed.  Rep.  27. 

*  In  re  German  American  Bank 
((Southern  District  of  Ohio,  1905, 
not    reported). 


WHAT    PASSES    TO    THE    TRUSTEE. 


483 


g  165.    Leaseholds. 

A  lease  which  may  be  transferred  by  a  bankrupt  or  levied 
upon  and  sold  under  judicial  process  against  him  prior  to  the 
filing  of  the  petition,  is  not  terminated  by  bankruptcy  but 
passes  to  the  trustee.*^  Although  the  legal  title  passes,  the 
trustee  is  not  bound  to  take  the  lease  and  charge  the  estate 
with  the  payment  of  rent.  He  may  elect  not  to  take  the  lease 
when  it  would  be  a  burden  and  not  a  benefit  to  the  estate  on 
the  ground  that  it  is  onerous  property.^" 

Under  the  statute  of  1867  a  landlord  was  not  entitled  to 
prove  a  debt  for  rent  accruing  subsequent  to  the  filing  of  the 


"/«  re  Ells,  98  Fed.  Rep.  967, 
3  Am.  B.  R.  564,  2  N.  B.  N.  360, 
Judge  Lowell  said :  "A  lease  re- 
cently examined  was  made  for  a 
term  of  several  hmidred  years,  up- 
on a  payment  of  $16,000  at  the 
beginning  of  the  term,  and  subject 
to  a  future  rent  of  $1  a  year  if  de- 
manded by  the  lessor.  Clearly,  this 
would  be  an  asset  of  a  bankrupt's 
estate  which  the  trustee  would  al- 
most certainly  elect  to  assume,  and 
I  can  find  nothing  in  the  bank- 
rupt act  which  would  terminate 
the  lease  and  entitle  the  landlord 
to  possession.  Many  existing 
ground  leases,  also,  would  certain- 
ly be  assumed  by  a  trustee  in  bank- 
ruptcy of  the  lessee,  and  it  would 
be  unjust  to  hold  them  terminated 
by  the  adjudication." 

See  also  In  re  Bush,  126  Fed. 
Rep.  878,  II  Am.  B.  R.  415;  In  re 
Adams,  134  Fed.  Rep.  142,  14  Am. 
B.  R.  23;  In  re  Arnstein,  loi  Fed. 
Rep.  706,  4  Am.  B.  R.  246,  2  X.  B. 
N.  106;  In  re  Pennewell  (C.  C. 
A.  Gih  Cir.),  119  Fed.  Rep.  139, 
9  Am.  B^.  R.  490;  Lamson,  etc., 
Co.  V.  Bowland  (C.  C.  A.  6th 
Cir.),  114  Fed.  Rep.  639,  52  C  C. 
■A.  335;  /Xtkins  V.  Wilcox  (C.  C. 
A.  5th  Cir.),   105  Fed.   Rep.  595,  5 


Am.  B.  R.  313.  Contra,  In  re  Jef- 
ferson, 93  Fed.  Rep.  948,  2  Am.  B. 
R.  206;  Bray  v.  Cobb,  100  Fed.  Rep. 
270,  3  Am.  B.  R.  788,  2  N.  B.  N. 
586;  In  re  Hays,  etc.,  Co.,  117  Fed. 
Rep.  879,  9  Am.  B.  R.  144. 

^^  See  Trustee  not  bound  to  take 
encumbered  interest.  Sec.  151,  and 
Rent,  Sec.  120. 

In  re  Chambers,  Calder  &  Co.,  98 
Fed.  Rep.  865,  3  Am.  B.  R.  537,  2 
N.  B.  N.  388;  Ex  parte  Whitman, 
not  reported,  but  referred  to  by 
Judge  Ware  in  Smith  v.  Gordon, 
No.  13052  Fed.  Cas.,  6  Law  Rep. 
313;  In  re  Ten  Eyck,  No.  13829 
Fed.  Cas.,  7  N.  B.  R.  26;  Turner 
V.  Richardson,  7  East's  Reports 
336;  Welch  V.  Myers,  4  Campbell 
368;  Thomas  v.  Pemberton  and 
Kittredge,  7  Taunt.  205 ;  Ansell 
V.  Robson,  2  Crompton  &  Jervis, 
610;  Clark  V.  Hume,  Ryan  & 
Moody's  Reports,  207;  Page  v. 
Godden,  2  Starkie,  309;  Hastings 
V.  Wilson,  Holt,  290 ;  Wheeler  v. 
Bramah,  3  Campbell  340;  Hill  v. 
Dobie,  2  Moore  342;  Hill  v.  Dobie, 
8  Taunt.  325 ;  Hanson  v.  Steven- 
son, I  Barnewall  &  Aldcrson  303; 
Carter  v.  Warne,  4  Carrington  & 
Payne  191  ;  Goodwin  v.  Noble,  8 
Ellis  &  Blackburn  587. 


484 


LAW     AM)     I'ROCEEDINGS     IN     I'.A  .\  K  KUPTCY. 


n 


petition/'  But  it  was  held  that  if  the  assignee  in  bankruptcy 
continue  to  occup)'  the  leased  premises  that  he  was  bound 
to  pay  rent  for  the  time  he  actually  used  them/-  Such  rent 
was  considered  a  provable  debt  as  expenses  of  administration.'- 
This  rule  has  been  applied  under  the  present  act/'" 

Under  the  act  of  1841  leases  passed  to  a  trustee,  subject  to 
his  election  to  take  or  reject  them/*  In  England  leases  have 
passed  to  a  trustee  or  assignee  under  the  earlier  acts,  subject 
to  an  election  to  take  or  refuse  them/^  Since  the  act  of  1869 
(32  and  33  Vic.)  leases  have  passed  subject  to  a  statutory  dis- 
claimer, and  no  power  of  election  has  been  recognized/^    It  is 


"  R.  S.  Sec.  5071 ;  In  re  Webb, 
No.  1731S  Fed.  Cas.,  6  N.  B.  R. 
302;  In  re  Huffnagel,  No.  6837,  12 
N.  B.  R.  554;  In  re  Butler,  No. 
2236  Fed.  Cas.,  6  N.  B.  R.  501. 

"/«  re  Huffnagel,  No.  6837  Fed. 
Cas.,  12  N.  B.  R.  554;  In  re  Dun- 
ham, No.  4145  Fed.  Cas.,  27  Leg. 
Int.  404;  Buckner  v.  Jewell,  No. 
3060  Fed.  Cas.,  2  Woods  220;  In 
re  McGrath,  No.  8808  Fed.  Cas., 
5  Ben.  183;  In  re  Walton,  No. 
17131  Fed.  Cas.,  i  N.  B.  R.  557; 
In   re   Appold,   No.   499   Fed.   Cas., 

1  N.  B.  R.  621 ;  In  re  Hamburger, 
No.  5975  Fed.  Cas.,  12  N.  B.  R. 
277;  In  re  Ives,  No.  71 16  Fed  Cas., 
18  N.  B.  R.  28;  In  re  Yeaton,  No. 
18133  Fed.  Cas.,  i  Low.  420.  See 
Rent,  Sec.  120,  ante. 

^^  In  re  Chambers,  Calder  &  Co., 
98  Fed.  Rep.  865,  3  Am.  B.  R.  537, 

2  N.  B.  N.  388;  Bray  v.  Cobb,  100 
Fed.  Rep.  270,  3  Am.  B.  R.  788,  2 
N.  B.  N.  586;  In  re  Grmies,  96 
Fed.  Rep.  529,  2  Am.  B.  R.  730. 

'*£jr  parte  Whitman,  not  report- 
ed, but  referred  to  by  Judge  Ware, 
m  Smith  V.  Gordon,  No.  13052  Fed. 
Cas.,  6  Law  Rep.  313. 

"  See  Robson  on  Bankruptcy, 
460,  et  seq. 


In  Wilson  v.  Wallani,  5  Ex.  Div. 
ISS>  Judge  Stephen  reviews  the 
Fnglish  statutes  upon  this  point, 
and  reaches  the  conclusion  on  page 
163  as  follows:  "I  think  that  un- 
der the  first  act  of  bankruptcy  laws 
— those  which  were  consolidated  in 
1S24 — the  power  of  the  trustees  to 
renounce  onerous  leases  arose 
from  the  absence  of  any  legal 
enactment  citing  such  leases  in 
them,  and  from  the  insufficiency 
for  that  purpose  (as  explained  in 
Copeland  v.  Stephens,  i  B.  &  A. 
393)  of  a  general  assignment. 
Lender  the  second  set  of  bankruptcy 
laws,  including  the  act  of  1849,  the 
property  was  actually  vested  in 
them,  but  a  power  to  elect  whether 
they  would  take  it  or  not  was  con- 
firmed by  the  express  words  of  s. 
145  of  the  act  of  1849.  This  act 
was  repealed  by  32  and  22)  Vict. 
c.  83.  Under  the  third  system  es- 
tablished by  the  act  of  1869,  the 
leases  of  the  bankrupt  are  vested 
absolutely  in  the  trustee,  subject 
to  his  right  of  disclaimer,  but  no 
power  of  election  is  giVen  to  him 
or  recognized  in  hun.  It  thus  ap- 
pears to  me  that  the  power  of 
election    conferred    by    the    act    ot 


VVHAT    PASSES    TO    THE    TRUSTEE. 


485 


therefore  evident  that  cases  decided  prior  to  the  act  of  1869 
may  be  useful  in  construing  the  act  of  1898  in  this  respect. 

Assuming  that  a  leasehold  estate  vests  under  the  act  of  1898 
in  the  trustee,  subject  to  his  election  to  take  or  reject  it,  the 
first  inquiry  is  what  is  necessary  to  constitute  such  election? 
The  safer  practice  is  for  the  trustee  to  immediately  serve  a 
written  notice  upon  the  lessor  stating  his  election.  If  he  elects 
not  to  take  he  may  make  a  new  lease  with  the  same  landlord 
with  reference  to  using  the  premises  as  may  be  for  the  best 
interests  of  the  bankrupt's  estate. 

When  the  trustee  does  not  give  a  notice  of  his  election  in 
writing  his  intention  may  be  presumed  from  his  acts.  No 
general  rule  can  be  laid  down  as  to  the  effect  of  remainine 
in  possession  of  the  leased  premises,  or  paying  rent  for  them, 
or  doing  any  other  act  consistent  with  the  supposition  that 
the  trustee  has  not  elected  to  take  the  lease  as  a  part  of  the 
property  of  the  bankrupt.  Each  case  must  be  determined  by 
the  particular  circumstances  belonging  to  it,  and  the  exam- 
ination of  the  decisions  is  only  useful  to  p-et  at  the  o-eneral 
principle  by  which  they  are  governed.  Thus,  ordinarily,  if 
he  takes  any  steps  toward  the  management  of  or  continues  to 
use  the  leased  premises,  he  may  be  presumed  to  have  elected 
to  take  the  lease. ^^ 


1849,  being  repealed  b\'  express 
words,  and  the  estate  being  vested 
in  the  trustee  by  the  express  words 
of  the  act  of  1869,  he  has  no  power 
to  get  rid  of  it,  except  by  follow- 
ing the  express  words  of  s.  23.  I 
do  not  think  this  view  is  inconsist- 
ent with  the  cases  to  which  I  have 
referred.  They  show  only  that 
the  provisions  of  the  act  of  1869 
are  not  to  be  extended  by  implica- 
tion. I  do  not  intend  to  do  so  by 
this  judgment.  1  think  that  the  po- 
sition of  the  trustee  has  been  al- 
tered by  express  words,  though  not 
by  words  which  expressly  state  all 
the  consequences  of  the  alteration. 
Upon   the    whole,    1    hold   that    the 


lease  was  vested  in  the  trustees  on 
their  appointment,  and  that  they 
are  personally  liable  upon  the  cov- 
enants, unless  they  make  a  valid 
disclaimer.  I  think  Ex  parte 
Dressier  (9  Ch.  D.  252)  is  an  ex- 
press authority  as  to  their  per- 
sonal liability,  assuming  the  lease 
to  be  vested  in  them  absolutely." 
h-i  this  case  he  held  that  the  dis- 
claimer was  not  formal,  and  there- 
fore not  bindmg.  See  also  Titter- 
ton  V.  Cooper,  9  L.  R.  Q.  B.  Div.  473. 

The  act  of  1883,  enacted  since 
this  decision,  also  provides  for  for- 
mal   disclaimer. 

""'  It  has  been  held  that  it  amounts 
to  an  election  tor  the  trustee  to  in- 


486 


LAW     A'Xl)     rUOCEliDlxXGS    IN     BANKRUPTCY. 


He  must  make  an  election  within  a  reasonable  time.^'  If 
he  fails  to  do  this,  or  refuses  when  requested,  he  is  deemed  to 
have  elected  not  to  take  the  lease,  and  it  remains  in  the  bank- 
rupt. 


J 


18 


termeddlo    with     ami     assume     the 
maiiagement   of   a    farm.       I  homas 
V.   Pemberton,  7  Taunt.  206  Brad- 
shaw  V.  Jones,  20  L.  T.   781,  s.  c. 
W.   R.    1010;  or  where  the  trustee 
allowed   his   cows   to    remain   upon 
the  pasture  land  for  two  days  after 
appointment   and   ordered    them    to 
be  milked  there,  Welch  v.  Myers,  4 
Camp.  368,  or  where  he  pays  rent 
for  leased  property,  Ansell  v.  Rob- 
son,  2   C.   &   J.   610;    also    Broome 
V.    Robinson,    7    East   339.     Where 
the    trustee     takes     possession     of 
leasehold     property,     although     the 
trustee    delivered    up   the   keys   im- 
mediately   after   the   bankrupt's   ef- 
fects are    sold,    Hansen   v.    Steven- 
son,  I   B.  &  A.  303;  or  where  the 
trustee  of  a  bankrupt  lessee  chosen 
on  the  15th  of  November  kept  the 
bankrupt'  in   the  premises,  carrying 
on   the  business   for   the   benefit   of 
the  creditors  until  April  following, 
although  on  the  23d  of  December 
he  disclaimed  the  lease  by  letter  to 
the  landlord,  Clark  v.  Hume,  R.  & 
M.   207;   or  where  the   trustee   as- 
signs the  lease  to  the  owner  as  se- 
curity for  advances,  Mackey  v.  Pat- 
tendon,  30  L.  J.  Q.  B.  225,  s.  c.  4 
L.    T.    285 ;    or   where    the    trustees 
so  act  as  to  make  the  property  ot 
less  value,   Carter  v.   Warne,  4  C. 
&    P.    igi  ;    or    where    the    trustees 
sell  a  bankrupt's  estate  and  rever- 
sionary     interest      in      the      prem- 
ises, Page  V.  Godden,  2  Stark,  309. 
See  also  Hastings  v.  Wilson,  Holt. 
290. 

But  it  was  held  not  to  be  an  elec- 
tion to  take  where  the  trustees  of  a 


bankrupt    having    allowed    his    ef- 
fects to  remain  on  the  premises  oc- 
cupied     by      him      nearly      twelve 
months    after    the    bankruptcy    and 
paid   the   arrears  of   the    rent   due, 
at  the  same  time  intimating  to  the 
landlord    that    they    did    not    mean 
to  take  the  land  unless  it  could  be 
advantageously    disposed    of;    .ef- 
fects were  soon  after  sold  and  re- 
moved from  the  premises;  the  land 
was   put   up    for   sale   by   order   of 
the  trustees,  but  there  were  no  bid- 
ders ;    they    omitted    to    return   the 
key  to  the  landlord  for  nearly  four 
months  after,  Wheeler  v.   Bramah, 
3  Camp.  340;  or  where  the  trustee 
of  a  bankrupt  lessee  of  a  hotel,  up- 
on  the   bankruptcy,   closed   the   ho- 
tel with  the   exception  of  the  bar, 
which  was  occupied  by  a  third  par- 
ty,  tenant   to    the   bankrupt   before 
bankruptcy,    and    he    was    supplied 
by  order  of  the  trustee  with  liquor 
at  a  slight  advance  over  cost  price, 
Goodwin  v.   Noble,  27  L.  J.  Q.  B. 
204,  s.  c.  8  El.  &  Bl.  587;  or  where 
trustees  were  possessed  of  a  farm, 
part  of  which  he  had  under-let  to 
another,    released    such    under-ten- 
ant, being  afterwards  asked  by  the 
lessor  to  elect,  refused  to  take  the 
original    lease.    Hill    v.    Dobie,    2 
Moore,   342,     s.    c.    8    Taunt.    325. 
Trustees   may   likewise    do    reason- 
able acts  to  ascertain  the  value  of 
property    by    puttmg    up    farms    to 
sell.     See  Turner  v.  Richardson,  7 
East.    336;     Hastings     v.     Wilson, 
Holt,  290. 
*' Clark  V.    Hume,   R.   &   M.  207. 
"  See    Sparhawk    v.    Yerkes,    142 


WHAT    PASSES    TO    THE    TRUSTEE. 


487 


Where  the  trustee  elects  to  take  the  lease  he  takes  it  subject 
to  equities/''  He  thereby  makes  the  estate  and  himself  per- 
sonally liable  for  the  payment  of  rent  for  the  full  term  of  the 
lease  or  until  it  passes  by  assignment  to  another  person.'" 
He  may  relieve  himself  of  liability  by  surrendering  the  lease 
to  the  lessor  or  assigning  it  to  a  third  party,  who  may  be  a 
pauper.-^  The  reason  for  this  rule  is  that  the  trustee  holds 
in  privity  of  estate  only,  not  in  privity  of  contract,  between 
himself  and  the  landlord,  which  is  the  sole  basis  of  his  lia- 
bility. If  this  is  taken  away  by  assignment  it  destroys  the 
privity,  and  hence  the  liability. 

Following  the  English  decisions  a  trustee  will  not  be  al- 
lowed to  sell  off  crops,  manure,  hay  or  straw,""  or  to  remove 
fixtures  -^  contrary  to  the  terms  of  the  lease. 

The  benefit  of  a  contract  or  option  for  a  lease  to  which  the 
bankrupt  is  entitled  will  also  probably  vest  in  the  trustee, 
and  may  be  assigned  by  him,"*  or  he  may  decline  to  take  such 
contract.-^  Where  the  trustee  elects  to  take  such  contract  or 
option  the  lessor  will  not  be  bound  to  grant  a  lease  to  him, 
unless  he  enters  into  tlie  same  covenants  as  the  bankrupt  must 
have  entered  into  if  solvent.""     It  mav  be  that  the  trustee  can 


U.  S.  I,  35  L.  Ed.  915;  Taylor  v. 
Irwin,  20  Fed.  Rep.  615;  Smith  v. 
Gordon,  No.  13052  Fed.  Cas.,  6  L. 

R.  313. 

"  Ex  parte  Faxon,  No.  4704  Fed- 
Cas.,  I  Low.  404.  See  McFarland 
Carriage  Co.  v.  Solanes,  108  Fed. 
Rep.  532,  6  Am.  B.  R.  221. 

^  Hansen  v.  Stevenson,  i  B.  & 
A.  307;  Thomas  v.  Pemberton,  7 
Taunt.  205 ;  Welch  v.  Myers,  4 
Camp.  368;  Anscll  v.  Robson,  2  C. 
&  J.  6ro;  Carter  v.  Warne,  4  Car. 
&  P.  191 ;  Ila.stings  v.  Wilson, 
Holt,   290. 

Tn  Clark  v.  Hume,  R.  &  M.  207, 
a  trustee  in  bankruptcy  was  held 
personally  liable. 

"'  llopkinson  v.  Lovering,  ir  L. 
R.  Q.   n.   Div.  02.     A';  to  the  right 


to  pursue  a  bankrupt  after  bank- 
ruptcy proceedings  in  an  action  of 
covenant,  see  Auriol  v.  Mills,  4  T. 
R.  60. 

'^  Ex  parte  Maundrell,  2  Mad. 
315  ;  Ex  parte  Whittington,  Buck.  87. 

^  See  Stansfield  v.  Portsmouth,  4 
C.  B.  N.  S.  120,  4  Jur.  N.  S.  440; 
Saint  v.  Pilley,  L.  R.  10  Ex.  137, 
s.  c.  33  L.  T.  93. 

'"'Buckland  v.  Papillon,  l  L.  R. 
Eq.  477;  Crosbie  v.  Tooke,  i  M.  & 
K.  421 ;  Morgan  v.  Rhodes,  I  M.  & 

K.  435. 

■'^  Ex  parte  Blake,  ii  Chan.  Div. 
572;  Ex  parte,  Llynvi  Coal  Co.,  7 
Chan.  App.  28. 

'"Powell  V.  Lloyd,  i  Y.  &  J. 
427,  s.  c.  2  Y.  &  J.  372;  Page  v. 
Broom,  3  Beav.  2^. 


LAW     AND     PROCEEDINGS    IN     BANKRUPTCY. 


not  assign  the  benefit  of  such  a  contract  so  as  to  entitle  the 
assignee  of  it  to  a  lease  without  a  stipulation  to  that  effect." 

The  acceptance  or  rejection  of  the  lease  by  the  trustee  will 
not  release  from  liability  a  surety  for  the  lessee."^  The  surety 
will  continue  liable  for  breaches  of  covenant  committed  before 
the  lease  is  surrendered. 

A  trustee  has  no  greater  rights  under  a  lease  than  the  lessee. 
A  landlord  may  reenter  and  terminate  a  lease  containing  such 
a  covenant,-'*  or  may  enforce  a  lien  for  rent  under  a  state 
law.'" 

It  has  been  held  that,  where  a  lease  prohibited  an  assign- 
ment [y  the  lessee  or  that  "his  interest  herein  shall  be  sold 
under  execution  or  other  legal  process,"  a  sale  by  the  trustee 
of  the  lessor  of  the  interest  the  trustee  holds  for  the  benefit 
of  the  estate  is  not  a  breach  of  either  condition  of  the  lease.^^ 


§  i66.     Growing  crops,  fixtures  and  good-will. 

Growing  crops  which  are  annually  produced  by  the  culti- 
vator are  considered  emblements,  and  before  their  severance 
from  the  soil  pass  to  the  trustee  as  personal  property.^     But 

-'See  Dowell  v.  Dew,  i  W.  &  C-       the   leasehold    estate   is   not   within 
Chan.  365;  Buck-land  v.  Papillon,  i 
L.  R.  Eq.  477;  Weatherall  v.  Gear- 
ing, 12  Ves.  504. 

^B.  A.  1898,  Sec.  16;  Inglis  v. 
McDougal,  I  J.  B.  Moore  196; 
Tuck  V.  Fyson,  6  Bing.  321. 

=»/n  re  Ells,  98  Fed.  Rep.  967,  3 
Am.  B.  R.  564,  2  N.  B.  N.  360;  In 
re  Arnstein,  loi  Fed.  Rep.  706,  4 
Am.  B.  R.  246,  2  N.  B.  N.   106. 

''"McFarland  Carriage  Co.  v.  So- 
lanes,  108  Fed.  Rep.  532,  6  Am.  B. 
R.  221;  In  re  Mitchell,  116  Fed. 
Rep.  87,  8  Am.  B.  R.  324- 

''^  In  Gazlay  v.  Williams,  trustee 
(C.  C.  A.  6th  Cir.),  148  Fed  Rep. 
— ,  17  Am.  B.  R.  — ,  the  court 
said :  "And  a  consideration  of 
the  language  of  the  condition  shows 
that  a  sale  by  appellee   [trustee]   of 


its  terms.  It  is  not  within  the 
voluntary  branch  thereof,  because 
if  it  may  be  said  to  be  a  voluntary 
assignment,  it  is  not  an  assignment 
by  said  'lessee.'  It  is  not  within 
the  involuntary  branch  thereof,  for 
though  it  may  be  said  to  be  an  in- 
voluntary assignment  and,  possi- 
bly, also  a  sale  under  legal  process, 
it  is  not  a  sale  of  'said  lessee's  in- 
terest.' It  is  a  sale  of  the  appel- 
lee's [trustee's]  interest  held  by  it 
for  the  benefit  of  creditors  and 
which  passed  to  it  notwithstand- 
ing the  condition,  by  virtue  of  the 
bankruptcy  proceeding." 

^  In  re  Barrow,  98  Fed.  Rep. 
582,  3  Am.  B.  R.  414,  3  N.  B.  N. 
95;  In  re  Daubner,  96  Fed.  Rep. 
805,  3  Am.  B.  R.  368;  In  re  Coi¥- 


WHAT    PASSES    TO    THE    TRUSTEE. 


489 


where  the  crop  is  gathered  after  an  adjudication  by  the  bank- 
rupt he  should  be  allowed  a  reasonable  compensation  for  work 
and  care  from  the  date  of  adjudication.-  They  do  not  pass 
where  a  mortgagee  is  entitled  to  possession  and  demands  it  in 
pursuance  of  the  terms  of  his  mortgage,^  or  where  the  bank- 
rupt has  parted  with  his  interest  in  the  crops,*  or  where  the 
crop  is  planted  by  a  bankrupt  after  the  filing  of  a  petition  in 
bankruptcy  J"' 

Where  the  terms  of  the  lease  permit  a  tenant  to  remove 
fixtures  the  trustee  succeeds  to  his  right,''  but  otherwise  not/ 
The  general  rule  v;ith  reference  to  tenants  is,  that  after  the 
expiration  of  his  tenancy  he  has  no  right  to  remove  fixtures 
which  he  might  have  removed  during  his  lease,^  but  that 
they  become  the  property  of  the  landlord.^ 

\Miere  goodwill  is  local,  and  not  of  a  personal  nature, 
it  will  pass  to  the  trustee/'^  The  reason  for  this  exception 
may  be  readily  understood  when  it  is  considered  that  the 
whole  value  of  a  good-will  may  be  inseparable  from  personal 
professional  skill,  as,  for  example,  that  of  a  surgeon  or  lawyer, 
such  being  very  different  in  nature  from  a  commercial  mat- 
ter.^^ 


man,  93  Fed.  Rep.  422,  i  Am.  B. 
R.  530;  In  re  Rooney,  109  Fed. 
Rep.  601,  6  Am.  B.  R.  478;  In  re 
Schiimpert,  No.  12491  Fed.  Cas., 
s.  c.  8  N.  B.  R.  415;  Ex  parte 
National  Mercantile  Bank,  16  Chan. 
Div.    104. 

^/»  re  Barrow,  98  Fed.  Rep.  582, 
3  Am.  B.  R.  414,  3  N.  B.  N.  95- 

^  Bagnall  v.  Villar,  12  Chan. 
Div.  812. 

*  Consult  In  re  Gregg,  No.  5796 
Fed.  Cas.,  i  Hask.  173. 

°  In  re  Barnett,  No.  1024  Fe^. 
Cas.,  3  Pitts.  Rep.  559. 

'  See  In  re  Breck,  No.  1822  Fed. 
Cas.,  8  Ben.  93 ;  Stansfeld  v. 
Portsmouth,  4  C.  B.  Rep.  N. 
S.   it8. 


"'Ex  parte  Ames,  No.  ;^2t,  Fed. 
Las.,  s.  c.  I  Low.  561 ;  Ex  parte 
Tliomas,  44  L.  T.  781,  29  W.  R. 
527;  Ex  parte  Morrow,  No.  9850 
Fed.    Cas.,    i    Low.    386. 

'See  Lyde  v.  Russell,  i  B.  & 
.A.d.  394;  Pugh  V.  Arton,  L.  R.  8 
Eq.  626.  See  also  and  compare 
Mcintosh  V.  Trotter,  3  M.  &  W. 
184;  Weaton  v.  Woodcock,  7  M.  & 
W.    14. 

"  See  In  re  Thomas,  29  W.  R. 
527,  44  L.  T.  781. 

^^  See  Ex  parte  Punnett,  16  Chan. 
Div.  226;  Ex  parte  Thomas,  2 
Mont.  D.  &  DeG.  294,  10  L.  J. 
Bankruptcy,   75. 

"  See  Farr  v.  Pearce,  3  Madd. 
74- 


490 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


§  167.    Goods  and  chattels  generally. 

All  the  personal  estate,  merchandise,  stocks,  bonds,  notes, 
money,  plate,  furniture,  etc.,  so  as  to  include  every  sort  of 
personal  property,  except  such  as  is  exempt  by  the  state  law, 
passes  to  and  vests  in  the  trustee. 

Personal  property  belonging  to  the  bankrupt,  which  is  in 
the  possession  of  his  agents  or  factors,  is  considered  in  his 
possession,  and  accordingly  passes  to  the  trustee.  Thus,  grain 
in  a  warehouse  has  been  held  to  vest  in  a  trustee.^  But  goods 
in  a  United  States  bonded  warehouse,  on  which  the  duties 
have  not  been  paid,  for  they  are  in  the  possession  of  the  United 
States,  were  held  not  to  pass."  Legacies  or  personal  property 
inherited  prior  to  filing  the  petition  pass  to  the  trustee,^ 
but  such  property  inherited  after  that  date  does  not  pass  to 
the  trustee.* 

\Miere  a  stock  of  goods  was  transferred  for  the  purpose  of 
defrauding  creditors  of  a  firm  and  was  subsequently  retrans- 
ferred  to  the  bankrupts,  the  property  was  held  to  pass  to  the 
trustee.'"' 


^  Brook  V.  Scoggins,  No.  1936 
Fed.  Cas.,   11   N.  B.  R.  258. 

"In  re  Clifford,  No.  2893  Fed. 
Cas.,  2  Saw.  428. 

^In  re  Stoner,  105  Fed.  Rep. 
752,  5  Am.  B.  R.  402,  3  N.  B.  N. 

423- 

*  in  re  Burka,  104  Fed.  Rep. 
326,  5  Am.  B.  R.  12. 

But  see  Ex  parte  Newhall,  No. 
10159   Fed.    Cas.,    2    Story   360. 

For  a  further  discussion  of  this 
question,  see  Sec.   175,  post. 

^  In  re  Brown,  91  Fed.  Rep.  358, 
I  Am.  B.  R.  107,  the  court  said : 
"Xor  does  it  affect  the  question 
that,  at  the  time  the  bankrupt 
act  was  passed,  the  title  to  the 
property  in  dispute  was  in  the 
Brown-Heath  Comi)any.  the  fraud- 
ulent grantee,  and  was  there- 
fore beyond  the  reach  of  the  bank- 
ruptcy court,  assuming  that  the  de- 


vice of  a  conveyance  by  the  part- 
ners to  a  corporation  formed  and 
controlled  by  them  to  take  it  would 
have  that  effect.  By  the  voluntary 
reconveyance  of  the  property  by 
the  Brown-Heath  Company  it  be- 
comes a  part  of  the  bankrupt  es- 
tate, to  be  administered  as  such. 
The  court  is  not  called  upon  to  set 
aside  a  conveyance.  There  is  no 
such  effect  attaching  to  property 
which  has  been,  at  some  time  prior 
to  the  proceedings  in  bankruptcy, 
the  subject  of  a  fraudulent  trans- 
fer, as  to  preclude  the  court  of 
bankruptcy  from  thereafter  deal- 
ing with  such  property,  when  tlie 
title  is  in  the  bankrupt.  There  is 
no  contention  that  the  bankrupt 
does  not  have  the  legal  title,  and 
is  not  in  fact  the  owner  of  this 
property." 


WHAT    PASSES    TO    THE    TRUSTEE. 


491 


Whether  the  property  of  the  husband  or  wife  passes  to  the 
trustee  in  bankruptcy  of  the  estate  of  the  other  depends  upon 
local  law."  If,  under  the  law  of  the  situs,  the  property  of  a 
wife  or  husband  is  subject  to  the  payment  of  the  debts  of  the 
other  it  passes  to  the  trustee;  if  not,  it  does  not  pass  to  the 
trustee,  but  remains  the  separate  property  of  such  husband  or 
w^ife  not  declared  bankrupt.  Thus  it  has  been  held  that  prop- 
erty of  a  bankrupt's  wife,  engaged  in  business  without  comply- 
ing with  a  statute  to  entitle  her  to  the  privilege  of  a  fciiime  sole 
trader,  passes  to  the  trustee  of  her  husband.'  So  also  where 
the  product  of  the  separate  property  of  the  wife  is  liable  for 
her  husband's  debts  it  passes  to  the  trustee.^  Where  prop- 
erty has  been  conveyed  to  the  wife  in  fraud  of  creditors  it 
passes  to  the  husband's  trustee."  It  has  been  held  that, 
where  a  wife  is  entitled  to  one-third  of  the  husband's  personal 
property  upon  decree  of  divorce,  the  whole  of  his  property 
pases  to  his  trustee  pending  divorce  proceedings  by  his  wife.'" 

Property,  purchased  on  condition  tliat  the  title  shall  not 
pass  until  paid  for,  passes  to  the  debtor's  trustee,  wliere 
such  conditional  sale  is  invalid  as  to  creditors  under  the  state 
law."  Where  a  valid  lien  exists  under  the  state  law  in  favor 
of  the  seller  it  passes  to  the  trustee,  subject  to  such  lien.'- 


"In  re  Rooney,  109  Fed.  Rep. 
601,  6  Am.  B.  R.  478;  In  re  Ham- 
mond, 98  Fed.  Rep.  845,  3  Am.  B. 
R.  446 ;  III  re  Fowler,  93  Fed. 
Rep.  417,  I  Am.  B.  R.  555; 
Greensfelder  v.  Corbett  (Sup.  Ct. 
111.),  3  N.  B.  N.  825;  Hawk  v. 
Hawk,  102  Fed.  Rep.  679,  4  Am.  B. 
R.  463,  2  N.  B.  N.  940. 

'  In  re  Hammond,  98  Fed.  Rep. 
845,  3  Am.  B.  R.  466. 

*/n  re  Rooney,  109  Fed.  Rep. 
601,  6  Am.   B.  R.  778. 

"  In  re  Fowler,  93  Fed.  Rep. 
417.  I  Am.  B.  R.  555;  Fellows  v. 
Freudentlial,  102  Fed.  Rep.  731,  4 
Am.  B.  R.  490;  Greensfelder  v. 
Corbclt  (Sup.  Ct.  III.),  3  N.  B.  N. 
825. 


"Hawk  V.  Hawk,  102  Fed.  Rep. 
679.  4  Am.  B.  R.  463,  2  N.  B.  N. 
940. 

"  In  re  Legg,  96  Fed.  Rep.  326 ; 
In  re  Garcewich  (C.  C.  A.  2d 
Cor.),  HE  Fed.  Rep.  87,  8  Am.  B. 
R.  149;  In  re  N.  Y.  Economical 
Printing  Co.  (C.  C.  A.  2d  Cir), 
no  Fed.  Rep.  514,  6  Am.  B.  R. 
615;  Chesapeake  Shoe  Co.  v.  Seld- 
ner  (C.  C.  A.  4th  Cir.),  122  Fed. 
ReP-  593.  10  Am.  B.  R.  466;  In  re 
Ducker  (C  C.  A.  6th  Cir.),  134 
Fed.  Rep.  43,  13  Am.  B.  R.  760; 
/;;  re  Butterwick,  ,131  Fed.  Rep. 
,371,    12   Am.    B.    R.   536. 

'"  Hewit  V.  Berlin  Machine 
Works,  194  U.  S.  296,  48  L.  Ed. 
986.    IT    Am.     B.     R.     709;    In    re 


492 


LAW     AXD     I'ICOCri-niXGS    IN    IJANKRUl'TCV, 


It  has  been  held  that  the  interest  of  an  infant  partner  passes 
to  the  trustee  of  the  partnership."  .But  the  earnings  of  a 
minor  son,  who  has  been  expressly  emancipated  by  his  father, 
are  not  assets  of  the  father's  estate/^ 

The  salary  of  a  public  officer  not  due  or  payable  at  the 
time  of  bankruptcy  does  not  pass  to  the  trustee. 

A  diamond  stud  worth  $250,^"''  a  gold  w-atch,^*^  and  a  Ma- 
sonic Ainiform,^'"  have  been  held  nut  to  pass  to  the  trustee, 
but  may  Ije  held  by  a  bankrupt  as  wearing  apparel. 

§  i68.    Shares  of  stock. 

Questions  with  reference  to  shares  of  stock  will  arise  in 
bankruptcy  proceedings  in  tw^o  relations,  first,  where  the 
share  is  owned  by  the  bankrupt,  and,  second,  wdien  a  bunk- 
lupt  corporation  may  enforce  subscriptions  for  shares  of  stock. 

First,  Shares  of  stock  in  incorporated  companies,  standing 
in  the  name  of  a  bankrupt,  pass  to  his  trustee  subject  to  his 
election  to  take  or  reject  them.^  Where  the  stock  stands  in 
the  name  of  a  fictitious  person,  but  belongs  to  the  bankrupt, 
the  court  may  direct  the  corporation  to  erase  the  name  of  the 
fictitious  person  and  insert  the  bankrupt's  name  on  their 
books."  Stock  delivered  as  security  for  a  bona  tide  debt,  with 
powder  of  attorney  to  have  transfer  made  on  books  of  the  com- 


Ducker  (C  C.  A.  6th  Cir.),  134  , 
Fed.  Rep.  43,  13  Am.  B.  R.  760; 
In  re  Kellogg,  112  Fed.  Rep.  52, 
7  Am.  B.  R.  270;  York  Mfg.  Co. 
V.  Cassell,  201  U.  S.  344,  50  L. 
Ed.  782,   15   Am.  B.   R.  633. 

"/m  re  Duguid,  100  Fed.  'Rep. 
274,  3  Am.  B.  R.  794,  2  N.  B.  N. 
607. 

"  In  re  Dunavant,  96  Fed.  Rep. 
542,  3  Am.   B.   R.  41. 

'^  In  re  Doherty,  135  Fed.  Rep. 
432,  13  Am.  B.  R.  549. 

'*/m  re  Smith,  96  Fed.  Rep.  832, 
3  Am.  B.  R.  140. 

"  In  re  Jones,  97  Fed.  Rep.  yji, 
3  .Am.  B.  R.  259,  2  N.  B.  N.  296; 


Sellers  v.  Bell  (C.  C.  A.  5th  Cir._), 
94  Fed.  Rep.  801,  2  Am.  B.  R.  529. 

^  American  File  Company  v.  Gar- 
rett, no  U.  S.  286,  28  L.  Ed.  149; 
Graham  v.  The  Van  Dieman's 
Land  Co.,  11  Ex.  Rep.  loi ;  South 
Straffordshire  Ry.  Co.  v.  Burnside. 
5  Ex.  Rep.  128. 

^  Green  v.  The  Bank  of  Eng- 
land, 3  Y.  &  C.  722. 

As  to  stock  standing  in  the  name 
of  the  wife  of  a  bankrupt,  but 
which  was  purchased  with  joint 
funds,  see  Fellows  v.  Freudenthal, 
T02  Fed.  Rep.  731,  4  Am.  B.  R. 
490. 


WHAT    PASSES    TO    THE    TRUSTEE. 


493 


pany,  does  not  pass.^  The  trustee,  however,  may  redeem  s\,ich 
stock  by  paying  the  debt  which  it  secures.  Nor  does  stock 
pass  which  was  honestly  purchased  with  a  wife's  separate 
property  years  before  the  commencement  of  bankruptcy  pro- 
ceedino's.* 

WMiere  the  assignee  elects  to  take  stock  he  is  entitled  to 
have  it  transferred  on  the  books  of  the  corporation.^  The 
trustee  thereupon  becomes  a  stockholder  in  the  corporation, 
and  may  attend  meetings  of  the  corporation  and  vote  the 
stock,*'  and  is  liable  for  assessments  upon  such  stock.  Where 
he  elects  not  to  take  the  stock,  neither  he  nor  the  bankrupt's 
estate  is  liable  for  such  assessments.' 

Second,  A  trustee  of  a  bankrupt  corporation  is  entitled  to 
recover  unpaid  subscriptions  upon  stock  in  such  company  as 
assets  of.  the  bankrupt  company.''  And  the  directors  can 
not  relieve  the  stockholders  by  refusing  to  make  the  call.' 
Xor  can  the  shareholder  make  the  defense  of  false  and  fraud- 
ulent representations  inducing  such  subscription,  especially 
when  the  subscriber  has  not  been  vigilant  in  discovering  such 
fraud  and  repudiating  his  contract/*'  nor  the  defense  of  irreg- 
ular organization  of  the  corporation."  Such  assessments  are 
considered  a  trust  fund  for  tlie  creditors,  and  a  stockholder 
indebted   to   the  bankrupt  corporation   for  unpaid   shares  of 


^  Dickinson  v.  Central  National 
Bank,    129   Mass.   279. 

*  Glover  V.  Love,  26  Coop.  Sup. 
Court  Rep.  657. 

''  Wilson  V.  Atlantic,  etc.,  R.  Co., 
2  Fed.  Rep.  459. 

"  American  File  Co.  v.  Garrett, 
no  U.  S.  288.  28  L.  Ed.  149. 

^  American  File  Co.  v.  Garrett, 
no  U.  S.  288,  28  L.  Ed.  149. 

"  In  re  Crystal  Springs  Bottling 
Co.,  96  Fed.  Rep.  945,  3  y\m.  B.  R. 
194;  Rathbone  v.  Ayer,  82  N.  Y. 
Supp.  235 ;  In  re  Morris  Arc  Lamp 
Co.,  TO  Am.  B.  R.  569;  Payson  v. 
Stoevcr,  No.  10863  Fed.  Cas.,  s.  c.  2 
Dill.  427;   Payson  v.   Withers,   No. 


10864  Fed.  Cas.,  s.  c.  5  Biss.  269; 
Payson  v.  Brooke,  No.  10857  Fed. 
Cas.,  s.  c.  I  Weekly  Notes,  89 ;  In  re 
Republic  Insurance  Co.,  No.  11704 
Fed.  Cas.,  s.  c.  3  Biss.  452;  Upton  v. 
Hansbrough,  No.  16801  Fed.  Cas., 
s.  c.  3  Biss.  417. 

"Rathbone  v.  Ayer,  82  N.  Y. 
Supp.  235. 

'"Upton  V.  Tribilcock,  91  U.  S. 
45,  23  L.  Ed.  203 ;  Webster  v.  Upton, 
91  U.  S.  65,  23  L.  Ed.  384;  Ogilvie 
V.  Knox  Tn.surance  Co.,  22  How. 
380,  16  L.  Ed.  349;  Sawyer  v.  Hoag, 
17   Wall.  610,  21    L.   Ed.   731. 

"  Chubb  V.  Upton,  T)5  U.  S.  667, 
24  L.  Ed.   523. 


4'^U  T.AW     AND     PROCEEDINGS    IN     BANKRUPTCY. 

Stock  can  not  set  off  against  this  fund  a  debt  due  him  by  the 
corporation.  ^'- 

Stockiiolders',  etc.,  Liability. — The  right  to  enforce 
a  statutory  liabihty  against  an  officer,  director  or  stock- 
liolder  of  a  bankrupt  corporation  does  not  pass  to  its 
trustee  in  l)ankruptcy.  The  trustee  is  not  entitled  to 
maintain  a  suit  to  enforce  such  habihty  in  a  state  or  federal 
court.  The  reason  for  this  is  that  such  liability  is  not  a  part 
of  the  estate  of  the  corporation.  By  virtue  of  statutes  of  this 
character  the  officers,  directors,  or  stockholders,  or  some  of 
them,  become,  as  it  were,  sureties  for  the  debts  of  the  cor- 
poration to  the  extent  provided  by  the  statute.  It  is  in  the 
nature  of  a  security  to  which  a  creditor  may  resort  if  the 
corporation  does  not  pay  its  debts. ^"  The  corporation  could 
not  enforce  this  liability.  The  trustee  in  bankruptcy  has 
power  to  enforce  certain  rights  of  creditors  for  the  benefit  of 
the  estate,  but  he  is  not  concerned  ^\■ith  secondary  security 
to  which  a  creditor  may  resort  for  the  balance  of  his  debt 
after  v.e  has  collected  as  much  of  it  as  may  be  collected  from 
the  bankrupt's  estate.  The  bankrupt  act  expressly  provides 
that  such  liability  is  not  released  by  the  discharge  of  the  cor- 
poration." The  creditor  may,  therefore,  proceed  to  enforce 
the  liability  in  a  state  court  witliout  joining  the  trustee  as  a 
party  and  without  regard  for  bankruptcy, ^^  except  that  a 
creditor  will  be  permitted  to  recover  in  both  proceedings  the 
full  payment  of  his  debts  only  and  no  more. 

§  169.   Membership  in  exchanges,  franchises  and  privileges 

[Membership  in  an  exchange  vests  in  the  trustee,  subject  to 

''Sawyer  v.  Hoag.   17  Wall.  610,  '"'Wood     &     Selick     v.     Vander- 

21   L.  Ed.  731.  veer,  55  N.  Y.  App.  Div.  549;  Old 

"/n  re  Crystal  Spring  Bottling  Colony  Boot  &  Shoe  Co.  v.  Par- 
Co.,  96  Fed.  Rep.  945,  3  Am.  B.  R.  ker-Sampson-Adams  Co.,  183  Mass. 
194.      See     also     Merrill     v.     Nat.  557. 

Bank,    173    U.    S.    131,    43    L.    Ed.  See   also    In    re    Marshall    Paper 

640.  Co.,    102  Fed.   Rep.  872,  4  Am.   B. 

"  B.   A.    1898,    Sec.   4,   as   amend-  R.   468;   In   re   Remington   Auto.   & 

cd  Feb.  5,  1^03,  S2  Stat,  at  L.  797.  Motor    Co.,    119    h'ed.    Rep.    441,    9 

Am.   B.   R.   533. 


WHAT    PASSES    TO    THE    TRUSTEE. 


495 


the  rules  of  the  exchange.'  The  trustee,  however,  may  elect 
not  to  take  such  certificate  of  membership.-  In  such  case  the 
certificate  of  membership  remains  in  the  bankrupt,  and  can 
not  be  taken  from  him  afterwards  by  the  trustee  if  it  becomes 
valuable.- 

A  franchise  or  privilege  which  might  have  been  transferred 
by  the  bankrupt  or  levied  upon  and  sold  under  judicial  process 
against  him  before  the  filing  of  the  petition  will  pass  to  the 
trustee  as  an  asset  of  the  bankrupt's  estate.  Thus  it  was  held 
that  a  permit  to  occupy  a  stand  in  market,  revokable  at  the 
pleasure  of  the  comptroller  and  transferable  only  with  his 
permission,  but  which  was  ordinarily  bought  and  sold  for 
money,  passes ; ""  so  also  a  license  to  take  toll  for  crossing  a 
bridge,*  or  a  license  to  sell  liquor.^''  But  a  franchise  to  take 
toll  on  a  turnpike,  being  personal  in  its  nature,  was  held  not  to 
pass  to  the  trustee. °  So  also  where  a  lease  to  a  public  house 
was  determinable  on  the  bankruptcy  of  the  lessee,  and  con- 
tained a  covenant  by  the  lessee  upon  the  termination  of  the 
term  to  assign  the  licenses  to  the  lessor,  it  was  held  that  no 
interest  in  the  licenses  passed  to  the  trustee,  but  the  lessor  was 


^  Page  V.  Edmunds,  187  U.  S. 
596,  47  L.  Ed.  318,  9  Am.  B.  R. 
277;  In  re  Hullbutt,  Hatch  &  Co. 
(C.  C.  A.  2d  Cir.),  135  Fed.  Rep. 
504,  13  Am.  B.  R.  50;  In  re  Gay- 
lord.  Ill  Fed.  Rep.  717,  7  Am.  B. 
R.  195;  In  re  Neimann,  124  Fed. 
Rep.  738,  10  Am.  B.  R.  739;  Hyde 
V.  Woods,  94  U.  S.  523,  24  L.  Ed. 
264;  In  re  Werder,  15  Fed.  Rep. 
789;  In  re  Warder,  10  Fed.  Rep. 
275;  In  re  Ketchum,  i  Fed.  Rep. 
840.  But  see  In  re  Sutherland,  No. 
^i^W  ^""t-'d.  Cas.,  s.  c.  6  Biss.  526. 

''Sparhawk  v.  Yerkes,  142  U.  S. 
I,  35  L.  Ed.  915.  See  also  Meyers 
V.  Josephson  (C.  C.  A.  5th  Cir.), 
124  Fed.  Rep.  734.  10  Am.  B.  R. 
687,  affirming  121  I'Vd.  Rep.  142,  9 
Am.  B.  R.  345. 


^in  re  Gallagher.  No.  5192  Fed. 
Cas.,  16  Blatch.  4104  In  re  Emrich, 
Id  Fed.  Rep.  231,  4  Am.  B.  R.  89, 
2  N.  B.  N.  656. 

*  Stewart  v.  Hargrove,  23  Ala. 
429. 

^In  re  Fisher,  98  Fed.  Rep.  89, 
I  Am.  B.  R.  557,  affirmed  (C. 
C.  A.  1st  Cir.),  1031  Fed.  Rep. 
860,  4  Am.  B.  R.  646,  2  N. 
B.  N.  221 ;  In  re  Brodbine,  93 
Fed.  Rep.  643,  2  Am.  B.  R.  53;  In 
re  Becker,  98  Fed.  Rep.  407,  3  Am. 
B.  R.  412,  2  N,  B.  N.  245;  In  re 
Olewine,  125  Fed.  Rep.  840,  11  Am. 
B.  R.  40;  In  re  McArdle,  126  Fed. 
Rep.  442,  II  Am.  B.  R.  358. 

'  People  V.   Duncan,  41   Cal.   508. 


49o 


LAW     AND     PROCEEDINGS    IN     BANKRUPTCY. 


entitled  to  have  the  licenses  delivered  up  to  him  upon  the 
bankruptcy  of  the  lessee." 

§  170.    Negotiable  instruments. 

All  bills  of  exchange,  promissory  notes  and  other  negotiable 
instruments  belonging  to  the  bankrupt  vest  in  the  trustee/ 
The  bankrupt  is  no  longer  able  to  sue  on  such  instruments, 
or  to  convey  any  perfect  title  to  them  by  endorsement  or  other- 
wise. If  the  bankrupt  makes  a  bona  fide  transfer  of  the  in- 
strument without  endorsement  before,  he  may  endorse  it  after 
bankruptcy,  and  such  endorsement  will  enable  the  holder  of 
the  instrument  to- maintain  an  action  upon  it  in  his  own  name." 

When  a  bill  of  exchange  or  a  note  is  dishonored  after  the 
bankruptcy  of  the  drawer  or  maker,  notice  of  dishonor  must 
be  given  as  though  bankruptcy  had  not  intervened.^  The 
Detter  opinion  seems  to  be  that  a  notice  to  the  bankrupt  is  a 
proper  and  sufficient  notice  if  the  trustee  has  not  been  ap- 
pointed. He  is  the  only  person  who  can  be  notified.*  If 
immediate  action  is  necessary  against  the  promisor  or  acceptor 
to  save  a  probable  loss,  the  bankrupt,  upon  application  to  the 
court,  will  be  permitted  to  prosecute.  After  a  trustee  has 
been  appointed  the  safer  practice  is  to  give  notice  to  him  and 
also  to  the  bankrupt. 

§  171.    Pensions. 

Pensions  of  a  bankrupt  granted  by  the  government  for  mili- 
tary services  are  not  vested  in  the  trustee  in  banruptcy,  as 


^  Ex  parte  Royle,  46  L.  T.  Bk. 
85,  25  W.  R.  560. 

'  Kitchen  v.  Bartsch,  7  East,  53 ; 
Gay  V.  Kingsley,  93  Mass.  345; 
Smith   V.    Chandler,   69   Mass.   392. 

"  I  lughes  V.  Nelson,  29  N.  J.  Eq. 
547;  Hersey  v.  Ellmtt,  67  Me.  526; 
Ex  parte  Greening,  13  Ves.  206; 
VVatkins  v.  Maule,  2  J.  &  W.  237; 
Ex  parte  Mowbray,  i  J.  &  W. 
428;  Smith  V.  Pickering,  i  Peak's 
N.  P.  Rep.  69. 

"  Ex     parte     Tremont     National 


Bank,  No.  14169  Fed  Cas.,  2  Low. 
409;  Ex  parte  Moline,  19  Ves.  216; 
Esdaile  v.  Sowerby,  11  East.  114; 
Nicholson  v.  Gouthit,  2  H.  Black. 
609;  Bowes  V.  Howe,  5  Taunt.  30; 
Rohde  V.  Proctor,  4  B.  &  Cres. 
517;  Donnell  v.  Savings  Bank,  80 
Mo.  165 ;  House  v.  National  Bank, 
43  O.  S.  346;  Calahan  v.  Bank  of 
Kentucky,  82  Ky.  231. 

■*  Ex  parte  Tremont  National 
Bank,  No.  14169  Fed.  Cas.,  2  Low. 
409. 


WHAT    PASSES    TO    THE    TRUSTEE. 


497 


the}-  are  made  by  statute  inalienable  and  not  subject  to  attach- 
ment/ It  has  been  held  that  the  bankrupt's  pension  money 
in  his  hands  at  the  time  of  filing-  his  petition  as  it  was  received 
and  not  loaned  or  invested  or  changed  in  its  nature  will  not 
pass  to  the  trustee."  In  England  the  rule  is  otherwise.^  Sal- 
ary and  pensions  of  the  army  and  navy  and  all  persons  em- 
ployed or  engaged  in  the  civil  service  pass  to  the  trustee  in 
bankruptcy. 


§  172.    Insurance  policies. 

Policies  of  insurance  vest  in  the  trustee,  but  the  bankrupt 
act  provides  ^  that  "when  any  bankrupt  shall  have  any  insur- 
ance policy  which  has  a  cash  surrender  value  payable  to  him- 
self, his  estate,  or  personal  representatives,  he  may,  within 
thirty  days  after  the  cash  surrender  value  has  been  ascertained 
and  stated  to  the  trustee  by  the  company  issuing  the  same, 
pay  or  secure  to  the  trustee  the  sum  so  ascertained  and  stated, 
and  continue  to  hold,  own  and  carry  such  policy  free  from 
the  claims  of  the  creditors  participating  in  the  distribution 
of  his  estate  under  the  bankruptcy  proceedings,  otherwise  the 
policy  shall  pass  to  the  trustee  as  assets." 

The  status  of  life  insurance  policies  will  give  rise  to  many 
interesting  questions  with  reference  to  whether  such  policies 
pass  to  the  trustee.  AMiere  such  policies  have  a  cash  sur- 
render value  and  are  payable  to  the  bankrupt,  his  estate  or 
personal  representatives,  they  undoubtedly  pass  to  the  trustee." 


*R.  S.  Sees.  4745  and  4747;  see 
Streeter  v.  Sumner,  11  Foster  (N. 
H.)  557. 

"In  re  Bean,  100  Fed.  Rep.  262, 
4  Am.  B.  R.  53. 

'46  and  47  Vict.  Chap.  52,  Sec. 
52,  which  is  substantially  the  same 
provision  as  that  contained  in  Sees. 
89  and  90  of  the  bankrupt  act  of 
1869  (32  and  2,5  Vict). 

*B.  A.  1898,  Sec.  70,  clause  5. 
Con<;ult  in  re  Bennett,  No.  1315 
Fed.   Cas.,   2   N.   B.   R.    181,   as  to 


Erben's   case.     In   re   Welling    (C. 
C.  A.  7th  Cir.),  113  Fed.  Rep.  189, 
7  Am.  B.  R.  340. 
"In  re  Diack,  100  Fed.  Rep.  770, 

3  Am.  B.  R.  723,  2  N.  B.  N.  664; 
In  re  Boardman,  103  Fed.  Rep.  783, 

4  Am.  B.  R.  620.  2  N.  B.  N.  821 ; 
In  re  Slingluff,   106  Fed.  Rep.   154, 

5  Am.  B.  R.  76,  3  N.  B.  N.  254; 
In  re  Lange,  91  Fed.  Rep.  361,  i 
Am.  B.  R.  186,  I  N.  B.  N.  44-60; 
In  re  Becker,  106  Fed.  Rep.  54,  5 
Am.  B.  R.  438,  3  N.  B.  N.  267;  In 


498 


LAW     AXn     TROt.  i:iil)lNc;S     l\      r.ANKRUl'TCY. 


Policies  without  a  cash  surrender  value  also  pass  provided 
they  ha\  e  an  actual  value ''  and  it  has  been  held  that  the 
bankrupt  should  be  permitted  to  pay  that  actual  value  and  re- 
ceive a  conveyance  from  the  trustee  of  all  claims  thereto.* 
It  is  to  be  observed  that  the  trustee  does  not  take  policies 
of  insurance  payable  to  the  wife,  children  or  other  kin  of  the 
Ixuikrupt,  but  only  policies  the  proceeds  of  which  are  payable 
to  the  bankrupt,  his  estate  or  personal  representatives. 

The  rule  with  reference  to  insurance  policies  passing  is  well 
illustrated  /;/  /t^  Steele.'^'  It  was  there  held  that  a  policy  pay- 
able to  the  bankrupt,  his  executors,  administrators  or  assigns, 
became  part  of  the  assets  of  the  bankrupt's  estate,  unless  he 
availed  himself  of  the  right  to  pay  the  surrender  value  to  the 
trustee;  a  policy  issued  on  the  life  of  one  bankrupt,  whose 
wife,  another  bankrupt,  was  to  pay  the  premiums  and  receive 
the  benefit  of  the  policy,  was  part  of  the  estate  of  the  wife ; 
another  policy  payable  to  the  executors,  administrators  or 
assigns  of  the  bankrupt,  who  had  by  a  writing  assigned  the 
same  to  his  fiancee,  who  afterwards  became  his  wife,  made  the 
policy  one  payable  to  the  wife  of  the  bankrupt  and  it  did  not 
pass  to  the  trustee. 

Where  an  endowment  policy  is  payable  to  the  bankrupt  and 
in  case  of  his  death  to  his  wife,  the  bankrupt's  interest  in  the 
surrender  value  of  the  policy  passes  to  the  trustee.^ 


re  Steele,  98  Fed.  Rep.  78.  3  Am. 
B.  R.  549,  2  N.  B.  N.  281,  reversed 
on  another  point  in  Steele  v.  Buel, 
104  Fed.  Rep.  968,  5  Am.  B.  R. 
165,  3   N.   B.   N.  330. 

=  In  re  Welling  (C.  C.  A.  7th 
Cir.),  113  Fed.  Rep.  189,  7  Am.  B. 
R.  340;  In  re  Slingluff,  106  Fed. 
Rep.  154,  5  Am.  B.  R.  76;  In  re 
Coleman  (C  .C.  A.  2d  Cir.),  136 
Fed.  Rep.  818,  14  Am.  B.  R.  461. 

Vm  re  Welling  (C.  C.  A.  7th 
Cir.),  113  Fed.  Rep.  189,  7  Am.  B. 
R.  340. 

'98  Fed.  Rep.  78,  3  Am.  B.  P. 
549,  2  N.   B.   N.  281.     This  decree 


was  reversed  in  Steele  v.  Buel,  104 
Fed.  Rep.  968,  5  Am.  B.  R.  165, 
3  N.  B.  N.  330,  on  the  ground  that 
the  bankrupt  was  entitled  to  claim 
these  policies  as  exempt  under  the 
state  law. 

"  In  re  Diack,   100  Fed.  Rep.  770, 

3  Am.  B.  R.  722,,  2  N.  B.  N.  664; 
In  re  Boardman,  103  Fed.  Rep.  783, 

4  Am.  B.  R.  620,  2  N.  B.  N.  821; 
In  re  Slingluff,   106  Fed.   Rep.   154, 

5  Am.  B.  R.  76,  3  N.  B.  N.  254; 
In  re  Welling  (C.  C.  A.  (7th  Cir.), 
113  Fed.  Rep.  189,  7  Am.  B.  R. 
340;  In  re  Steele,  98  Fed.  Rep.  78,  3 
Am.  B.  R.  549;  In  re  Slingluff  and 


WHAT    PASSES    TO    THE    TRUSTEE.  499 

A  policy  of  insurance  does  not  pass  to  the  trustee  where  it 
has  no  cash  surrender  vakte  and  no  value  except  upon  the  con- 
tingency of  the  death  of  the  bankrupt,  if  the  premiums  are 
kept   paid,'    or   where   the   bankrupt    is    the   beneficiary   and 
not  a  contracting  party  and  would  not  be  entitled  to  the  sur- 
render value  of  the  policy,^  or  where  it  is  exempt  under  the 
laws  of  the  state  in  which  the  bankrupt  has  his  domicile.^ 
In  other  words,  if  the  bankrupt's  interest  in  the  policy  at  the 
date  of  his  bankruptcy  has  no  cash  value,  nothing  passes  to 
the  trustee.     The  cash  surrender  value  which  a  policy  pos- 
sesses is  the  cash  value  which  would  be  recognized  and  paid 
by  the  insurer  on  the  surrender  of  the  policy  at  the  date  of  the 
filing  of  the  petition  in  bankruptcy,  and  is  not  confined  to  a 
surrender  value  expressly  stipulated  by  the  contract  of  insur- 
ance to  be  paid.^" 

In  the  schedules,  which  the  petitioner  in  bankruptcy  must 
file,  the  amount  and  character  of  insurance  policies  should  be 
stated. 

A  life  insurance  policy,  exempted  by  a  state  law  frDUi 
liability  for  debts,  does  not  pass  to  the  trustee." 

It  has  been  held  that  when  a  trustee  has  once  rejected  a 
policy  as  having  no  surrender  value  and  as  being  onerous,  he 

In  re  Steele  seem  to  hold  that  the  A.   5th   Cir.   in    124   Fed.   Rep.   734, 

entire  interest  passes  to  the  trustee  10  Am.  B.  R.  687;  Gould  v.  N.  Y. 

and  that  wife  of  the  bankrupt  loses  Life    Ins.    Co.,    132    Fed.    Rop.    927, 

her  contingent  right;  In  re  Diack ;  13   Am.   B.   R.  233. 

In  re  Boardman  and  In  re  Welling,  But  see  In   re   Mertens,   131   Fed. 

protect  the   wife's  contingent  right  Rep.  972,   12  Am.  B.  R.  712. 

and  any  equitable  lien  she  may  have  ^  In  re  McDonnell.   loi   Fed.  Rep. 

obtained   by   paying   premiums.     In  239,  4  Am.   B.   R.  92. 

re   Steele   is   expressly  disapproved  But  see  In  re  Mertens,  131  Fed. 

of    in    In     re    Welling;     see    also  Rep.  972,   12  Am.  B.  R.  712. 

Haskell    V.    Equitable    Life    Assur.  "  Holden    v.    Stratton.    198    U.    S. 

Society.      181        ?^Iass.     341;     Pin-  202,  49  L.  Ed.   1018,   14  Am.  B.  R. 

grey  v.  National  Ins.  Co.,  144  Mass.  94. 

374;    Pulsifer    v.    Hussey,    97    Me.  '"Holden  v.    Stratton,    198  U.    S. 

434,  9  Am.  B.  R.  657.  202-214,  49  L.  Ed.  T018,  14  Am.  B. 

''  In  re  Buelow,  98  Fed.  Rep.  86,  R.  94. 

3  Am.  B.   R.  3S9,  2  N.  B.  N.  230;  "Holden   v.   Stratton.    198   U.    S. 

In  re  Josephson,  121  Fed.  Rep.  142,  202,  49  L.  Ed.   T018,   14  Am.   P..   R. 

9  Am.   P..  R.  345,  affirmed  by  C.  C.  94;    Steele    v.    P.uel    ( C.    C.    .A.   8th 


500 


LAW     AM)     PROCEEDINGS    I.\     BANKRUPTCY. 


can  not  claim  the  proceeds  if  the  premiums  are  kept  up  and  the 
poHcy  becomes  vahiable  because  of  the  death  of  the  bankrupt, 
but  that  he  can  claim  the  amount  of  the  surrender  value  out 
of  the  proceeds  if  it  later  appear  that  there  was  a  surrender 
value.'" 

Fire  Insurance  Policies. — Standard  policies  of  fire  in- 
surance do  not  regularly  pass  to  the  trustee  except  l)y  the  con- 
sent of  the  insurance  company.  The  trustee  must  insure  the 
property  after  the  title  to  it  passes  to  him.  if  it  is  desired  to 
have  the  property  insured.  Where  a  fire  occurs  after  a  peti- 
tion in  bankruptcy  is  filed  and  before  the  appointment  of  a 
trustee,  the  trustee  may  sue  on  the  policy  issued  to  the  bank- 
rupt and  recover  for  the  loss.'"'  For  the  reason  that  no  change 
of  title  is  effected  until  the  appointment  and  qualification  of 
the  trustee.  A  trustee  can  not  recover  for  loss  (^n  property 
insured  by  a  bankrupt  and  burned  after  the  trustee  is  quali- 
fied. For  the  reason  that  most  policies  are  void  when  the  title 
to  the  property  is  changed  and  the  title  to  the  bankrupt's  prop- 
erty is  changed  by  the  qualification  of  the  trustee. 

§  173.    Property  held  by  the  bankrupt  as  trustee. 

Property  which  the  bankrupt  holds  in  trust  for  some  other 
person  does  not  vest  in  the  trustee.'  The  act  of  1867  pro- 
vided that  no  property  held  by  the  bankrupt  in  trust  should 
pass.-  This  was  a  mere  declaration  of  a  well-settled  princi- 
ple.^ 


Cir.),  104  Fed.  Rep.  968,  5  Am.  B. 
R.  165,  3  N.  B.  N.  330;  Pulsifer  v. 
Hussev,  97  Me.  434,  9  Am.  B.   R. 

657 

^'' In  re  Josephson,  121  Fed.  Rep. 
142,  9  Am.  B.  R.  345,  affirmed  (C. 
C.  A.  5th  Cir.),  124  Fed.  Rep.  734, 
10  Am.  B.  R.  687. 

'*  Fuller  V.  Jameson,  184  N.  Y. 
605;  Fuller  V.  N.  Y.  Fire  Ins.  Co., 
184  Mass.  12. 

"■  Perry  on  Trusts,  Sec.  345 ;  see 
also  Carpenter  v,  Marnell,  3  B.  & 
P.  40. 


=  R.  S.  Sec.  5053- 

^This  rule  was  laid  down  as 
early  as  1742  by  Lord  Chief  Jus- 
tice Willes,  in  Scott  v.  Surman, 
Willes'  Rep.  400:  "My  notion," 
he  said,  "is  that  assignees  under 
a  commission  of  bankrupt  are  not 
to  be  considered  as  general  assign- 
ees of  all  the  real  and  personal 
estate  of  which  the  bankrupt  was 
seized  and  possessed,  as  heirs  and 
executors  are  of  the  estates  of  their 
ancestors  and  testators;  but  that 
nothing    vests    in    these    assignees 


WHAT    PASSES    TO    THE    TRUSTEE. 


501 


The  trustee  is  vested  only  with  the  title  of  the  bankrupt.* 
Property,  which  belongs  in  law  or  equity  to  another  person, 
does  not  pass  to  the  trustee  as  an  asset  in  bankruptcy.'"'  This 
includes  property  held  by  the  bankrupt  as  an  express  trustee,  or 
as  an  agent  or  bailee,  or  collector  of  rents,  or  in  any  fiduciary 
position."  The  beneficial  owner,  as  against  the  trustee  in 
bankruptcy,  is  entitled  to  such  property  if  it  can  be  identified, 
or  the  trust  property  can  be  traced  and  followed  into  other 
property  into  which  it  has  been  converted.'     For  this  purpose 


even    at    law    but    such    real    and 
personal  estate  of  the  bankrupt  in 
which  he  had  the  equitable  as  well 
as  the  legal   interest,  and  which   is 
to   be  applied   for   the   payment   of 
the  bankrupt's  debts.     And  I  found 
this  my  opinion  both   on  the   rea- 
son   and    justice    of   the    case,    and 
likewise    on    the    several    statutes 
made   concerning   bankrupts   which 
relate  to  this  point.    As  to  the  rea- 
son of  the  case,-  I   rely  here  again 
upon    the    rule    concerning    circuity 
of  action;   for   I   think  it  would  be 
very    absurd    to    say    that    anything 
shall   vest   in  the  assignees   for  no 
other    purpose    but    in    order    that 
there     may     be     a     bill    in    equity 
brought     against     them     by     which 
they  will  be  obliged  to  refund  ind 
account,  and,  according  to  the  case 
of  Burdett  v.  Willett,  will  likewise 
have    costs    decreed    against    them ; 
and  so  the  effects  of  the  bankrupt 
which  ought   to   be   applied   to   the 
discharge    of     his     debts     will     be 
wasted  to  serve  no  purpose   what- 
ever.     If,    therefore,    the    bankrupt 
were    seized    of    a    trust    estate    in 
lands,  for  the  reasons  already  men- 
tioned,   I    should    think   that    it   did 
not  vest  in  the  assignees  at  all,  but 
that    the    legal    estate    as    to    that 
should  still  remain  in  the  bankrupt 


for    the    benefit    of   the    cestui   que 
trust." 

Speaking  of  the  opinion  of  Lord 
Chief    Justice     Willes,    Vice-Chan- 
cellor   Whittlesey,  in  Ontario   Bank 
V.    J\Iumford,   5    N.   Y.    Chan.   Rep. 
616,   after    referring   to   the   quota- 
tion above,  said     "But  as  his  asso- 
ciates upon  the  bench  were  not  pre- 
pared   to    put    the    decision   of   the 
case  then  under  consideration  upon 
that  ground  the  point  was  left  un- 
decided.     That      notion      of      this 
learned     and     distinguished     jurist, 
however,     was     subsequently     fol- 
lowed, and  has  long  since  become 
the   settled   law,   not   only   in    Eng- 
land, but   in  this  state." 

See  also  Ludwig  v.  Highley,  5 
Pa.  St.  132;  Kip  V.  Bank  of  New 
York,  10  Johns.  (N.  Y.)  63;  Bhn 
V.  Pierce,  20  Vt.  25. 

'York    Mfg.    Co.    v.    Cassell,   201 
U.  S.  344,  50  L.   Ed.  782,   15  y\m. 
B.^  R.  633. 
°  Sec.   152,  ante. 

"  Nat.  Bank  v.  Insurance  Co.,  104 
U.  S.  54,  26  L.  Ed.  693;  fn  re  Ilal- 
Ictt's    Estate,    13    Ch.    Div.   6g6. 

"Smith  v.  Au  Gres  (C.  C.  A.  6lh 
Cir.),  148  Fed.  Rep.  — ;  In  re  Taf: 
(C.  C.  .'\,  6th  Cir.).  133  Fed. 
Rc-p.  5ir,  13  ;\m.  B.  R.  417; 
Welch    V.    Policy,    177    N.    Y.    117; 


502 


LAW     AM)    PROCEEDINGS    IN     BANKRUPTCY. 


''There  is  no  difference  between  investments  in  the  purchase 
of  lands,  or  chattels,  or  bonds,  or  loans,  or  moneys  deposited 
in  a  bank  account."  '^  But  where  he  can  not  trace  the  trust  prop- 
erty or  fuijd,  in  its  original  or  some  substituted  form,  in  the 
estate  which  comes  into  the  hands  of  the  trustee,  he  is  not 
entitled  to  any  priority  over  the  general  creditors  with  whom 
he  is  entitled  to  share  pro  rafa.'^ 

At  one  time  the  rule  was  that  trust  property  could  be 
followed  into  other  kinds  of  property,  but  when  turned  into 
money  and  mixed  with  other  money,  it  could  not  be  followed 
because  money  had  no  earmark  by  which  the  trust  fund 
could  be  identified.^"  Applying  tliis  theory,  the  courts  held 
that  where  a  bankrupt  mixed  trust  funds  with  his  own  money 
in  a  bank  account  the  beneficiary  could  not  follow  the  fund 
into  the  hands  of  the  trustee,  but  was  a  general  creditor  to 
the  amount  of  his  claim. ^^  The  modern  rule  is  that  "equity 
will  follow  money  even  if  put  into  a  bag  or  indistinguishable 
mass  by  taking  out  the  same  quantity.^'  This  doctrine  has 
been  applied  in  bankruptcy  under  the  present  act.  If  the 
bankrupt  mixes  trust  funds  or  property  with  his  own,   the 


II  Am.  B.  R.  2IS;  Deere  Plow 
Co.  V.  McDavid  (C.  C.  A.  8th 
Cir.),    137   Fed.   Rep.   802,    14   Am. 

B.  R.    653;    Bills    V.    Schliep     (C. 

C.  A.  2d  Cir.),  127  Fed.  Rep. 
103,  II  Am.  B.  R.  607;  In  re  Gas- 
kill,  130  Fed.  Rep.  235,  12  Am.  B. 
R.  251;  Southern  Pine  Co.  v.  Sa- 
vannah Trust  Co.  (C.  C.  A.  5th 
Cir.),    141    Fed.   Rep.   802,    15   Am. 

B.  R.  618. 

^  Nat.  Bank  v.  Insurance  Co.,  104 
U.  S.  54,  68,  26  L.  Ed.  693. 
"Deere  Plow  Co.  v.  McDavid  (C. 

C.  A.  8th  Cir.),  137  Fed.  Rep.  802, 
14  Am    B.  R.  653. 

"  See  cases  discussed  in  the  opin- 
ions In  re  Hallett's  Estate,  13  Ch. 
Div.  696,  and  Nat.  Bank  v.  Insur- 
ance Co.,   104  V.   S.  54,  26  Ld.  Ed. 


693,  where  the  rule  is  disapproved. 

"  Illinois  Trust  &  Savings  Bank 
V.  First  Nat.  Bank,  15  Fed.  Rep. 
858 ;  In  re  Janeway,  No.  7208  Fed. 
Cas.,  4  N.  B.  R.  100;  In  re  Hobbs, 
No.  6549  Fed.  Cas.,  2  Low.  491  ; 
Phelan  v.  Iron  Mountain  Bank, 
No.  .11069  Fed.  Cas.,  4  Dill.  88;  lu 
re  Bank  of  Madison,  No.  890  Fed. 
Cas.,  s.  c.  5  Biss.  515;'  Bank  of 
Commerce  v.  Russell,  No.  884  Fed. 
Cas.,  s.  c.  2  Dill.  215. 

"/;;  re  Hallett's  Estate,  13  Ch. 
Div.  696;  Nat.  Bank  v.  Insurance 
Co.,  104  U.  S.  54,  26  L.  Ed.  693; 
Holder  v.  Western  German  Bank 
(C.  C.  A.  6th  Cir.),  136  Fed.  Rep. 
go ;  Western  German  Bank  v.  Nor- 
vell  (C.  C.  A.  5th  Cir.),  134  Fed. 
Rep.   724. 


WHAT    PASSES    TO    THE    TRfSTEE. 


503 


whole  will  pass  to  the  trustee  impressed  with  a  lien  to  the 
extent  of  the  trust  property/^ 

Clearly  property  held  by  the  bankrupt  under  a  deed  or  will 
for  the  benefit  of  some  other  person  is  trust  property  which 
does  not  vest  in  the  trustee."*  It  is  well  settled  that  an  ex- 
change of  securities  held  in  trust  is  not  a  confusion  of  prop- 
erty, but  that  the  new  securities  constitute  the  trust  property. '•'^ 
Jt  has  been  held  to  be  trust  property  which  could  be  traced  by 
the  beneficiary  where  a  broker  kept  the  bonds  of  his  principal, 
and  proceeds  from  the  sale  of  them,  in  a  particular  envelope 
or  box,  separate  and  apart  from  his  own  property,^''  or  where 
the  proceeds  of  the  sales  of  property  of  a  number  of  consign- 
ors were  placed  by  the  bankrupt  factor  in  the  hands  of  his 
attorney,  in  order  that  the  fund  might  be  kept  separate  and 
apart  from  his  general  estate/'  ^^'here  cotton  was  by  mistake 
delivered  to  factors  to  whom  it  was  not  consigned  and  was 
sold  and  the  proceeds  deposited  in  a  bank,  the  owner  of  the 
cotton  was  entitled  to  the  value  as  against  the  trustee  of  the 
factors  in  bankruptcy.'^  The  assets  of  a  partnership  in  the 
hands  of  one  partner  charged  with  the  payment  of  the  debts 
of  the  firm,  are  trust  property.'^  There  is  a  fiduciary  relation 
between  vendee  and  vendor  in  case  of  a  fraudulent  sale  of 
goods  when  the  vendor  elects  to  rescind  the  sale  and  reclaim 


"Erie  R.  R.  Co.  v.  Dial  (C.  C. 
A.  6th  Cir.),  140  Fed.  Rep.  689, 
15  Am.  B.  R.  559;  Bills  v.  Schliep 
(C.  C.  A.  2d  Cir.),  127  Fed.  Rep. 
<03.  II  Am.  B.  R.  607,  Southern 
Pine  Co.  V.  Savannah  Tru.st  Co. 
(C.  C.  A.  5th  Cir.),  141  Fed.  Rep. 
802,  IS  Am.  B.  R.  618;  In  re 
Woods  &  Malone,  121  Fed.  Rep. 
599,  9  Am.   B.  R.  615. 

'*  Faxon  v.  Folvey,  no  Alass. 
.192;  Svvepson  v.  Rouse,  65  N.  C. 
.34- 

'=Cook  V.  Tullis,  18  Wall.  340, 
2\  T..  Ed.  933;  Clark  v.  Tselin.  21 
Wall.  360,  22  T..  F.d.  568;  Burn- 
Iii-cl    V.    Firman,    22    Wall.    170,    22 


L.  Ed.  766;  Sawyer  v.  Turpin,  91 
U.  S.  114,  23  L.  Ed.  235;  Taylor  v. 
Plumer,  3   Maule  &   S.   562. 

'"  Cook  V.  Tullis,  18  Wall.  2,32^  21 
L.  Ed.  933 ;  Voight  v.  Lewis,  No. 
16989  Fed.  Cas..  14  N.  B.  R.  543. 
See  also  Hugewittcr  v.  Von  Sacks, 
No.   14343   Eed.   Cas.,  4   Ben.   167. 

''In  re  Taft  (C.  C.  A.  6th  Cir.), 
133  Fed.  Rep.  51 1,  13  Am.  B.  R. 
417. 

"/»  re  Woods  &  Alalone,  121 
Fed.   Rep.  599,  9  .\m.   B.   R.  615. 

'"Jones  V.  Newsom,  No.  7484  Fed. 
Cas.,  7  Biss.  321 :  Amsinck  v. 
I'.ean.  22  Wall.  395,  22  L.  lul.  80T  ; 
I  lnll;in<l    V.    I'uller,    13    hid.    195. 


504  LAW     AND    PROCEEDINGS    IN     liANKRUrXCV. 

the  goods,-"'  \\'liere  a  manufacturer  mixed  a  consignment 
of  raw  material  with  other  like  material  in  the  course  of 
business,  the  owner  of  the  consignment  was  permitted  to 
follow  the  raw  material  in  the  mass.-^  Moneys  deposited 
in  a  bank  for  a  specific  purpose  is  a  trust  fund  which  may  be 
followed  into  the  hands  of  the  trustee  of  the  bank.'-'- 

\\'here  a  sale  of  a  stock  of  goods  was  made  in  bulk  to 
buyers,  who  subsequently  became  bankrupt,  and  the  seller 
fully  complied  with  the  state  law  requiring  such  sales  to  be 
accompanied  by  a  list  of  the  seller's  creditors  and  payment 
of  the  price  to  be  applied  to  their  claims,  a  part  of  the  price 
remaining  unpaid  at  the  time  of  the  buyers'  bankruptcy  con- 
i:tituted  a  trust  fund  for  the  benefit  of  the  seller's  creditors, 
in  so  far  as  it  represented  a. part  of  the  stock  remaining  at  the 
time  of  the  bankruptcy,  or  was  capable  of  being  segregated 
from  the  other  assets  of  the  bankrupt. -''  The  purchaser  of 
such  goods  is  not  entitled  to  claim  exemptions  out  of  the 
trust  property  as  against  the  creditors  of  the  seller.^* 

Controversies  with  reference  to  whether  property  is  held  in 
trust  or  not  are  to  be  determined  by  the  court  of  bankruptcy. 
They  ordinarily  arise  either  upon  the  application  of  the  trus- 
tee for  possession  of  the  property  or  upon  the  application  of 
the  beneficiary  to  have  the  property-  delivered  to  him,  or  the 
value  of  such  property  paid  to  him.  In  either  case  an  order 
of  the  court  will  be  made  only  upon  petition  and  proofs. 

§  174.     Trust  property  in  which  the  bankrupt  has  a  bene- 
ficial interest. 

\Aniether  the  beneficial  interest  of  a  bankrupt  in  property 
held  in  trust  passes  to  the  trustee  or  not  depends  upon  whether 


="See   Sec.   152&,  ante.  (C.  C.  A.  StH  Cir.),  134  Fed.  Rep. 

^Erie  R.   R.  Co.  v.  Dial    (C.  C.  724;    Nat.  Bank  v.    Insurance   Co.. 

A.  6th  Cir.),  140  Fed.  Rep.  689,  15  104  U.  S.  54,  26  L.  Ed.  693. 

Am.  B.  R.  559.  But   see   In   re   Smart,    136   Fed. 

"^  Smith    V.    Mottley    (C.    C.    A.  Rep.  974,   14  /\m.  B.  R.  672. 

Cth  Cir.),  149  Fed.  Rep. —;  Holder  °"/n    re    Gaskill,  ''130    Fed.    Rep. 

V.  Western  German  Bank  (C.  C.  A.  235,  12  Am.  B.  R.  251. 

6th     Cir.),      136     Fed.     Rep.     90;  " /;;    re    Connor,    146    Fed.    Rep. 

Western   German   Bank   v.    Norvcll  998. 


WHAT    PASSES    TO    THE    TRUSTEE. 


505 


it  is  such  an  interest  that  the  bankrupt  might  have  transferred 
it,  or  it  .might  have  been  levied  upon  or  sold  under  judicial 
process  against  him.  If  it  is  so  vested  it  passes.^  If  it  is  not, 
it  will  not  pass  to  the  trustee.'  Such  questions  are  determin- 
able only  by  the  local  law  of  the  state,  territory  or  district 
where  the  property  has  its  situs."'' 

The  bankruptcy  of  the  beneficiary  ordinarily  puts  an  end 
to  any  discretion  which  the  trustee  under  the  trust  may  have 
in  the  disposition  of  the  trust  funds,  and  vests  the  whole  in- 
terest of  the  cestui  que  trust  in  the  trustee  in  bankruptcy.* 
But  where  the  bankrupt's  interest  is  terminated  by  his  bank- 
ruptcy there  is  nothing  to  pass  to  the  trustee,  because  his  bene- 
ficial interest  in  the  trust  property  is  ended. ^ 

§  175.    After-acquirec'  property. 

Property  acquired  by  a  bankrupt  subsequent  to  the  com- 
mencement of  bankruptcy  proceedings  and  which  does  not  pass 
to  the  trustee  is  called  after-acquired  property.     Such  prop- 


*  Sandford  v.  Lackland,  No. 
12312  Fed.  Cas.,  2  Dill.  6;  Smith 
V.  Profitt,  82  Va.  832;  Sparhawk 
V.  Cloon,  125  Mass.  263;  Anderson 
V.  Miller,  15  Smedes  &  M.  (Miss.) 
286. 

"Spindle  v.  Shreve,  iii  U.  S. 
542,  28  L.  Ed.  512. 

'  Nichol  V.  Levy,  5  Wall.  433. 
18  L.  Ed.  596;  Spindle  v.  Shreve, 
III  U.  S^  542,  28  L.  Ed.  512.  See 
also  Nichols  v.  Eaton,  gi  U.  S. 
729,  23  L.  Ed.  254. 

In  some  of  the  states,  as  in 
New  York,  Illinois  and  Tennessee, 
there  are  .statutory  provisions  pre- 
venting the  alienation  of  trust  es- 
tates or  exempting  the  interests  of 
the  beneficiaries  therein  from  lia- 
bihty  for  the  debts  where  the  trust 
is  created  by,  or  the  property  so 
held  has  proceeded  from,  some  per- 
i>on  other  than  the  defcndnnt  him- 


self, and  the  trust  is  declared  by 
will  duly  recorded  or  deed  dul}'^ 
registered.  Graff  v.  Bonnctt,  31 
N.  Y.  9;  Campbell  v.  Foster,  35  N. 
Y.  361 ;  Williams  v.  Thorn,  70  N. 
Y.  270;  Nichol  V.  Levy,  5  Wall. 
433,  18  L.  Ed.  596;  Spindle  v. 
Shreve,  iii  U.  S.  542-548,  28  L.  Ed. 
512,  and  one  branch  of  Potter  v. 
Couch,  14:  U.  S.  319,  329,  35  L. 
Ed.  721,  were  cases  where  statu- 
tory provisions  were  construed  and 
applied. 

*  Snowdon  v.  Dales,  6  Sim.  524 ; 
Graves  v.  Dolphin,  i  Sim.  66; 
Younghusband  v.  Gisborne,  t  Coll. 
400;  Piercy  v.  Roberts,  1  My].  & 
K.  4;  Re  Sanderson's  Trust,  3  K. 
&  J-  497 '-  Green  v.  Spicer,  i  R.  & 
^1-   395- 

■''Nichols  V.  Eaton,  91  U.  S.  716, 
23    L.    Ed.    254. 


506 


Law    and     PROCEEDliNGS    IN     BANKRUPTCY. 


erty  in  this  country  is  liable  for  his  debts  prior  to  bankruptcy 
only  on  condition  he  does  not  succeed  in  obtaining  a  dis- 
charge/ 

Under  the  act  of  1841  all  property  vested  i!i  the  bankrupt, 
at  the  time  of  the  decree  declaring  him  a  bankrupt,  passed 
to  his  assignee  and  only  property  acquired  after  the  adjudi- 
cation was  after-acquired  property."  Under  the  act  of  1867 
the  date  of  cleavage  was  the  date  of  filing  the  petition  and  any 
property  acquired  thereafter  was  after-acquired  property.'' 

Section  70  of  the  bankrupt  act  of  1898  provides  that  the 
title  of  the  bankrupt  shall  vest  in  the  trustee  ""as  of  the  date  he 
was  adjudged  a  bankrupt"  (except  such  as  is  exempt),  to  six 
classes  of  property  there  enumerated.  'These  are,  first,  docu- 
ments; second,  patents  and  copyrights;  third,  powers;  fourth, 
property  transferred  in  fraud  of  creditors ;  fifth,  property  which 
prior  to  the  filing  of  the  petition  he  could  by  any  means  have 
transferred  or  which  might  have  been  levied  upon  and  sold  un- 
der judicial  process  against  him ;  and  sixth,  rights  of  action 
upon  contracts.  The  only  right  or  title  the  trustee  has  to  any 
of  the  bankrupt's  property  is  acquired  under  this  section.*  If 
property  of  the  bankrupt  is  not  embraced  in  one  of  the  six 
provisions  it  does  not  pass  to  the  trustee,  and  if  acquired  after 
the  commencement  of  bankruptcy  proceedings  is  after-acquired 


'  In  re  Woods,  133  Fed.  Rep.  82, 
13  .Xm.  B.   R.  240. 

^Act  of  1841,  Sec.  3,  5  Stat,  at 
L.  443 ;  Ex  parte  Newhall,  No. 
10159  Fed.  Cas.,  2  Stor\',  360; 
Fisher   v.   Currier,   7   Mat.    (Mass.) 

42?. 

■'  /;;  re  Barnett,  No.  1024  Fed. 
Cas..  3  Pitts.  Rep.  559;  Mays  v. 
National  Bank,  64  Pcnn.  St.  74; 
Da}'  V.  Superior  Court,  61  Cal. 
489;  Mosby  V.  Steele  &  Metcalfe, 
7  Ala.  299;  In  re  Benson,  No. 
1328  Fed.  Cas..  8  Biss.  T16;  In  re 
Grant.  No.  5693  Fed.  Cas.,  2  Story 
312. 

In   England,   aflcr-acquired   jiro])- 


erty  is  an  asset  of  the  bankrupt's 
estate  (46-7  Vict.,  Chap.  52,  Sec. 
44,  (i),)  and  has  been  so  treated 
from  early  times,  act  of  S  George 
11. ,  Chap.  30;  Ex  parte  Proudfoot 
(1743).  I  Atk.  252;  Ashley  v.  Kell, 
2  Stra.  1207;  Webb  v.  Ward,  7  T. 
R.  296;  Kitchen  v.  Bartsch,  7  East. 
53;  Crofton  V.  Poole  (1830),  i  B. 
&  Ad.  568:  Bankrupt  Act  of  1869 
(32-3  Vict.),  Sec.  15. 

\Steele  v.  Buell  (C.  C.  A.  8th 
Cir.).  T04  Fed.  Rep.  968,  5  Am.  B. 
R.  rr.?,  3  N.  B.  N.  330;  In  re  Mc- 
Donnell, TOT  lu-d.  Rep.  230,  4  Am. 
B.    R.  92. 


WHAT    PASSES    TO    THE    TRUSTEE.  507 

property.  It  will  be  observed  that  no  date  is  fixed  in  the  first 
four  and  sixth  clauses  other  than  the  date  of  adjudication  to 
determine  what  property  in  those  classes  passes  to  the  trustee. 
It  must  be  the  property  the  title  to  which  is  vested  in  the 
bankrupt  at  the  date  he  is  adjudged  a  bankrupt. 

The  fifth  clause  specifies  particularly  that  it  is  the  property, 
which  was  alienable  or  subject  to  levy  and  execution  at  the 
date  of  filing  the  petition,  which  passes.  This  property  passes 
as  of  the  date  of  the  adjudication  and  only  such  property  passes 
as  was  alienable  or  subject  to  levy  and  execution  at  the  date 
of  filing  the  petition.  Property  acquired  by  the  bankrupt  be- 
tween the  date  of  filing  the  petition  and  the  adjudication  which 
would  otherwise  be  embraced  within  the  fifth  clause  may  be 
considered  after-acquired  property.^ 

After-acquired  property  includes  all  property  acquired  in  a 
new  business  in  which  he  may  have  engaged/*  money  bor- 
rowed for  the  purpose  of  engaging  in  business,^  or  crops 
planted  after  the  adjudication,®  wages  or  salary,  property 
which  may  come  to  him  by  way  of  inheritance  or  devise,^  such 
as  he  may  have  obtained  from  a  wife  upon  his  divorce  granted 
after  bankruptcy,^''  property  acquired  under  an  agreement  made 
subsequent  to  bankruptcy,"  and  a  right  to  redeem  lands  ob- 
tained by  a  waiver  of  a  previous  forfeiture.^" 

The  trustee  has  no  interest  whatever  in  after-acquired  prop- 
erty, and  is  not  entitle--'  to  examine  the  bankrupt  relative  to 
such  property. 


13 


'/«  re  Burka,  T04  Fed.  Rep.  326,  611,   15   Am.    B.    R.  4,  the  testator 

5  Am.  B.  R.   12.  died   one  hour  and   fifteen   minutes 

"/m  re  Rosenfield,  No.  12059  Fed.  before   beneficiary   filed   his   volun- 

Cas.,   I   N.  B.  R.  319.  tary  petition,  and  the  legacy  passed 

''In  re  Patterson,  No.  10815  Fed.  to  trustee. 

Cas.,   I  Ben.  496.  "/n    re    Benson,    No.    1328    Fed. 

'/»    re    Barnett,    No.    1024    Fed.  Cas.,  8  Biss.    116. 

Cas.,  3  Pitts.   Rep.  559;   See  In  re  "  Cullen    v.    Dawson,    24    Minn. 

Barrow,  98  Fed.   Rep.   582,   3  Am.  66;    In    re   Oleson,    no   Fed.    Rep. 

B.  R.  414,  3  N.  B.  N.  95.  796,  7  Am.  B.  R.  22. 

"In  re  Woods,  133  Fed.  Rep.  82,  ''Kittridge     v.     McLaughlin,     2,3 

13  Am.  B.  R.  240;  In  re  Burka,  104  Me.  327. 

Fed.  Rep.  326,  S  Am.   B.  R.  12.  "/«     re     Patterson,     No.     10815 

In    re    McKenna.    137    Fed.    Rep.  Fed.  Cas.,  i  Ben.  496;  In  re  Rosen- 


308 


LAW      AM)     rUOCKKDl.Nc'.S     l\      1!A  N  K  Ul '  I' IHV 


A  conn  111  i,-lKiiioor\'  will  iniorriM-i,'  l)\'  iiijmu'lion  lo  prulcrt 
the  bankrupt  in  tlio  onjoynicnl  oi  such  propcrl\  until  it  can 
be  ascertained  whether  he  will  obtain  his  discharg-e." 


§  176.     Rights  of  action  upon  contracts,  for  injury,  etc.,  to 
property. 

The  bankrupt  act  transfers  and  vests  in  the  trustee  all  rights 
of  action  arising  upon  contracts,  or  for  the  luilawful  taking 
or  detention  of.  or  injury  to.  the  bankrupt's  property.^  This 
provision  is  in  accord  with  the  general  spirit  of  the  act  that 
everything  belonging  to  the  bankrupt  that  can  be  turned  to 
profit  passes  to  the  trustee  for  the  l)enelit  of  the  creditors. 
The  trustee,  however,  as  in  case  of  property,  may  elect  to 
adopt  or  reject  such  rights  of  action,  according  as  they  are 
likely  to  be  beneficial  or  onerous  to  the  estate."  Where  the 
trustee  does  not  elect  to  exercise  such  a  right  of  action,  it 
remains  in  the  bankrupt.'" 

This  provision  authorizes  the  trustee  to  maintain  suits  aris- 
ing from  two  distinct  causes  of  actions.  First,  those  arising 
ex  contractu,  and,  second,  those  arising  c.v  chiictti,  so  far  as 
they  affect  property. 


field.  No.  I20S9  Fed.  Cas.,  i  N.  B. 
R.  319;  In  re  Levy,  No.  8296  Fed. 
Cas.,    I   Ben.  496. 

'*Mosby  V.  Steele  &  IM'etcalfe,  7 
Ala.  299. 

'  B.  A.   1898,  Sec.  70,  clause  6. 

"  Gibson  v.  Carrnthers,  8  M.  & 
W.  326,  Rolfe,  B.;  Lawrence  v. 
Knowles,  5  Bing.  N.  C.  399;  Mor- 
gan V.  Bain,  L.  R.  10  C.  P.  15;  In  re 
Phcenix  Bessemer  Steel  Co.,  4 
Chan.  D.  108.  Sec  also  Sparhawk 
V.  Yerkes,  142  U.  S.  i,  35  L.  Ed. 
915;  Sessions  v.  Romadka,  145  U. 
S.  39,  39  L.  Ed.  608;  .American  File 
Co.  V.  Garrett,  no  U.  S.  295,  28  L. 
Ed.  149;  Glenny  v.  Langdon,  98  U. 
S.  20,  25  L.  Ed.  43. 

In  Kittle  v.  Hall,  29  Fed.  Rep. 
512,  the  court  said:  "It  can  not  he 
maintained  lliat  it  is  tlie  duly  of 
an  assignee   in   h.niKrniili-y    Id   insti- 


tute suits  for  the  infringement  of  a 
patent  owned  l)\-  the  Iiankrupl,  and 
that  his  failure  to  do  so  is  negli- 
gence." 

"Chilton  V.  Cabiuess,  14  Ala.  447. 

In  Clark  v.  Calvert,  8  Taunt.  742, 
an  action  for  trespass  on  land  be- 
fore the  bankruptcy  of  the  assignee 
was  maintained  by  the  bankrupt  in 
his  own  u;uue.  Tlie  court  said  (p. 
731)  :  "We  form  our  opinion  on  the 
precise  nature  of  the  action  and  on 
the  ground  that  the  assignees  Iiad 
not  interposed."  See  also  Rogers 
V.  Spence,  13  M.  &  W.  571.  af- 
hrmed  in  the  1  louse  of  Lords,  12 
Clark  &   h'imi.  700. 

Consult  also  Sparhawk  v.  Yer- 
kes, 142  r.  S.  I,  35  L.  F.d.  015; 
Taylor  v.  Irwin,  Jo  hVd.  Rep.  615; 
Smith  V.  (lordon,  No.  13052  Fed. 
Cas.,   6   Law    l\ep.    313. 


WHAi     i'.\.-..-5i..-,     I'j     iiii.    TUUSTEE. 


509 


First:  Actioxs  upon   Coxtkacts.—  . .  >  <\ 


■^  i  IV^  J    CLl 


osition  bankruptcy  does  not  discharge  a  contract.*  In  no  case 
can  the  party  who  contracted  with  a  bankrupt  set  up  the 
bankruptcy  against  the  assignees  as  a  reason  for  not  doing 
what  he  has  agreed  to  do.^  But  where  the  contract  has  not 
been  executed  by  the  bankrupt  he,  or  the  trustee  (if  he  may 
do  the  act),  must  perform  the  condition  which  remains  to  be 
performed  in  order  to  claim  the  benefit  of  the  contract/' 

Cases  arising  upon  contracts  may  be  either  for  the  consid- 
eration of  hquidated  damages  or  for  unliquidated  damages  on 
account  of  a  breach  of  the  covenants  contained  in  the  con- 
tract. All  the  rights  of  action  being  vested  in  the  trustee  by 
the  bankrupt  act,  he,  and  not  the  bankrupt,  must  maintain 
all  suits  upon  contracts  made  with  the  bankrupt,  as  well  for 
unlirjuidated  '  as  for  liquidated  damages,  w^hether  the  breach 
occurred  before  *  or  after  the  bankruptcy,"  unless  the  trustee 
elects  to  abandon  the  right. 

Thus  the  trustee  is  the  proper  party  to  institute  a  suit  to 
recover  the  value  of  lands  of  goods  and  merchandise  sold  by 
the  bankrupt,^''  or  to  maintain  a  suit  for  damages  for  not  de- 
livering goods  to  the  bankrupt  which  had  been  contracted 
for,'^  or  a  suit  to  recover  money  had  and  received  from  the 
bankrupt.^^  So  also  the  trustee,  where  a  right  of  action  exists 
under  the  state  or  federal  law,  may  recover  money  lost  in 
gambling,^'  or  may  bring  suit  to  recover  usurious  interest," 


*  Brooke  v.  Hewitt,  3  Ves.  253; 
Carey  v.  Nagel,  No.  2403  Fed.  Cas.. 
2  Biss.  244. 

"Rolfe,  B.,  in  Gibson  v.  Carruth- 
ers,  8  M.  &  W.  2,2-7. 

'■  Gibson  v.  Carruthers,  8  M.  &  W 
32  r. 

'  Wright  V.  Fairfield,  2  B.  &  Ad. 

'  Beckham  v.  Drake,  2  H.  L.  579. 

'  Gibson  V.  Carruthers,  8  M.  & 
W.  321 ;  Schondler  v.  Wace,  i 
Camp.   487;    Fuller    v.    "     '^    Fire 

Tns.   Co.,    T84   Mass.   t2;   Fuller   v. 
J.-nneson,  184  N.  Y.  605. 


""  Stewne  v.  Ajdesv/orth,  18  Conn. 

244- 

"  Wright  V.  Fairfield,  2  B.  &  Ad. 
"TZ"];  Gibson  v.  Carruthers,  8  M.  & 
'*V.  321. 

"  Foster  v.  Lowell,  4  Mass.  307. 

"Moore  v.  Jones,  23  Vt.  739; 
Brandon  v.  Pate,  2  H.  Black,  308; 
Brandon  v.  Sands,  2  Ves.  Jr.  514. 
But  see  Lafountain  v.  Savings 
Bank,  56  Vt.  332. 

"Wright  V.  First  National  Bank, 
No.  18078  Fed.  Cas.,  8  Biss.  243; 
Bromley  v.  Smith,  No.  1922  Fed. 
Cas.,    2     Biss.     511;     Monongahela 


510 


LAW    AM)    I'KOL  i:i:i)i.\c;s    i.\    i'.an  kruptcy, 


A  liustco  iiKiy  maintain  a  snil  on  a  policy  of  insurance 
to  recoN'cr  damages  by  a  lire  after  an  ad jiulicalion  in  hank- 
rnplcy  and  before  llie  appointment  of  the  trustee.'"  In  those 
cases,  where  the  common  law  pre\ails  w  ilh  reference  to  wife's 
property,  ehoses  in  action  belonging  to  her  do  not  pass  to  the 
trustee,  unless  reduced  to  possession/"  Nor  does  purely 
personal  property  o{  the  wife,  as  ornaments,  jewelry,  ap- 
parel, etc.,  pass,  even  in  those  states.^'  A  wife's  separate 
property  ne\-er  passes  to  the  trustee  of  the  bankrupt  husband.^'' 

Although,  generally,  rights  under  contracts  pass  to  the  trus- 
tee, the  general  rule  is  subject  to  two  important  exceptions. 

First  Exception.  A  right  of  action  where  the  breach  of  a 
contract  involves  injury  to  the  person  or  the  feelings  of  the 
bankrupt,  without  immediate  reference  to  his  rights  of  prop- 
erty, does  not  pass  to  the  trustee.^"  Such  rights  of  actioir,  for 
instance,  are  those  for  the  breach  of  a  contract  of  marriage, 
or  for  negligently  carrying  the  bankrupt  by  rail,  coach  or 
vessel,  or  negligently  conducting  a  cure  whereby  his  person 
is  injured,  or  negligently  conducting  a  suit  whereby  he  is 
imprisoned.  Although,  it  is  true,  the  estate  of  the  bankrupt 
is  incidentally  affected  l)y  the  recovery  or  failure  to  recover 
in  such  actions,  the  gist  of  tlie  action  is  conceived  to  be  per- 
sonal in  its  nature,  and  therefore  does  not  pass  to  the  trustee. 

Second  Exception.    A  right  of  action  arising  upon  an  exec- 


Bank  V.  Overholt,  96  Penn.  St.  327; 
Gray  v.  Bennett,  44  Mass.  522.  See 
also  Tififany  v.  Boatman's  Institu- 
tion, 18  Wall.  375.  21  L.  Ed.  868. 

'"Fuller  V.  N.  Y.  Fire  Tns.  Co., 
184  Mass.  12;  Fuller  v.  Jameson, 
184   N.   Y.   60s. 

'"  Shay  V.  Sessaman,  10  Penn.  St. 
432;    Chilton   V.    Cabines.s,    14   Ala. 

447- 

"In  re  Grant,  No.  5693  Fed. 
Cas.,  2  Story,  312;  In  re  Ludlow, 
No.  8599  Fed.  Cas.,  i  N.  Y.  Leg. 
Obs.  332;  T.  L.  Lexan  v.  Wilson, 
43  Me.  186;  Carr  v.  Gale,  No.  2434 


Fed.  Cas.,  2  Ware,  330;  Backhouse 
V.  Jott,  710  Fed.  Cas.,  s.  c.  T  Brock, 
50a. 

'"  See  Voohees  v.  Bonesteel,  16 
Wall.  t6.  21  L.  Ed.  268;  Porter  v. 
Lazear,  109  U.  S.  84,  27  L.  Ed. 
865;  Driggs  V.  Russell,  No.  4084 
J'cd.  Cas.,  3  N.  B.  R.  161 ;  In  re  El- 
dred,  No.  4328  Fed.  Cas.,  3  N.  B. 
R.  256;  Glenn  v.  Johnson,  18  Wall. 
476,  21   L.   Ed.  856. 

"  See  Beckham  v.  Drake,  8  M.  & 
W.  846,  s.  c.  in  House  of  Lords, 
2  H.  L.  579,  where  this  subject  is 
elaborately  discussed. 


WiiAT     I'ASSEb    TO    THE    TRUSTEE.  511 

Litory  contract,  in  which  the  personal  skill  or  conduct  of  the 
bankrupt  forms  a  material  part,  does  not  vest  in  the  trustee.-" 

Some  contracts  of  this  nature  are  necessarily  terminated  by 
the  bankruptcy  because  it  becomes  imposible  to  perform  the 
condition  thereafter.  A  contract  by  a  bankrupt  to  enter  into 
partnership  is  a  familiar  example.  Manifestly  neither  the 
bankrupt  nor  his  trustee  can  perform  the  part  agreed  or  main- 
tain a  suit  for  the  breach  of  it. 

Other  contracts  of  this  nature  can  be  performed  by  the 
bankrupt,  although  by  no  other  person.  Such  are  contracts 
with  authors,  actors,  musicians,  artists,  etc.  It  may  be 
doubted  if  such  a  contract  may  be  enforced  by  a  trustee  under 
the  present  statute.  It  can  not  at  all  events  be  doubted  that 
where  a  contract  remains  to  be  executed,  and  it  can  not  be 
executed  without  the  cooperation  of  the  bankrupt,  that  the 
trustee  can  not  enforce  the  contract  unless  he  can  procure  the 
bankrupt  to  cooperate  with  him.  Under  the  present  statute 
after-acquired  property  does  not  pass.  The  bankrupt  may 
refuse  to  do  his  part,  and  thereupon  make  a  new  contract  with 
the  same  party  and  receive  the  benefit  of  it  himself. 

Second:  Actions  for  Injury,  etc.,  to  Property. — 
A  right  of  action  ex  delicto  for  the  recovery  of  damages 
arising  from  the  unlawful  taking  or  detention  of,  or  injury  to, 
the  bankrupt's  property  is  expressly  vested  in  the  trustee.^^ 

Such  actions  are  confined  to  those  relating  to  his  real  or 
personal  property.  Thus,  claims  for  an  unlawful  seizure  of 
property  by  a  foreign  government.--  claims  against  the  United 
States  by  a  citizen  -^  or  a  resident  alien.'*  pass  to  the  trustee. 
It  has  also  been  held  that  the  trustee  and  not  the  bankrupt  is 
the  proper  party  to  institute  a  suit  to  recover  for  improvement 

""Streeter  v.    Sumner,    ii    Foster  193.    7    L-    Ed.    108;    Williams    v. 

r\.   H.)    542.     See  also   Gibson  v.  Heard,    140   U.    S.    529,   35   L.   Ed. 
Carruthers,   8   M.   &   W.   321 ;   and  '    550. 

Beckham  v.  Drake,  2  H.  L.  579-  -' Erwin  v.  United  States,  97  U. 

'■  B.  A.   1898,  Sec.  70,  clause  6.  S.  392,  24  L.  Ed.  1065. 

="  Clark  V.  Clark,  17  How.  315.  i5  ''Phelps  v.   McDonald,  99  U.   S. 

L.  Ed.  77 ;  Comcgys  v.  Vasse,  i  Pet.  298,  25  L.  Ed.  473- 


512 


LAW     AND     TROCEEDINGS    IN     BANKRUPTCY. 


made  on  govcniincnt  lands, "^  or  for  money  obtained  by  deceit 
and  fraud, •^'  or  against  a  sheriff  for  not  collecting  the  contents 
of  an  execution."' 

Actions  for  Personal  Injuries. — A  right  of  action,  how- 
ever, for  the  recovery  of  damages  for  injury  to  the  person 
or  the  personal  feelings  of  the  bankrupt  are  personal  torts, 
r,nd  does  not  vest  in  a  trustee. ^^  Such  are  actions  for  malicious 
prosecutions,''"'  or  a  trespass  for  seizing  and  selling  the  plain- 
tiff's goods  under  a  false  claim  of  debt,'^"  or  slander  or  libel, ''^ 
or  an  assault  and  battery,  or  deceit  arising  out  of  a  fraudulent 
recommendation  of  a  person  to  a  position  of  confidence, 
whereby  property  entrusted  to  him  is  lost.'''- 

It  has  been  held  that  a  father's  right  of  action  in  Michigan 
for  the  wrongful  killing  of  a  son  passes  to  the  trustee  under 
Sec.  70,  clause  5.^^ 


"°  French  v.  Carr,  7  111.  664. 
''"Il3-de  V.  Tufts,  45   N.  Y.   Sup. 
Ct.  56. 
"'Sullivan  v.  Bridge,  i  Mass.  511. 
^  In    re    Haensell,    91    Fed.    Rep. 
355,     I     Am.     B.     R.     286,     Judge 
De Haven,    after    quoting    the    pro- 
visions    of     the     act     relating     to 
what    propert}'    vests    in    the    trus- 
tee,    said :     "A     cause     of     action 
for  damages  arising  out  of  a  per- 
sonal wrong  suffered  b}'  the  bank- 
rupt is  not  embraced  in  the   fore- 
going description   of  property,   the 
title  to  vvhich,  by  operation  of  law, 
vests    in    the   trustee   of   the   bank- 
rupt.    The  right  to  sue  for  a  per- 
sonal  tort,    such   as    slander,   mali- 
cious   prosecution,    assault,    etc.,    is 
strictly  personal.     It  can  not  be  as- 
signed,  is  not   subject  to   levy   and 
sale  upon  judicial  process,  and  the 
statute    does    not    contemplate    that 
the  bankrupt's  right  to  maintain  an 
action  to  recover  damages  for  such 


wrongs  shall  constitute  any  part 
of  his  estate  in  bankruptcy.  The 
law  follow^,  in  this  respect.  Section 
14  of  the  bankruptcy  act  of  1867 
(14  U.  S.  Stats.  517),  in  the  con- 
struction of  which  it  was  uniformly 
held  that  rights  of  action  for  per- 
sonal torts  did  not  vest  in  the  as- 
signee in  bankruptcy."  See  also 
cases  cited  in  the  notes  below  in 
this  section. 

'"'In  re  Haensell,  91  Fed.  Rep. 
355,  I  Am.  B.  R.  286;  Noonan  v. 
Orton,  34  Wis.  259. 

'"Brewer  v.  Dew,  11  M.  &  W. 
625 ;  Rogers  v.  Spence,  13  M.  &  W. 

571 ;     affirmed     in     the     House     of 
Lords,  12  Clark  &  Fenn.  700. 

"  Dillard    v.     Collins,     25     Grat. 

(Va.)    343- 
^■/h   re   Brick,  4  Fed.  Rep.  804; 

In  re  Crockett,  No.  3402  Fed.  Cas., 

2  Ben.  514. 

^^In  re  Burnstine,  131  Fed    Rep. 

828,  12  Am.  B.  R.  596. 


EXEMPTIONS. 


513 


CHAPTER   XVII. 


EXEMPTIONS. 


§  177.     By  what  laws  exemptions  are  granted. 

No  particular  property  of  the  bankrupt  is  mentioned  in  the 
act  as  exempt  from  being  applied  to  the  payment  of  his  debts. 
Military  uniforms,  arms  and  equipments  are  exempted  by  the 
statutes  of  the  United  States/ 

The  bankrupt  statute  declares  tliat  it  ''shall  not  affect  the 
allowance  to  bankrupts  of  the  exemptions  which  are  prescribed 
by  the  state  laws  in  force  at  the  time  of  the  filing  of  the  peti- 
tion in  the  state  wherein  they  have  had  their  domicile  for  the 
six  months  or  the  greater  portion  thereof  immediately  preced- 
ing the  filing  of  the  petition."  ^ 

By  this  provision  congress  evidently  intended  to  adopt  the 
laws  of  the  several  states  and  territories  ^  regulating  exemp- 
tions. A  court  of  bankruptcy  is,  therefore,  to  look  to  die 
exemption  laws  of  the  several  states  and  territories  for  the 
description  of  the  person  who  may  claim  exemption  and  for 
the  amount  and  species  of  the  property  to  be  exempt.*  A 
bankrupt  is  entitled  to  the  same  exemptions  as  if  proceeded 
against  as  a  debtor  under  the  state  laws  and  to  none  other. '^ 
In  order  to  claim  exemptions  in  bankruptcy  he  must  comply 


'  R.  S.  Sec.  1628. 

"  B.  A.  i8g8,  Sec.  6.  Compare  R. 
S.  Sec.  5045. 

Exemptions  in  bankruptcy  and 
under  state  laws  compared.  See 
Holland  v.   Withers,  76  Ga.  667. 

^B.  A.  1898,  Sec.  I,  clause  24, 
provides  that  "states  shall  include 
the  territories,  the  Indian  Terri- 
tory, Alaska  and  the  District  of 
Columbia."      See    also    In    re    Mc- 


Kercher  and  Pettigrew,  8  N.  B.  R. 
409. 

*  Richardson  v.  Woodward  (C.  C. 
A.  4th  Cir.),  104  Fed.  Rep.  873,  5 
yVm.  B.  R.  94 ;  In  re  Meriwether, 
107  Fed.  Rep.  102,  5  Am.  B.  R. 
435;  Steele  v.  Buel  (C.  C.  A.  8th 
Cir.),  104  Fed.  Rep.  968,  5  Am. 
1!.    R.    165. 

° /m  re  Manning,  112  Fed.  Rep. 
948,  7  Am.  B.  R.  571. 


314 


.AW      AM)     rKt)CKEDINGS     I X     BANKRUPTCY. 


with  iho  requirements  of  the  state  law.''  If  he  fails  to  bring 
himself  within  the  eonditions  and  re([uirenienls  of  such  law, 
the  property  claimed  is  not  exemi)t  from  the  operation  of  the 
bankrupt  law,  and  the  trustee  should  administer  it  for  the 
benefit  of  creditors. 

In  applying  these  exemption  laws  the.  bankruptcy  courts 
will  adopt  and  follow  the  construction  of  them  announced  by 
the  highest  court  of  the  state  the  statute  of  which  is  involved.'' 
If  the  state  law  has  not  been  construed  by  the  state  tribunals, 
or  if  there  is  a  conflict  of  opinion  as  to  the  meaning  of  a  par- 
ticular provision,  the  courts  of  bankruptcy  are  free  to  construe 
it.  Otherwise  they  are  bound  by  the  interpretation  given  by 
the  state  courts.  These  are  familiar  and  w^ell-settled  rules 
recognized  by  the  United  States  courts  wdth  reference  to  state 
laws  and  constitutions  generally.^  A  state  law  which  is  in- 
valid or  unconstitutional  under  a  state  or  the  federal  constitu- 
tion is  not  adopted  by  this  provision.^  A  court  of  bankruptcy 
will  not  enforce  such  a  law. 


'/»  re  Parish,  No.  4647  Fed. 
Cas.,  2  N.  B.  R.  168;  In  re  Gainey, 
No.  5181  Fed.  Cas.,  2  N.  B.  R.  525; 
In  re  Jackson,  No.  7127  Fed  Cas.,  2 
N.  B.  R.  508;  Guise  v.  State.  41 
Ark.  249;  Briggs  v.  McCullough,  36 
Cal.  542;  Griffin  v.  Sutherland,  14 
Barb.    (N.   Y.),   456. 

'/m  re  Stevenson,  93  Fed.  Rep. 
789,  2  Am.  B.  R.  230;  In  re 
Pope,  98  Fed.  Rep.  722,  3  Am. 
B.  R.  525 ;  In  re  Waxelbaum, 
loi  Fed.  Rep.  228,  4  Am.  B.  R.  120; 
In  re  Meriwether,  107  Fed.  Rep. 
102,  5  Am.  B.  R.  435 ;  In  re  Irvin 
(C.  C.  A.  8th  Cir.),  120  Fed.  Rep. 
73Z,  9  Am.  B.  R.  689,  affirming 
In  re  Stone,  116  Fed.  Rep.  35,  8 
Am.  B.  R.  416 ;  In  re  Woodward,  95 
Fed.  Rep.  955,  2  Am.  B.  R.  692; 
In  re  Wyllie,  No.  181 12  Fed.  Cas., 
s.  c.  2  Hughes,  449;  Goodall  v. 
Tuttle,  No.  5533  Fed.  Cas.,  3  Biss. 
219. 


The  supreme  court  of  the  United 
States  recognized  this  principle, 
with  reference  to  exemption  laws, 
in  Gunn  v.  Barry,  15  Wall.  621,  21 
L.  Ed.  212,  when  it  said :  "It  may 
well  be  doubted  whether  both  these 
provisions  [of  the  exemption  stat- 
ute of  Georgia]  were  not  intended 
to  be  wholly  prospective  in  their  ef- 
fect. But  as  we  understand  the  su- 
preme court  of  the  state  has  come 
to  a  different  conclusion  we  shall 
not  consider  the  question." 

■''  Morley  v.  Lakeshore  Ry.  Co.,  146 
U.  S.  162,  36  L.  Ed.  92s;  Leffing- 
well  and  Warren,  2  Black.  603,  17 
L.  Ed.  261 ;  Randall  v.  Brigham, 
7  Wall.  541,  19  L-  Ed.  28s;  Prov- 
ident Institution  v.  Massachusetts, 
6  Wall,  630,  18  L.  Ed.  907;  Bucher 
V.  Cheshire  R.  R.  Co.,  125  U.  S.  582, 
31  L.  Ed.  795. 

"  See  In  re  Everitt,  No.  4579  Fed. 
Cas.,  9  N.  B.  R.  90;  In  re  Dillard, 
No.  3912  Fed.  Cas.,  2  Hughes  190. 


EXEMPTIONS.  515 

The  law  which  governs  any  particular  case  is  that 
prescribed  by  the  state  laws  in  force  at  the  time  of 
the  filing  of  the  petition  in  the  state  wherein  the  bank- 
rupt has  had  his  domicile  for  the  six  months,  or  the 
greater  portion  thereof,  immediately  preceding  the  filing  of 
the  petition.*"  This  will  usually  be  the  law  of  the  state  in 
which  the  petition  is  filed.  It  is  not  necessarily  so.  A  per- 
son may  be  adjudged  a  bankrupt  in  a  district  where  he  has 
his  principal  place  of  business  and  which  is  not  the  district  of 
his  domicile."  In  such  cases  the  amount  and  the  species 
of  the  property  to  be  exempt  is  determined  by  the  law  of  the 
state  of  his  domicile,  and  not  the  state  in  which  he  has  his 
principal  place  of  business.  It  is  not  necessary  or  proper  to 
look  to  the  law  of  the  state  in  which  the  property  is  situated 
to  see  if  it  is  exempt.  If  the  property  is  exempt  undei  the 
law  of  the  state  of  the  bankrupt's  domicile,  it  is  exempt 
where^•er  it  may  be  situated.^" 

It  has  been  held  that  a  statute  exempting  wearing  apparel 
included  a  diamond  stud  worth  $250.^^  a  watch, ^*  a  Masonic 
uniform,"  and  a  statute  exempting  tools  of  an  artisan  or 
mechanic  include  the  articles  which  a  baker  uses  to  carry  on 
his  trade, ^"  and  a  watch  where  it  was  necessary  for  the  work- 
As  to  when  an  exemption  law  is  ''/«  re  Stevens.  No.  13392  Fed. 
unconstitutional  because  it  impairs  Cas.,  2  Biss.  373. 
the  obligation  of  a  contract,  see  "  In  re  Smith.  96  Fed.  Rep.  832, 
Gunn  V.  Barry,  15  Wall.  610,  21  L.  3  Am.  B.  R.  140. 
Ed.  212.  */»  re  Jones,  97  Fed.  Rep.  773, 
'"B.  A.  1898,  Sec.  6;  In  re  Mc-  3  Am.  B.  R.  259;  Sellers  v.  Bell 
Cutchen,  100  Fed.  Rep.  779,  4  Am.  (C.  C.  A.  5th  Cir.),  94  Fed.  Rep. 
B.  R.  81,  2  N.  B.  N.  636;  lit  re  801,  36  C.  C.  A.  502.  2  Am.  B.  R. 
Grimes,  94  Fed.  Rep.  800,  2  Am.  B.      529. 

R.    160;    In    re    VVoodard,   95    Fed.  But  see  In  re  Turnbull,  106  Fed. 

Rep.  260,  2  Am.  B.  R.  339;  In  re  Rep.  667,  5  Am.  B.  R.  549;  In  re 
Buelow,  98  Fed.  Rep.  86,  3  Am.  B.  Everleth,  129  Fed.  Rep.  620,  12  Am. 
R.  389;  In  re  Lynch,  loi  Fed.  Rep.       B.  R.  236. 

579,  4  Am.  B.   R.  262.     See  In  re  "'In  re  Jones,  97   Fed.   Rep.  773, 

Kerr,  No.  7729  Fed.  Cas.,  9  N.  B.  3  Am.  B.  R.  259,  2  N.  B.  N.  296; 
R.  566;  In  re  Dillard,  No.  3912  but  see  In  re  Everleth  129  Fed.  620, 
Fed.  Cas.,   s.  c.   2   Hughes,    190.  12  Am.  B.  R.  236. 

"  B.  A.  1898,  Sec.  2,  clause  i.  '"/«    re    Petersen,    95    Fed.    Rep. 

417,  2  Am.  B.  R.  630. 


'16 


AW     AND     I'ROCEEDINGS     IN     HANKRUPTCY. 


man  to  know  the  time/'  Where  growing  crops  are  not  exempt 
under  the  state  hiw.  the  hankrupt  is  not  entitled  to  the  grow- 
nig  crops  on  an  c-\eni[)t  homesteatl."* 

A  bankrupt  is  not  entitled  to  exemptions  out' of  the  pro- 
ceeds of  the  sale  of  a  license  to  sell  licjuor  in  Pennsylvania.^" 

Where  a  policy  of  insurance  is  exempt  under  the  laws  of  the 
state  of  the  bankrupt,  they  are  exempt  under  Section  6  of  the 
Bankrupt  Act,  even  though  they  have  cash  surrender  values."** 
The  provisions  of  Section  70a  of  the  Bankrupt  Act  do  not 
apply  to  policies  which  are  exempt  under  the  state  law.'** 

§  177a.    The  domicile  of  a  bankrupt. 

By  domicile  is  meant  that  residence  from  which  there  is  no 
present  intention  to  remove,  or  to  which  there  is  a  general 
intention  to  return.  The  domicile  of  a  bankrupt  does  not 
depend  on  citizenship,  nor  on  residence,  but-  on  the  concur- 
rence of  two  elements:  first,  residence  in  a  place,  and,  second, 
the  intention  for  the  present  to  make  that  place  his  home.^  A 
person  can  not  be  without  a  legal  domicile  somewhere.^  The 
domicile  of  a  person  may  be  clianged.  To  constitute  a  new 
domicile  two  things  are  indispensable :  -first,  residence  in  a  new 
locality,  and,  second,  the  intention  to  remain  there.  The 
change  can  not  be  made  except  facto  ct  aninio.  Both  are  alike 
necessary.  Mere  absence  from  a  fixed  home,  however  long 
continued,  can  not  work  the  change.  There  must  be  animus 
to  change  the  prior  domicile  for  another.  Until  the  new  one 
is  acquired  the  old  one  remains.^     The  fact  that  a  man  ab- 


''  In  re  Osborn,  104  Fed.  Rep. 
780,  5  Am.  B.  R.  Ill  ;  In  re  Coller, 
III  Fed.  Rep.  503,  7  Am.  B.  R.  131; 
In  re  Everleth,  129  Fed.  Rep.  620, 
12  Am.  B.  R.  236. 

"/w  re  Coffman,  93  Fed.  Rep. 
422,  I  Am.  B.  R.  530. 

"/n  re  Myers,  102  Fed.  Rep.  869, 
4  Am.  B.  R.  536. 

But  see  In  re  Olewine,  125  Fed. 
Rep.  840,   II  Am.  B.  R.  840. 

^Holden  v.    Stratton,    198  U.   S. 


202,  49  L.  Ed.  iot8,  14  Am.  B.  R. 
94. 

'  Bouvier's  Law  Die-,  subject, 
"Domicil";  Century  Die.,  subject, 
"Domicile";  Mitchell  v.  United 
States,  21  Wall.  352-3,  22  L.  Ed. 
584;  Morris  v.  Gilmer,  129  U.  S. 
328,  32  L.  Ed.  690. 

'  Desmare  v.  United  States,  93 
U.  S.  610,  22,  L.  Ed.  959. 

'  Morris  v.  Gilmer,  129  U.  S.  328, 
32  L.  Ed.  690;   Mitchell  v.  United 


EXEMPTIONS.  517 

sconds  to  avoid  arrest,  leaving  his  family  behind,  does  not 
change  his  domicile.* 

The  domicile  of  a  corporation  can  only  be  in  the  state  by 
which  it  was  created.'^  A  corporation  can  not  change  its  dom- 
icile.^ 

The  domicile  which  determines  what  state  law  of  exemp- 
tion applies,  is  the  domicile  which  the  bankrupt  has  had  for 
more  than  three  of  the  six  months  immediately  preceding  the 
filing  of  the  petition.  If  he  has  not  had  a  domicile  for  more 
than  three  months  in  any  one  state  during  tliis  period,  he  is 
not  entitled  to  exemptions.  The  law  of  no  state  applies  to 
such  a  case.  It  may  be  contended  that  where  a  bankrupt  has 
had  a  domicile  in  one  state  for  more  than  three  months,  and 
has  then  removed  his  domicile  into  another  state,  and  within 
three  months  thereafter  a  petition  in  bankruptcy  is  filed,  that 
he  has  forfeited  his  right  to  claim  exemptions.  The  statute 
does  not  seem  to  be  so  limited.  A  bankrupt  can  establish 
only  one  domicile  within  the  six  months  immediately  preced- 
ing the  filing  of  the  petition.  It  would  seem  that  the  law  of 
the  state  in  which  he  had  this  domicile,  whether  it  be  the 
first  or  the  last  part  of  the  six  months,  would  determine  what 
state  law  applies. 

Where  a  person  has  established  a  domicile  in  a  state,  the 
burden  is  upon  the  creditor  opposing  claim  to  exemption  on 
the  ground  that  the  bankrupt  has  changed  his  domicile.® 

g  178.     Constitutionality  of  clause  providing  for  exemptions. 

It  can  not  be  seriously  urged  against  the  constitutionality 
of  Section  6  of  the  act,  adopting  the  state  exemption  laws, 
that  congress  is  without  power  to  grant  exemptions  to  the 

States,  21  Wall.  353,  22  L.  Ed.  584;  Pet.  585.   to  L.  Ed.  274;  Lafayette 

Bouvier's  Die,  subject,  "Domicil";  Insurance  Co.  v.   French,   18  How. 

In    re    Schulz.    135    Fed.    Rep.    228,  404,  15  L.  Ed.  451 ;  Shaw  v.  Quincy 

14  Am.  B.  R.  317.  Mining  Co.,    145   U.    S.   450.   36  L. 

*  In  re   Filer,    loS  Fed.   Rep.   209,  Ed.  768. 

£  Am.  B.  R.  332.  "  In  re  Grimes,  94  Fed.  Rep.  800, 


6 


Bank    of    Augusta    v.    Earl,    13      2  Am.  B.  R.  160. 


518 


LAW      AM)     I'KOCEEDINGS    IN     BANKRUPTCY. 


bankrupt.'  Tlie  power  of  congress  m  this  respect,  as  with 
reference  to  other  matters  rehiting  to  the  subject  of  the  bank- 
ruptcies, is  plenary  and  has  no  hniitation  but  the  (hscretion 
of  congress  and  uniforinitv." 

Under  the  act  of  1867,  as  amended,'"  there  was  at  one  time 
considerable  discussion  in  regard  to  the  constitutionality  of  a 
clause  allowing  exemptions  under  the  state  laws.*  The  ground 
of  the  objection  was  that  the  constitution  of  the  United 
States  gave  congress  power  to  establish  a  uniform  system  of 
bankruptcy.  Idie  exemptions  prescribed  by  the  various  state 
laws  differ  widely  in  the  amount  and  species  of  property 
exempted,  and  also  in  the  requirements.  It  was  contended 
that  this  occasioned  a  lack  of  uniformity  in  the  bankrupt  law. 
It  may  be  considered,  however,  settled  that  the  uniformity 
required  by  the  constitution  relates  to  national  legislation 
only,  and  therefore  the  laws  of  the  several  states  regulating 
exemptions  may  be  left  in  force  so  long  and  to  such  an  extent 
as  congress  may  see  fit.* 

§  179.     Title  to  exempt  property. 

As  a  general  rule,  property  exempted  by  the  laws  of  the 
several  states  may  be  divided  into  two  classes :  first,  specific 
lands  or  chattels  where  selection  is  not  required  or  has  been 
exercised,  and,  second,  exemptions  which  consist  of  certain 
articles  to  be  selected  from  many,  or  of  property  to  a  certain 
valuation  to  be  set  apart  from  a  large  quantity.     In  some 


*  Hanover  Nat.  Bank  v.  Moyses, 
186  U.  S.  181,  46  L.  Ed.  rii3,  8 
Am.  B.  R.  I ;  In  re  Kean,  No.  7630 
Fed.  Cas.,  2  Hughes,  322;  /;;  re 
Smith,  No.  12986  Fed.  Cas.,  8  N. 
B.  R.  401. 

'U.  S.  Const,  Art.  I.,  Sec.  8.  See 
Powers  of  congress,  Cliap.  H.,  ante. 
'  R.  S.  Sec.  5045- 

*  Hanover  National  Bank  v. 
Moyses,    186  U.    S.    181,  46  L.   Ed. 


Berry,  13  Fed.  Rep.  668 ;  In  re  Beck- 
erford,  No.  1209  Fed  Cas.,  i  Dill. 
45;  In  re  Jordan,  No.  7514  Fed. 
Cas.,  8  N.  B.  R.  180;  In  re  Jordan, 
No.  7515  Fed.  Cas.,  10  N.  B.  R. 
427 ;  In  re  Kean,  No.  7630  Fed.  Cas., 
2  Hughes  322;  In  re  Everitt,  No- 
4579  Fed.  Cas.,  9  N.  B.  R.  90. 

Contra,  In  re  Deckert,  No.  3728 
Fed.  Cas.,  2  Hughes  183 ;  In  re 
Duerson,  No.  41 17  Fed.  Cas.,  13  N. 


1 1 13,   8  Am.    B.    R.    i;    Darling  &       B.  R.  183. 


EXEMPTIONS. 


519 


States  the  homestead  must  be  selected  and  designated  in  ad- 
vance of  the  proceedings  against  the  debtor.  In  such  cases  it 
belongs  to  the  first  class  of  exemptions.  In  case  the  home- 
stead may  be  selected  at  any  time  it  belongs  to  the  second 
class. 

The  title  to  exempt  property  does  not  pass  to  the  trustee.* 
Property  which  is  specifically  designated  by  the  state  statute, 
or  which  has  been  set  apart  by  the  trustee,  may  be  considered 
exempt  property.  The  title  to  such  property  is  in  the  bank- 
rupt." He  may  sell  it  or  mortgage  it  or  maintain  suits  in 
respect  to  it,  as  for  the  recovery  of  it  in  specie  or  for  any 
damages  or  wrongs  done  in  respect  to  it.^  Where  a  transfer 
of  exempt  property  has  been  surrendered  as  a  preference  the 
title  is  then  in  the  bankrupt,  and  he  may  claim  his  exemption 
in  it.*  Upon  the  death  of  the  bankrupt  exempt  property 
descends  to  his  heirs  according  to  the  law  of  the  state.^ 

Property  of  the  second  class  can  not  be  considered  exempt 
propel  ty  until  it  is  selected  and  set  apart."     It  must  neces- 


'  B.  A.  1898,  Sec.  70a,  vests  title 
in  property,  except  what  is  exempt. 

In  re  Durham,  104  Fed.  Rep.  231, 
4  Am.  B.  R.  760,  2  N.  B.  N.  iioi  ; 
In  re  Wells,  105  Fed.  Rep.  762,  5 
Am.  B.  R.  308,  3  N.  B.  N.  21,2,:  In 
re  Mayer  (C.  C.  A.  7th  Cir.),  108 
Fed.  Rep.  599,  6  Am.  B.  R.  117; 
In  re  Seabolt,  113  Fed.  Rep.  766, 
8  Am.  B.  R.  57 ;  Lockwood  v.  Ex- 
change Nat.  Bank,  190  U.  S.  294, 
47  L.  Ed.  1061,  10  .\in.  R.  R.  107. 

^  Schlitz  V.  Schatz,  No.  12459  Fed. 
Cas.,  2  Biss.  248;  In  re  Hunt,  No. 
6883  Fed.  Cas.,  5  N.  B.  R.  493; 
Bush  V.  Lester,  55  Ga.  579,  15  N. 
B.  R.  36;  In  re  Hester,  No.  6437 
Fed.  Cas.,  5  N.  B.  R.  285;  Felker 
V.  Crane,  77  Ga.  484;  Wilkinson  v. 
Waite,  44  Vt.  508 ;  Simpson  v. 
Houston,  97  N.  C.  344. 

"Winn  V.  Morse,  59  N.  H.  210; 
Sulling  V.  Gunderman,  35  Tex.  545; 


Henly  v.  Lanier,  75  N.  C.  172; 
Schlitz  V.  Schatz,  No.  12459  Fed. 
Cas.,  2  Biss.  248. 

'In  re  Falconer  (C.  C.  A.  8th 
Cir.),  no  Fed.  Rep.  in,  6  Am.  B. 
R.  557;  Ba.shinski  v.  Talbott  (C.  C. 

A.  5th  Cir.),  n9  Fed.  Rep.  ^^7,  g 
Am.  B.  R.  513,  affirming  In  re  Tal- 
bott, 116  Fed.  Rep.  417,  8  Am.  B.  R. 
427;  but  see  In  re  Long,  116  Fed. 
Rep.  n3,  8  Am.  B.  R.  591;  In  re 
Evans,    n6   Fed.   Rep.   909,   8   Am. 

B.  R.  730 :  in  re  White,  109  Fed. 
Rep.  635,  6  Am.  B.  R.  451. 

°  In  re  Hester,  No.  6437  Fed.  Cas., 
5  N.  B.  R.  285 ;  In  re  Lambert,  No. 
8026  Fed.  Cas.,  2  N.  B.  R.  426;  Rix 
V.  Bank,  11869  Fed.  Cas.,  s.  c*  2 
Dill.  367;  Bullymore  v.  Cooper,  46 
N.  Y.  236;  p-ehley  v.  Barr,  66  Penn. 
196. 

'Woolfolk  V.  Murray,  44  Ga. 
137-8. 


520  LAW     AXD     PROCEEDINGS    IN     BANKRUPTCY. 

sarily  pass  to  the  trustee.'  It  may  ne\cr  be  selected  or  set 
apart  as  an  exemption.  It  can  not  be  determined  in  advance 
precisely  what  property,  if  any,  will  be  set  apart.  The  trus- 
tee must  have  temporary  dominion  over  it  in  order  that 'the 
exemption  may  be  measured  and  set  apart  by  him.  He  may 
be  said  to  take  a  defeasible  title  to  such  property.  When  it 
is  so  designated  and  set  apart  as  exempt,  the  title  of  the  trus- 
tee is  defeated  by  the  superior  title  of  the  bankrupt.^  Where 
a  homestead  exemption  is  disputed  and  doubtful  the  title  may 
be  treated  as  in  the  trustee  subject  to  the  determination  of  the 
question,  and  if  it  abandoned  by  the  bankrupt  it  vests  abso- 
lutely in  the  trustee.^  The  proper  way  to  determine  whether 
or  not  disputed  property  is  exempt  is  for  the  trustee  to  report 
it  to  the  referee  as  exempt  or  not  exempt,  to  which  report  the 
aggrieved  party  should  take  exceptions.' 


10 


§  i8o.    Jurisdiction  of  a  court  of  bankruptcy  over  exempt 
property. 

The  statute  expressly  authorizes  a  court  of  bankruptcy  to 
determine  all  claims  of  bankrupts  to  their  exemptions.^  It  is 
the  duty  of  the  bankrupt  to  make  a  claim  for  such  exemptions 
as  he  may  be  entitled  to  in  the  schedule  filed  by  him.^  A  vol- 
untary bankrupt  should  claim  his  exemptions  at  the  tme  of 
filing  the  petition.^  It  devolves  upon  the  trustee,  and  it  is  his 
duty,  to  set  apart  the  bankrupt's  exemptions  and  report  the 

'In  re  Mayer  (C.  C.  A.  7th  Cir.),  Cir.).  108  Fed.  Rep.  599,  6  Am.  B. 

108  Fed.  Rep.  599,  6  Am.  B.  R.  117;  R.  117. 

In    re    Friedrich     (C.    C.    A.    7th  "/m  re  Smith,  93  Fed.  Rep.  791, 

Cir.),  icx)  Fed.  Rep.  284,  3  Am.  B.  2  Am.  B.  R.  190;  McGahan  v.  An- 

R.  801.  derson    (C.    C.    A.    4th    Cir.),    113 

^  In  re  Hatch,  102  Fed.  Rep.  280,  Fed.  Rep.  115,  7  Am.  B.  R.  641. 

4  Am.  B.  R.  349;  In  re  Camp,  91  '  B.    A.    1898,    Sec.    2,    clause    11; 

Fed.   Rep.    745,    i    Am.    B.   R.    165;  McGahan    v.    Anderson    (C.  C.  A' 

In  re  Hill,  96  Fed.  Rep.  185,  2  Am.  4th  Cir.),  113  Fed.  Rep.  115,  7  Am. 

B.   R.   798;    In  re   Gibbs,    109   Fed.  B.  R.  641. 

Rep.  627,  6  Am.  B.  R.  485 ;  In  re  '  B.  A.  1898,  Sec.  7,  clause  8. 

Wells,    105    Fed.   Rep.   762,    5   Am.  ^  In   re   Friedrich    (C.    C.   A.   7th 

B.  R.  308.  Cir.),  100  Fed.  Rep.  284,  3  Am.  B. 

°/«    re    Mayer     (C.    C.    A.    7th  R.  8or ;  In  re  Lucius,  124  Fed.  Rep. 

455,    10    Am.    B.    R.    653. 


EXEMPTIONS.  521 

items  and  estimated  value  thereof  to  the  court  as  soon  as 
practicable  after  his  appointment.* 

•  From  this  it  would  seem  that  the  jurisdiction  of  the  court 
of  bankruptcy  in  regard  to  exempt  property  is  limited  to 
determining  the  claims  and  designating  and  setting  apart  such 
property.^  A  state  court  will  not  review  the  decision  of  a 
court  of  bankruptcy  as  to  what  property  is  properly  exempted 
by  the  state  law.**  \\'hen  the  property  is  so  designated  and 
set  apart  it  does  not  pass  to  the  trustee,  nor  is  it  subject  to  be 
administered  by  the  court  as  a  part  of  the  bankrupt's  estate.^ 
But  where  no  specific  property  has  been  set  off  to  the  bankrupt 
the  bankruptcy  court  has  jurisdiction  to  determine  all  liens 
claimed.^  But  a  court  of  bankruptcy  has  no  power  to  order 
the  sale  of  a  homestead,  exempt  under  the  state  law,  to  pay  a 
creditor  who  has  a  claim  or  lien  on  it." 

Although  the  trustee  never  obtains  title  to  exempt  property, 
he  must  at  least  have  temporary  dominion  over  it  in  order 
that  the  exemption  may  be  measured  and  set  apart  by  him.^" 
When  the  exemption  consists  of  one  article  to  be  selected 
from  many,  or  of  property  of  a  certain  valuation  to  be  set 
apart  from  a  large  quantity,  it  would  seem  that  the  possession 
and  control  must  pass  for  the  time  being  to  the  trustee.  In 
case  the  exemption  is  of  some  specific  chattel  or  chattels, 
where  neither  selection  nor  valuation  is  required,  -there  is  not 
an  equal  reason  for  the  trustee  to  have  possession. 

*B.  A.    1898,   Sec.  47,  clause   11;  '  B.  A.  1898,  Sec.  70a.    Lockwood 

In  re  Friedrich  (C.  C.  A.  7th  Cir.),  v.  Exchange  Nat.  Bank,   190  U.  S. 

100   Fed.    Rep.    284.    3    Am.    B.    R.  294.  47  L.  Ed.   1161,  10  Am.  B.   R 

801.  107.     See  Title  to  exempt  property. 

*Lockwood     V.     Exchange     Nat.  Sec.   179,  ante. 

Bank,  190  U.  S.  294,  47  L.  Ed.  1161,  "In  re  Lucius,  124  Fed.  Rep.  455. 

10  Am.  B.  R.    107;  In  re  Swords,  10  Am.  B.  R.  653. 

112  Fed.  Rep.  661,  7  Am.  B.  R.  436;  'Ingram  v.  Wilson  (C.  C.  A    8tli 

In   re   Camp,   91    Fed.   Rep.   745,    i  Cir.),  125  F"ed.  Rep.  913,  11  Am.  B. 

Am.  B.  R.  165;  In  re  Hill,  96  Fed.  R.  192;  In  re  Little,  no  Fed.  Rep. 

Rep.  185,  2  Am.  B.  R.  798.  621,  6  Am.  B.  R.  681  ;  In  re  Wells, 

"Maxwell    v.    McCune,    2i7    Tex.  105  Fed.  Rep.  762,  5  Am   B.  R.  308. 

515;    Woolfolk    V.    Murray,    44  Ga.  '"Sheldon   v.    Rounds,     40    Mich. 

133-  427;   see  Title  to  exempt  property, 

Sec.  179,  ante. 


522  LAW     AXU    PROCEEDINGS    IN     BANKRUPTCY. 

After  the  exempt  property  has  been  designated  and  set 
apart  by  the  trustee,  it  has  been  administered  and  has  passed 
out  of  the  possession  and  control  of  the  court.  The  trustee 
and  the  creditors  have  no  further  concern  with  it.  The  court 
has  no  jurisdiction  to  defend  such  property  from  adverse 
claims  or  liens  that  may  or  may  not  be  extinguished  by  the 
bankruptcy  proceedings^^  nor  to  order  the  sale  of  a  bank- 
rupt's homestead.^'  It  will  not  entertain  a  proceeding  to 
enforce  a  lien  upon  such  property.^''  nor  has  it  jurisdiction 
to  determine  the  effect  of  waiver  notes  and  the  rights  of 
creditors  holding  such  obligations.^'*  The  decision  of  the  rights 
of  parties  properly  belongs  to  the  tribunals  of  the  state  under 
the  laws  of  which  they  are  claimed.  The  court  of  bank- 
ruptcy may  postpone  the  granting  of  a  discharge  until  a  per- 
son who  claims  the  property  as  against  the  bankrupt  can  settle 
his  rights  in  a  state  court  ^*  or  may  restrain  its  own  officials 
or  persons  subject  to  its  jurisdiction  from  interfering  with 
the  exempt  property.  It  will  not.  however,  assist  the  bank- 
rupt in  enforcing  his  rights  to  such  property  beyond  prevent- 
ing such  interference  with  it.  Such  questions  are,  as  has  been 
stated  above,  left  to  the  state  courts. 

§  i8i.     Liens  on  exempt  property. 

The  object  of  the  bankrupt  statute  in  allowing  exemptions 
to  the  bankrupt  is  to  set  apart  a  portion  of  the  property  in 


11 


Lockwood     V.     Exchange     Nat.  2   Am.   B.    R.   730;    In   re   Hill,   96 

Bank,  190  U.  S.  294,  47  L.  Ed.  1161,  Fed.    Rep.    185,   2   Am.    B.    R.    798; 

10  Am.  B.  R.  107;  Jeffries  v.  Bart-  In    re    Camp,   91    Fed.    Rep.    745,    i 

lett,   20    Ped.    Rep.    496.  Am.  B.  R.  165. 

''  Ingram  v.  Wilson  ( C.  C.  A.  8th  But  see  In  re  Sisler,  96  Fed.  Rep. 

Cir. ),    125    Fed.    Rep.   913,    11    Am.  402,  2  Am.  B.  R.  760;  In  re  Wood- 

B    R.    192.  ruff,  96  Fed.  Rep.  317,  2  Am.  B.  R. 

"Lockwood     V.     Exchange     Nat.  678;    In    re    Garden,    93    Fed.    Rep. 

Bank,  190  U.  S.  294,  47  L.  Ed.  1161,  423,   i  Am.  B.  R.   582. 

10  Am.  B.  R.  107;  In  re  Gibbs,  109  "Lockwood     v.     Exchange     Nat. 

Fed.    Rep.   627,   6  Am.    B.    R.  485;  Bank,  190  U.  S.  294,  47  L.  Ed.  1161, 

In    re    Wells,    105    Fed.    Rep.    762,  10    Am.    B.    R.    107;    In    re    Brum- 

5  Am.   B.   R.  308.  3   N.   B.   N.   233;  baugh  ,128  Fed.  Rep.  971,  12  Am.  B. 

In    re    Grimes,    96    Fed.    Rep.    529,  R.    782. 


EXEMPTIONS,  523 

the  schedule  of  tlie  bankrupt  for  his  use  free  from  the  claims 
of  creditors.  The  title  to  property  exempted  by  the  state  laws 
in  specie  can  never  pass  to  the  trustee.  The  bankrupt  may 
deal  with  it  as  he  sees  fit.  All  liens  on  such  property  remain 
unimpaired  and  unaffected  by  bankruptcy  proceedings.  The 
rights  of  lien-holders  are  a  special  property  which  the  bank- 
rupt law  does  not  take  away.  Such  liens  are  enforceable  in 
the  state  courts  against  such  property.^  The  taking  of  exempt 
property  upon  execution  before  the  commencement  of  bank- 
ruptcy proceedings  does  not  constitute  a  valid  lien  and  will 
not  prevent  such  property  being  set  off  to  the  bankrupt." 

Where  property  to  a  certain  valuation,  to  be  selected  by 
the  bankrupt,  is  exempted,  as  a  homestead  or  an  equivalent, 
it  is  set  off  to  the  bankrupt  free  from  all  claims  of  creditors.^ 
If  the  bankrupt  selects  property  to  be  exempted  as  required 
by  the  state  law,  it  does  not  pass  to  the  trustee  as  a  part  of 
the  bankrupt's  estate.  But  if  the  bankrupt  does  not  comply 
with  the  requirements  of  the  state  law,  the  property  will  pass 
to  the  trustee  to  be  distributed  among  the  creditors  like  other 
assets  of  the  bankrupt.*  Where  the  selection  is  properly  and 
duly  made,  the  question  frequently  arises  with  reference  to 
what  effect  liens  on  such  property  may  have.  If  the  property 
of  the  bankrupt  is  encumbered  by  liens  the  court  may  'order 
the  property  sold.      The  bankrupt   will   then  be   entitled   to 

'  Rix      V.      Capitol      Bank,      No.  No.  9326  Fed.  Cas.,  2  Cin.  Law  Bui. 

11869  Fed.  Cas.,  2  Dill.  367;  Schlitz  152;    In    re    Jones,    No.    7445    Fed. 

V.    Schatz,   No.    12459   Fed.   Cas.,   2  Cas.,  2  Dill.  343. 

Biss.  248;   Fowler  v.   Wood,  26  S.  */m  re  Farish,  No.  4647  Fed.  Cas., 

C.   169;  Haworth  v.  Travis,  67  Til.  2  N.  B.  R.  168;  In  re  Gainey,  No. 

30 r;  Jackson  v.  Allen,  30  Ark.  no;  5181  Fed.  Cas.,  2  N.  B.  R.  525;  In 

Cumming  v.    Clegg,    52    Ga.    605 ;  re  Jackson,   No.  7127  Fed.   Cas.,  2 

Hatcher  v.  Jones,  53  Ga.  208;  In  re  N.  B.  R.  508;  In  vc  Duffy,  118  Fed. 

Lambert,  No.  8026  Fed.  Cas.,  2  N.  Rep.  926,  9  Am.   B.  R.  358;  In  re 

B.  R.  426;  Tuesley  v.  Robinson,  103  West,  116  Fed.  Rep.  767,  8  Am.  B. 

Mass.  558.  R.   564;   In   re   Stephens,    114   Fed. 

"/»  >r  Martin,  No.  9152  Fed.  Cas.,  Rep.    192,  8  Am.   B.   R.   53;   In   re 

2  Hughes,  418;  In  re  Owens,  No.  Boorstin,  114  Fed.  Rep.  696,  8  Am. 

T0632  Fed.  Cas.,  6  Biss.  432.  B.  R.  89.    See  Title  to  exempt  prop- 

"/«    re    Brown,     No.     1980     Fed.  erty,  Sec.  179,  ante. 
Cas.,  3   N.  B.   R.  250;   In  re  May, 


324  LAW     AND     PROCEEDINGS    IN     BANKRUPTCY. 

claim  exemptions  out  of  the  fund  arising  from  tlie  sale  of  the 
equity  of  redemption,  or  to  select  the  property  to  the  value 
allowed  by  the  state  law."  The  effect  of  liens  on  exempt  prop- 
erty and  the  right  to  select  property  to  be  exempted  depends 
solely  upon  the  law  of  the  state  in  which  the  bankrupt  has  his 
domicile.  It  may  be  stated  as  a  general  rule  that  a  mechan- 
ic's lien  for  -mprovements  and  a  vendor's  lien  °  are  superior 
to  a  homestead  exemption  in  land,  and  that  other  liens  are 
subordinate  to  it. 

To  illustrate  the  general  rule,  suppose  that  a  bankrupt 
owns  two  lots  of  land,  A  and  B,  and  both  of  them  are  mort- 
gaged; that  upon  the  sale  under  an  order  of  the  court  of 
bankruptcy  there  is  a  surplus  over  and  above  paying  the 
mortgage  debt  on  lot  "A" ;  that  lot  "B"  does  not  sell  for 
enough  to  pay  the  mortgage  debt;  and  that  judgments  ag.iinst 
the  bankrupt  have  attached  as  liens  on  the  land.  The  order 
of  payment  would  be  as  follows :  The  mortgagee  of  lot  "A" 
would  be  paid  in  full.  The  mortgagee  of  lot  "B"  would  take 
the  proceeds  of  the  sale  and  become  a  general  creditor  to  the 
extent  of  the  balance  of  his  debt.  The  bankrupt  would  be 
entitled  to  his  exemption  from  the  sale  of  the  equity  of  re- 
demption in  lot  "A,"  or  the  balance  of  the  proceeds  after 
paying  the  mortgage  debt.  If  there  be  still  a  balance  of 
proceeds,  the  judgment  lien-holders  should  next  be  paid  in 
order  of  their  priority.  This  illustrates  the  general  rule  with 
reference  to  the  effect  of  liens  upon  exempt  property.  It  is, 
however,  subject  to  be  varied  by  the  law  of  a  particular  state. 

§  182.    Who  may  claim  exemptions. 

The  right  to  claim  exemptions  is  personal  to  the  bankrupt 
and  his  family.  The  claim  is  regularly  made  by  the  bankrupt 
himself.  He  may,  however,  claim  his  exemption  through  his 
agent  or  attorney.^     In  the  absence  or  disability  of  the  hus- 

^  In  re  May,  No.  9326  Fed.  Cas.,  head,  No.  17362  Fed.  Cas.,  2  N.  B. 

2  Cin.  Law  Bui.   152;  In  re  Jones,  R.  599;  Fehley  v.  Barr,  66  Pa.  196. 

No.  7445  Fed  Cas.,  2  Dill.  343.  ^  Regan     v.     Zeeb,    28    Ohio    St. 

"/n    re    Perdue,    No.    10975    Fed.  483;  Wilson  v.  McElroy,  ;i2  Pa.  St. 

Cas.,  2  N.  B.  R.  183;  In  re  White-  82. 


EXEMPTIONS. 


525 


band,  the  wife  or  children  may  present  tlie  claim.^  No  other 
person  can  assert  the  right  of  exemption,  unless  possibly  a 
mortgagee  of  exempted  property,  where  the  exemption  is 
waived  in  or  by  the  mortgage."  Neither  a  bankrupt  nor  his 
wife  can  claim  exemptions  by  courtesy  or  dower  in  the  life- 
time of  the  other.-*  It  should  be  borne  in  mind  that  the  court 
is  to  look  to  the  laws  of  the  several  states  and  territories  for 
the  description  of  the  person  who  may  claim  exemptions. 
The  rules  stated  above  will  apply  under  most,  if  not  all,  of 
these  laws. 


§  183.     Waiver  of  exemption. 

The  statute  expressly  makes  it  the  duty  of  the  bankrupt  to 
claim  such  exemptions  as  he  may  be  entitled  to  in  his  sched- 
ule.' This  he  should  do.  If  the  bankrupt  fails  to  make  a 
claim  for  liis  exemptions  in  his  schedule,  does  he  thereby 
waive  his  right  to  claim  them? 

A  bankrupt  can  not  waive  his  right  of  exemption  in  prop- 
erty specifically  set  apart  to  him  by  the  statute  so  that  the 
trustee  can  acquire  title  to  it  for  the  benefit  of  the  estate, 
unless  he  expressly  conveys  it  to  the  trustee.  It  does  not  pass 
by  operation  of  law.'  It  may  be  doubted  if,  as  a  general  rule, 
he  will  be  deemed  to  waive  his  right  to  claim  exemptions  out 
of  property  to  be  selected  by  him  by  simply  failing  to 
make  the  claim  in  his  schedule.  If  the  claim  is  not  made  in 
the   schedule    an   amendment   will    usually   be   allowed,^    but 


^  Smith  V.  Kchr,  Xo.  13071  Fed. 
Cas.,  2  Dill.  50.  affirmed  20  Wall. 
31,  22  L.  Ed.  31,3:  In  re  Pratt,  No. 
1 1370  Fed.  Cas.,  i  Flip.  353.  This 
is  the  subject  of  special  enactment 
in   some   of   the    states. 

'Edmondson  v.  Hyde.  No.  4285 
Fed.  Cas.,  s.  c.  2  Saw.  205. 

In  Wisconsin  mortgagee  can  not 
claim  such  exemption.  In  re  Schul- 
ler,  108  Ted.  Rep.  591,  6  Am.  B.  R. 
278. 

*  In  re  McKenna,  9  Fed.  Rep.  27; 


Kelly  V.  Strange,  No.  yeyG  Fed. 
Cas.,  s.  c.  3  N.  B.  R.  8. 

'  B.  A.   1898,   Sec.  7.  clause  8. 

=  B.  A.  1898,  Sec.  70a. 

•'/;;  re  Falconer  fC.  C.  A.  8th 
Cir.),  no  Fed.  Rep.  iir,  6  Am. 
B.  R.  557;  /"  re  White,  128  Fed. 
Rep.  513,  ir  Am.  B.  R.  556;  In  re 
Tollett  CC.  C.  A.  6th  Cir.),  106 
Fed.  Rep.  866,  5  Am.  B.  R.  404: 
/;;  re  Duffy,  ir8  Fed.  Rep.  926.  9 
Am.  B.  R.  358;  In  re  Berman,  140 
Fed.  Rep.  761,  15  Am.  B.  R.  463. 


52b 


LAW     A.N'n     I'ROCEEDINGS    IN     BANKRUPTCY. 


not  if  the  a\o\vc(l  purpose  is  to  pay  creditors  against  whom 
he  has  waived  exemption.'*  There  are  cases  which  hold  that 
where  the  bankrupt  files  no  schedule  and  makes  no  request 
upon  the  trustee  to  set  aside  specific  articles  of  exemption 
until  after  a  sale,  he  must  be  regarded  as  having  waived  his 
right  of  exemption."'  Where,  however,  a  bankrupt  claims  his 
exemptions  in  his  schedules  as  required  by  the  bankrupt  act, 
the  mere  fact  that  the  goods  themselves  have  been  sold  by  a 
receiver  under  direction  of  the  court  as  perishable,  will  not 
deprive  him  of  Ihe  right  to  come  in  ujjon  tlie  proceeds." 
He  must  make  the  claim  in  a  court  of  bankruptcy  before  his 
discharge.^  He  will  not  be  permitted  to  assert  such  a  claim  in 
a  state  court  subsequent  to  his  discharge.^  The  right  to  claim 
exemption  has  been  denied  a  bankrupt  after  being  a  fugitive 
from  justice  for  ten  years.^ 

As  a  general  rule  it  may  be  stated  that  where  a  debtor 
would  be  held  to  have  waived  his  right  to  exemptions  in  a 
proceeding  in  a  state  court  he  will  probably  be  held  to  have 
waived  it  in  a  court  of  bankruptcy.  The  general  doctrine  is 
recognized  in  most  states  that  an  exemption  is  a  personal  priv- 
ilege and  that  debtors  may  waive  it  by  contract  or  surrender 
or  by  neglecting  to  claim   it  before  the   sale.^**     Where   no 


*  Moran  v.  King,  iii  Fed.  Rep. 
730,  7  Am.  B.  R.  176. 

°  In  re  Von  Kerm,  135  Fed.  Rep. 
447,  14  Am.  B.  R.  403 ;  In  re  Man- 
ning, 112  Fed.  Rep.  949,  7  Am.  B. 
R.  571 ;  In  re  Wunder,  133  Fed. 
Rep.  821,  13  Am.  B.  R.  701 ;  In  re 
Prince  &  Walter,  131  Fed.  Rep. 
546,  12  Am.  B.  R.  675 ;  In  re  Ras- 
kins, 109  Fed.  Rep.  789,  6  Am.  B. 

R.  485. 

"^  Lipman  v.  Stein  (C.  C.  A.  3d 
Cir.),  134  Fed.  Rep.  235,  14  Am. 
B.  R.  30,  affirming  130  Fed.  Rep. 
629,  12  Am.  B.  R.  384;  In  re  Kane 
(C.  C.  A.  7th  Cir.),  127  Fed.  Rep. 
552,  II  Am.  B.  R.  533;  In  re  Le- 
Vay,  125  Fed.  Rep.  990,  1  t  Am.  B. 


R.  114;  In  re  Bolinger,  108  Fed. 
Rep.  374,  6  Am.  B.  R.  171 ;  In  re 
Sloan,  135  Fed.  Rep.  873,  14  Am. 
B.  R.  435. 

'  In  re  Kean,  No.  7630  Fed.  Cas., 
2    Hughes,   322. 

'Steele  v.  Moody,  53  Ala.  418; 
Gayle  v.  Randall,  71  Ala.  469; 
Woolfolk  V.  Murray,  44  Ga.  133; 
Maxwell  v.  McCune,  2)7  Tex.  515. 

"/n  re  Moyer,  15  Fed.  Rep.  598. 

"'Consult  Spitley  v.  Frost,  15 
Fed.  Rep.  304  (this  case  was  re- 
versed on  another  point  in  121  U. 
S.  552,  30  L.  Ed.  loio;  Green  v. 
Blunt,  50  Ta.  79;  Pond  v.  Kimball, 
loi  Mass.  105;  Wicker  v.  Com- 
stock,  52  Wis.  315;   People  v.   Pal- 


EXEMPTIONS. 


527 


claim  for  an  exemption  is  made  in  the  progress  of  a  case 
and  before  there  is  judgment,  execution  and  a  sale,  the  debtor 
is  usually  deemed  to  have  waived  his  right  of  exemption  in 
the  property  sold.  He  may,  however,  assert  his  claim  at  any 
time  before  the  sale  of  the  property." 

A  waiver  in  favor  of  some  particular  creditors  can  not  be 
made  to  inure  to  the  benefit  of  the  general  creditors.^-  A 
debtor  may  waive  his  exemption  in  favor  of  one  creditor  and 
msist  upon  it  as  against  another.  The  creditor  in  whose  favor 
the  exemption  is  waived  may  proceed  in  the  state  court  against 
the  exempt  property  after  it  is  set  apart  to  the  bankrupt. ^^  In 
such  cases  the  bankruptcy  court  will  usually  withhold  a  dis- 
charge until  such  suits  are  ended,  where  a  discharge  would 
bar  the  debt. 

A  bankrupt  may  forfeit  his  right  to  an  exemption  by  fraud. 
Thus  where  a  bankrupt  gave  a  deed  of  trust  as  security  for 
money  then  loaned  to  him  and  for  future  advances,  and  after- 
wards declared  a  homestead  on  one  of  the  lots  so  conveyed  in 
trust,  and  subsequently  obtained  further  advances  without 
disclosing  the  fact  that  he  had  declared  a  homestead  on  the 
premises,  he  was  not  allowed  to  claim  his  exemption.^*  Where 
a  bankrupt  conceals  a  great  part  of  his  property  and  takes  it 
out  of  the  jurisdiction,  he  can  not  claim  exemptions  out  of 


mer,  46  111.  398 ;  Clapp  v.  Thomas, 
5  Allen  (Mass.),  158;  Hevves  v. 
Parkman,  20  Pick.  (Mass.)  90; 
McKinney  v.  Reader,  6  Watts, 
34;  Hutchinson  v.  Campbell,  25 
Pa.  St.  273 ;  Lauck's  .Appeal,  24 
Pa.  St.  426;  Hammer  v.  Freese,  19 
Pa.  St.  255;  Bowyer's  Appeal,  21 
Pa.  St.  210;  Case  v.  Dunmore.  23 
Pa.  St.  93;  Brackett  v.  Watkins, 
21  Wend.    (N.  Y.)   68. 

"  Bartholomew  v.  West,  No.  lojr 
Fed.  Cas.,  2  Dill.  290;  Slaughter  v. 
Dctiney,  15  Tnd.  49;  McClusky  v. 
McNcely,  8  111.  578;  Shepherd  v. 
Murrill,  90  N.  C.  208.  See  also 
Weaver's   Appeal,    18   Pa.    St.   307; 


Yost  V.  Heffner,  69  Pa.  St.  68; 
Toenes  v.  Moog,  78  Ala.  558. 

'"In  re  Bolinger,  108  Fed.  ,Rep. 
374,  6  Am.  B.  R.  171,  3  N.  B.  N. 
447;  In  re  Black,  104  Fed.  Rep.  289, 

4  Am.  B.  R.  776,  3  N.  B.  N.  47; 
In    re    Osborn,    104   Fed.    Rep.   780, 

5  Am.  B.  R.  hi;  In  re  Camp,  91 
Fed.  Rep.  745,  i  Am.  B.  R.  165 ;  but 
see  In  re  Garner,  115  Fed.  Rep.  200, 
8  Am.  B.  R.  263:  /;;  re  Nye  (C.  C. 
.'\.  8th  Cir.).  133  Fed.  Rep.  :i2,  I3 
Am.    B.    R.    142. 

'■' McKenney  v.  Cheney,  118  Ga. 
387;  Bell  V.  Dawson,  120  Ga.  628. 

"/m  re  Haake,  No.  5883  Fed. 
Cas.,  2  Saw.  231. 


528 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


his  remaining  property.'''  A  bankrupt  can  not  while  insolv- 
ent build  a  house  with  money  derived  from  goods  not  paid 
for  and  then  claim  it  as  a  homestead. ''"'  A  bankrupt  is  not, 
however,  deprived  of  his  right  to  a  homestead  exemption 
merely  because,  while  insolvent,  he  moved  into  the  house  for 
the  purpose  of  claiming  it  as  exempt." 

Under  the  statute  of  Washington,  which  in  case  of  a  sale 
in  bulk  of  a  stock  of  merchandise  makes  the  purchaser  respon- 
sible for  the  application  of  the  purchase  price  on  the  seller's 
debts,  the  seller  by  making  such  a  sale  must  be  deemed  to  have 
assented  to  such  application,  and  on  his  adjudication  as  a 
bankrupt  can  not  claim  his  statutory  exemptions  out  of  the 
money  due  from  the  purchaser.^^  Nor  do  the  creditors  waive 
their  rights  in  such  fund  by  instituting  involuntary  proceed- 
ings in  bankruptcy  against  him.^^ 

When  there  are  no  other  assets  the  bankrupt  must  pay 
costs  out  of  exempt  property. 


19 


§  184.     Waiver  to  exemption  in  property  fraudulently  con- 
veyed. 

Does  a  bankrupt  waive  his  right  to  claim  an  exemption  in 
property  which  he  had  conveyed  in  fraud  of  creditors  prior 
to  the  commencement  of  bankruptcy  proceedings,  and  which 
the  trustee  subsequently  recovered  for  the  benefit  of  the  estate? 
There  is  a  conflict  of  authority  on  this  point.     The  better 


"/m  re  Taylor,  114  Fed.  Rep.  607, 
7  Am.  B.  R.  410. 

^' McGahan   v.    Anderson    (C.    C. 

A.  4th  Cir.),  113  Fed.  Rep.  115,  7 
Am.  B.  R.  641.  See  also  In  re 
Schnechter,  9  Am.  B.  R.  729;  Can- 
non V.  Dexter,  etc.,  Co.  (C.  C  A. 
4th  Cir.),  120  Fed.  Rep.  657,  9  Am. 

B.  R.  724;  In  re  Campbell,  124  Fed. 
Rep.  417,  10  Am.  B.  R.  723;  In  re 
Butler,  120  Fed.  Rep.  100,  9  Am. 
B.  R.  539.  These  cases  depend 
largely  on  the  construction  of  state 
statutes. 


"/»  re  Irvin  (C.  C.  A.  8th  Cir.), 
120  Fed.  Rep.  TZZ^  9  Am.  B.  R.  689, 
affirming  In  re  Stone,  116  Fed.  Rep. 
35,  8  Am.  B.  R.  416;  Huenergardt 
V.  Brittain  Dry  Goods  Co.  (C.  C. 
A.  8th  Cir.),  116  Fed.  Rep.  31,  8 
/im.  B.  R.  341. 

'*/?t  re  Connor,  146  .Fed.  Rep., 
998. 

"/n  re  Hines,  117  Fed.  Rep.  790, 
9  Am.  B.  R.  27;  In  re  Collier,  93 
Fed.  Rep.  191,  i  Am.  B.  R.  182; 
In  re  Bean.  100  Fed.  Rep.  262,  4 
Am.  B.  R.  53. 


EXEMPTIONS.  529 

reason  seems  to  support  tlie  rule  that  the  bankrupt  does  not 
waive  his  right  to  claim  a  homestead  exemption  in  lands  so 
conveyed  and   recovered/ 

The  argument  in  favor  of  this  rule  may  be  briefly  stated. 
Homestead  laws  are  favorably  construed  by  the  courts  in  the 
interest  of  the  debtor's  family.  It  is  true  that  the  debtor  may 
have  conveyed  his  homestead  right  and  would  be  estopped  to 
claim  it  as  against  his  grantee  or  any  person  claiming  under 
him.  The  trustee  does  not  claim  under  the  deed  of  convey- 
ance, but  in  hostility  to  it.  The  property  is  recovered  by  the 
trustee  as  representative  of  the  creditors.  When  so  recovered 
the  deed  is  declared  to  be  null  and  void  as  between  the  bank- 
lupt  and  the  trustee.  Surely  the  trustee  can  not  claim  to  be 
subrogated  to  any  rights  of  the  grantee.  His  rights  are  the 
same  that  they  would  have  been  had  the  deed  never  been 
made.  If  the  bankrupt  had  the  right  of  exemption  as  against 
creditors  before  the  deed  was  made,  he  is  not  estopped,  as 
against  the  trustee,  to  claim  the  right  to  the  homestead  or  the 
value  to  the  extent  given  by  the  statute.  It  does  not  make 
the  estate  any  less  than  if  the  fraudulent  conveyance  had  not 
been  made.  An  opposite  view  would  give  the  creditors  a 
profit  out  of  the  attempted  fraud  at  the  expense  of  the  bank- 
rupt's family. 

There  are  cases,  however,  which  hold  that  the  bankrupt 
waives  his  right  to  an  exemption   in  property   fraudulently 

'  McFarland     v.     Goodman,     No.  In  re  Tollett    (C.  C.  A.  6th  Cir.), 

8789  Fed.  Cas.,  6  Biss.  in;  Cox  v.  106  Fed.  Rep.  866,  5  Am.  B.  R.  404, 

Wilder,  No.  3308  Fed  Cas.,  2  Dill.  3  N.  B.  N.  454;  In  re  Falconer  (C. 

45,  reversing  No.  3309  Fed.  Cas.,  5  C.  A.  8th  Cir.),  no  Fed.  Rep.  ni, 

N.  B.  R.  443;  Smith  v.  Kehr,  No.  6  Am.  B.  R.  557;  Bashinski  v.  Tal- 

13071    Fed.    Cas.,   2   Dill.    50;    Bar-  bott   (C.  C.  A.  sth  Cir.),   n9  Fed. 

tholomew  v.   West,   No.    1071    Fed.  Rep.  ZZI,  9  Am.  B.  R.  513,  affirm- 

Cas.,  2  Dill.  290;  Penny  v.  Taylor,  ing   In   re   Talbott,    n6   Fed.    Rep. 

No.   10957   Fed.   Cas.,    10  N.   B.   R.  417,  8  Am.  B.  R.  427;  In  re  Thomp- 

200;  In  re  Poleman,  No.  11247  Fed.  son,  140  Fed.  Rep.  257,   15  Am.  B. 

Cas.,  5  Biss.  526;  In  re  Detert,  No.  R.  283. 

3829  Fed.   Cas.,   n    N.   B.   R.  293;  As  to  the  effect  of  a  fraudulent 

Vogler-   V.     Montgomery,     54     Mo.  conveyance  upon  the  right  of  dow- 

577;  In  re  Park,  102  Fed.  Rep.  602,  er,    see   Scribner  on   Dower,   Chap. 

4  Am.  B.  R.  432,  2  N.  B.  N.  981 ;  IX. 


530  LAW     AXl)     I'KOCKKniXCS     1\     BANKRUPTCY. 

conveyed  b)-  him."  The  arg-unient  in  favor  of  this  position 
is  substantially  as  follows :  The  deed  is  valid  between  the 
bankrupt  and  his  grantee.  He  thereby  extinguishes  his 
homestead  interest.  Whatever  passed  to  the  grantee  remains 
subject  to  the  creditors'  demands.  The  grantee  can  not  hold 
against  adjudged  fraud.  1die  grantor  can  not  reclaim  his 
grant.  The  annihilation  of  the  homestead  by  the  bankrupt 
leaves  the  premises  like  any  other  realty  owned  by  the  grantor 
to  which  no  pretense  of  a  homestead  interest  ever  obtained. 
It  inures  to  the  benefit  of  the  creditors  whom  it  was  sought  to 
defraud. 

There  seem  to  be  two  principal  objections  to  this  ru.le. 
First,  The  creditors  are  benefited  by  a  provision  of  a  deed 
which  must  be  held  invalid  as  between  the  bankrupt  and  the 
creditors  in  order  that  the  property  may  be  recovered  at  all 
by  the  trustee;  and,  second,  because  it  gives  the  creditors  a 
profit  out  of  the  attempted  fraud  at  the  expense  of  the  family, 
for  whose  benefit  the  exemption  is  mainly,  if  not  wholly, 
provided.  If  the  law  gave  to  a  single  man  the  right  to  this 
exemption,  it  might  accord  with  the  natural  desire  to  punish 
fraud  to  visit  a  penalty  upon  him ;  but  to  denounce  a  for- 
feiture of  the  homestead  where  there  is  a  family  subverts  the 
policy  on  which  the  exemption  is  provided  and  allowed. 

A  bankrupt  will  not  usually  be  deemed  to  have  waived  his 
right  to  a  homestead  exemption  by  previously  waiving  his 
homestead  rights  in  mortgaged  property  in  favor  of  a  particu- 
lar creditor.^  The  reason  for  this  is  that  the  waiver  only 
applies  to  persons  claiming  under  the  instrument  in  which 
the  waiver  was  made,  and  does  not  inure  to  the  benefit  of  the 
trustee  in  bankruptcy  for  the  creditors. 

'In  re  Graham,    No.    5660    Fed.  909,  8  Am.  B.  R.  730;  In  re  White, 

Cas.,  2  Biss  449;  Keating  V.  Keefer,  109    Fed.    Rep.    635,    6   Am.    B.    R. 

No.   7635   Fed.   Cas.,   s.  c.   5   N.   B.  451 ;    In    re    Coddington,    126    Fed. 

R.    133;    Cox  V.   Wilder,   No.   3309  Rep.  891,  11  Am.  B.  R.  122. 

Fed.    Cas.,   5    N.    B.    R  443,   which  ^  In  re  Poleman,  No.  11247,  Fed. 

was  reversed  by  the  circuit  court  in  Cas.,    5    Biss.    526;    Rix    v.    Capitol 

No.  3308  Fed.  Cas.,  2  Dill.  45;  In  re  Bank,   No.    11869  Fed.   Cas.,  2  Dill. 

Long.  116  Fed.  Rep.  113,  8  Am.  B.  367.     See   In   re   Garner,    115    Fed. 

R.  591;  In  re  Evans,  116  Fed.  Rep.  Rep.  200,  8  Am.  B.  R.  263. 


EXEMPTIONS.  531 

A  bankrupt  is  not  entitled  to  claim  as  exempt  property 
which  he  has  acquired  by  fraud.* 

§  185.    Dower. 

The  bankrupt  statute  expressly  provides  that  in  case  of  the 
death  of  the  bankrupt  the  widow  and  the  children  are  entitled 
to  all  rights  of  dower  and  allowances  fixed  by  the  laws  of  the 
state  of  the  bankrupt's  residence.^  The  effect  of  this  pro- 
vision is  to  preserve  the  right  of  dower  in  the  bankrupt's  es- 
tate after  the  title  has  passed  from  the  bankrupt  to  the  trustee.'^ 
It  is  a  mere  declaration  of  a  well-recognized  principle  of  law 
and  of  the  construction,  which  the  bankrupt  act  of  1867  re- 
ceived without  any  such  proviso.^ 

Whether  the  contingent  or  inchoate  right  of  dower  attaches 
to  property  in  hands  of  the  trustee  depends  upon  the  law  of 
the  state  of  the  bankrupt's  residence.  This  becomes  impor- 
tant if  the  trustee  has  occasion  to  convey  any  real  estate, 
either  for  the  purpose  of  reducing  it  to  money  or  to  free  it 
from  mortgage  or  other  liens  and  charges,  or  for  any  purpose 
whatever.  How  may  the  trustee  make  such  a  conveyance  as 
to  pass  title  to  real  estate  free  of  all  claims  of  dower?  The 
general  rule  in  this  respect  may  be  thus  stated : 

*  In  re  Woollcott.   140  Fed.   Rep.  In  re  Buckingham.  102  Fed.  Rep. 

460,   15  Am.   B.   R.  386.  972.  A  widow  had  waived  her  right 

'  B.  A.   1898,   Sec.  8.  to  homestead  exemption  in  certain 

The    act    of    1867     contained    no  property  and  the  property  was  sold, 

such  provision.     The  act  of  August  She    was    allowed    subsequently    to 

19,  1841,  Sec.  2  (5  Stat,  at  L.),  con-  claim   a   homestead    exemption   out 

tained    a    provision    similar    to    the  of  the  proceeds  of  the  sale  of  other 
presena  act,  viz.:  "Nothing  in  this  "   real  estate  in  the  hands  of  the  trus- 

act  contained  shall  be  construed  to  tee  in  bankruptcy, 

annul,  destroy  or   impair  any  law-  ^  Porter  v.  Lazear,   109  U.  S.  89, 

ful  rights  of  married  women,  which  27  L.  Ed.  865,  affirming  87  Pa.   St. 

may  be  vested  by   the   laws  of  the  513;  Speake  v.  Kinard,  4  S.  C.  54; 

states   respectively,   and    which    arc  /;;  re  Angier,  No.  388  Fed.  Cas.,  4 

not  inconsistent  with  the  provisions  N.  B.  R.  6ig;  /«  re  Bartenbach.  No. 

of  the  second  and  fifth  sections  of  1068    Fed.    Cas.,    1 1    N.    B.    R.    61 ; 

this   act."     See    also   Worcester   v.  Dwyer    v.    Garlough,    31    Ohio    St. 

Clark,  2  Grant  (Pa.)  84.  15'"^:  Warford  v.  Noble,  2  Fed.  Rep. 

'/«    re    Shaeffer,    105    Fed.    Rep.  202;    Warford    v.    Clark,    2    Grant 

352.  5  Am.  B.  R.  92«.  (Pa.)  84. 


bo2  LAW     AND     I'KOCEEUlxNfGS    IN     BANKRUPTCY, 

In  those  states  in  whieh  the  wife  is  entitled  to  clower  only 
lands  owned  hy  her  hnsband  during  coverture,  the  trustee  may 
convey  any  lands  held  by  him  free  of  dower  during  the  life- 
time of  the  bankrupt/  The  wMfe's  right  of  dower  will  attach 
only  to  such  real  property  as  remains  in  the  hands  of  the 
trustee  at  the  time  of  the  death  of  the  bankrupt.  She  has 
no  contingent  right  of  dower  in  lands  of  the  bankrupt  prior 
to  that  time.  The  bankrupt  could  have  sold  them  free  of 
dower,  and  the  trustee  is  in  the  same  position.  The  wife  has 
no  greater  claims  against  the  trustee  than  she  would  have 
against  her  husband  had  bankruptcy  proceedings  not  inter- 
vened. 

In  those  states  in  which  the  wife  is  entitled  to  dower  in  all 
lands  owned  by  her  husband  during  coverture,  the  trustee  may 
proceed  to  sell  free  of  dower  only  when  the  wife  consents  to 
the  sale  and  asks  to  have  an  equivalent  of  her  contingent 
right  of  dower  set  off  to  her  in  money.  In  such  case  the 
trustee  may  convey  lands  free  of  dower.^  The  value  of  her 
contingent  interest  or  inchoate  right  of  dower  is  computed 
usually  by  tables  for  finding  the  present  value  of  such  inter- 
est." If  the  wife  refuses  consent,  the  property  can  be  sold 
only  subject  to  her  right  of  dower." 

Dower  and  homestead  rights  are  governed  by  substantially 
the  same  rules  and  priniciples.^  AA'hat  has  been  said  with 
reference  to  exemptions  in  this  chapter  will  assist  in  answer- 
ing many  questions  which  may  arise  with  reference  to  dower.* 

§  i86.    How  to  set  apart  exemptions. 

The  exemptions  provided  by  the  law  of  the  state  are  al- 
lowed by  the  bankruptcy  act,  but  the  manner  of  claiming  such 

*  Kelly  V.  Strange,  No.  7676  Fed.       Wilder,    No.   3309   Fed.    Cas.,   s.   c. 
Cas.,  3  N.  B.  R.  8.  5    N.    B.    R.    443,    reversed   in    No. 

°  Ih  re  Bartenbach,  No.  1068  Fed.  3308  Fed.  Cas.,  2  Dill.  45 ;  Mc- 
Cas.,  II  N.  B.  R.  61.  Farland  v.  Goodman,  No.  8789  Fed. 

*  Consult    Giauque    &    McClure's       Cas.,  6  Biss.  in. 

Present  Value  Tables.  "As     to     dower     in     partnership 

'  Porter  v.  Lazear,   109  U.  S.  84,  propertj',     consult     Exemptions     in 

27  L.  Ed.  865.  partnership  property,  Sec.  187,  post. 
*B.    A.    1898,     Sec.     6;     Cox     v. 


EXEMPTIONS.  533 

exemptions  and  of  setting  apart  and  awarding  them  is  regu- 
lated by  the  bankruptcy  act/ 

It  is  made  the  duty  of  the  bankrupt  to  claim  such  exemp- 
tions as  he  may  be  entitled  to  in  his  schedule.-  It  devolves 
upon  the  trustee,  and  it  is  his  duty,  to  set  apart  the  bank- 
rupt's exemptions  and  report  the  items  and  estimated  value 
thereof  to  the  court  within  twenty  days  after  receiving  notice 
of  his  appointment.^  Where  no  trustee  has  been  appointed 
the  court  may  set  apart  the  exemptions.*  The  trustee  has  no 
discretion  with  reference  to  what  propert}'  shall  be  exempt. 
The  right  of  the  bankrupt  is  absolute  and  fixed  by  the  law 
of  the  state  in  which  he  has  his  domicile  for  the  greater  part 
of  the  six  months  immediately  preceding  the  filing  of  the 
petition.^ 

The  trustee  regularly  allow^s  the  claim  of  the  bank- 
rupt to  and  sets  apart  such  articles  as  are  specifically  ex- 
empted by  the  statute  of  that  state,  regardless  of  their  value 
or  the  situation  of  the  bankrupt.  He  should  also  set  apart 
the  homestead,  or  the  value  thereof,  and  such  articles  as  the 
bankrupt  may  be  entitled  to  select  under  the  state  law.  The 
trustee  should,  as  soon  thereafter  as  possible,  file  with  the 

Vw  re  Kane  (C.  C.  A.  7th  Cir.),  A.  6th  Cir.),   io6  Fed.  Rep.  866,  5 

127  Fed.   Rep.   552;    11    Am.   B.   R.  Am.  B.  R.  404,  3  N.  B.  N.  454;  In 

533;  In  re  Friedrich   ( C.  C.  A.  7th  re   Falconer    (C.    C.    A.   8th    Cir.), 

Cir.),  100  Fed.  Rep.  284,  3  Am.  B.  110  Fed.  Rep.  iii,  6  Am.  B.  R.  557. 

R.  801;  Lipman  v.  Stein   (C.  C.  A.  '  B.  A.   1898,   Sec.  47,  clause   11; 

3d  Cir.),  134  Fed.  Rep.  235,  14  Am.  Gen.  Ord.   17;  In   re  Friedrich    (C. 

B.  R.  30;  Burke  v.  Guarantee  Title  C.  A.  7th  Cir.),  100  Fed.  Rep.  284, 

&  Trust   Co.    (C.    C.   A.   3d   Cir.),  3   Am.    B.    R.   801;   In   re   Hill,  96 

134  Fed.    Rep.   562,    14  Am.   B.   R.  Fed.  Rep.  185,  2  Am.  B.  R.  798;  In 

31.  re  Osborn,  104  Fed.  Rep.  780,  5  Am. 

°B.  A.  1898,  Sec.  7,  clause  8;  In  B.   R.   11 1;  In  re   Park,    102    Fed. 

re  Friedrich    (C.   C.   A.   7th   Cir.),  Rep.  602,  4  Am.  B.  R.  432. 

100  Fed.  Rep.  284,  3  Am.  B.  R.  801 ;  '  In  re  Smalley  v.  Langcnour,  196 

In  re  Lucius,  124  Fed.  Rep.  455,  10  U.    S.   93,   49   L.    Ed.  400,    13   Am. 

Am.    B.   R.   653.  B.   R.  692,  and  In  re  Allen  &  Co., 

A  bankrupt  was  refused  leave  to  134   Fed.    Rep.   620,    13   Am.   B.    R. 

amend   in   In   re   Moran,    105   Fed.  518,    a    homestead    exemption    was 

Rep.  901,  5  \m.  B.  R.  472.     lie  was  allowed  by  a  referee, 

permitted  to  amend  his  schedule  in  °  B.  A.  1898,  Sec.  6. 
this  respect  in  In  re  ToUett  (C.  C. 


534  l.AW     AXD     PROCEEDTNC.S    IN     BANKRUPTCY. 

referee  an  itemized  report  of  the  property  thus  set  apart." 
General  Ortlcr  17  requires  the  specification  of  the  separate 
articles  and  their  separate  appraisement."  His  act  in  setting- 
aside  the  exemptions  claimed  is  ministerial,  and  no  issue  on 
the  question  of  the  bankrupt's  right  to  them  is  raised  until 
his  report  is  filed."*  The  creditors  may  then  raise  this  issue 
by  taking  exceptions  to  the  report  within  twenty  days.'-*  A 
creditor  who  has  received  notice  of  the  filing  of  the  petition 
and  that  he  is  a  scheduled  creditor  is  charged  with  notice  of 
whatever  transpires  in  the  administration  of  the  estate  and 
a  failure  to  contest  the  bankrupt's  claim  for  exemptions  is 
such  laches  as  will  deprive  him  of  the  right  to  reopen  the  mat- 
ter.^" The  burden  of  showing  that  an  article  alleged  to  be 
exempt  is  within  the  provisions  of  the  statute  rests  on  the 
bankrupt."  The  referee  may  require  the  exceptions  to  be 
aro-ued  before  him,  and  shall  certifv  them  to  the  court  for 
final  determination  at  the  request  of  either  party.  In  case 
the  trustee  shall  neglect  to  file  any  report  within  five  days 
after  the  same  shall  be  due,  it  is  the  duty  of  the  referee  to 
make  an  order  requiring  the  trustee  to  show  cause  before 
the  judge  at  a  time  specified  in  the  order  why  he  should  not 
be  removed  from  office.^" 

Ordinarily  exemptions  can  not  be  set  of¥  until  after  the 
trustee  is  appointed,  but  where  no  creditors  appear  at  the  first 
meeting  and  no  trustee  is  appointed  the  court  can  probably 
allow  the  exemptions  on  satisfactory  proof. ^*  A  bankrupt 
may  be  allowed  to  take  property  claimed  to  be  exempt,  be- 

*  Official  Form  No.  47 ;  see  Form  "  In  re  Campbell,   124  Fed.  Rep. 

No.  91,  post.  417.  10  Am.  B.  R.  723;  In  re  Turn- 

'/m   re   Manning,    112    Fed.    Rep-  bull,  106  Fed.  Rep.  667,  5  Am.  B.  R. 

948,  7  Am.  B.  R.  571.  549- 

"in   re   Campbell.    124   Fed.   Rep.  "Gen.  Ord.  17.     See  Removal  of 

417.  10  Am.  B.  R.  723.  trustees.  Sec.  145,  ante- 

'Gen.   Ord.    17;   In  re   Campbell,  '^/h  re  Smith,  93  Fed.  Rep.  791. 

124   Fed.    Rep.   417,    10  Am.   B.    R.  2  Am.  B.  R.  190;  in  re  Grimes,  96 

723;  In  re  Smith,  93  Fed.  Rep.  791,  Fed.  Rep.  329,  2  Am.  B.  R.  730;  In 

2  Am.  B.  R.   190.  re  Allen  &  Co.,  134  Fed.  Rep.  620, 

'"In  re  Reese,  115  Fed.  Rep.  993,  13  Am.  B.  R.  518. 
8  Am    Is    R.  411. 


EXEMPTIONS.  535 

fore  it  is  set  apart  1)}-  the  trustee,  upon  giving  a  fortlicoming 
bond  for  its  return."  The  more  usual  practice  in  such  cases 
is  to  put  in  the  claim  for  exemptions  and  allow  the  property 
to  be  sold  and  have  the  exemptions  set  apart  out  of  the  pro- 
ceeds of  the  sale.^"'  It  has  been  held  that  the  costs  of  such 
sale  could  not  be  deducted  from  exemptions.'" 

If  it  becomes  necessary  to  appraise  exempt  property  for  the 
purpose  of  setting  it  off  it  may  be  appraised  like  other  prop- 
erty of  the  bankrupt  by  three  disinterested  appraisers  ap- 
pointed by  the  court.''  In  some  cases  the  trustee  has  appointed 
appraisers  who  have  appraised  the  property  claimed  to  be 
exempt  and  reported  to  the  court.  In  other  cases  the  trustee 
has  followed  the  practice  of  the  state  in  this  respect.  In  one 
case  it  was  held  that  there  was  no  authority  for  etn  appraise- 
ment and  that  the  allotment  must  be  made  by  the  trustee 
without  the  assistance  of  appraisers. ^"^  When,  however,  a 
homestead  has  been  set  off  under  a  state  law,  the  court  of 
bankruptcy  may  adopt  it  without  a  new  appraisement.^^  When 
the  property  can  not  be  divided  it  may  be  sold  and  the  exemp- 
tion allowed  out  of  the  proceeds.-"  \\diere  the  exempted 
property  has  been  sold  by  the  trustee  the  proceeds  may  be 
given  to  the  bankrupt. -^       If  any  controversy  arises  with  the 


14 


'In  re  Shaffer  &   Son,  128  Fed.  779,  4  Am.  B.  R.  81,  the  court  di- 

Rep.  986,   II  Am.  B.  R.  717.  rected  the  appraisers  to  be  appoint- 

'°Lipman   v.   Stein    (C.   C.   A.   3d  ed,  one  to  be  selected  by  the  bank- 

Cir.),    134   Fed.    Rep.   235,    14   Am.  rupt,  one  by  the   trustees  and  one 

B.   R.   30,  affirmmg   130   Fed.   Rep.  by  the  creditors. 

629,  12  Am.  B.  R.  384;  In  re  Kane  ""/n  re  Grimes,  96  Fed.  Rep.  529, 

(C.  C.  A.  7th  Cir.),  127  Fed.  Rep.  2  Am.  B.  R.  730. 

552,   II  Am.  B    R.  533;  In  re  Le-  '''In  re  Hall,  No.  5921  Fed.  Cas., 

Vay,  125  Fed.  Rep.  990,  11  .-\m.  B.  2    Flughes  411;   In   re  Vogler,   No. 

R.    114;    In   re   BoHngcr,    108   Fed.  16986  Fed.  Cas.,  2  Hughes,  297;  In 

Rep.   374,  6  Am.   B.   R.    171:   In   re  re    Rhodes,    109    Fed.    Rep.    117,    6 

Sloan,   135   Fed.   Rep.  873,   14   .Am.  Am.   B.    R.    173. 

B.  R   43c;.  A  new  allotment  may  be  ordered 

"/u    re   Le   Vay,    125    Fed.    Rep.  In   re  McBryde,  99  Fed.   Rep.  686, 

990,  II  Am.  B.  R.  114.  3  Am.  B.  R.  729. 

"  ?>.  A.  1898,  Sec.  job.    In  re  Co-  -"  In    re    Brown,    No.    1980    Fed. 

ltmil)ia   Iron   Works,  142  Fed.  Rep.  Cas.,  3  N.  B.  R.  250. 

234,   14  Am,   B.  R.  526.  -'  In  re  Jones,  No.  7445  Fed.  Cas., 

In  re  McCutchen,   100  Fed,  Rep.  2  Dill.  343;  /)(  re  Welch,  No.  17366 


536 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


bankrupt  with  reference  to  what  property  is  exempt  the  court 
should  decide  the  controversy.  A  practical  method  for  the 
determination  of  disputes  arising  from  valuation  of  property 
claimed  to  be  exempt  is  to  order  the  property  in  question  sold, 
and  the  trustee  to  set  apart  to  the  bankrupt  the  proceeds  to 
the  extent  of  the  amount  allowed  as  exemption  by  the  state 
laws."  Homesteads  where  practicable  should  be  set  apart 
in  kind,  so  where  the  value  of  the  homestead  is  in  excess  of 
the  exemption  allowed  the  bankrupt  should  be  allowed  to  keep 
the  property  on  paying  the  difference."^  The  court  of  bank- 
ruptcy is  expressly  given  power  to  determine  all  claims  of 
bankrupts  to  their  exemptions."*  This  would  appear  to  fur- 
nish all  machinery  necessary  for  determining  and  setting  apart 
exemptions  in  the  court  of  bankruptcy  independent  of  the 
state  courts. 

Where  exempt  property  has  been  set  apart  to  the  bankrupt 
the  court  will  not  order  the  bankrupt  to  restore  the  property 
in  order  that  it  may  be  sold  for  the  benefit  of  a  mortgagee."'^ 
\\'here  the  bankrupt  claims  property  as  a  homestead  and  pro- 
ceedings are  taken  before  the  referee  to  subject  it  to  the  pay- 
ment of  a  prior  debt  the  bankrupt  should  be  allowed  an  op- 
portunity to  set  up  defenses  against  such  debt."*^ 

§  187.     What  property  is  exempt  generally. 

No  property  is  specifically  exempted  by  the  bankrupt  stat- 
ute  from   being   applied   to   the   payment   of   the   bankrupt's 


Fed.  Cas.,  5  Ben.  230;  In  re  Ellis, 
No.  4400  Fed.  Cas.,  i  N.  B.  R.  555. 

In  some  states  where  the  exempt 
property  had  not  actually  been  set 
aside  before  sale,  the  bankrupt  is 
not  entitled  to  claim  from  fund.  In 
re  Haskin,  109  Fed.  Rep.  789,  6  Am. 
B.  R.  485;  In  re  Woodard,  95  Fed. 
Rep.  955,  2  Am.  B.  R.  692. 

"In  re  Lynch,  loi  Fed.  Rep. 
579,  4  Am.  B.  R.  262;  In  re  Rich- 
ard, 94  Fed.  633,  2  Am.  B.  R.  506; 
In  re  Osborn,  104  Fed.  Rep.  780, 
5  Am.   B.   R.    in;   In  re  Bolinger, 


108  Fed.  Rep.  374,  6  Am.  B.  R.  171, 

3  N.  B.  N.  447;  In  re  Park,  102 
Fed.  Rep.  602,  4  Am.  B.  R.  432,  2 
N.  B.  N.  981 ;  In  re  Brown,  100 
Fed.  Rep.  441,  4  Am.  B.  R.  46; 
/;;  re  Diller,  100  Fed.  Rep.  931,  4 
Am.  B.  R.  45. 

"'  In  re  Manning,    123  Fed.   Rep. 
180,    10  Am.   B.   R.  498. 

•*  B.  A.  1898,  Sec.  2,  clause  11. 
"^  In  re  Hatch,  102  Fed.  Rep.  280, 

4  Am.  B.  R.  349. 

•"  In  re  Bean,  100  Fed.  Rep.  262, 
4  Am.   B.   R.  63. 


EXEMPTIONS. 


537 


debts.  The  property  exempted  is  only  such  as  is  exempted 
in  behalf  of  a  debtor  under  the  law  of  the  state  in  which  the 
bankrupt  has  had  his  domicile  for  the  greater  portion  of  the 
six  months  immediately  preceding  the  filing  of  the  petition.' 
There  are,  however,  several  questions  with  reference  to 
exemptions  generally  which  will  arise  in  bankruptcy  proceed- 
ings. Some  of  these  questions  may  be  briefly  alluded  to  at 
this  point. 

In  Property  Fraudulently  Conveyed. — The  inquiry 
may  be  made  as  to  whether  a  bankrupt  is  entitled  to  claim 
an  exemption  in  property  which  was' conveyed  or  encumbered 
with  liens  in  fraud  of  creditors  prior  to  the  commencement 
of  bankruptcy  proceedings,  and  which  the  trustee  has  subse- 
quently recovered  for  the  benefit  of  the  estate.  There  is  a 
conflict  of  opinion  on  this  point.  The  better  rule  seems  to  be 
that  he  may  claim  a  homestead  exemption  in  such  lands.' 

In  Property  Purchased  on  the  Eve  of  Bankruptcy. 

So  also  the  decisions  are  conflicting  as  to  whether  property 
which  would  ordinarily  be  exempt  from  seizure  on  attach- 
ment or  execution  is  liable  to  be  administered  for  the  pay- 
ment of  the  debts  of  the  bankrupt  when  such  property  was 
purchased  on  the  eve  of  bankruptcy  with  the  proceeds  of 
other  property  not  exempt.'     Quere,  Does  the  same  rule  ap- 


'B.  A.  1898,  Sec.  6;  In  re  Dur- 
ham, 104  Fed.  Rep.  231,  4  Am.  B. 
R.  760.  2  N.  B.  N.   iioi. 

'  See  Waiver  to  exemption  in 
property  fraudulently  conveyed. 
Sec.  184,  and  cases  there  cited  m 
the  notes. 

'  Holdmg  that  the  bankrupt  is 
not  entitled  to  his  exemption  in 
.such  property,  see  In  re  Boothroyd, 
No.  165^  Fed.  Cas.,  s.  c.  14  N.  B. 
R.  223;  In  re  Parker,  No.  10724 
Fed.  Cas.,  s.  c.  5  Savvy.  58;  In  re 
Wright,  No.  18067,  s.  c.  3  Biss.  359; 
Brackett  v.  Watkins,  21  Wend. 
68;   Pratt  v.   Burr,   No    11372   Fed. 


Cas.,  s.  c.  5  Biss.  36;  In  re  Lammer, 
No.  8031  Fed.  Cas..  s.  c.  7  Biss.  269; 
In  re  Sauthoff,  No.  12380  Fed.  Cas., 
c.  c.  8  Biss.  35;  Long  v.  Murphy.  27 
Kan.  375. 

Contra,  In  re  Henkel.  No.  6362 
Fed.  Cas.,  s.  c.  2  Sawy.  305:  Kelly 
V.  Sparks,  54  Fed.  Rep.  70;  Com- 
stock  V.  Bechtel,  63  Wis.  656;  Ja- 
coby  V.  Distilling  Co..  41  Minn. 
227,  at  p.  230;  O'Donnell  v.  Scgar, 
25  Mich.  366.  See  also  /;;  re  Ir- 
vin  (C.  C.  A.  8th  Cir.),  120  Fed. 
r<ep.  7^2,,  9  Am.  B.  R.  689,  aflRrm- 
mg  In  re  Stone,  116  Fed.  Rep.  35, 
8  \m.   B.   R.  416;    lluenergardt  v. 


538 


LAW    AND     PROCEEDINGS    IN     BANKRUPTCY. 


ply  to  property  purchased  after  the  petition  is  filed  and  before 
tlie  adjudication,  since  the  title  remains  in  the  l)ankrupt  until 
that  time? 

In  Partnership  Property. — The  general  rule  is  that  there 
is  no  separate  exemption  to  the  individual  members  of  a 
tirm  out  of  undivided  partnershii)  property.*  The  exemp- 
tion is  several,  personal  and  individual,  as  well  in  regard  to 
the  property  to  whicli  it  applies  as  to  the  right  conferred. 
The  impracticability  of  granting  the  exemption  out  of  undi- 
vided partnership  property  grows  out  of  the  nature  of  such 
property  and  the  relations  of  partners  to  each  other  and  to 
the  creditors.  Property  belonging  to  a  firm  can  not  be  said 
to  be  the  separate  property  of  any  member  of  it.  One  part- 
ner has  no  exclusive  interest  in  it.  It  belongs  to  the  other 
partner  or  partners  as  much  as  it  does  to  him,  and  can  not  in 
whole  or  in  part  be  appropriated  (so  long  as  it  remains  undi- 


Brittain  Dry  Goods  Co.  (C.  C.  A. 
8th  Cir.),  ii6  Fed.  Rep.  31,  8  Am. 
B.  R.  341. 

*  In  re  Beauchamp,  loi  Fed. 
Rep.  106,  4  Am.  B.  R.  151;  In  re 
Lentz,  g7  Fed.  Rep.  486.  2  N.  B.  N. 
190 ;  In  re  Hosier,  112  Fed.  Rep. 
138,  7  Am.  B.  R.  268;  In  re  De- 
marest,  no  Fed.  Rep.  638,  6  Am. 
B.  R.  2^2;  In  re  Blodgett,  No.  1555 
Fed.  Cas.,  s.  c.  10  N.  B.  R.  145; 
In  re  Tonne,  No.  14095  Fed.  Cas., 
s.  c.  13  N.  B.  R.  170;  In  re  Corbett, 
No.  3220  Fed.  Cas.,  s.  c.  5  Sawy. 
206;  In  re  Price,  No.  11410  Fed. 
Cas.,  s.  c.  6  N  .B  .R.  400;  In  re 
Croft,  No.  3404  Fed.  Cas.,  s.  c.  8 
Biss.  188;  In  re  Handlin,  No.  6018 
Fed.  Cas.,  s.  c.  3  Dill.  290;  In  re 
Hughes,  No.  6842  Fed.  Cas.,  s.  c. 
8  Biss.  107;  Pond  v.  Kimbal,  loi 
Mass.  105;  In  re  Stewart,  No. 
13420  Fed.  Cas.,  s.  c.  13  N.  B.  R. 
295;  In  re  Boothroyd,  No.  1652 
Fed.  Cas.,  s.  c.  14  N.  B.  R.  223. 


See  contra,  In  re  Young,  No. 
18148  Fed.  Cas.,  s.  c.  3  N.  B.  R. 
440;  In  re  Richardson,  No.  11776 
Fed.  Cas.,  s.  c.  11  N.  B.  R.  114; 
In  re  Rupp,  No.  12 141  Fed.  Cas.,  s. 
c.  4  N.  B.  R.  95.  But  In  re  Rupp 
was  overruled  In  re  Corbett,  supra; 
In  re  Camp,  91  Fed.  Rep.  745,  I 
Am.  B.  R.  165,  under  the  law  of 
Georgia. 

See  also  In  re  Parks,  No.  10765 
Fed.  Cas.,  s.  c.  9  N.  B.  R.  270, 
where  a  house  was  built  with  part- 
nership funds  set  apart  for  that  pur- 
pose. See  also  In  re  Meriwether, 
107    Fed.    Rep.    102,    5    Am.    B.    R. 

435- 

In  Burns  v.  Allen,  67  N.  C.  140, 
it  was  held  that  an  exemption  might 
be  claimed  by  one  partner,  out  of 
partnership  property  with  the  con- 
sent of  the  co-partners,  but  not 
without   such   consent. 


EXEMPTIONS. 


539 


vided)  to  the  benefit  of  his  family.  It  may  be  wholly  con- 
tingent and  uncertain  whether  any  of  it  will  belong  to  him 
in  the  winding  up  of  the  business  and  the  settlement  of  his 
separate  account. 

In  some  states  separate  exemptions  to  individual  partners 
are  allowed  out  of  the  firm  property  under  state  law.  In  such 
states  the  bankruptcy  courts  will  allow  similar  exemptions.^" 


'In  Wisconsin.  In  re  Friedrich, 
100  Fed.  Rep.  284,  3  Am.  B.  R. 
801,  affirming  95  Fed.  Rep.  282.  In 
North  Carolina.  In  re  Wilson,  loi 
Fed.  Rep.  571,  4  Am.  B.  R.  260; 
In  re  Stevenson,  93  Fed.  Rep.  789, 
2   Am.    B.    R.   230;    In    re    Duguid, 


100  Fed.  Rep.  274,  3  Am.  B.  R.  794; 
In  re  Grimes,  94  Fed.  Rep.  800,  2 
Am.  B.  R.  r6o;  In  re  Seabolt,  113 
Fed.  Rep.  766,  8  Am.  B.  R.  57.  In 
Georgia.  In  re  Camp,  91  Fed.  Rep. 
745,  I  Am.  B.  R.  165. 
See  also  last  note  above. 


540  LAW    AND     PROCEEDINGS    IN     BANKRUPTCY. 


CHAPTER  XVIII. 


PREFERENCES    AND    LIENS. 


§  189.     The  general  nature  of  preferences  and  liens. 

Preferences  and  liens,  as  used  in  the  bankrupt  law,  usually 
relate  to  charge  upon  the  property  of  an  insolvent  debtor. 
But  an  insolvent  debtor  may  have  a  lien  upon  the  property  of 
another,  who  may  be  either  solvent  or  insolvent.  The  present 
inquiry  is  confined  to  preferences  and  liens  against  an  insolvent 
debtor's  property. 

A  preference  is  defined  by  the  act  itself  in  the  following 
words :  "A  person  shall  be  deemed  to  have  given  a  preference 
if,  being  insolvent,  he  has  within  four  months  before  the  filing 
of  the  petition  or  after  the  filing  of  the  petition  and  before  the 
adjudication  procured  or  suffered  a  judgment  to  be  entered 
against  himself  in  favor  of  any  person,  or  made  a  transfer  of 
any  of  his  property,  and  the  effect  of  the  enforcement  of  such 
judgment  or  transfer  will  be  to  enable  any  one  of  his  creditors 
to  obtain  a  greater  percentage  of  his  debt  than  any  other  of 
such  creditors  of  the  same  class."  ^ 

From  this  definition  it  appears  that  a  preference  may  be  cre- 
ated by  a  judgment  or  a  transfer. 

By  judgment,  in  this  section,  is  probably  meant  an  order 
or  decree  of  court  upon  which  is  founded  process  or  other 
proceedings,  the  object  of  which  is  to  take  hold  of  the  prop- 
erty and  withdraw  it  from  the  possession  and  control  of  the 
debtor  and  from  the  ordinary  reach  of  the  creditors  for  the 
payment  of  what  is  due  to  them. 

A  transfer  is  defined  to  mean  "the  sale  and  every  other  and 
different  mode  of  disposing  of  or  parting  with  property,  or  the 
possession  of  property,  absolutely  or  conditionally,  as  a  pay- 
ment, pledge,  mortgage,  gift  or  security. 


"  2 


'  B    A.  1898.  Sec.  60;  as  amended  'B   A.  1898,  Sec.  i,  clause  25. 

Job.  5,  1903,  32  Stat,  at  L.  797. 


PREFERENCES    AND    LIENS.  541 

A  lien,  as  used  in  the  bankruptcy  statute,  includes  a  hold 
cr  claim  which  one  person  has  upon  the  property  of  another 
as  a  security  for  some  debt  or  charge.  There  are  common 
law,  statutory  and  equitable  liens.  As  ordinarily  used  in  the 
sense  of  the  bankrupt  law,  liens  are  included  in  the  definition 
of  a  preference. 

A  preference  or  a  lien  may  be  valid  or  invalid  or  voidable. 
It  may  be  avoided  if  tainted  with  fraud,  or  it  may  be  avoided, 
although  otherwise  unobjectionable,  because  made  fraudulent 
by  the  provisions  of  the  bankrupt  statute, 

§  190.    Valid  preferences  and  liens. 

The  statute  expressly  recognizes  certain  preferences,  liens 
or  charges  to  be  valid. ^  They  are :  First,  taxes  legally  owing 
by  the  bankrupt  to  the  United  States,  state,  county,  district  or 
municipality.  Second,  the  actual  and  necessary  cost  of  pre- 
serving the  estate  subsequent  to  filing  the  petition.  Third, 
the  filing  fees  paid  by  creditors.  Fourth,  the  actual  cost  of 
administration.  Fifth,  wages  due  to  workingmen,  clerks  or 
servants,  which  have  been  earned  within  three  months  before 
the  date  of  commencement  of  proceedings,  not  to  exceed  $300 
to  each  claimant.  Sixth,  a  debt  owing  to  any  person  who  by 
the  laws  of  the  states  or  the  United  States  is  entitled  to  priority. 
Seventh,  any  preference,  valid  under  local  law'S,  given  more 
than  four  months  prior  to  the  filing  of  the  petition.^  Eighth, 
any  preference  created  wathin  four  months  before  the  filing 
cf  the  petition  wdiere  the  person  to  be  benefited,  or  his  agent 
therein,  shall  not  have  reasonable  cause  to  believe  that  it  was 
intended  thereby  to  give  a  preference ;  that  is  to  say,  a  prefer- 
ence which  has  been  acquired  in  good  faith. ■''  Ninth,  liens 
given  or  accepted  in  good  faith  and  not  in  contemplation  of  or 
in  fraud  upon  the  act,  and  for  a  present  consideration,  w'hich 

'B.  A.    1898,   Sec.   64&.  Am.   B.   R.  648;   In  re   Mitchell,  8 

"B.   A.    1898,    Sees,   bob  and  67^,  Am.  B.  R.  324,  116  Fed.  Rep.  87. 

last  clause.      In   re   West    Norfolk  '  B.   A.    1898,  boh  and  bye. 

Lumber   Co.,    112   Ted.   Rep.   759,   7 


542  LAW     AXn     l'ROCKi:i)lNGS    IX     BANKRUPTCY. 

h;i\o  boon  recoviled  according"  to  law,  if  record  thereof  was 
iiecessar\    in  order  to  impart  notice/ 

Properly  upon  which  there  is  a  vaHd  preference  or  lien 
passes  to  the  trustee,  if  he  elects  to  take  it,  subject  to  such 
equities,  liens  or  incumbrances,  whether  created  by  operation 
of  law  or  by  the  act  of  the  bankrupt.' 

The  courts  of  bankruptcy  will  enforce  in  the  l)ankruptcy 
proceedings  all  rights  of  persons  dealing  with  the  bankrupt 
prior  to  his  bankruptcy  and  his  generafl  creditors,  .as  they 
existed  at  the  time  of  the  tiling  of  the  petition  in  bankruptcy. 
In  other  words,  the  courts  of  bankruptcy  will  administer  the 
debtor's  property,  having  respect  to  all  claims  and  liens  against 
it,  w  hich  are  valid  under  the  bankrupt  law  and  the  state  law 
at  the  time  of  filing  the  petition  in  bankruptcy  and  -will  avoid 
such  as  are  invalid.  The  courts  will  work  out  in  the  bank- 
ruptcv  proceedings  the  rights  of  all  the  parties  as  they  exist 
according  to  law  and  equity  without  favor  to  the  debtor  or 
creditors. 

§  191.     Invalid  preferences  and  liens. 

The  bankrupt  act  provides  that  certain  preferences  and  Hens 
shall  be  void  or  voidable.  Such  are :  First,  those  which  are 
invalid  under  the  state  law.^  Second,  any  preference  created 
within  four  months  before  the  petition  is  filed  and  the  person 
to  be  benefited  has  reasonable  cause  to  believe  that  it  was  in- 
tended thei-eby  to  create  a  preference."  Thirct  a  lien  created 
by  legal  proceedings  begun  within  four  months  before  the 
petition  w^as  filed,  where  the  person  sought  to  be  benefited  had 

*  B.    A.    1898,    Sec.    bjd.      In    re  New    Orleans    Savings    Institution. 

West  Norfolk  Lumber  Co.,  7  Am.  95  U.  S.  764,  24  L.  Ed.  589;  Cook 

B.  R.  648,  112  Fed.  Rep.  759.  v.  Tullis,    18  Wall.  332,  21    L.   Ed. 

^  York  Mfg.  Co.  V.  Cassell,  201  U.  933;    Stewart   v.    Piatt,    loi    U.    S. 

S.  344,  so  L.  Ed.   782,   15  Am.   B.  731,  25  L.  Ed.  816.     See  also  Title 

R.   633;   Hewitt   V.   Berlin   Machine  to    bankrupt's    property,     Sec.     149, 

Works,    194  U.    S.   296,   48  L.    Ed.  ante. 

986,  II  Am.  B.  R.  709;   Metcalf  v.  '  B.  A.  1898,  Sees.  67  a  and  e.  last 

Barker,    187   U.   S.    165,   47   L.    Ed-  clause. 
122,  9  Am.  B.   R.  36;   Yeatman  v.  "^  B.  A./  1898,   Sec.  60b. 


PREFERENCES    AND    LIENS.  543 

reasonable  cause  to  believe  that  the  debtor  was  insolvent  and  in 
contemplation  of  bankruptcy,  or  that  such  lien  was  sought  and 
permitted  in  fraud  of  the  bankrupt  act.''  And,  fourth,  any 
levy,  judgment,  attachment  or  other  lien  obtained  by  legal  pro- 
ceedings within  four  months  prior  to  the  filing  of  the  petition.* 
In  addition  to  these  any  preference  or  lien  which  is  tainted 
with  fraud  is  in  itself  void,  irrespective  of  the  provisions  of  the 
bankrupt  act.  These  several  liens  will  be  more  fully  consid- 
ered in  connection  with  the  treatment  of  the  particular  subjects 
immediately  following. 

Whenever  a  preference  or  a  lien  which  is  declared  fraud- 
ulent or  invalid  under  the  bankrupt  act  has  been  placed  upon 
property,  the  trustee  takes  such  property  discharged  and  re- 
leased from  such  lien  or  preference.^  The  trustee  is  author- 
ized to  reclaim  and  recover  such  property  or  its  value.''^ 

§  192.     Liens  created  by  judgments,  attachments,  levies,  etc. 

The  act  provides  ''that  all  levies,  judgments,  attachments, 
or  other  liens,  obtained  through  legal  proceedings  against  a 
person  who  is  insolvent,  at  any  time  within  four  months  prior 
to  the  filing  of  a  petition  in  bankruptcy  against  him,  shall  be 
deemed  null  and  void  in  case  he  is  adjudged  a  bankrupt,  and 
the  property  affected  by  the  levy,  judgment,  attachment,  or 
other  lien  shall  be  deemed  wholly  discharged  or  released  from 
the  same,  and  shall  pass  to  the  trustee  as  a  part  of  the  estate 
of  the  bankrupt.^  This  provision  applies  to  voluntary  as  well 
as  involuntary  proceedings  in  bankruptcy.- 

This  provision  does  not  avoid  the  levies  and  liens  therein 

°  B.  A.    1898,   Sec.  67c.  ferencc   committee   reported  to   the 

^  B.    A.    1898,    Sec.   67/.  House  of  Representatives.  June  28, 

"B.  A.  1898,  Sees.  60,  67  and  70;  1898,    paragraph    XIX,     31      Cong. 

as  amended  Feb.   5,   1903;   Trimble  Record,  p.  7205. 

V.  Woodhead,  102  U.  S.  647,  26  L.  'In    re   Richards    (C.    C.    .\.    7th 

Ed.  290.  Cir.),  96  Fed.  Rep.  935,  3  Am.  B. 

'B.   A.    1898,   Sec.   67/.  R.  145;    Brown     v.     Case     (S.     C. 

This    provision    was    inserted    in  Mass.),    6   Am.    B.    R.    744;    /;;    re 

the   bill    for   the    first   time   by   the  Blair,  108  Fed.  Rep.  529,  6  Am.  B. 

conference    conmiittee,    just    before  R.  206. 

its  passage.     See  statement  of  con- 


544  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

referred  to  against  all  the  world,  but  only  against  the  trus- 
tee in  bankruptcy  and  those  claiming  under  him,  so  that  the 
property  may  pass  to  and  be  distributed  by  him  among  the 
creditors  of  the  bankrupt.  It  has  been  held  that  a  judgment 
obtained  within  lour  months  on  a  note  that  waives  homestead 
rights  may  be  enforced  against  the  exempt  property  of  the 
bankrupt.-'  antl  that  an  attachment  levied  upon  a  homestead 
within  the  four  months  period  is  not  dissolved.*  The  courts  of 
bankruptcy  will  usually  withhold  a  discharge  pending  such 
litigation,  where  the  discharge  would  bar  the  debt.  But  a 
discharge  will  not  be  withheld  where  it  constitutes  no  bar  to 
judgment.^ 

In  order  to  avoid  or  dissolve  a  levy,  judgment,  attachment 
or  other  lien  under  Sec.  67/  of  the  bankrupt  act  three  things 
must  concur.  First,  a  lien  must  be  created  through  legal  pro- 
ceedings; second,  it  must  be  created  within  four  months  before 
a  petition  in  bankruptcy  is  filed,  and,  third,  the  debtor  must 
be  insolvent  at  the  time.  If  any  one  of  these  elements  is  ab- 
sent the  judgment,  levy,  attachment  or  lien  is  valid  and  will 
be  so  recognized  by  the  courts  of  bankruptcy. 

§  192a.     First :  A  lien  must  be  created  through  legal  pro- 
ceedings. 

The  phrase  legal  proceedings  includes  any  proceeding  in 
a  court  of  justice  by  which  a  party  pursues  a  remedy  which 
the  law  affords  him.  As  used  in  Section  67/  of  the  bankrupt 
act  it  obviously  refers  to  the  use  of  judicial  process.^  It  is 
not  confined  to  any  particular  form  of  writ,  execution  or  at- 
tachment.    It  has  been  applied  to  proceedings  in  attachment " 

^McKenney    v.    Cheney,    118   Ga.  T02    Fed.    Rep.    291,   4   Am.    B.    R. 

387;   Bell  V.   Dawson  Grocery  Co.,  126. 

120  Ga.  628.  'In  re  Tune,   115   Fed.   Rep.  906. 

'Robinson    v.    Wilson,    15    Kan.  8    Am.    B.    R.    285;    In   re    Moore, 

595.  107  Fed.  Rep.  234,  6  Am.  B.  R.  175; 

^  In    re    Weaver,    144    Fed.    Rep.  Thompson    v.    Ragan,    25    Ky.   Law 

229,  t6  Am.  B.  R.  265.  Rep.   1684. 

■/k  re  Emslie  (C.  C.  A.  2d  Cir.), 


PREFERENCES    AND    LIENS. 


545 


and  garnishment,'  to  a  levy  of  execution/  to  a  lien  created  by 
a  judgment,'  to  a  seizure  of  property  by  a  vendor  to  subject 
it  to  the  payment  of  the  purchase  money,"  to  a  seizure  of. 
property  on  a  writ  of  replevin,'  and  to  proceedings  in  aid  of 
execution.® 

It  is  essential  to  invalidate  a  judgment,  levy,  attachment  or 
other  lien  under  Sec.  67/  of  the  bankrupt  act  that  a  lien  be 
created  through  legal  proceedings,  which  may  be  had  within 
the  four  months'  period.  It  is  not  sufficient  that  merely  a  judg- 
ment or  decree  be  obtained  or  judicial  process  issued  and 
served.  It  has  been  expressly  ruled  by  the  supreme  court  that 
"a  judgment  or  decree  in  enforcement  of  an  otherwise  valid 
preexisting  lien  is  not  the  judgment  denounced  by  the  statute 
which  is  plainly  confined  to  judgment  creating  liens."  ^  Thus 
it  has  been  held  that  judgments  to  enforce  a  lien  created  b}- 
the  commencement  of  a  judgment  creditor's  suit,'''  or  an 
attachment  lien."  or  a  lien  created  by  garnishment,^'  or  a  lien 
created  by  a  judgment.'^  or  otherwise  valid  liens  existing  prior 


^  In  re  McCartney,  109  Fed.  Rep. 
629,  6  Am.  B.  R.  367;  In  re  Beals, 
116  Fed.  Rep.  530,  8  Am.  B.  R. 
639- 

*  In  re  Darwin  (C.  C.  A.  6th 
Cir.),  117  Fed.  Rep.  407,  8  Am.  B. 

R.  703. 

°/m  re  Richards  (C.  C.  A.  7th 
Cir.),  96  Fed.  Rep.  935,  3  Am.  B. 
R.  14s;  IMohr  &  Sons  v.  Mattox, 
120  Ga.  962. 

"In  re  Wilkes,  112  Fed.  Rep.  975, 
7  Am.  B.  R.  574. 

'  In  re  Haynes,  123  Fed.  Rep. 
looi,  10  Am.  B.  R.  715;  In  re 
Flymes  Buggy  &  Imp.  Co.,  130  Fed. 
Rep.  977,   12  .A.m.  B.  R.  477. 

*  Rodgers  &  Son  v.  Forbes  & 
Schoen,  23  Ohio  Cir.  Ct.  Rep.  438. 

"Metcalf    V.    Barker,    187  U.  S. 

174,  47  L.  Ed.  122,  9  Am.  B.  R. 
36. 

"Metcalf   V.    Barker,    187  U.  S. 


165,  47  L.  Ed.  122,  9  Am.  B.  R. 
36;  Pickens  v.  Roy,  187  U.  S.  177, 
47  L.  Ed.  128,  9  Am.  B.  R.  47;  Tay- 
lor V.  Taylor,  59  N.  J.  Eq.  84,  4 
Am.  B.  R.  211;  Frazier  v.  Southern 
L.  &  T.  Co.  (C.  C.  A.  4th  Cir.),  99 
Fed.  Rep.  707,  3  Am.  B.  R.  710; 
Doyle  V.  Heath,  22  R.  I.  213,  4 
Am.  B.  R.  705;  Nat'l  Bank  v. 
Hobbs,  118  Fed.  Rep.  626,  9  Am- 
B.  R.  190;  Snyder  v.  Smith,  185 
Mass.  58. 

"  In  re  Snell,  125  Fed.  Rep.  154. 
1 1  \m.  B.  R.  35 ;  In  re  Beaver  Coal 
Co.,  no  Fed.  Rep.  630,  6  Am.  B. 
R.  404;  In  re  Blair,  108  Fed.  Rep. 
529,  6  Am.  B.  R.  206. 

'"  Bank  of  Comm.  v.  Elliott,  109 
\y\s.  648,  6  Am.  B.  R.  409. 

"Owen  V.  Brown  (C.  C.  A.  6th 
Cir.),  120  Fe(l.  Rep.  812,  9  Am. 
B.  R.  717;  Ilillyer  v.  LeRoy,  179 
N.  Y.  369. 


546 


LAW     AM)     PROCEEDINGS    IN     BANKRUPTCY 


to  the  four  months'  period  arc  not  affected  by  an  adjudication 
in  bankruptcy.  It  is  equall}-  clear  that  a  judgment  to  foreclose 
a  valid  mortgage  given  prit)r  to  the  four  months'  period  would 
not  be  invalidated  by  bankruptcy  of  the  mortgagor,'*  although 
the  judgment  was  obtained  within  the  four  months'  period, 
because  these  liens  arc  not  created,  but  are  merely  enforced,  by 
the  legal  proceedings. 

The  effect  of  a  legal  proceeding  to  create  a  lien  and  the 
time  at  which  it  attaches  is  determined  by  the  local  law  as 
construed  by  the  highest  court  of  the  state  where  such  pro- 
ceeding is  had.^^ 

Liens  created  by  statute  which  may  be  enforced  by  legal 
proceedings  are  not  affected  by  Sec.  67/  of  the  bankrupt  act. 
A  mechanic's  lien  for  labor  or  materials  ^"  or  a  livery  keeper's 
lien  ^"  is  not  dissolved  although  legal  proceedings  are  taken 
within  the  four  months'  period  to  enforce  the  same. 


§  192b.     Second :    The  lien   must   be   created  within  four 
months. 

Whether  a  judicial  lien  may  be  annulled  or  dissolved  by 
bankruptcy  proceedings  depends  upon  the  time  when  it  was 
created. 

Sec.  67/  of  the  bankrupt  act  applies  only  to  such  liens  as 
are  created  within  four  months  prior  to  the  filing  of  the  petition 
in  bankruptcy.^    Liens  obtained  by  judgment,  levy,  attachment 


"  Reed  v.  Equitable  Trust  Co., 
115  Ga.  780,  8  Am.  B.  R.  242. 

''In  re  Darwin  (C.  C  A.  6th 
Cir.),  117  Fed.  Rep.  407,  8  Am.  B. 
R.  703;  In  re  Blair,  108  Fed.  Rep. 
529,  6  Am.  B.  R.  206;  In  re  John- 
I  .son,  108  Fed.  Rep.  2>72,^  6  Am.  B.  R. 
202;  In  re  Wilkes,  112  Fed.  Rep. 
975,  7  Am.  B.  R.  574;  London 
Guaranty  &  Accident  Co.  v.  Moss- 
ness,  108  Til.  .-Xpp.  440. 

"/«  re  Kmslie  fC.  C.  A.  2d  Cir.), 
102  Fed.  Rep.  291,  4  Am.  B.  R. 
126;    Fehling   v.    Goings,    67    N.    J. 


Ch.  375.  58  Atl.  Rep.  642,  13  Am.  B. 

R.  154- 

"  In  re  Pratesi,  126  Fed.  Rep. 
588,  II  Am.  B.  R.  319;  In  re  Mero, 
128  Fed.  Rep.  630,  12  Am.  B.  R. 
171. 

'  In  Mctcalf  V.  Barker,  187  U.  S. 
174,  47  L.  Ed.  122,  9  Am.  B.  R. 
36,  the  supreme  court  say :  "It  is 
the  lien  created  by  a  levy,  or  a  judg- 
ment, or  an  attachment,  or  other- 
wise, that  is  invalidated,  and  that 
where  the  lien  is  obtained  more 
than   four  months   prior  to  the  fil- 


■  'REFERENCES    AND    LIENS. 


547 


or  otherwise  within  that  period  may  be  dissolved  or  avoided. - 
Those  which  are  obtained  prior  to  four  months  before  the 
petition  in  bankruptcy  is  filed  are  valid  and  enforceable  and 
are  so  recognized  by  the  courts  of  bankruptcy.'' 

This  section  of  the  bankrupt  act  does  not  apply  to  judg- 
ments, levies  or  attachments  obtained  after  the  petition  is 
filed.*  The  reason  for  this  is  that  it  is  not  within  the  four 
months'  period  specified  in  the  act  and  also  that  no  lien  can  be 
created  upon  the  property  of  the  bankrupt  by  such  proceedings 
after  the  petition  is  filed."  Such  property  passes  to  the  trus- 
tee unafi^ected  by  the  legal  proceedings. 

The  time  a  lien  attaches  depends  upon  the  state  law.''    The 


ing  of  the  petition,  it  is  not  only 
not  to  be  deemed  to  be  null  and 
void  on  adjudication,  but  its  valid- 
ity is  recognized.  When  it  is  ob- 
tained within  four  months  the  prop- 
erty is  discharged  therefrom,  but 
not  otherwise." 

As  to  computing  time,  see  Jones 
V.  Stevens,  94  :\Ie.  582,  5  Am.  B. 
R.  571. 

'  Clarke  v.  Larremore,  188  U. 
S.  486,  47  L.  Ed.  555,  9  Am.  B.  R. 
476,  affirming  In  re  Kenney,  105 
Fed.  Rep.  897,  5  Am.  B.  R.  355;  In 
re  Darwin  (C.  C.  A.  6th  Cir.),  117 
Fed.  Rep.  407,  8  Am.  B.  R.  703;  In 
re  Richards  (C.  C.  A.  7th  Cir.),  96 
Fed  Rep.  935,  3  Am.  B.  R.  145; 
In  re  Wilkes,  112  Fed.  Rep.  975, 
7  Am.  B.  R.  574;  In  re  Hymes 
Buggy  &  Implement  Co.,  130  Fed. 
Rep.  977,  12  Am.  B.  R.  477;  In  re 
Haynes,  123  Fed.  Rep.  looi,  10 
Am.  B.  R.  715;  /)(  re  Tune,  115 
Fed.  Rep.  906,  8  .\m.  B.  R.  285. 

"  Metcalf  v.  Barker,  187  U.  S.  165, 
47  L.  Ed.  122,  9  Am.  B.  R.  36;  Pick- 
ens v.  Roy,  187  U.  S.  177,  47  L.  Ed. 
128,  9  Am.  B.  R.  47;  In  re  Blum- 
berg,  94  Fed.  Rep.  476.  i  Am.  B.  R. 
633;  In  re  Blair,  108  Fed.  Rep.  529, 


6  Am.  B.  R.  206;  Owen  v.  Brown 
(C.  C.  A.  8th  Cir.),  120  Fed.  Rep. 
812,  9  Am.  B.  R.  717;  Snyder  v. 
Smith.  185  Mass.  58;  In  re  Snell, 
125  Fed.  Rep.  154.  11  Am.  B.  R. 
35;  Tucker  v.  Denico,  26  R.  I.  560; 
Jlillyer  v.  LeRoy,  179  N.  Y.  369; 
Camp  v.   Young,   119  Ga.  981. 

*  in  re  Engle,  105  Fed.  Rep.  893, 
5  Am.  B.  R.  ;iy2;  Kinmouth  v. 
Braeutigam,  63  N.  J.  Eq.  103,  10 
Am.  B.  R.  83;  Kinmouth  v.  Braeu- 
tigam, 4  Am.  B.  R.  344;  St.  Cyr  v. 
Daignault,  103  Fed.  Rep.  854.  4 
Am.  B.  R.  638;  In  re  Duble,  117 
Fed.  Rep.  794,  9  Am.  B.  R.  121  ; 
State  Bank  v.  Co.x  (C.  C.  A.  7th 
Cir.),  143  Fed.  Rep.  91,  16  Am.  B. 

R.  32. 

^  See  cases  cited  in  last  note 
above. 

"In  re  Darwin  (C.  C.  A.  6th 
Cir.),  117  Fed.  Rep.  407,  8  Am.  B. 
R.  703;  In  re  Blair,  108  Fed.  Rep. 
529,  6  Am.  B.  R.  206;  In  re  John- 
so:n,  108  Fed.  Rep.  ^7^,  6  Am.  B. 
R.  202;  In  re  Wilkes,  112  Fed.  Rep. 
975.  7  Am.  B.  R.  574;  London 
Guaranty  &  Accident  Co.  v.  Moss- 
ness,    108   111.   .'\pp.  440. 


548 


l.AW     AM)     PROCEEDINGS    IN     BANKRUPTCY. 


general  rule  is  that  a  lien  is  created  whenever  by  the  law  and 
the  usage  of  the  state  the  charge  created  by  process  of  law 
becomes  fixed,  fastened  to  the  property  itself,  so  as  to  make  it 
specifically  liable  for  the  debt,  In  various  states  the  property 
becomes  so  charged  at  ditferent  stages  in  the  proceedings,  as 
by  the  rendition  of  judgment,  by  the  delivery  of  the  execution 
to  the  sheriff,  by  the  commencement  of  the  levy  or  it  may 
relate  back  to  the  beginning  of  the  suit  or  the  first  day  of  the 
term  at   which  the  judgment  was   rendered." 

A  lien  created  by  a'  judgment  and  levy  of  execution  within 
four  months  of  the  filing  of  a  petition  in  bankruptcy  is  null 
and  void  where  the  officer  has  not'  paid  the  money  collected 
on  the  execution  to  the  judgment  creditor.**  It  has  been 
intimated  by  the  supreme  court "  and  held  by  other  courts  ^° 
that  where  the  money  has  been  collected  upon  an  execution 


''In  re  Mencke  v.  Rosenberg,  202 
Penn.  St.  Rep.  131,  9  Am.  B.  R. 
222,,  it  was  held  that  a  testatum  H  fa 
issued  within  four  months  on  a 
judgment  entered  prior  to  that  time 
was  avoided  by  Sec.  67/.  In  re 
Darwin  (C.  C.  A.  6th  Cir.),  117 
Fed.  Rep.  407,  8  Am.  B.  R.  703,  it 
was  held  that  a  lien  of  execution 
could  not  be  relating  back  to  the 
beginning  of  the  suit  antedate  the 
date  of  acquiring  the  property 
seized.  In  Waller  v.  Be.st,  3  How. 
Ill,  a  lien  was  held  to  attach  under 
the  laws  of  Kentucky  upon  the  de- 
livery of  the  writ  to  the  sheriff. 

Voyles  v.  Parker.  4  Fed.  Rep. 
210,  9  Biss.  326,  where  the  lien  was 
held  to  relate  back  to  the  beginning 
of  a  suit  under  a  local  statute. 

In  Reed  v.  Mclntyre,  98  U.  S. 
507,  25  L.  Ed.  171,  it  was  held 
that  a  levy  on  the  property  of  a 
bankrupt  after  it  had  been  con- 
veyed to  an  assignee  for  the  ben- 
efit of  creditors  did  not  constitute 
a  valid  lien,  because  the  title  to  the 


property  had  passed  out  of  the 
bankrupt  before  the  levy. 

*  Clarke  v.  Larremore,  trustee, 
188  U.  S.  486,  47  L-  Ed.  555,  9  Am. 
B.  R.  476;  affirming  In  re  Kenney, 
105  Fed.  Rep.  897.  5  Am.  B.  R.  355; 
In  re  Benedict  (Sup.  Ct.  N.  Y.), 
8  Am.   B.   R.  463. 

In  re  Breslauer,  121  Fed.  Rep. 
910,  10  Am.  B.  R.  22,,  it  was  held 
recoverable  by  trustee  where  sheriff 
had  notice  of  bankruptcy  before 
payment  to  creditor. 

"  Clarke  v.  Larremore,  trustee, 
188  U.  S.  486,  47  L-  Ed.  555,  9  Am. 
B.  R.  476. 

"Botts  v.  Hammond  (C.  C.  A. 
4th  Cir.),  99  Fed.  Rep.  916,  3  Am. 
B.  R.  775;  Levor  v.  Seiter  (Sup. 
Ct.  App.  Div.  N.  Y.),  8  Am.  B.  R. 
459,  Peck  V.  Connell  (Com.  Pleas 
Pa.),  6  Am.  B.  R.  93;  Davis  v. 
Jewetts  Bros.,  17  S-  D.  410;  In  re 
Bailey,  144  Fed.  Rep.  214,  16  Am. 
B.  R.  289;  In  re  Blair,  102  Fed. 
Rep.  987,  4  Am.  B.  R.  220. 


PREFERENCES    AND    LIENS.  549 

issued  upon  a  judgment  obtained  against  the  bankrupt  within 
the  four  months'  period  and  paid  to  tlie  judgment  creditor 
before  the  fibng  of  the  petition  in  bankruptcy  that  it  does  not 
fall  within  the  prohibition  of  Sec.  67/.  The  reason  for  this 
distinction  is  that  Sec.  67  refers  to  existing  liens  and  does  not 
cover  cases  where  a  lien  has  been  merged  in  judgment,  execu- 
tion and  sale  and  the  money  distributed.  The  lien  is  thereby 
extinguished.  It  would  seem  that  property  so  paid  to  a  judg- 
ment creditor  might  be  recovered  in  a  proper  case  under  Sec. 
60b,  as  a  preference  created  by  a  judgment.  The  bankruptcy 
court  may  intervene  to  stay  the  process  at  the  instance  of  the 
creditors  who  had  or  were  about  to  institute  bankruptcy  pro- 
ceedings.    This  has  frequently  been  done.^^ 

A  lien  created  by  a  judgment  obtained  within  the  four 
months'  period  on  a  note  which  gave  the  holder  a  power  of 
attorney  to  enter  up  judgment  against  the  debtor  in  case  of 
nonpayment  at  maturity  is  void,  although  the  note  was  given 
prior  to  that  period.^"  The  reason  is  that  the  lien  is  created  by 
the  judgment  and  not  by  giving  the  note. 

An  execution  levied  within  four  months  of  bankruptcy  upon 
a  judgment  obtained  prior  to  that  period  is  annulled  by  Sec. 
67//^  but  not  where  the  judgment  so  obtained  created  a  lien 
on  the  property  of  the  debtor.^*  A  fund  discovered  by  pro- 
ceedmgs  in  aid  of  execution  should  be  paid  to  the  trustee  and 
not  to  the  judgment  creditors. ^^ 

The  seizure  of  property  by  a  vendor  to  subject  it  to  the  pay- 
ment of  the  purchase  money  falls  within  the  prohibition  of  the 
statute."  Sec.  67/  also  covers  a  seizure  of  property  on  a  writ 
of  replevin  within  four  months  of  bankruptcy.^" 

"Clarke    v.    Larremore,    trustee,  dr.),  117  Fed.  Rep.  407,  8  Am.  B. 

188  L'.  S.  486,  47  L    Ed.  555.  9  .Xm.  R.  703;   Mencke  v.  Rosenberg,  202 

B.  R.  476;   Peck  V.  Connell    (Com.  Pcnn.   St.    Rep.    131,  9   Am.   B.    R. 

Pleas  Pa.),  6  Am.  B.  R.  93.  323. 

"In   re  Richards    (C.    C.   A.   7th  "  Hillyer    v.    LeRoy,    179    N.    Y. 

Cir.),  96  Fed.   Rep.  935,  3  Am.   B  369. 

R.  145;  Rothcrmel  V.  Mover,  24  Pa  "  Rodgers   &    Son    v.     Forbes   & 

Super.  Ct    R.  325;  Wilson  v.  Nel-  Schoen,  23  Ohio  Cir.  Ct.  Rep.  438. 

son.  183  v.  S.  191,  46  L.  Ed.  147,  7  '"In    re    Wilkes,    112    Fed.    Rep. 

Am.  B.  R.  142.  975,  7  Am.  B.  R.  574. 

In    re    Darwin    (C.    C.    A.    6th  "In   re   Hymes  Buggy  &   Implc- 


IS 


550 


LAW     AND     PROCEEDINGS    IN     BANKRUPTCY. 


An  aitachnient  in  a  suit  to  collect  a  simple  contract  debt 
begun  within  iouv  months  before  the  filing  of  a  petition  in 
bankruptc}-  is  in\alidaled  by  an  adjudication."'  Where  the 
attachment  lien  existed  prior  to  the  four  months'  period  a 
judgment  within  that  period  enforcing  the  lien  is  valid.'''*  The 
same  rule  has  been  recognized  by  the  courts  with  reference  to 
garnishment  proceedings."" 

When  a  judgment  is  rendered  null  and  void  because  obtained 
\vithin  the  four  months'  period,  such  nullity  and  invalidity 
relate  back  to  the  time  of  the  entry  of  the  judgment  and  affects 
that  and  all  subsequent  proceedings.-'  The  property  afifected 
by  such  lien  is  wholly  discharged  and  released  therefrom. 
If  the  property  has  been  sold  to  a  bona  fide  purchaser  the  fund 
received  from  such  sale  takes  the  place  of  the  property  and 
passes  to  the  trustee.^" 

§  192c.    Third :  The  debtor  must  be  insolvent. 

It  is  essential  to  bring  a  case  within  the  prohibition  that  it 
appear  that  the  lien  was  obtained  against  a  person  who  was  in- 
solvent at  the  time.  If  it  does  not  so  appear  the  lien  is  valid.' 
It  is  not  sut^cient  that  the  levy  caused  insolvency.^ 


ment  Co.,  130  Fed.  Rep.  977,  12 
Am.  B.  R.  477;  In  re  Haynes,  123 
Fed.  Rep.   looi,   10  Am.  B.  R.  715. 

"/h  re  Tune,  8  Am.  B.  R.  285, 
IIS  Fed.  Rep.  go6;  In  re  Moore,  6 
Am.  B.  R.  175,  107  Fed.  Rep.  234; 
Thompson  v.  Ragan,  25  Ky.  Law 
Rep.   1684. 

^^  In  re  Beaver  Coal  Co.,  no 
Fed.  Rep.  630,  6  Am.  B.  R.  404; 
In  re  Blair,  108  Fed.  Rep.  529,  6 
Am.  B.  R.  206;  In  re  Snell,  125 
Fed.  Rep.  154,  11  Am.  B.  R.  35. 

^"Garnishment  held  valid  in  Bank 
of  Commerce  v.  Elliott,  109  Wis. 
648,  6  Am.  B.  R.  409;  In  re  Swift, 
III  Fed.  Rep.  503,  7  Am.  B.  R.  117. 


Garnishment  held  invalid  In  re 
McCartney,  109  Fed.  Rep.  629,  9 
Am.  B.  R.  367;  In  re  Beals,  116 
I'ed.   Rep.  530,  8  Am.  B.  R.  639. 

''  Clarke  v.  Larremore,  188  U.  S. 
486,  47  L.  Ed.  555,  9  Am.  B.  R.  476 ; 
in  re  Beals,  8  Am.  B.  R.  639,  116 
Ted.  Rep.  530. 

""'  Clarke  v.  Larremore,  188  U.  S. 
4S6,  47  L.  Ed.  555,  9  Am.  B.  R. 
476. 

'  Snnpson  v.  Van  Etten,  108  Fed. 
Rep.  199,  6  Am.  B.  R.  204. 

■Chicago  Title  &  Trust  Co.  v. 
Roebhng,  107  Fed.  Rep.  71,  5  Am. 
B.    R.  368. 


PREFERENCES    AND    LIENS.  551 

§  I92d.    PreservingliensunderSec.67f  for  general  creditors. 

Judicial  liens  are  not  necessarily  held  null  and  void. 
The  court  may  preserve  them,  if  to  destroy  the  lien  would  mili- 
tate against  the  best  interests  of  the  estate.  A  familiar  exam- 
ple is  where  there  are  subordinate  valid  liens  which  would 
take  precedence  if  the  judicial  lien  be  null  and  void/  It  is 
possible  that  if  the  lien  be  avoided  the  whole  property  to 
which  the  lien  attached  might  be  exhausted  by  claims,  which 
should  justly  be  paid  after  the  judicial  lien. 

In  such  cases  the  court  may,  on  due  notice,  order  that  the 
right  under  such  levy,  judgment,  attachment  or  other  lien 
shall  be  preserved  for  the  benefit  of  the  estate,  and  thereupon 
the  same  may  pass  to  and  be  preserved  by  the  trustee  for  the 
benefit  of  the  estate.-  In  other  words,  the  trustee  is  subro- 
gated to  the  rights  of  a  particular  creditor  for  the  benefit  of 
all  the  creditors.  Substantially  the  same  provision  is  made 
with  reference  to  liens  created  by  judicial  proceedings  begun 
within  four  months  of  bankruptcy  proceedings."'  The  court 
is  authorized  to  order  such  conveyance  as  may  be  necessary 
to  carry  the  purpose  of  this  section  into  efifect.  But  nothing 
contained  in  this  provision  has  the  effect  to  destroy  or  impair 
the  title  obtained  by  such  levy,  judgment,  attachment,  or  other 
lien  of  a  bona  fide  purchaser  for  value  who  has  acquired  the 
same  without  notice  or  reasonable  cause  for  inquiry.* 

§  193.    Dissolution  of  liens. 

The  act  provides^  that  a  lien  created  by  or  obtained  in  or 
pursuant  to  any  suit  or  proceeding  at  law  or  in  equity,  includ- 

'  First   National    Bank   v.    Staake,  Baird,    126   Fed.    Rep.   845,    11   Am. 

202   U.   S.    141,   50   L.    Ed.  967,    15  B.  R.  435;  In  re  Merrow,  131  Fed. 

Am.  B.  R.  639.  Rep.   993.    12   Am.    B.    R.  615;    Re- 

''B.    A.     1898,    Sec.    67/^.      /;;    re  ceivers,    etc.,   v.    Staake    (C.    C.    A. 

Moore,    107   Fed.   Rep.  234,  6  Am.  4th    Cir.),    133    Fed.    Rep.    717,    13 

B.  R.   175;   First  National  Bank  v.  Am.  B.  R.  281. 

Staake,  202   U.    S.    141,   50  L.   Ed.  '  B.  A  .1898,  Sec.  67c. 

967,  15  Am.  B.  R.  639.  affirming  (C.  "  B.  A.  Sec.  67/.     As  to  purchaser 

C.  A.  4th  Cir.),   133  Fed.  Rep.  717,  with  notice,  see  Brown  v.  Case,  185 
13  Am.  B.  R.  281 ;  affirming  In  re  Mass.  45,  6  Am.  B.  R.  744. 


5SZ 


LAW     AND     PROCEEDINGS    IN     BANKRUPTCY. 


ing  an  attachment  upon  mesne  process  or  a  judgment  by  con- 
fession, which  was  begun  against  a  person  within  four  months 
before  the  tihng  of  a  petition  in  bankruptcy  by  or  against 
such  person,  shall  be  dissolved  by  the  adjudication  of  such 
person  to  be  a  bankrupt,  if,  first,  it  appears  that  said  lien  was 
obtained  and  permitted  while  the  defendant  was  insolvent,  and 
that  its  existence  and  enforcement  will  work  a  preference ; "  or, 
second,  the  party  or  parties  to  be  benefited  thereby  had  rea- 
sonable cause  to  believe  the  defendant  was -insolvent  and  in 


*B.  A.  1898,  Sec.  67c.  In  re 
Dovigliert\%  109  Fed.  Rep.  480,  6 
Am.  B.  R.  457. 

=  Wilson  V.  City  Bank,  17  Wall. 
473,  21  L.  Ed.  723;  Clark  v.  Iselin, 
21  Wall.  360,  22  L.  Ed.  568;  Wat- 
son V.  Taylor,  21  Wall.  378,  22  L. 
Ed.  576;  Liule  v.  Alexander,  21 
Wall.  500,  22  L.  Ed.  625 ;  National 
Bank  v.  Warren,  96  U.  S.  539,  24 
L.  Ed.  640;  Rogers  v.  Palmer,  102 
U.  S.  263,  26  L.  Ed.  164;  Traders' 
Bank  v.  Campbell,  14  Wall.  87,  20 
L.  Ed.  832;  Buchanan  v.  Smith,  16 
Wall.  277,  21  L.  Ed.  280;  Hoover  v. 
Wise,  91  U.  S.  308,  23  L.  Ed.  392; 
In  re  Kerr,  No.  7728  Fed.  Cas.,  2 
N.  B.  R.  388;  In  re  Campbell,  No. 
2349  Fed.  Cas.,  i  Abb.  U.  S.  185; 
In  re  Schnepf,  No.  12471  Fed.  Cas., 
2  Ben.  72. 

As  to  judgment  notes  and  judg- 
ment by  confession,  see  Clark  v. 
Iselin,  21  Wall.  360,  22  L.  Ed.  568; 
Watson  V.  Taylor,  21  Wall.  378,  22 
L.  Ed.  576;  Haughey  v.  Albin,  No. 
6;:22  Fed.  Cas.,  2  Bond,  244;  Mays 
V.  Fritton,  20  Wall.  414,  22  L.  Ed. 
389;  Street  v.  Dawson,  No.  13533 
Fed.  Cas.,  4  N.  B.  R.  207;  Balfour 
V.  Wheeler,  18  Fed.  Rep.  893;  In 
re  Baxter,  25  Fed.  Rep.  703. 

*As  to  what  constitutes  a  reason- 
able cause  to  believe  the  defendant 
was  insolvent,  etc.,  see  Buchanan  v. 


Smith,  16  Wall,  277,  21  L.  Ed.  280; 
Grant  v.  First  National  Bank,  97 
U.  S.  80,  24  L.  Ed.  971 ;  Merchants 
National  Bank  v.  Cook,  95  U.  S. 
342,  24  L.  Ed.  412;  Wager  v.  Hall, 
16  Wall.  584,  21  L.  Ed.  504;  Bar- 
bour v.  Priest,  103  U.  S.  293,  26  L. 
Ed.  478;  Toof  v.  Martin,  13  Wall. 
40,  20  L.  Ed.  481 ;  Stuckey  v.  Ma- 
sonic Savings  Bank,  108  U.  S.  74, 
27  L.  Ed.  640;  Clark  v.  Iselin,  21 
Wall.  360,  22  L.  Ed.  568;  Foster  v. 
Hackley,  No.  4971  Fed.  Cas.,  2  N. 
B.  R.  406;  In  re  Wright,  No.  18071 
Fed.  Cas.,  2  N.  B.  R.  490;  Scam- 
mon  v.  Cole,  No.  12432  Fed.  Cas., 
3  Clif.  472;  Peckham  v.  Burrows, 
No.  10897  Fed.  Cas.,  3  Story,  544; 
Burpee  v.  National  Bank,  No.  2185 
Fed.  Cas.,  5  Biss.  405 ;  Forbes  v. 
Howe,  102  Mass.  427;  Otis  v.  Had- 
ley,  112  Mass.  100;  Graham  v- 
Stark,  No.  5676  Fed.  Cas.,  3  Ben. 
520;  Castle  V.  Lee,  No.  2506  Fed. 
Cas.,  II  B.  R.  80;  Haskell  v.  In- 
galls.  No.  6193  Fed.  Cas.,  i  Hask. 
341 ;  In  re  Walton,  No.  17128  Fed. 
Cas.,   Deady,  442. 

As  to  the  meaning  of  the  words 
"in  contemplation  of  bankruptcy," 
see  Buckingham  v.  McLean,  13 
How.  167,  14  L.  Ed.  91 ;  In  re 
Craft,  No.  3316  Fed.  Cas.,  2  Ben. 
214,  affirmed  in  "No.  3317  Fed.  Cas., 
6  Blatch.  177;  Ashby  v.  Steere,  No, 


PREFERExNCES    AND    LIENS.  553 

contemplation  of  bankruptcy;"  or,  third,  that  such  lien  was 
sought  and  permitted  in  fraud  of  the  provisions  of  the  act. 
The  act  of  congress  was  designed  to  secure  an  equal  distribu- 
tion of  the  property  of  an  insolvent  debtor  among  his  cred- 
itors, and  any  judicial  lien,  obtained  with  a  view  to  secure  the 
property  or  any  part  of  it  to  one,  and  thus  prevent  such  equal 
distribution,  is  a  lien  sought  and  permitted  in  fraud  of  the  pro- 
visions of  this  act.* 

It  has  been  held  that  this  provision  was  destroyed  by  the 
subsequent  introduction  of  Sec.  67/  into  the  bill  before  enact- 
ment.°  It,  however,  stands  as  a  part  of  the  bankruptcy  law 
of  this  country  and  a  case  falling  within  the  terms  and  not  con- 
trolled by  67/  will  undoubtedly  be  sustained  according  to  its 
terms. 

§  194.     Preferences  by  transfers. 

Under  the  bankrupt  act  a  preference  may  be  created  by 
transferring  property  to  or  for  the  benefit  of  a  creditor  as 
well  as  by  a  judicial  lien.'  The  word  "transfer,"  as  used 
in  the  bankrupt  act,  includes  the  sale  and  every  other  and 
different  mode  of  disposing  of  or  parting  with  property  or 
the  possession  of  property  absolutely  or  conditionally  as  a  pay- 
ment, pledge,  mortgage,  gift  or  security.-     Before  considering 

576  Fed.  Cas.,  2  Woodb.  &  M.  347;  Boutts,  4  M.  &  G.    169;   Gibson  v. 

Robson's  Bankruptcy,   166.  Muskett,  4  M.  &  G.  160 ;  Poland  v. 

To   the    effect   that    actual   bank-  Glyn,  12  J.  B.  Moore,  109 ;  Ex  parte 

ruptcy    must    be    contemplated    by  Simpson,    De    eGx,    9;    Alfred    v. 

the  debtor  at  the  time  of  the  trans-  Constable,  4  Ad.  and  El.  N.  S.  674. 

action,  see  Morgan  v.  Brundrett,  5  *  See   observation  of   Mr.  Justice 

B.  &  Ad.  296 ;  Atkinson  v.  Brindall,  Field,   with    reference  to   transfers, 

2  Bing.  N.  C.  225;  Abbott  v.  Bur-  in  Toof  v.  Martin,  13  Wall.  40,  51, 

bage,  2  Scott,  656;  Strachan  v.  Bar-  20  L.  Ed.  481. 

ton,    I    I  Ex.   647.  °/w   re   Tune,  8  Am.   B.   R.  285, 

To    the    effect    that    the    circum-  115  Fed.  Rep.  906. 
stances   and    not   the    actual    intent  '  B  .A.  1898,  Sec.  60,  as  amended 
of  the   debtor   at   the  time   of  the  Feb.  5,  1903,  32  Stat,  at  L.  797. 
transaction  are  such  as  to  make  his  '  B.  A.  1898,  Sec.  i,  clause  25. 
bankruptcy  a  probable  or  inevitable  In   Stern,    Falk  &   Co.  v.   Louis- 
event,  is  a   sufficient  contemplation  ville  Trust  Co.  ,112  Fed.  Rep.  501, 
of     bankruptcy,     see     Gibson     v.  7  Am.  B.  R.  305,  the  circuit  court 


554 


LAW     A.\D    rUOCEliDlAGS    IX     T.AN  KRLU'TCV, 


these  different  methods  of  transfeniiig  property  separately,  it 
may  be  profitable  to  notice  the  incidents  relating  to  transfers 
generally. 

It  shonld  be  observed  that  Sec.  60a  defines  what  constitutes 
a  preference,  ant!  par.  h  oi  the  same  section  prescribes  the  con- 
ditions under  w  hich  such  preference  may  be  set  aside.  By  the 
amendment  of  1903  the  four  months'  limitation  was  taken 
from  clause  /;  and  inserted  in  clause  a.  Under  the  bankruptcy 
act  as  it  exists  the  only  interest  a  practitioner  has  in  a  pref- 
erence is  to  determine  whether  it  is  a  voidable  preference  or 
not.  This  is  necessary  in  deciding  whether  the  preferred  prop- 
erty transferred  can  be  recovered  in  a  suit  by  the  trustee  or 
whether  the  creditor  must  surrender  his  preference  under  Sec. 
57g  before  the  allowance  of  his  claim.  In  either  of  these  cases 
it  must  be  a  voidable  preference  since  the  amendment  of  1903. 
What  constitutes  a  preference  so  as  to  be  an  act  of  bankruptcy 
is  considered  in  Chapter  VIII. 

In  order  that  a  transfer  shall  constitute  a  preference,  which 
may  be  avoided,  whatever  the  manner  of  transferring  it  may 
be,  four  elements  are  necessarv.^     First,  the  transfer  must  be 


of  appeals  for  the  sixth  circuit, 
said: 

"The  controHing  question  of  law 
in  the  cases  is  whether  these  facts 
constitute  a  preference  within  the 
meaning  of  that  term  in  the  bank- 
ruptcy act.  The  word  is  not  in 
set  terms  defined  by  the  act,  but  we 
have  no  doubt  that  so  far  as  the 
nature  of  the  property  transferred 
is  concerned  it  incUides  everything 
which  has  capacity  for  being  taken 
and  appropriated  to  tlie  satisfac- 
tion of  debts  provable  under  the 
act.  It  may  be  of  a  legal  or  of  an 
equitable   nature. 

"In  respect  to  the  means  by  which 
the  transfer  is  effected  there  is  no 
limitation.  However  devious  the 
method,  if  the  result  is  that,  but 
for    the    act,    the    creditor    acquires 


propert}'  from  the  debtor  which  is 
subject  at  law  or  in  equity  to  be  ap- 
propriated to  the  satisfaction  of 
the  debtor's  obligations,  that  is  a 
transfer  within  the  meaning  of  the 
law." 

See  also  Pirie  v.  Chicago  Title 
&  Trust  Co.,  182  U.  S.  438,  45  L. 
Ed.  1 171,  5  Am.  B.  R.  814;  Jaquith 
v.  Alden,  189  U.  S.  78,  47  L.  Ed. 
717,  9  Am.  B.  R.  773. 

A  transfer  does  not  embrace  a 
fictitious  transaction  where  no 
value  was  intended  to  pass  and 
where  none  was  actually  transfer- 
red. Ill  re  Steam  Vehicle  Co.,  121 
P\h1.   Rep.  939,   10  Am.   B.   R.  385. 

'Sebring  v.  Wellington  (N.  Y. 
Sup.  Ct.  App.  Div.),  6  Am.  B.  R. 
671;  In  re  Dundas,  iii  Fed.  Rep. 
500,  7  Am.  B.  R.  129. 


PREFERENCES    AND    LIENS. 


r  r  I" 

•j5d 


made  from  an  insolvent  person  to  a  creditor.  Second,  the 
efifect  of  such  transfer  must  be  to  enable  any  one  of  his  cred- 
itors to  obtain  a  greater  percentage  of  his  debt  than  any  other 
of  such  creditors  of  the  same  class.  Third,  the  person  receiv- 
ing it  or  to  be  benefited  thereby,  or  his  agent  acting  therein, 
must  have  had  reasonable  cause  to  believe  that  it  was  intended 
thereby  to  give  a  preference.  Fourth,  the  transfer  must  have 
been  made  within  four  months  before  filing  a  petition  in  bank- 
ruptcy, or  after  filing  the  petition  and  before  adjudication. 

If  any  one  of  these  elements  is  wanting,  the  preference  can 
not  be  set  aside,  if  otherwise  valid  under  the  state  law.'' 
Thus  if  it  were  made  more  than  four  months  prior  to  the 
filing  of  the  petition,  or  by  a  solvent  person,  or  did  not  in  fact 
prefer  a  creditor  by  giving  him  a  larger  percentage  than  other 
creditors,  or  if  the  person  receiving  it  had  no  cause  whatever 
to  believe  that  he  was  obtaining  a  preference  over  other  cred- 
itors, it  can  not  be  recovered  by  the  trustee. 

It  is  immaterial  under  the  bankrupt  act  whether  the  prefer- 
ence is  given  voluntarily  or  at  the  urgent  solicitation  or  threat 
of  a  creditor." 

Although  the  bankrupt  law  does  not  operate  beyond  the 
limits  of  the  United  States,  a  preference  given  to  a  foreigner 
is  in  violation  of  its  provision  to  the  same  extent  and  under 
the  same  conditions  that  it  would  be  if  the  preference  had  been 
given  to  a  resident  of  the  United  States."  It  makes  no  dif- 
ference in  this  proposition  that  the  contract  of  purchase  was 
made  abroad,  and  to  be  performed  abroad  when  the  goods  had 


*Tiflfany  v.  Lucas,  15  Wall.  410, 
21  L.  Ed.  198;  Anibal  v.  Heacock, 
2  Fed.  Rep.  169;  Rice  v.  Grafton 
Mills,  117  Mass.  228;  Paddock  v. 
Fish,  10  Fed.  Rep.  125;  Alexander 
V.  Gait,  9  Fed.  Rep.  149;  Warren 
V.  Moody,  122  U.  S.  132,  30  L.  Ed. 
1 128. 

In  re  Henry  C.  King  Co.,  113 
Fed.  Rep.  no,  7  Am.  B.  R.  619, 
Judje  Lowell  said:  "I  must  hold, 
therefore,    that    knowledge    of  /in- 


solvency did  not  make  a  preference 
of  acts  which  otherwise  did  not 
amount  to  a  preference." 

°  Clarion  Bank  v.  Jones,  21  Wall. 
325,  22  L.  Ed.  542;  Wilson  v. 
Brinkman,  No.  17794  Fed.  Cas., 
2  N.  B.  R.  468;  Rison  v.  Knapp, 
No.  ri86i  Fed.  Cas.,  i  Dill.  187; 
Graham  v.  Stark,  No.  5676  Fed- 
Cas.,  3  N.  B.  R.  357;  Foster  v. 
llackley,  No.  4971  Fed.  Cas.,  2  N. 
B.  R.  406. 


.iSC) 


LAW      AND     I'KUCKEDINGS    IN     1!  A  X  K  Kl' l"l  C\'. 


been  delivered  lo  the  lianknipt,  and  they  were  his  proi-)crty.  and 
in  the  Ignited  States/' 


§  194a.     First :  The  transfer  must  be  made  by  an  insolvent 
person  to  his  creditor. 

An  essential  element  of  a  preferential  transfer  voidable 
under  Seetion  60a  is  that  the  transfer  be  made  by  an  insolvent 
person  to  or  for  the  benefit  of  his  creditor. 

A  transfer  by  a  person  other  than  the  bankrupt  to  the 
creditor  does  not  constitute  a  preference/  as  where  the  wife  of 
a  bankrupt  pa^'S  his  debts  from  her  separate  estate,"  or  where 
the  directors  of  a  corporation  individually  pay  a  debt  of  the 
corporation/  or  wdiere  money  is  advanced  to  the  bankrupt 
by  a  third  person  for  a  specific  purpose  and  is  not  used  for 
that  purpose  but  returned  to  him.'*  Where  the  transfer  is  made 
by  the  agent  of  the  bankrupt  to  a  creditor  it  constitutes  a 
preference,  as  where  a  clearing  house  in  making  settlements 
with  its  members  pays  money  due  the  bankrupt  bank  to  its 
creditors/  Such  credit  should  be  paid  to  the  trustee  of  the 
bankrupt  bank. 

A  transfer  to  a  person  other  than  a  creditor  unless  for  his 
benefit  '^  is  not  a  preference  within  this  section/  A  customer 
is  not  a  creditor  of  a  stockbroker.^  A  creditor  will  not  be 
permitted  to  obtain  a  preference  indirectly  by  transfer  of  his 


*01cott  V.  McLean,  50  How. 
Prac.  455- 

^  Dressel  v.  North  State  Lumber 
Co.,  119  Fed.  Rep.  531,  9  Am.  B.  R. 
541 ;  Goode  v.  Elwood  Lodge,  160 
Ind.  251  ;  Keegan  v.  Hamilton  Nat. 
Bank,  163  Ind.  216;  Western  Tie  & 
Timber  Co.  v.  Brown,  196  U.  S. 
502,  49  L.  Ed.  571,   13  Am.  B.  R. 

447- 

°  Goode  V.  Ehvood  Lodge,  160 
Ind.  251. 

^  Keegan  v.  Hamilton  Nat.  Bank, 
163  Ind.  216. 

*  Dressel  v.   North   State  Lumber 


Co.,  119  Fed.  Rep.  531,  9  Am.  B. 
R.  541. 

°  Rector  v.  City  Deposit  Bank, 
200  U.  S.  405,  50  L.  Ed.  527,  15 
Am.  B.  R.  336;  Rector  v.  Commer- 
cial Nat.  Bank,  200  U.  S.  420,  50 
L.   Ed.   533.   15  Am.   B.   R.  347. 

"In  re  Wright  Lumber  Co.,  114 
Fed.  Rep.  ion,  8  Am.  B.  R.  345.. 

'Richardson  v.  Shaw  (C.  C.  A. 
2d  Cir.),  147  Fed.  Rep.  659;  Lyon 
V.  Clark,  129  Mich.  381 ;  North  v. 
Taylor,  70  N.  Y.  Supp.  339,  6  Am. 
B.  R.  233. 

*  Richardson  v.  Shaw  (C.  C.  A. 
2d  Cir.),   147  Fed.  Rep.  659. 


PREFERENCES    AND    LIENS.  557 

account,  procuring  a  third  party  to  loan  money  to  the  debtor 
for  payment  of  such  creditor,  or  other  colorable  device  or 
transaction  intended  to  evade  the  provisions  of  the  bankrupt 
act."  An  endorser  or  surety  is  a  creditor,  who  may  receive  a 
preference  from  his  principal.^"  Such  transfers  may  be  recov- 
ered in  a  proper  case  under  Sec.  67c  and  Sec.  7^c. 

A  transfer  of  all  his  property  by  a  debtor  to  a  corporation, 
owned  by  a  committee  of  creditors  selected  at  a  general  meet- 
ing of  his  creditors  for  this  purpose,  can  not  be  set  aside  at 
the  suit  of  a  nonparticipating  creditor,  in  the  absence  of  a 
fraudulent  design.  ^^ 

A  transfer  or  conveyance  of  property  by  a  solvent  debtor 
to  his  creditor  is  not  a  preference  voidable  under  Section  60. 
A  person  may  dispose  of  his  property  by  gift  or  sale  so  long 
as  he  has  enough  to  pay  his  just  debts. ^-  In  order  to  set  aside 
a  conveyance  or  transfer  of  property  it  must  be  alleged  and 
proved  to  have  been  made  by  a  person  insolvent  at  the  time.^^ 

The  act  of  1867  did  not  define  what  constituted  insolvency. 
It  was  defined  by  the  courts  to  mean  that  a  debtor  could  not 
pay  his  debts  in  the  ordinary  course  of  business  as  men  in  trade 
usually  do,  and  such  was  the  conclusion,  even  though  his  ina- 
bility was  not  so  great  as  to  compel  him  to  stop  business.^* 


a 


III   re   Beerman,    ii2   Fed.    Rep.  tenberg  Veneer   &    Panel   Co.,    lo8 

663,  7  Am.  B.  R.  431;  In  re  Wright  Fed.   Rep.   593,   6  Am.   B.   R.   271; 

Lumber  Co.,  114  Fed.  Rep.  ion,  8  Martin   v.    Bigelow    (Supr.    Ct.    N. 

Am.  B.  R.  345.  \.),  36  Misc.   Rep.   298,   7  Am.  B. 

'"Crandall    v.    Coats,    133    Fed-  R.  218;  Kimball  v.  Dresser,  98  Me. 

Rep.    965,    13     Am.     B.     R.     712;  519;   In  re  Mandel,   127  Fed.   Rep. 

Swarts   V.    Siegal    (C.     C.    A.   8th  863,    10    Am.    B.    R.    774;    Empire 

Cii-.),  117  Fed.  Rep.  13,  8  Am.  B.  R.  Trust  Co.  v.   Fisher,  67  N.  J.   Eq. 

689.  88,   57  Atl.    Rep.   502;    Schilling  v. 

"/»  re  Robertshaw  Mfg.  Co.,  133  Curran,  30  Mont.  370,  76  Pac.  Rep. 

Fed.  Rep.   556,   13  Am.   B.   R.  409.  998;    Swartz    v.    Frank,     183    Mo. 

'■Warren    v.    Moody,    122    U.    S.  438;    Townes   v.   Alexander,   69   S. 

132,  30  L.  Ed.  1 128;  Adams  v.  Col-  C.  23. 

lier,  122  U.  S.  3S2,  30  L.  Ed.  1207;  "  Toof   v.    Martin,    13    Wall.    40. 

Savage   v.    Savage    (C.    C.    A.   4th  20  L.  Ed.  481 ;   Wager  v.   Hall,    16 

Cir.),  T41  Fed.  Rep.  346,  15  Am.  P..  Wall.   584,  21    L.   Ed.   504;   Wilson 

R-  590-  .  V.   City   Bank,    17  Wall.  473,  21   L. 

''V)!  yc  .Mexander.  102  Fed.  Rep.  Ed.  yz:^;  Tiffany  v.  Lucas,  15  Wall. 

464,  4  Am.  B.  R.  376;   In   re  Wit-  410,  21  L.  Ed.   198. 


558  LAW     AND     PROCEEDINGS    IN     BANKRUPTCY. 

But  ill  the  present  act  "insolvency"  is  not  used  in  the 
same  sense  as  it  was  used  in  the  prior  acts.  It  is  defined  by 
the  statute  itself:  "A  person  shall  be  deemed  insolvent  within 
the  provisions  of  this  act  whenever  the  aggregate  of  his  prop- 
crtv.  exclusive  of  any  property  which  he  may  have  conveyed, 
transferred,  concealed  or  removed  or  permitted  to  be  concealed 
or  removed  with  intent  to  hinder  or  delay  his  creditors  shall 
not  at  a  fair  valuation  be  sufficient  in  amount  to  pay  his 
debts."  ^^  It  thus  appears  that  a  person  might  not  be  able  to 
pay  his  debts  as  they  become  due  in  the  ordinary  course  of 
business,  and  yet  be  perfectly  solvent.  The  test  under  the 
present  act  is  whether  or  not  the  debtor's  property,  at  a  fair 
valuation,  equals  his  liabilities. 

The  question  of  insolvency  is  one  of  fact.^*"'  It  should  be 
submitted  to  a  jury  under  proper  instructions  when  the  case 
is  tried  to  a  jury.  The  burden  of  establishing  insolvency  at 
the  time  the  preference  was  given  is  on  the  person  alleging  it.^^ 

The  mere  fact  that  a  debtor  is  adjudged  a  bankrupt  raises  no 
presumption  of  insolvency  prior  to  the  filing  of  the  petition.^* 
But  wdiere  the  question  of  insolvency  is  adjudged  in  determin- 
ing an  act  of  bankruptcy  in  an  involuntary  proceeding  the 
fact  of  insolvency  at  the  date  the  act  w^as  committed  may  be 
taken  as  established  by  the  adjudication.^®  The  books  of  a 
bankrupt,  the  schedule  and  inventory  and  appraisement  are 

In  Scammon  v.  Cole,  No.   12433  S.  271,  49  L.  Ed.  190,  12  Am.  B.  R. 

Fed.  Cas.,  i  Hask.  214,  Judge  Fox  S62. 

says:     "This    definition    has    been  "In   re   Chappell,    113    Fed.    Rep. 

substantially  adopted  by  every  dis-  545,  7  Am.  B.  R.  608;  Edwards  v. 

trict   judge    in    the    country   before  Milling  Co.,  108  Mo.  App.  275 ;  Hal- 

whom  the  question  has  arisen."  bert  v.  Pranke,  91  Minn.,  204;  In  re 

"B.   A.    1898,   Sec.    I,   clause   15;  Gilbert,    T12   Fed.   Rep.  951,  8  Am. 

/;;   re  Eggert    (C.   C.  A.  7th   Cir.),  B.   R.    loi  ;   Kimball   v.   Dresser,  98 

102    Fed.    Rep.    735,    4    Am.    B.    R.  Me.  519. 

449;   Butler  Paper  Co.  v.  Goembel  ^^ In   re   Chappell,    113   Fed.    Rep. 

(C.  C.  A.  7th  Cir.),  143  Fed.  Rep.  545.  7  Am.  B.   R.  608;   Kimball  v. 

295,  16  Am.  B.  R.  26.  Dresser,  98  Me.  519;  Edwards  Mill- 

For  a  discussion  of  when  a  debtor  ing  Co.,  108  Mo.  App.  275. 

is  insolvent,   see  Sec.  50a,  ante.  "  DeGraff  v.  Lang,  87  N.  Y.  Supp. 

'"Kaufman  v.   Treadway,    195  U.  78.  92  App.   Div.    N.   Y.   Supr.   Ct. 

564- 


PREFERENCES    AND    LIENS. 


559 


evidence  on  the  question  of  insolvency  within  four  months  of 
the  (late  of  the  filing  of  the  petition,  but  are  not  conclusive,"'* 
Where  the  quantity  and  value  of  the  bankrupt's  assets  were 
not  materially  diminished  from  the  time  of  the  transfer  until 
ihe  commencement  of  the  proceedings  in  bankruptcy,  the 
court  or  jury  may  find  that  the  debtor  was  insolvent  when  he 
made  the  transfer,-^ 


§  194b.  Second  :  The  effect  must  be  to  enable  any  creditor 
to  obtain  a  greater  percentage  of  his  debt  than 
any  other  creditor  of  the  same  class. 

The  main  object  of  the  bankrupt  law  is  to  provide  for  the 
equal  distribution  of  the  property  of  a  debtor  among  his  cred- 
itors. Sec.  60(7  makes  every  transfer  of  any  of  the  insolvent's 
property,  by  means  of  which  a  greater  percentage  would  be 
paid  out  of  his  estate  to  any  creditor,  or  on  any  claim,  than 
every  other  creditor  and  every  other  claim  of  the  same  class 
would  receive  a  preference  to  be  avoided  or  surrendered  under 
other  provisions  of  the  statute.  "The  test  of  a  preference, 
under  the  act,  is  the  payment,  out  of  the  bankrupt's  property, 
of  a  greater  percentage  of  the  creditor's  claim  than  other  cred- 
itors of  the  same  class  receive."  ^  It  does  not  depend  upon  the 
purpose  or  intent  of  the  debtor  or  the  creditor."  It  is  merely 
the  effect  or  result  of  the  transaction.  Payments  and  sales 
in  the  usual  course  of  business  where  the  new  sales  succeed 
payments  and  net  result  is  to  increase  the  bankrupt's  estate 


""In  re  Docker-Fisher  Co.,  123 
Fed.  Rep.  190.  10  Am.  B.  R.  584; 
In  re  Mandel,  127  Fed.  Rep.  863, 
10  Am.  B.  R.  774;  Bank  of  N.  Y. 
V.  Southern  Nat.  Bank,  170  N.  Y. 
i;  Mackney  v.  Hargreaves  Bros., 
68  Neb.  624,  13  Am.  B.  R.  164, 
overruling  10  Am.   !>.  R.  213. 

^'  Clarion  Bank  v.  Jones,  21  Wall. 
325,  22  L.  Fd.  542. 

'  Swarts  V.  I'^ourth  National 
Bank  (C.  C.  A.  8th  Cir.),  117  Fed- 
Rep.    I.  8  Am.   15.   R.  673. 


=  Pirie  v.  Trust  Co..  182  U.  S. 
438,  45  L.  Ed.  T171 ;  Engel  v.  Union 
Square  Bank  (N.  Y.  Sup.  Ct.  Div.), 
87  N.  Y.  Supp.  1070;  Hackney  v. 
Hargreaves,  68  Neb.  624,  13  Am.  B. 
R.  164,  reversing  10  Am.  B.  R.  213, 
5  Am.  B.  R.  814;  In  re  Fixen,  102 
Fed.  Rep.  295,  4  Am.  B.  R.  10;  In 
re  Conhaim.  97  Fed.  Rep.  923,  3 
Am.  B.  R.  249;  Crooks  v.  People's 
Nat.  Bank  (N.  Y.  Sup.  Ct.),  3  Am. 
B.  R.  238.      - 


560  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

do  not  constitute  preferential  transfers.''  A  part  payment  to 
a  creditor  is  not  a  preference,  when  by  the  receipt  of  tlie 
amount  he  did  not  get  a  larger  percentage  of  his  debt  than  the 
debtor  is  able  to  pay  his  other  creditors  at  that  time.'* 

Where  creditors  are  entitled  to  the  same  percentage  on  their 
debts  they  are  in  the  same  class  as  unsecured  creditors  having 
provable  claims.  This  is  true  even  though  some  of  them  are 
secured  by  endorsement  or  guaranty  and  the  others  are  not.^ 
Labor  claimants,  entitled  to  priority,  constitute  a  separate  class 
from  the  unsecured  creditors."  Other  classes  may  be  com- 
posed of  creditors  having  a  valid  mortgage,  lien  or  other  se- 
curities or  entitled  to  priorities  in  the  distribution  of  the  estate. 
These  secured  classes  become  material  in  actual  practice 
when  there  are  not  sufficient  funds  to  pay  the  whole  of  any 
one  class,  as  where  the  assets  are  insufficient  to  pay  all  the  labor 
claims.  In  such  case  they  must  be  paid  pro  rata  or  a  prefer- 
ence is  created. 

The  giving  of  a  leasehold  in  order  that  the  grantee  may  get 
an  advantage  over  other  creditors  is  a  preference.'^ 

In  order  to  entitle  a  trustee  to  recover  a  preference  he  must 
allege  and  prove,  among  other  things,  that  there  is  a  conse- 
quent inequality  between  creditors  of  the  same  class.^ 

§  194c.     Third  :  Reasonable  cause  to  believe,  etc. 

Under  the  act  of  1867  the  person  receiving  the  transfer 
must  at  the  time  have  had   reasonable  cause  to  believe  the 

'  Jacquith  v.  Alden,  189  U.  S.  78,  '  Swarts    v.    Fourth    Nat.    Bank, 

47  L.  Ed.   717,  9  Am.   B.   R.   773;  117  Fed.  Rep.  i,  8  Am.  B.  R.  673; 

Jn   re    Sagor    (C    C.    A.    2d    Cir.),  Swarts    v.    Siegel,     114    Fed.    Rep. 

121    Fed.    Rep.    658,    9    Am.    B.    R.  looi    (on  app.  to  C.  C.  A.),  8  Am. 

361;  Dickson  v.  Wyman   (C  C.  A.  B.   R.  689,   117  Fed.   Rep.    13. 

1st  Cir.),  Ill  Fed.  Rep.  726,  7  Am.  But   see   Jn   re   Harpke,    116  Fed. 

B.  R.  186;  Cans  v.  Ellison   (C.  C  Rep.  295,  8  Am.  B.  R.  5.35- 

A.  3d  Cir.),    114  Fed.  Rep.   734,  8  ' ^'^    ''c    Read    &    Knight,    7   Am. 

Am.  B.  R.  153;  Kimball  v.  Rosen-  B.  R.  in. 

han   Co.    (C.   C.   A.  8th   dr.).    114  'Carter  v.    Hobbs,   94   Fed.    Rep. 

Fed.  Rep.  85,  7  Am.  B.  R.  718.  loS,  2  Am.  B.'R.  224. 

*Brittain  Dry  Goods  Co  v.  Ber-  *  Kimball  v.  Dresser,  98  Me.  519. 
tenshaw,  68  Kan.  734. 


PREFERENCES    AND    LIENS.  561 

person  making  the  transfer  was  insolvent/  Under  the  present 
act  the  creditor  to  be  benefited  must  have  reasonable  cause  to 
believe  that  a'  preference  was  intended  to  be  given."  This 
phrase  includes  reasonable  cause  to  believe  that  the  debtor  is 
insolvent,  for  this  is  one  of  the  elements  of  a  preference.^  It 
also  includes  a  reasonable  cause  to  believe  that  he  is  to  obtain 
a  greater  percentage  of  his  debts  than  any  other  creditor  in 
his  class,  for  this  is  another  element  of  a  preference.  The 
intent  of  the  debtor  is  immaterial.'^  The  result  of  his  action 
only  is  considered  in  determining  whether  he  has  given  a  pref- 
erence. 

It  is  not  necessary  that  the  creditor  knoAvs  or  even  actually 
believes  that  a  preference  is  being  given,  provided  he  has  rea- 
sonable cause  to  be  put  upon  inquiry  as  to  whether  a  prefer- 
ence is  actually  given  or  not.  Constructive  notice  is  sufficient, 
upon  the  ground  that  when  a  party  is  about  to  perform  an  act 
by  which  he  has  reason  to  believe  that  the  rights  of  a  third 
party  may  be  affected,  an  inquiry  as  to  the  facts  is  a  moral 
duty  and  diligence  an  act  of  justice.  Whatever  fairly  puts 
a  party  upon  inquiry  is  sufficient  notice  where  the  means  of 
knowledge  are  at  Iiand,  and  if  the  party  under  such  circum- 
stances omits  to  inquire  and  proceeds  to  receive  the  transfer 
or  conveyance,  he  does  so  at  his  peril,  as  he  is  chargeable  of 
knowledge  and  of  all  the  facts,  which  by  a  proper  inquiry 
he  might  have  ascertained.'     It  has  been  held  that  the  mere 

'R.   S.   Sec.   5128;   Toof  v.  Mar-  671;   Levor  v.    Seiter    (N.  Y.   Sup. 

tin,    13    Wall.    40,    20   L.    Ed.    281;  Ct.  App.   Div.),  8  Am.  B.   R.  459; 

Buchanan  v.    Smith,    16   Wall.   277,  In  re  Dundas,  7  Am.  B.  R.  129,  in 

21   L.  Ed.  280;   Wager  v.   Hall,    16  Fed.  Rep.  500. 

Wall.   584,  21   L.   Ed.  504.  'Thomas    v.    Adelman,    136    Fed. 

'B.  A.  1898,  Sec.  60b;  Jacobs  v.  Rep.  973,  14  Am.  B.  R.  510;  Blank- 
Van  Sickle,  123  Fed.  Rep.  340,  10  cnbaker  v.  Charleston  State  Bank, 
Am.  B.  R.  519;  Tait  v.  National  in  111.  App.  393;  Des  Moines  Sav- 
Bank,  8  Ohio  N.  P.  Rep.  59,  2  N.  ings  Bank  v.  Morgan  Jewelry  Co., 
B.    N.    1 145;    Hicks    V.    Langhorst  123   la.   432. 

(Hamilton    County,    O.,    Common  'Benedict    v.    The    Union    Cloak 

Pleas),  3  N.  B.   N.  528,  6  Am.  B.  and  Suit  Co.,  177  N.  Y.  i,  n  Am. 

R.  178;  In  re  Jacobs,  i  Am.  P..  R.  W.   R.  20. 

518;  Scbring  V.  Wellington    (N.  Y.  'Crittenden     v.     Barton     (N.     v' 

Sup.  Ct.  App.   Div.),  6  Am.   B.   R.  Sup.  Ct.  App.   Div.),  5  Am.   B.   R. 


562 


LAW     AM)     I'KOCEEUINGS    IN     HAN  KRU  FTCY. 


knowledg'C  that  a  debtiM-  was  behind  in  liis  payments  is  not 
i-iifficient  of  itself  to  put  his  creditors  upon  inquiry  and  charge 
hint  with  notice  of  facts  \\hich  in(|uiry  might  chsclose,"  nor 
the  mere  fact  of  taking  security  for  a  loan." 

Mr.  Justice  Bratlley.  speaking  for  the  supreme  court  in  a 
leading  case  on  this  subject,  laid  down  the  rule  with  refer- 
ence to  what  constituted  a  reasonable  cause  to  believe  a  debtor 
to  be  insolvent  under  tiie  former  statutes  in  the  following 
words :  ®  "Some  confusion  exists  in  the  cases  as  to  the  meaning 
of  the  phrase  'having  reasonable  cause  to  believe  such  a 
person  is  insolvent.'  Dicta  are  not  w^anting  which  assume  that 
it  has  the  same  meaning  as  if  it  had  read  'having  reasonable 
cause  to  suspect  such  a  person  is  insolvent.'  But  the  two 
phrases  are  distinct  in  meaning  and  effect.  It  is  not  enough 
that  a  creditor  has  some  cause  to  suspect  the  insolvency  of 
his  debtor;  but  he  must  have  such  knowledge  of  facts  as 
to  induce  reasonable  belief  of  his  debtor's  insolvency  in  order 
to  invalidate  a  security  taken  for  his  debt.  To  make  mere 
suspicion  a  ground  of  nullity  in  such  a  case  would  render  the 
business  transactions  of  the  community  altogether  too  inse- 
cure.'"' It  w^as  never  the  intention  of  the  framers  of  the  act 
to  establish  any  such  rule.  A  man  may  have  many  grounds 
of  suspicion  that  his  debtor  is  in  failing  circumstances,  and 
yet  have  no  cause  for  a  well-grounded  belief  of  the  fact.  He 
may  be  unwilling  to  trust  him  further;  he  may  feel  anxious 
about  his  claim,  and  have  a  strong  desire  to  secure  it,  and 


775;  Wager  v.  Hall,  i6  Wall.  £84, 
21  L.  Ed.  504;  Hackney  v.  Har- 
greaves,  68  Neb.  624,  13  Am.  B.  R. 
164,  overruling  10  Am.  B.  R.  213. 
'/«  re  Eggert  (C.  C.  A.  7th  Cir.), 
102    Fed.    Rep.    735,   4   Am.    B.    R. 

449- 

'  Stedman  v.  Bank,  117  Fed.  Rep. 
237,  9  Am.  B.  R.  4. 

*  Grant  v.  National  Bank,  97  U. 
S.  81,  24  L.  Ed.  971.  This  is  re- 
ferred to  in  Stuckey  v.  Savings 
Bank.  to8  U.  S.  74,  27  L.  Ed.  640, 


as  "a  case  vi^hich  v^^as  fully  con- 
sidered, and  which  has  since  been 
followed  by  us  as  a  leading  case 
on   the    subject." 

''In  re  Eggert  (C.  C.  A.  7th 
Cir.),  102  Fed.  Rep.  735,  4  Am.  B. 
R.  449;  Lyon  v.  Clark,  129  Mich. 
381;  Brown  v.  Guichard  (Sup.  Ct. 
N.  Y.),  7  Am.  B.  R.  515;  In  re 
Soudan  Mfg.  Co.  (C.  C.  A.  7th 
Cir.),  IT3  Fed.  Rep.  804,  8  Am.  B. 
R.  45 ;  Gretchel  v.  First  Nat.  Bank, 
66  N.  J.  Eq.  88. 


PREFERENCES    AND    LIENS.  563 

yet  such  belief  as  the  act  requires  may  be  wanting.  Obtaining 
additional  security,  or  receiving  payment  of  a  debt  under  such 
circumstances,  is  not  prohibited  by  the  law.  Receiving  pay- 
ment is  put  in  the  same  category,  in  the  section  referred  to,  as 
receiving  security.  Hundreds  of  men  constantly  continue  to 
make  payments  up  to  the  very  eve  of  their  failure,  which  it 
would  be  very  unjust  and  disastrous  to  set  aside.  And  yet 
this  could  be  done  in  a  large  proportion  of  cases  if  mere 
grounds  of  suspicion  of  their  solvency  were  sufficient  for  the 
purpose. 

"The  debtor  is  often  buoyed  up  by  the  hope  of  being  able 
to  get  through  his  difficulties  long  after  his  case  is  in  fact 
desperate;  and  his  creditors,  if  they  know  nothing  of  his 
embarrassments,  either  participate  in  the  same  feeling  or  at 
least  are  willing  to  think  that  there  is  a  possibility  of  his 
succeeding.  To  overhaul  and  set  aside  all  his  transactions 
with  his  creditors,  made  under  such  circumstances,  because 
there  may  exist  some  grounds  of  suspicion  of  his  inability  to 
carry  himself  through,  would  make  the  bankrupt  law  an  en- 
gine of  oppression  and  injustice.  It  would,  in  fact,  have  the 
effect  of  producing  bankruptcy  in  many  cases  where  it  n-^ight 
otherwise  be  avoided. 

"Hence  the  act,  very  wisely,  as  we  think,  instead  of  mak- 
ing a  payment  or  a  security  void  for  a  mere  suspicion  of  the 
debtor's  insolvency,  requires,  for  that  purpose,  that  his  cred- 
itor should  have  some  reasonable  cause  to  believe  him  insol- 
vent. He  must  have  a  knowledge  of  some  fact  or  facts  cal- 
culated to  produce  such  a  belief  in  the  mind  of  the  ordinary 
intelligent  man.''  The  definition  given  by  the  supreme  court 
to  the  phrase  used  in  the  act  of  1867  has  been  applied  in  con- 
struing language  used  in  tlie  present  bankrupt  act.^*^ 

"As  was  done  In  re  Eggert  fC.  ing  Co.,  gg  Me.  320,   13  Am.  B.  R. 

C.  A.  7th  Cir.),  102  Fed.  Rep.  735,  201;  In  re  Coodhile,  130  Fed.  Rep. 

4  Am.   B.   R.  449;   Lyon  v.   Clark,  471,  12  Am.  R.  R.  374;  Off  v.  Hakes 

120  Mich.  381;  Bardes  v.  First  Nat.  (C.  C.  A.  7th  Cir.),   142  Fed.  Rep. 

Bank,    122    la.   443.    ii    Am.    B.    R.  364,  15  Am.   B.   R.  696;   Butler   Pa- 

77 r  ;  In  rr  Virginia  HardwDod  Mfg.  per  Co.  v.   Goembel    (C.   C.  A.  7th 

Co.,  139  Fed.  Rep.  209,   15  Am.  B.  Cir.),    143   Fed.    Rep.   295,    16   Am. 

R.  135;  Stevenson  v.  Milliken  Mill-  B.  R.  26. 


564 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


^^'hether  a  creditor  has  reasonable  cause  to  believe,  etc.,  may 
be  determined  from  the  conduct  of  the  parties  and  the  nature 
of  the  transaction.'^  This  is  often  the  only  means  of  proof. 
A  person  is  always  presumed  to  intend  what  is  the  necessary 
and  unavoidable  consequences  of  his  act,^"  Whether  or  not 
the  facts  and  circumstances  in  the  possession  of  the  creditor 
at  the  time  the  alleged  preference  was  made  were  sufficient  to 
cause  an  ordinary  prudent  business  man  to  conclude  that  a 
preference  was  intended  is  a  question  for  the  jury  and  not  for 
the  court  in  a  jury  trial." 

It  should  be  observed  that  a  person  receiving  a  preference 
is  chargeable  with  the  knowledge  of  his  agent,  who  shall 
have  reasonable  cause  to  believe  that  it  was  intended  to  be  a 
preference.  The  words  of  the  statute  are  "agent  acting  there- 
in." "  It  is  therefore  necessary  in  order  to  charge  the  creditor 
with  notice,  that  the  agent  should  have  some  part  in  negotiat- 
ing the  transfer  which  constitutes  the  preference.  It  has  been 
held  that  the  knowledge  of  a  clerk  of  a  bankrupt  firm  of  its 
insolvency  is  not  binding  upon  a  preferred  creditor,  who  sub- 
sequently hires  the  said  clerk  to  take  charge  of  the  goods 


"  Sebring  v.  Wellington  (N.  Y. 
Sup.  Ct.  App.  Div.),  6  Am.  B.  R. 
671 ;  Hackney  v.  Raymond  Bros., 
Clarke  Co.,  68  Neb.  624,  13  Am.  B. 
R.  164,  overruling  10  Am.  B.  R.  213; 
Wilson  V.  Nelson,  183  U.  S.  191, 
46  L.  Ed.  147.. 

'"  Western  Tie  &  Timber  Co.  v. 
Brown,  196  U.  S.  502,  49  L.  Ed. 
571,  13  Am.  B.  R.  447;  English  v. 
Ross,    140   Fed.    Rep.   630,    15   Am. 

B.  R.  370. 

'^Kaufman  v.  Treadway,  195  U. 
S.  271,  49  L.  E'd.  190,  12  Am.  B. 
R.  682;  Wetstein  v.  Franciscus   (C. 

C.  A.  2d  Cir.),  133  Fed.  Rep.  900, 
13  Am.  B.  R.  326;  Sundheim  v. 
Ridge  Ave.  Bank,  138  Fed.  Rep. 
95T.  15  Am.  B.  R.  132;  Evans  v. 
Nat.  Broadway  Bank,  88  N.  Y. 
Sup.   Ct.   App.   Div.   549.  85   N.   Y. 


Supp.   loi. 

"B.   A.    1898,    Sec.   60b;    Babbitt 
V.     Kelley     (St.     Louis     Court    of 
App.),  9  Am.  B.  R.  335,  70  S.  W. 
R.   384;    In   re   Dunavant,   96   Fed. 
Rep.   542,  3  Am.   B.   R.  41 ;   In  re 
Gillette,   104  Fed.  Rep.  769,  5  Am. 
B.  R.   119;  In  re  Nassau,  140  Fed. 
Rep.  912,  14  Am.  B.  R.  828;  Plum- 
mer  v.   Myers,    137   Fed.    Rep.   660, 
14  Am.  B.  R.  805;  Beattie  v.  Gard- 
ner,   No.    iigs    Fed.    Cas.,    4    Ben. 
479;    Graham    v.    Stark,    No.    5676 
Fed.    Cas.,    3    Ben.    520;    Mayer   v. 
Herman,    No.    9344    Fed.    Cas.,    ip 
Blatch.  256 ;   Rogers  v.  Palmer,  102 
U.  S.  263;  Nisbit  V.  Macon  Co.,  12 
Fed.  Rep.  686;  Ungewitter  v.  Von 
Sachs.  No.  14343  Fed.  Cas.,  4  Ben. 
167. 


PREFERENCES    AND    LIENS. 


565 


transferred  to  such  creditor  as  a  preference."  Where  money 
is  collected  through  a  collection  agency  by  an  attorney  of  that 
agency,  who  was  not  employed  directly  by  the  creditors,  his 
knowledge  was  held  not  chargeable  to  the  creditors  in  such  a 
sense  as  to  render  them  liable  to  the  trustee  in  bankruptcy 
for  the  money  collected." 

It  may  be  collated  from  the  decisions  that  a  person  has 
reasonable  cause  for  inquiry,  where  a  banker  allows  his  drafts 
to  go  to  protest,  suspends  payment  and  closes  his  doors  against 
depositors  and  the  creditor  has  knowledge  of  these  facts,^'  or 
where  a  merchant  stops  payment  of  his  commercial  paper  and 
the  holder  is  compelled  to  bring  a  suit  to  which  no  defense  is 
put  in,^^  or  where  a  merchant  fails  to  meet  his  debts  as  they 
mature  in  the  ordinary  course  of  business.^^  The  existence 
of  a  general  financial  crisis  should  put  a  prudent  man  upon 
inquiry  with  reference  to  doubtful  debtors,-"  or  rumors  which 
a  creditor  has  heard  about  his  debtor's  embarrassment,"^  or 
any  transfer  or  payment  made  to  a  creditor  out  of  the  ordinary 
course  of  business."     Where  the  sale  of  a  stock  of  goods  to 


"Whitson  V.  Farber  Bank,  105 
Mo.  App.  605. 

"Hoover  v.  Wise,  91  U.  S.  308, 
23  L.  Ed.  392. 

''  Markson  v.  Hobson,  No.  9099 
Fed.  Cas.,  2  Dill.  327.  But  if  the 
bank  is  not  the  general  banker  of  a 
bankrupt,  the  rule  does  not  apply. 
Rankin  v.  National  Banl<,  No.  15568 
Fed.  Cas.,  14  N.  B.  R.  4. 

"Dunning  v.  Perkins,  No.  4180 
Fed.  Cas.,  2  Biss.  421. 

'"/«  re  Forsyth,  No.  4048  Fed. 
Cas.,  7  N.  B.  R.  174;  Swan  v.  Rob- 
inson, 5  Fed.  Rep.  287;  Mayer  v. 
I  lerman,  No.  9344  Fed.  Cas.,  10 
Blatch,  256;  Dunning  v.  Perkins, 
No.  4180  Fed.  Cas.,  2  Biss.  421 ; 
Bartholow  v.  Bean,  18  Wall.  635,  21 
L.  Ed.  866;  Wilson  v.  City  Bank, 
17  Wall.  473,  21  L.  Ed.  723. 

PnU   the   more   knowledge   that   a 


small  claim  remains  unsettled  does 
not  constitue  a  reasonable  cause 
to  believe,  etc.  Castle  v.  Lee,  No. 
2506  Fed.  Cas.  11  N.  B.  R.  80. 
In  re  Eggert  (C.  C.  A.  7th  Cir.), 
102  Fed.  Rep.  735,  4  Am.  B.  R. 
449;  Lj'on  V.  Clark,  129  Mich. 
Fed.  Cas.,  2  Biss.  434;  Post  v.  Cor- 
bin.  No.  1 1299  Fed.  Cas.,  5  N.  B. 
R.    II. 

-"/«  re  Clark  &.  Dougherty,  10 
N.  B.  R.  21. 

■'  Golson  v.  Niehoff,  No.  5524 
Fed.  Cas.,  2  Biss  434;  Post  v.  Cor- 
bin,  No.  11299  Fed.  Cas.,  5  N.  B. 
R.  11;  Hyde  V.  Corrigan,  No.  6968 
Fed.  Cas.,  9  N.  B.  R.  466. 

"See  R.  S.  Sec.  5130,  which  ex- 
pressly provided  that  such  trans- 
fers are  prima  facte  void.  In  re 
Coleman,  No.  3021  Fed.  Cas.,  2  N. 
B.    R.    562;    Tuttlo    v.    Truax,    No. 


566 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


pay  his  debt,""  or  an  execution  must  necessarily  stop  the  debt- 
or's business,  it  is  sufficient  to  put  the  creditor  upon  inquiry,-* 
or  knowledge  of  the  commission  of  an  act  of  bankruptcy  on 
the  part  of  the  debtor.-^  The  plea  of  ignorance  on  the  part 
of  the  creditor  will  not  relieve  him  of  liability  when  a  small 
amount  of  inquiry  would  have  given  all  the  necessary  infor- 
mation."" Nor  is  an  inquiry  of  a  person  suspected  of  fraud, 
who  has  every  motive  for  concealing  the  truth,  sufficient,  when 
better  and  more  reliable  sources  of  information  are  open. 


27 


§  I94d.    Fourth:  Within  four  months,  etc. 

In  order  that  a  preference  be  created  under  the  bankruptcy 
act  the  transfer  must  have  been  within  four  months  before 
filing  a  petition  in  bankruptcy,  or  after  filing  the  petition  and 
before  the  adjudication.^  This  clause  was  transferred  from 
Section  60b  to  Section  60a  by  the  amendment  of  Feb.  5,  1903. 
By  this  change  the  four  months'  limitation  becomes  an  element 
of  a  preference  and  not  merely  an  element  of  a  voidable  pref- 
erence. Prior  to  the  amendment  there  was  a  conflict  in  the 
decisions  as  to  whether  a  transfer  prior  to  the  four  months' 
period  was  a  preference.  This  became  material  in  determin- 
ing whether  the  preference  must  be  surrendered  under  Sec- 
tion 57 g  before  a  claim  could  be  allowed.  It  is  not  material 
since  the  amendment  because  only  voidable  preferences  ar6 
required  to  be  surrendered. 


14277  Fed.  Cas.,  i  N.  B.  R.  601 ; 
In  re  Meyer,  No.  9515  Fed.  Cas., 
2  N.  B.  R.  422;  In  re  Beck,  No. 
1205  Fed.  Cas.,  i  N.  B.  R.  588; 
North  V.  House,  No.  10310  Fed. 
Cas.,  6  N.  B.  R.  365 ;  In  re  Palmer, 
No.  10681  Fed.  Cas.,  3  N.  B.  R. 
283. 

■^  Thomas  v.  Adehnan,  136  Fed. 
Rep.  973,  14  Am.  B.  R.  510. 

"'  Zahm  V.  Fry,  No.  18198  Fed. 
Cas.,  9  N.  B.  R.  546:  Hood  v.  Kar- 
per,  No.  6664  Fed.  Cas.,  5  N.  B.  R. 
358;  Smith  V.  McLean,  No.  13074 
Fed.     Cas.,     10     N.     B.     R.     260; 


Buchanan  v.  Smith,  16  Wall.  277, 
21   L.   Ed.  280. 

■°  Warren  v.  National  Bank,  No. 
17202  Fed.  Cas.,  10  Blatch.  493,  96 
U.  S.  539,  24  L.  Ed.  640. 

"Vw  re  Wright,  No.  18071  Fed. 
Cas.,  2  N.  B.  R.  490. 

■'Singer  v.  Jacobs,   11  Fed.  Rep. 

559- 

^  B.  A.  1898,  Sec.  60,  as  amend- 
ed Feb.  5,  1903 ;  32  Stat,  at  L.  797. 
Thompson  v.  Fairbanks,  196  U.  S- 
516,  49  L.  Ed.  577,  13  Am.  B.  R. 
437;  Humphrey  v.  Tatman,  198  U. 
S.  91,  49  L.  Ed.  956,  14  Am.  B.  R. 


PREFERENCES    AND    LIENS. 


567 


The  acts  mentioned  in  Section  60  are  not  such  as  were  for- 
bidden by  the  common  law  or  generally  by  the  statutes  of  the 
states,  nor  are  they  acts  which  in  their  essential  nature  are 
immoral  or  dishonest.  In  order  to  carry  out  the  spirit  of 
the  bankrupt  system,  namely,  an  equal  division  of  the  bank- 
rupt's property  among  his  creditors,  congress  has  adopted  a 
conventional  rule  to  determine  the  validity  of  these  prefer- 
ences. It  has  prescribed  a  limit  of  four  months.  Any  trans- 
fer made  within  that  time  is  fraudulent  and  voidable.  It  is 
so  not  because  such  preferences  are  morally  objectionable, 
but  simply  because  the  bankrupt  act  says  they  are." 

Prior  to  the  amendment  of  February  5,  1903,^  it  was  gen- 
erally held  that  the  four  months'  period  began  to  run  from 
the  date  the  transfer  was  made;  that  is  to  say,  from  the  date 
of  the  delivery  of  the  deed  or  mortgage  and  not  the  date 
of  recording  it,*  unless  recording  was  necessary  to  create 
the  lien."  This  was  the  rule  under  the  act  of  1867.*'  But  'f 
the  mortgagee  withholds  the  mortgage  from  record  for  the 
purpose  of  allowing  the  four  months  to  run  so  as  to  defeat 
the  provisions  of  the  bankruptcy  act  relating  to  preferences, 
and  intending  so  to  do  when  he  took  it.  it  was  held  that 
such  acts  constitute  a  fraud  upon  the  bankruptcy  act  and  ren- 
ders the  mortgage  invalid.^     Under  this  construction  it  was 


74;  Little  V.  Holly  Brooks  Hard- 
ware Co.  (C.  C.  A.  5th  Cir.),  133 
Fed.  Rep.  874,  13  Am.  B.  R.  422; 
Mayer  v.  Hellman,  91  U.  S.  496.  23 
L.  Ed.  377;  Alexander  v.  Gait,  9 
Fed.  Rep.  149. 

"Bean  v.  Brookinire,  No.  1168 
Fed.  Cas.   s.  c.   i   Dill.  25. 

^32  Stat,  at  L.  797. 

*  Humphrey  v.  Tatman,  198  U. 
S.  91,  49  L.  Ed.  956,  12  Am.  B.  R. 
74;  Rogers  v.  Page  (C.  C.  A.  6th 
Cir.),  140  Fed.  Rep.  596,  15  Am. 
B.  R.  502:  LittU'  V.  Holley-Brooks 
Hardw.  Co.  (C.  C.  A.  5th  Cir.), 
13.3  Fed.  Rep.  S74,  13  Am.  B.  R. 
422;    In    re    Kindt,    iot    Fed.    Rep. 


107,    4    Am.    B.    R.    148;    Sabin    v. 
Camp,  98  Fed.  Rep.  974,  3  Am.  B. 

R.  578. 

"First  Nat.  Bank  v.  Connett  (C. 
C.  A.  8th  Cir.),  142  Fed.  Rep.  33, 
IS  Am.  B.  R.  662;  Landis  v.  Mc- 
Donald, 88  Mo.  App.  335;  Babbitt 
V.  Kelly,  9  Am.  B.  R.  335,  70  S.  W. 
Rep.  384,  96   Mo.   App.   529. 

"  Gibson  V.  Warden,  14  Wall. 
244,  20  L.  Ed.  797;  Sawyer  v.  Tiir- 
pin.  9r  U.  S.  IT4,  23  L.  Ed.  235. 

'  Blennerhassett  v.  Sherman,  105 
V.  S.  100,  26- L.  Ed.  1080;  Clayton 
V.  Exchange  Bank  (C.  C.  A.  5th 
Cir.).  T2T  ¥e<\.  Rep.  630,  to  Am. 
B.  R.  173;  Rogers  v.  Page,  140  Fed. 


568 


LAW    AM)    PROCEEDINGS    IN     BANKRUPTCY. 


possible  for  a  transferee  to  obtain  a  deed  or  mortg-age  more 
than  four  months  before  bankruptcy,  which  would  be  valid 
t'gainst  the  trustee,  although  the  instrument  was  recorded 
within  the  four  months.  The  date  of  recording  the  instru- 
ment marks  the  beginning  of  the  four  months'  period  in  case 
of  an  act  of  bankruptcy  created  by  a  preference.'^  One  four 
months'  period  of  time  therefore  determined  whether  a  trans- 
fer was  a  preference  and  an  act  of  bankruptcy,  but  a  different 
four  months'  period  w^as  the  test  as  to  whether  the  same  trans- 
fer was  a  preference  and  an  asset  to  be  recovered  by  the 
trustee.  To  correct  the  evil  of  secret  liens  and  to  make  the 
same  period  the  test  in  both  instances  Section  60a  was  amend- 
ed by  the  act  of  1903. **  The  amendment  provides  that  "where 
a  preference  consists  in  a  transfer,  such  period  of  four  months 
chall  not  expire  until  after  the  date  of  recording  or  register- 
ing of  the  transfer,  if  by  law  such  recording  or  registering  is 
required."  ^*^ 

In  applying  this  provision  the  courts  differ  as  to  the  mean- 
mg  of  the  word  "required."  "  As  the  amendment  was  intro- 
duced in  the  House  it  read  "required  or  permitted."  In  this 
legard  it  followed  the  phraseology  of  Section  3b  oi  the  act. 
The  Senate  struck  out  the  words  "or  permitted*."  ^"  It  has 
been  held  that  an  instrument  may  be  said  to  be  "required" 
to  be  recorded,  when  recording  is  necessary  to  make  the 
transfer  or  lien  valid  as  against  the  claims  of  the  creditors 
represented  by  the  trustee,  but  if  under  the  laws  of  the  state 


Rep.  596,  15  Am.  B.  R.  502;  In  re 
Noel,  137  Fed.  Rep.  694,  14  Am. 
B.  R.  715;  In  re  Ewald  &  Brain- 
ard,  135  Fed.  Rep.  168,  14  Am.  B. 
R.  267. 

'B.  A.  1898,  Sec.  zh. 

°32  Stat,  at  L.  797;  In  re  Hunt, 
139  Fed.  Rep.  283,  14  Am.  B.  R. 
416;  Loeser  v.  Savings  Deposit 
Bank  &  Trust  Co.  (C.  C.  A.  6th 
Cir.),    148  Fed.   Rep.  . 

"  B.  A.  1898,  Sec.  60a,  as  amend- 
ed Feb.  5,  1903,  ^2  Stat,  at  L.  797. 


"  This  question  is  now  pending 
in  the  supreme  court  of  the  United 
States,  in  Loeser  v.  Savings  De- 
posit Bank  &  Trust  Co.,  on  appeal 
from  the  U.  S.  circuit  court  of  ap- 
peals for  the  sixth  circuit.  The  ap- 
peal was  taken  Dec.  3,   1906. 

'"For  a  history  of  this  amend- 
ment, see  In  re  Hunt,  139  Fed. 
Rep.  283,  14  Am.  B.  R.  416;  Loeser 
V.  Savings  Deposit  Bank  &  Trust 
Co.  (C.  C.  A.  6th  Cir.),  148  Fed. 
Rep.  . 


PREFERENCES    AND    LIENS.  569 

the  transfer  or  lien  is  valid  as  against  the  claims  of  such 
creditors  without  recording  such  recording  is  not  required.-^ 
It  is  a  serious  objection  to  this  construction  that  it  does  not 
materially  change  the  rule,  which  existed  prior  to  the  amend- 
ment. Some  effect  should  be  given  to  the  amendment  if  the 
language  of  the  provision  will  permit. 

The  better  rule  is  that  the  word  "required"  refers  to  the 
character  of  the  instrument  giving  the  preference  and  not  as 
to  the  persons  as  between  whom  it  may  be  valid  without  re- 
cording or  the  persons  as  to  whom  it  may  be  void  for  failure 
to  record;  that  is  to  say,  if  the  instrument  falls  within  the 
class  of  instruments  subject  to  record  under  the  laws  of  the 
state,  it  is  "required"  to  be  recorded  within  the  meaning  of 
this  provision."  This  construction  gives  effect  to  the  amend- 
ment and  makes  the  same  period  of  time  the  test  as  to  whether 
a  preferential  transfer  subject  to  record  is  an  act  of  bank- 
ruptcy or  may  be  avoided  and  the  property  recovered  b}-  the 
trustee.  It  is  true  that  a  mortgagee  may  have  a  valid  lien 
under  the  state  law  for  more  than  four  months  by  reason  of 
the  age  of  his  mortgage  and  that  it  may  be  avoided  as  a 
preference  because  not  recorded  or  because  recorded  within 
four  months  of  bankruptcy.  It  should  be  borne  in.  mind  that 
all  preferences  are  valid  under  state  laws,  as  has  been  pointed 
out  above,  and  are  invalid  only  because  they  fall  within  a 
class  of  transfers  made  within  the  period  of  time  fixed  by 
the  bankrupt  act. 

Where  no  recording  or  registering  is  required  under  the 
state  law,  this  provision  does  not  apply  and  the  general  rule 
prevails ;  namely,  that  the  four  months'  period  begins  to  run, 
in  the  absence  of  fraud,  from  the  time  the  transfer  is  made.^^ 

"Meyer  Drug  Co.  v.  Pipkin  Drug  supreme   court   Dec.   3,    igo6;    First 

Co.    (C.   C.  A.  5th   Cir.),    136  Fed.  Nat.     Bank     v.     Connett      (C.     C. 

Rep.  396,  14  Am.  B.  R.  477;  In  re  A.    8th    Cir.),     142    Fed.    Rep.    33, 

Hunt,  139  Fed.  Rep.  283.  14  Am.  B.  15    Am.    B.     R.    662:     English    v. 

R.  416.  Ross.    140    Fed.    Rep.   630,    15    .Xm. 

"  Loeser  v.  Savings  Deposit  Ban'  B,   R.  370. 
&  Trust   Co.    (C.   C.   A.  6th   Cir.),        '=  Meyer    Drug     Co.     v.     Pipkin 

148    Fed.    Rep.    ,    appealed    to  Drug  Co.    fC.  C  A.  5th  Cir.),   136 


570 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


It  may  be  observed  that  Section  60a  as  amended  does  not 
contain  the  provision  of  Section  3b  with  reference  to  the  four 
months'  period  beginning  to  run,  when  recorchng  is  not  re- 
quired, from  the  date  when  possession  is  taken  or  notice  is 
otherwise  brought  home  to  the  crechtors  of  the  bankrupt.  It 
has  been  held  that  this  clause  is  to  be  read  into  Section  60a. ^" 
If  possession  or  notice  in  some  form  is  necessary  to  a  valid 
transfer  the  time  would  regularly  begin  to  run  from  the  date 
such  possession  is  taken  or  notice  given.  If  Congress  had 
intended  this  clause  to  be  read  into  Section  60a  it  is  fair  to 
presume  that  it  would  have  been  incorporated  in  it  by  the 
amendment. 

Where  a  creditor  in  pursuance  of  a  valid  contract,  exe- 
cuted prior  to  the  four  months,  exercises  his  right  in  possess- 
ing himself  of  the  bankrupt's  property  under  such  contract 
within  four  months  no  preference  is  created. ^^    Where  a  cred- 


Fed.  Rep.  396,  14  Am.  B.  R.  477; 
In  re  Hunt,  139  Fed.  Rep.  283,  14 
Am.  B.  R.  416. 

'*  In  Long  V.  Farmers'  State 
Bank  (C.  C.  A.  8th  Cir.),  147  Fed. 
Rep.  360,  365,  the  court  said : 
"Said  provisions  of  Sections  3  and 
60  are  to  be  read  together.  When 
so  read  there  can  be  no  permissi- 
ble question  but  that  the  date  of 
the  preference  referred  to  in  Section 
60  is  the  same  as  that  referred  to 
in  Section  3&,  which,  as  applied  to 
the  facts  of  this  case,  is  the  date 
when  the  transferee  takes  posses- 
sion of  the  property,  unless  the  in- 
strument under  which  the  claim  is 
made  antedated  the  four  months' 
period  and  was  recorded  prior 
thereto,  if  authorized  to  be  record- 
ed under  the  local  statute,  or  if  not 
so  entitled  then  from  the  date  the 
beneficiary  takes  notorious,  exclu- 
sive possession,  unless  the  creditors 
of  the  bankrupt  had  actual  notice  of 
the  alleged  contract.     There  is  no 


pretense  made  in  this  case  of  any 
such  disclosure.  There  was,  there- 
fore, no  effective  transfer  of  this 
property  under  the  bankrupt  act 
until  June  28,  1904,  when  the  money 
was  turned  over  by  the  insolvent 
to  the  bank;  and  this  for  the  pal- 
pable reason  that  that  was  the  first 
time  the,  bank  took  any  possession 
of  the  property  or  gave  any  rec- 
ognizable notice  to  any  creditor  of 
the  bankrupt  of  its  asserted  title 
or  lien.  This  we  hold  is  so  both 
upon  reason  and  the  weight  of  au- 
thority." 

See  also  English  v.  Ross,  140 
Fed.  Rep.  630,  15  Am.  B.  R.  370. 

"  Sabin  v.  Camp,  98  Fed.  Rep. 
974,  3  Am.  B.  R.  578;  In  re  Wolf, 
98  Fed.  Rep.  74,  3  Am.  B.  R.  555; 
Thompson  v.  Fairbanks,  196  U.  S. 
516,  49  L.  Ed.  577,  13  Am.  B.  R. 
437;  Humphrey  v.  Tatman,  198  U. 
S.  91,  49  L.  Ed.  956,  14  Am.  B.  R. 
74;  Fisher  v.  Zollinger,  148  Fed. 
Rep.  ;  Wood  V.  U.  S.  Fidelity 


PREFERENCES    AND    LIENS.  571 

itor  previously  agreed  to  receive  grain  in  payment  of  his 
debt,  the  transfer  dates  from  the  time  when  the  warehouse 
receipt  is  mailed  to  him,  but  if  the  creditor  had  not  previously 
agreed  to  receive  grain  in  payment  of  his  debt,  the  transfer 
dates  from  the  time  when  the  receipt  sent  by  mail  is  received 
and  accepted  by  him.^**  In  other  words,  it  dated  from  the 
time  the  contract  is  actually  made.  An  order  on  a  third 
person  for  money  is  not  effective  as  a  transfer  until  it  is  pre- 
sented for  payment  and  the  four  months'  period  does  not  be- 
gin to  run  until  that  time.^^  Where  four  months  have  elapsed 
after  the  giving  of  a  firm  note  by  a  person  to  pay  a  separate 
debt  before  the  bankruptcy  of  the  firm,  but  less  than  four 
months  before  the  bankruptcy  of  the  partner,  the  transfer  is 
\alid.-*'  But  where  the  arrangement  Vv-as  made  by  which 
property  was  changed  from  joint  to  several  after  insolvency 
and  within  four  months  of  bankruptcy,  it  was  held  voidable."' 
It  has  been  held  that  where  an  agreement  to  pledge  is  made 
more  than  four  months  prior  to  bankruptcy,  but  the  goods 
actually  pledged  within  four  months,  a  preference  is  created."" 
If,  however,  the  agreement  is  to  pledge  a  particular  thing, 
which  is  subsequently  delivered,  the  date  of  the  delivery  re- 
lates back  to  the  time  of  making. the  agreement  and  the  four 
months'  period  should  be  computed  from  the  date  of  the  agree- 
ment."^ The  same  rule  applies  to  agreements  to  give  mort- 
gages.-' 

&  Guaranty  Co.,  143  Fed.  Rep.  424,  Cos.,  i  Low.  207;  In  re  Federhen, 

16    Am.    B.    R.    21;    Union    Trust  Cas.,    i    Low.   207;    In    re   Johnson. 

Co.  V.  Bulkeley  (C.  C.  A.  6th  Cir.),  No.  7369  Fed.  Cas.,  2  Low.   129. 

150  Fed.  Rep.  .  '^'' In    re    Sheridan,   98    Fed.    Rep. 

"Brooks  V.   Scroggins,   11   N.  B.  406,   3    Am.    B.    R.    554;    Nisbit   v. 

R.  258.  Macon    Bank    &    T.    Co.,    12    Fed. 

'"Johnston   v.    Huff,    Andrews   &  Rep.  686;   Copcland  v.  Barnes,   147 

Moyler  Co.,   \2,3  Fed.  Rep.  704,   13  Mass.  388. 

Am.    B.    R.    287.  ''See  Wilder  v.  Watts,   138  Fed. 

'^  In  re  Lane,  No.  8044  Fed.  Cas.,  Rep.  427,  15  Am.  B.  R.  57;  Union 

2  Low.   2^?>-     See  also   Forsaith  v.  'Jrust    Co.    v.    Bulkeley    (C.    C.    A. 

Merritt,  No.  4946  Fed.  Cas.,  i  Low.      (xh   Cir.).    150   VeA.   Rep.  . 

336;  In  re  Shepard,  No.  12754  Fed.  "'Douglas  v.  Voegler,  6  Fed.  Rep. 

Cas.,  3  Ben.  347.  52;    Sabin   v.    Camp.   98    Fed.    Rep. 

"In    re    Waite,    No.    17044    Fed.  974,  3  Am.   B.   R.   578;    Pollock  v. 


Ill 


LAW     AND     rkUCKEDlNGS    IN     liANKUTPTCY. 


The  date  from  which  an  unauthorized  act  of  an  agent 
which  has  been  ratified  is  computed  is  the  date  of  the  act  and 
not  of  the  ratification.  This  rule  is  subject  to  the  exception 
that  intervening-  rights  of  third  persons  can  not  be  defeated  by 
the  ratification.-^ 

In  computing  the  four  months  the  first  day  is  exckided 
<.nd  the  last  inchided,  unless  the  last  day  falls  on  a  Sunday  or 
holiday,  in  which  event  the  last  -day  included  shall  be  the 
next  day  thereafter  which  is  not  a  Sunday  or  a  legal  holiday.^" 
Holidays  are  defined  by  the  act  to  include  Christmas,  the 
fourth  of  July,  the  twenty-second  of  February,  and  any  day 
appointed  by  the  president  of  the  United  States  or  the  con- 
gress of  the  United  States  as  a  holiday  or  as  a  day  of  public 
lasting  or  thanksgiving.^'' 

If  the  transfer  is  made  wnthin  four  months  or  before  the 
adjudication  it  may  be  avoided  and  set  aside."^  If  it  has  been 
made  prior  to  that  time  it  is  a  valid  preference,  and  the  cred- 
itor secured  thereby  will  be  protected  under  the  bankrupt  act.^'* 
But  where  a  transfer  is  made  by  the  debtor  after  an  adjudi- 
cation, and  before  a  trustee  is  appointed,  it  is  not  a  prefer- 


Jones  (C.  C.  A.  4th  Cir.),  124  Fed. 
Rep.  163,  10  Am.  B.  R.  616;  In  re 
Dismal  Swamp  Const.  Co.,  135  Fed. 
Rep.  415,   14  Am.  B.  R.   175. 

=='Cook  V.  Tulis,  18  Wall.  338, 
21,  L.  Ed.  933;  In  re  Kansas  Manu- 
facturing Co.,  No.  7610  Fed.  Cas., 
9  N.  B.  R.  76;  Strain  v.  Gourdin, 
No.  1352 1  Fed  Cas.,  2  Woods,  380. 

''B.  A.  1898,  Sec.  31;  Dutcher 
V.  Wright,  94  U.  S.  553.  24  L.  Ed. 
130:  In  re  Hill.  140  Fed.  Rep.  984, 
15  .A.m.  B.  R.  499;  In  re  Lang,  No. 
8056  Fed.  Cas.,  2  N.  B.  R.  480; 
Jones  V.  Stevens,  94  Me.  582,  5  Am. 
B.  R.  571 ;  Whitley  Grocery  Co.  v. 
Roach,  115  Ga.  918. 

^' B.  A.  1898,  Sec.  I,  clause  14. 

^  Blennerhassett  v.  Sherman,  105 
U.  S.  100,  26  L.  E.  D.  1080;  Auff- 


m'ordt  V.  Rasin,  102  U.  S.  620,  26 
L.  Ed.  262;  Wager  v.  Hall,  16 
Wall.  584,  21  L.  Ed.  504;  Gibson  v. 
Warden,  14  Wall.  244,  20  L.  Ed. 
797;  Dutcher  v.  Wright,  94  U.  S. 
553,  24  L.  Ed.  130;  In  re  Klinga- 
man,  loi  Fed.  Rep.  691,  4  Am.  B. 
R.  254;  In  re  Woodward,  95  Fed. 
Rep.  260,  2  Am.  B.  R.  239;  Sa- 
bring V.  Wellington  (N.  Y.  Sup. 
Ct.  App.  Div.),  6  Am.  B.  R. 
671 ;  In  re  McLam,  3  Am.  B.  R. 
245,  97  Fed.   Rep.  922. 

""  Bank  v.  Sherman,  loi  U.  S. 
404,  25  L.  Ed.  866;  In  re  Randall, 
No.  11552  Fed.  Cas.,  I  Saw.  56; 
Taylor  v-  Robertson,  21  Fed.  Rep. 
209;  In  re  Kindt,  loi  Fed.  Rep.  107, 
4  Am.  B.  R.  148;  In  re  Wright,  96 
Fed.  Rep.  187,  2  Am.  B.  R.  364. 


PREFERENCES    AND    LIENS.  573 

tnce,""  but  simply  an  unlawful  intermeddling.     Such  a  trans- 
fer is  at  least  voidable. 

§  195.     Payments. 

A  payment  of  money  within  four  months  of  bankruptcy  by 
an  insolvent  to  apply  on  a  debt  past  due  is  a  preferential  trans- 
fer of  property,  irrespective  of  the  intent  of  the  parties,  where 
it  has  the  effect  of  enabling  a  creditor  to  obtain  a  greater  per- 
centage of  his  debt  than  other  creditors  of  the  same  class.^ 
Such  a  preferential  payment  may  be  recovered  or  required  to 
be  surrendered  before  claim  is  allowed  in  cases  where  the 
person  receiving  it  or  to  be  benefited  thereby,  or  his  agent 
acting  therein,  shall  have  had  reasonable  cause  to  believe  that 
it  was  intended  thereby  to  give  a  preference,"  but  not  other- 
wise.^ 

It  has  been  held  to  be  a  preference  to  pay  a  note  or  check, 
even  W'here  there  is  an  endorsement  by  a  solvent  party.*  If 
the  surety  pays  the  debt  of  his  principal  he  takes  it  subject 
to  the  disqualifications  and  limitations  of  the  principal  debtor, 
and  if  the  principal  creditor  had  received  preferential  paynients 
it  is  as  if  the  endorser  had  received  such  preferential  pay- 
ments.^    It  should  be  observed  that  it  is  the  payment  on  a 

'"Ryttenberg  v.  Schefer,  131  Fed.  Rep.  326,  7  Am.  B.  R.  412;  Landry 

Rep.  313,  ir  Am.  B.  R.  652.  v.  Andrews,  21  R.  I.  597,  6  Am.  B. 

'B.  A.  1898  Sec.  60a,  as  amend-  R.  281;  In  re  Geo.  M.  Hill  Co.  (C. 

ed  Feb.  5,  1903;  Pirie  v.  Trust  Co.,  C.  A.  7th  Cir.),  130  Fed.  Rep.  315, 

182  U.  S.  438,  45  L.  Ed.  1 171,  5  Am.  12   Am.    B.    R.    221 ;    Harris   v.   2d 

B.  R.  814.  Nat.  Bank,  no  Tenn.  239. 

^  In   re   Goodhile,    130   Fed.   Rep.  *  Swarts  v.  Siegel   (C.  C  A.  8th 

471,  12  Am.  B.  R.  374.     For  a  dis-  Cir.),  117  Fed.  Rep.   13,  8  Am.  B. 

cussion  of  the  elements  of  a  void-  R.    689;    Livingston    v.    Heineman 

able    preference,    see    Sec.    194,    et  (C.  C.  A.  6th  Cir.),  120  Fed.  Rep. 

seq.  786,  ID  Am.  B.  R.  39;  In  re  Lyon 

^Sherman  v.   Luckhardt,  96   Mo.  (C.  C.  A.  2d  Cir.),   10  Am.  B.   R. 

App.   320,   9   Am.    B.    R.   307.  25,  121  Fed.  Rep.  72^. 

*  S warts  V.  4th  Nat.  Bank  (C.  C.  But  see  In  re  Levi,  121  Fed.  Rep. 

A.   8th    Cir.),    117   Fed.    Rep.    i,   8  198,  9  Am.  B.  R.  176;  In  re  Wyly, 

Am.  B.  R.  673;  In  re  Lyon  (C.  C.  116  Fed.  Rep.  38,  8  Am.  B.  R.  604; 

A.  2d  Cir.),  121   Fed.  Rep.  723,  10  In   re  New,    116   Fed.   Rep.    116,  8 

Am.   B.    R.   25,   affirming    114   Fed.  Am.  B.  R.  566. 


.■>/ 


4 


LAW     AND     I'KorKF.nTNC.S     IX      B AN  KKl' I'TCV 


check  in-  iu)tc  and  nol  the  j^ivint;-  of  il  thai  constitutes  a  prefer- 
ence." but  giving  the  note  of  a  third  person  creates  a  pref- 
erence." Payments  on  account  of  loans  constitute  a  preference, 
although  the  loans  were  made  during  the  insolvency  and  within 
the  four  months'  period.''  Where  a  bank  borrows  one  of  its 
depositor's  deposit  and  gives  security  therefor,  the  giving  se- 
curity creates  a  preference."-'  A  payment  to  a  bank  to  pay  a 
note  which  the  bank  has  discounted  is  a  preference  in  favor  of 
the  person  who  had  the  note  discounted.^"  Giving  an  order  on 
mother  which  is  afterwards  accepted  and  paid  is  a  prefer- 
ence.^^ To  pay  for  goods  ten  days  after  delivery  is  not  a 
cash  transaction  but  a  preferential  payment.^-  It  is  a  voidable 
preference  to  return  goods  once  purchased. ^^  Payments  to 
an  endorsee  who  holds  the  note  as  collateral  security  for  a 
debt  of  the  payee  are  payments  to  the  payee  and  a  prefer- 
ence.^* A  payment  which  relieves  a  surety  is  a  preference 
in  favor  of  the  surety.^^  It  has  been  held  to  be  a  preference 
to  pay  any  creditor  in  full  while  insolvent  and  leave  others 
unpaid, ^'^  and  it  does  not  take  it  out  of  the  general  rule  that 
the  payment  was  made  to  a  holder  of  a  note  overdue,  on 
w'hich  there  was  a  solvent  indorser,  whose  liability  was  already 


^  In  re  Wolf  &  Levy,  122  Fed. 
Rep.  127,  10  Am.  B.  R.  153. 

'/h  re  Crooks  v.  Nat.  Bank  (N. 
Y.  Sup.  Ct.  App.  Div.),  3  Am.  B. 
R.  238;  Dickinson  v.  Security  Bank 
(C.  C.  A.  4th  Cir.),  no  Fed.  Rep. 
353,  6  Am.  B.  R.  551. 

'  In  re  Colton  Export  &  Import 
Co.  (C.  C.  A.  2d  Cir.),  121  Fed. 
Rep.  663,  10  Am.  B.  R.  14. 

"Ill  re  Cobb,  96  Fed.  Rep.  821, 
3  Am.  B.  R.  129. 

"  In  re  Waterbury  Furniture 
Co.,  114  Fed.  Rep.  255,  8  Am.  B. 
R.  79- 

"/m  re  Dundas,  in  Fed.  Rep. 
500,  7  Am.  B.  R.  129. 

'^/m  re  Morrow  &  Co.,  134  Fed. 
Rep.  686,  13  Am.  B.  R.  392. 


"/«  re  Andrews,  135  Fed.  Rep. 
599,  14  Am.  B.  R.  247. 

"/7i  re  Mejer,  115  Fed.  Rep.  997, 
8  Am.  B.  R.  598. 

'°  Livingstone  v.  Heineman  (C. 
C.  A.  6th  Cir.),  120  Fed.  Rep.  786, 
10  Am.  B.  R.  39;  Crandall  v.  Coats, 
133  Fed.  Rep.  965,  13  Am.  B  .R. 
712. 

""  Fox  V.  Gardner,  21  Wall.  475, 
22  L.  Ed.  685 ;  In  re  Foley,  140 
Fed.  Rep.  300,  14  Am.  B.  R. 
829;  In  re  Oregon  Bulletin  Print- 
ing and  Publishing  Co.,  No.  10559 
Fed.  Cas.,  13  N.  B.  R.  503;  Silver- 
man's Case,  No.  12855  Fed.  Cas., 
I  Saw.  410;  In  re  Dibblee,  No. 
3884  Fed.  Cas.,  3  Ben.  283,  sub  nom 
Clark  V.  Iselin,  21  Wall.  360,  22  L. 
Ed.  568. 


PREFERENCES    AND    LIENS.  575 

fixed/'  or  to  pay  a  private  debt  out  of  partnership  property/^ 
or  to  pay  an  overdraft  on  a  bank/''  or  either  directly  or  indi- 
rectly, in  contemplation  of  the  filing  of  a  petition  by  or  against 
him,  to  pay  money  or  transfer  property  to  an  attorney  and 
counselor  at  law,  solicitor  in  equity  or  proctor  in  admiralty 
for  services  to  be  rendered.  Such  transaction  may  be  re- 
examined by  the  court  on  petition  of  the  trustee  or  any  cred- 
itor, and  shall  only  be  held  valid  to  the  extent  of  a  reasonable 
amount  to  be  determined  by  the  court,  and  the  excess  may  be 
recovered  by  the  trustee  for  the  benefit  of  the  estate."** 

It  is  a  preference  for  a  clearing-house,  having  notice  of 
the  failure  of  a  bank,  to  apply  in  its  settlement  of  accounts 
the  credit  item  to  the  payment  of  claims  of  other  banks  against 
the  insolvent  bank.-^  Such  funds  pass  to  the  trustee  in  bank- 
ruptcy. 

But,  on  the  other  hand,  it  has  been  held  not  to  be  a 
preference  to  pay  rent  for  the  purpose  of  preserving  a  valu- 
able lease,--  or  to  make  payments  and  sales  under  a  running 
account,  where  new  sales  succeed  payments  and  the  net  result 
is  to  increase  the  indebtedness  of  the  bankrupt,  because  the 
creditor  does  not  obtain  a  greater  percentage  of  his  debt  than 
other  creditors,-''  or  to  pay  wages  because  if  there  are  sufficient 

"  Bartholow    v.    Bean,    i8    Wall.  "'  Rector    v.    City    Deposit    Bank, 

635,  21  L.  Ed.  866.  JOG  U.   S.  405,   50  L.   Ed.   5.?;,    15 

'"In    re    Mattot,    No.    9282    Fed.  Am.    B.    R.    336;    Rector   v.    Com- 

Cas.,   16  N.   B.  R.  485.  mcrcial  Nat'l  Bank,  200  U.  S.  420, 

"  Payne    v.    Solman,    No..    10856  so  L.  Ed.  533,  15  Am.  B.  R.  347. 

Fed.  Cas.,   14  N.  B.   R.   162;  In  re  "In    re    Peaison,    95    Fed.    Rep. 

Kellar,    no   Fed.   Rep.   348,   6  Am.  425,  2  Am.  B.  R.  482;   Merchants' 

B.  R.  621.  Insurance  Co.,  No.  9441  Fed.  Cas., 


20 


B.  A.   1898,  Sec.  6od;  Furth  v.  3  Biss.   162;  contra,  Smith  v.  Teu- 

Stahl    (Sup.  Ct.  Pa.).  205   Pa.  439,  tonia  Ins.  Co.,  No.  131 13  Fed.  Cas., 

10  Am.  B.  R.  442;  In  re  Lewin,  4  6  .\m.  Law  Rev.  584. 

Am.  B.  R.  632,  103  Fed.  Rep.  850;  In  re  Lange,  97  Fed.  Rep.  197,  3 

In    re    Corbett,    5   Am.    B.    R.   224,  Am.  B.  R.  231,  Judge  Brown  said: 

104  Fed.  Rep.  872;  In  re  Habegger  "Payment   of   rent   by   an   insolvent 

(C.  C.  A.  8th  Cir.),  139  Fed.  Rep.  is  not  necessarily  a  preference.    But 

623,    15    Am.    B.    R.    198,    Pratt    v.  when  it  is  done  as  a  means  and  for 

Bothe     (C.    C.    -A.    6th    Cir.),    130  the  purpose  of  carrying  on  a  busi- 

Fed.   Rep.   670,    12   Am.   B.   R.   529;  ness  in  fraud  of  creditors  it  should 

Swartz  V.  Frank,  183  Mo.  438.     See  be  so  regarded." 

also    Sec.   41a,   ante.  =^Jaquith  v.  Alden  189  U.  S.  78, 


0/6 


LAW     AND     PROCEEDINGS    IN     BANKRUPTCY. 


assets  to  pay  all  labor  claims  of  the  same  class  in  full,  payments 
on  account  prior  to  the  bankruptcy  are  immaterial  as  each 
creditor  of  that  class  is  fully  paid,  and  therefore  there  can  be 
no  preference  of  one  o\-er  another,-"*  or  to  repay  a  bank  money 
advanced  for  a  certain  purpose  on  a  check  when  not  used  for 
such  purpose,"''  or  to  pay  money  on  account  of  interest  on 
statutory  dower.-"  or  to  pay  interest  in  advance  for  the  re- 
newal of  a  loan,"'  or  to  make  fictitious  book  entries  where  no 
actual  value  passes."^  or  to  collect  book  accounts  assigned  at 
the  time  the  credit  was  given, "'^  or  to  subsequently  take  pos- 
session of  property  or  give  security  for  a  debt  in  accordance 
with  an  agreement  made  at  the  time  the  debt  w^as  created,'^" 
or  to  pay  an  old  debt  separate  and  distinct  from  an  indebtedness 
arising  upon  an  open  account,'"*^  or  to  pay  a  percentage  on 


47  L.  Ed.  717,  9  Am.  B.  R.  ^^y, 
Yaple  V.  Dahl-Milliken  Co.,  193 
U.  S.  526,  48  L.  Ed.  776,  1 1  Am.  B. 
R.  569;  Peterson  v.  Nash  (C.  C. 
A.  8th  Cir.),  112  Fed.  Rep.  311,  7 
Am.  B.  R.  181;  In  re  H.  C.  King 
Co.,  113  Fed.  Rep.  no,  7  Am.  B.  R. 
619;  Dickson  v.  Wyman  (C.  C- 
A.  1st  Cir.),  Ill  Fed.  Rep.  726,  7 
Am.  B.  R.  186;  In  re  Sagor  & 
Bro.  (C.  C.  A.  2d  Cir.),  121  Fed. 
Rep.  658,  9  Am.  B.  R.  361 ;  Cans 
V.  EHison  (C.  C.  A.  3d  Cir.),  114 
Fed.  Rep.  734,  8  Am.  B.  R.  153; 
Kimball  v.  Rosenham  Co.  (C.  C. 
A.  8th  Cir.),  114  Fed.  Rep.  85,  7 
Am.  B.  R.  718. 

Where  the  additional  credits  do 
not  equal  the  payments  the  differ- 
ence only  need  be  surrendered. 
Cans  V.  Ellison  (C.  C.  A.  3d  Cir.), 
114  Fed.  Rep.  734,  8  Am.  B.  R. 
153;  In  re  Geo.  M.  Hill  Co.  (C.  C. 

A.  7th    Cir.),    130   Fed.    Rep.    315, 
12  Am.  B.  R.  221. 

^'Vn  re  Feuerlicht,  8  Am.  B.  R. 
550;  In   re  Reed  &  Knight,   7  Am. 

B.  R.  III. 


But  see  In  re  Kohn,  7  Am.  B.  R. 
Ill  (note);  In  re  Jones,  no  Fed. 
Rep.  736,  4  Am.  B.  R.  563;  In  re 
Proctor,  6  Am.  B.  R.  660. 

^^  Dressel  v.  North  State  Lumber 
Co.,  119  Fed.  Rep.  531,  9  Am.  B. 
R.  541- 

""/n  re  Riddle's  Sons,  122  Fed. 
Rep.   559,    10   Am.    B.   R.   204. 

""In  re  Kellar,  no  Fed.  Rep.  348, 
6  Am.  B.  R.  621. 

"^/w  re  Steam  Vehicle  Co.,  121 
Fed.  Rep.  939,  10  Am.  B.  R.  385. 

^  In  re  Little,  no  Fed.  Rep.  621, 

6  Am.  B.  R.  681 ;  Young  v.  Upson, 
115   Fed.   Rep.    192,   8  Am.   B.    R. 

zn- 

^"  Sabin  v.  Camp,  98  Fed.  Rep. 
974,  3  Am.  B.  R.  578. 

But  see  In  re  Sheridan,  98  Fed. 
Rep.  406,  3  Am.  B.  R.  554. 

"'  In  re  Abraham  Steers  Lumber 
Co.,  7  Am.  B.  R.  332,  112  Fed.  Rep. 
406;  In  re  Seay,  7  Am.  B.  R.  700, 
113  Fed.  Rep.  969;  In  re  Champion, 

7  Am.  B.  R.  560 ;  Dickson  v.  Wy- 
man, 7  Am.  B.  R.  186,  III  Fed. 
726. 


PREFERENCES    AND    LIENS. 


577 


claims  of  a  part  of  the  creditors  when  the  others  will  receive 
the  same  percentage,'"  or  to  pay  unearned  premiums  on  poli- 
cies on  insurance/''^  or  a  payment  made  in  full  to  a  creditor 
by  a  third  person  as  a  friendly  act.^*  The  reason  for  this  is 
that  the  fund  to  which  the  creditors  look  for  payment  is  in 
nowise  diminished.  It  has  been  held  not  to  constitute  a  prefer- 
ential payment  that  where  mutual  debts  and  credits  have  been 
adjusted  in  good  faith  by  payments  by  the  debtor, ^^  for  the 
acceptance  and  payment  of  a  bill  of  exchange  which  had  been 
given  before  insolvency  after  the  debtor's  insolvency  was  no- 
torious,^^ or  when  a  payment  was  made  to  a  collection  agency, 
whose  attorney  knew  that  it  was  a  preference,  but  the  creditor 
did  not  have  cause  to  believe  it.^' 


In  the  case  of  Abraham  Steers 
Lumber  Co.,  112  Fed.  Rep.  406,  7 
Am.    B.    R.    332,   the   court    says : 

"The    bankrupt    was    indebted    to 
the  creditor  upon  an  open  account, 
and    at    a    date    more    than    four 
months  previous  to  the  fihng  of  the 
petition  made  a  payment  upon  that 
account    of    money,    and    gave    his 
note    for   the   balance,    which   pay- 
ment and  note  were  treated  by  the 
creditor   as    full    payment,    and    the 
account    was    balanced     upon     his 
books.     The    debtor    was   insolvent 
at  the  time,   but   the   creditors   had 
no  reasonable  cause  to  believe  that 
preference    was    intended.      Subse- 
quently the  bankrupt  contracted  an- 
other debt  with  the  creditor.     The 
question   is,   whether  proof  of  that 
debt  can  not  be  allowed  without  a 
surrender    by    the    creditor    of    the 
payment    received    upon    the    pre- 
vious debt.     We  are  of  the  opinion 
that   the    payment,    notwithstanding 
it  was  a  preference,  being  upon  a 
distinct  and  independent  debt  than 
that  which  is  sought  to  be  proved, 
need    not    be    surrendered    by    the 
creditor.     .     .     .     We  do  not  deem 
it    necessary    to    enlarge    upon    the 


reasons  for  our  conclusions  in  re- 
spect to  these  questions.  These  are 
fully  discussed  in  the  opinion  of 
Judge  Thomas,  who  decided  the 
case  in  the  court  below,  and  we 
fully  concur  in  his  views." 

^"  Brittain  Dry  Goods  Co.  v.  Ber- 
tenshaw,  68  Kan.  634;  In  re  Hap- 
good,  No.  6044  Fed.  Cas.,  2  Low. 
200;  Jones  v.  Sleeper,  No.  7496 
Fed.  Cas.,  2  N.  Y.  Leg.  Obs.  131. 
^  Knickerbocker  Ins.  Co.  v.  Com- 
stock,  No.  7879  Fed.  Cas.,  9  N.  B. 
R.  484. 

^*  Dressel  v.  North  State  Lumber 
Co.,  119  Fed.  Rep.  531,  9  Am.  B. 
R.  S41 ;  Goode  v.  Elwood  Lodge, 
160  Ind.  241  ;  Kcegan  v.  Hamilton 
Nat.  Bank.  163  Ind.  216;  Win.sor 
V.  Kendell,  No.  17886  Fed.  Cas.,  3 
Story,  507;  Repplicr  v.  Bloodgood, 
I  Sweeney  (N.  Y.  Sup.  Ct.)  34. 

'°  Robinson  v.  Ins.  Co.  Bank,  No. 
T1969  Fed.  Cas..  9  Biss.  117;  Hough 
V.  National  Bank,  No.  6721  Fed. 
Cass.,  4  Biss.  349;  Winslow  v.  Bliss, 
3  Lansing  (N.  Y.)  220. 

•■"'■  In  re  Baxter,  28  Fed.  Rep.  452. 

''  Hoover  v.  Wise,  91  U.  S.  308, 
23  L.   Ed.  392. 

The  attorney's  knowledge  in  this 


S7S 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


A  deposit  of  money  in  a  bank  subject  to  check  within  the 
four  nutntlis'  period  is  not  a  jireferential  payment.''^ 

§  196.     Sales. 

Tlie  law  does  not  recognize  that  every  sale  of  property  by 
an  embarrassed  person  within  the  period  limited  is  necessarily 
in  fraud  of  the  bankrupt  act/  If  it  were  so,  no  one  would 
know  with  whom  he  could  safely  deal ;  and,  besides,  a  person 
in  this  condition  would  have  no  encouragement  to  make  proper 
efforts  to  extricate  himself  from  the  dit'hculty. 

The  interdiction  in  the  act  with  reference  to  preferences 
applies  to  sale^  having  a  fraudulent  object,  and  not  to  those 
with  an  honest  purpose.  Thus  the  transfer  of  property  by 
an  insolvent  to  a  creditor,  with  the  consent  of  all  his  other 
creditors,  is  not  a  preferential  sale  w^hich  can  be  set  aside  by 
the  trustee."  So  also  a  sale  by  a  merchant  of  his  entire  stock 
of  goods  for  full  value,  in  the  absence  of  fraud,  can  not  be 
impeached."  It  has  also  been  held  that  a  bona  fide  purchaser 
will  be  protected  to  the  extent  of  the  actual  money  paid  as 
consideration.* 

In  order  to  set  aside  a  sale  on  the  ground  that  it  is  a  pref- 
erence, four  things  must  concur:  First,  the  sale  must  be 
made  by  an  insolvent  person  to  a  creditor;  second,  the  effect 
of  such  sale  must  be  to  enable  that  creditor  to  obtain  a 
greater  percentage  of  his  debt  than  any  other  of  such  cred- 


case  was  that  of  his  principal — 
the  collection  agency — and  not  the 
creditors,  who  did  not  employ  him. 

^N.  Y.  County  Bank  v.  Massey, 
192  U.  S.  138,  48  L.  Ed.  380,  II 
Am.  B.  R.  42;  In  re  Geo.  M.  Hill 
Co.  (C.  C.  A.  7th  Cir.),  130  Fed. 
Rep.  315,  12  Am.  B.  R.  221 ;  In  re 
Scherzer,  130  Fed.  Rep.  631,  12 
-Am.  B.  R.  451. 

*  Tiffany  v.  Lucas,  15  Wall. 
421,  21  L.  Ed.  198;  Rice  v.  Grafton 
Mills,  117  Mass.  228;  Rice  v. 
Melendy,  41   Iowa,  395 ;    Sparhawk 


V.  Richards,  No.  13205  Fed.  Cas., 
12  N.  B.  R.  74;  Sonstiby  v.  Keeley, 
I  r  Fed.  Rep.  578 ;  Lancaster  v.  Col- 
lins, 7  Fed.  Rep.  338;  In  re 
Strenz,  8  Fed.  Rep.  311. 

^  Judson  V.  The  Courier  Co.,  8 
Fed.  Rep.  422. 

^  In  re  Strenz,  8  Fed.  Rep.  311. 
But  see  In  re  Moody,  14  Am.  B.  R. 
272,  134  Fed.  Rep.  628. 

*  Lancaster  v.  Collins,  7  Fed. 
Rep.  338;  Sostiby  v.  Keeley,  11 
Fed.  Rep.  578. 


PREFERENCES    AND    LIENS.  579 

itors  of  the  same  class;  third,  the  creditor  must  have  had 
reasonable  cause  to  believe  that  it  was  intended  thereby  to 
give  a  preference ;  and,  fourth,  the  sale  must  have  been  made 
within  four  months  before  filing  the  petition  in  bankruptcy, 
or  after  the  filing  of  the  petition  and  before  the  adjudication/ 
If  any  one  of  these  elements  is  wanting,  the  sale  can  not  be 
set  aside  as  a  preference.  It  should  be  borne  in  mind  that  a 
sale  which  is  fraudulent  under  the  common  or  statutory  law 
may  be  avoided  on  another  ground,  although  made  more 
than  four  months  before  the  filing  of  the  petition.*^ 

\\'hether  a  sale  is  a  fraudulent  preference  or  not  depends 
upon  the  facts  in  the  particular  case.  It  has  been  held  to  be 
a  preferential  sale  which  could  be  avoided,  where  an  insolvent 
sold  to  a  creditor,  knowing  that  he  was  receiving  a  prefer- 
ence, all  his  real  and  personal  property,  leaving  other  cred- 
itors unprovided  for ;  '  or,  under  similar  circumstances,  where 
a  merchant  transferred  to  one  creditor  his  entire  stock  of 
goods ;  ^  or  where  a  debtor  transferred  a  large  portion  of  his 
property  to  one  creditor  without  making  provision  for  an 
equal  distribution  among  his  other  creditors;  **  or  where  prop- 
erty was  transferred  on  the  ground  of  exercising  a  factor's 
lien;"  or  a  sale  to  a  creditor  through  th.e  intervention  of  an 
agent  who  pays  the  purchase  price  with  notes  of  the  bank- 
rupt ;  "  or  a  sale  in  consideration  of  an  illegal  agreement,  as 
that  creditor  would  not  prosecute  the   debtor   for  a  misde- 

•B.    A.    1898,    Sec.    60.       For   a  "Toof    v.    ]\Iartin,    13    Wall.    40, 

further  consideration  of  these  ele-  20  L.  Ed.  481 ;  Wager  v.  Hall,   16 

ments,    see    Preferences    !>)'    trans-  Wall.    581,    21    L.    Ed.    504;    Mer- 

fers.  Sec.  194  et  seq.  chants'   Xat.   Bank  v.   Cook,  95  U. 

'  See    Setting     aside     fraudulent  S.  342,  24  L.  Ed.  412. 

conveyances,  Sec.  203.  In  re  Drummond,  No.  4094  Fed. 

'Foster  v.  Hackley,  No.  4971  Fed.  Cas.,  4  Biss.  149;  In  re  House,  No. 

Cas.,  2  N.  B.  R.  406.  6735  Fed.  Cas.,   i   N.  Y.  Leg.  Obs. 

'  Walbrun    v.    Babbitt,    16    Wall.  348 ;    In   re   Foster,    No.   4964   Fed. 

577,  21  L.  Ed.  489 ;  Ri.son  V.  Knapp,  Cas.,    18    N.    B.    R.    64:    Nisbet    v. 

No.    11861    Fed.    Cas.,    i    Dill.    187;  Quinn,  7  Fed.  Rep.  760. 

Smith  V.   McLean,   No.    13074  Fed.  '"  Xudd  v.  Burrows,  91  U.  S.  426, 

Cas.,    10  N.   B.   R.  260;   Norton  v.  23  L.  Ed.  286. 

Billings.   4    Fed.    Rep.   623 ;    Singer  "  Fleming    v.    Andrews,    3    Fed. 

V.  Jacobs,  II  Fed.  Rep.  559.  Rep.  632. 


580 


LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 


meaner ;  ^-  or  a  sale  to  a  bank  to  make  good  an  overdraft ;  ^^  or 
generally  any  sale  the  consideration  of  which  is  a  preexisting 
debt ;  ^*  or  where  firm  property  is  conveyetl  to  a  continuing 
partner/''  But  the  conveyance  of  property  to  a  creditor  who 
has  a  valid  lien  on  such  property  to  a  greater  amount  than 
the  value  of  it  is  not  a  preferential  sale.^''  It  is  otherwise 
where  the  lien  is  invalid/^ 

The  return  of  goods  which  has  been  purchased  on  credit 
creates  a  preference/^ 

Conditional  Sales. — Whether  a  sale  to  a  person,  who 
subsequently  becomes  a  bankrupt,  on  condition  that  the  title 
shall  remain  in  the  seller  constitutes  a  valid  lien  as  aeainst 
the  trustee  of  the  vendee  depends  upon  whether  the  arrange- 
ment between  the  seller  and  the  purchaser  is  valid  under  the 
local  law.  If  valid  the  lien  may  be  enforced  in  the  bankruptcy 
proceedings.^"  If  it  is  invalid  the  property  passes  to  the  trus- 
tee.-°     In  respect  to  such  property  it  was  held  in  the  earlier 


"  Sharp  V.  Philadelphia  Ware- 
house Co.,  lo  Fed.  Rep.  379. 

"Alderdice  v.  State  aBnk,  No. 
154    Fed.    Cas..    i    Hughes,    47. 

"Post  V.  Corbin,  No.  11299  Fed. 
Cas.,  5  N.  B.  R.  11;  Ex  parte 
Shouse,  No.  12815  Fed.  Cas., 
Crabbe,  482.  See  also  Casey  v.  La 
Societie,  etc..  No.  2496  Fed.  Cas.. 
2  Woods,  77 ;  Armstrong  v.  Chem- 
ical   National   Bank,   41    Fed.    Rep. 

234- 

"In  re  Kindt,  loi  Fed.  Rep.  107. 
4  Am.  B.  R.  148;  Collins  v.  Hood, 
3015  Fed.  Cas.,  4  McLean.  186;  hi 
re  Johnson,  No.  7369  Fed.  Cas.,  2 
Low.  129.  129;  In  re  Waite,  No. 
17044  Fed.  Cas.,  i  Low.  207;  In  re 
Federhen,  No.  4713a  Fed.  Cas.,  re- 
ferred to  In  re  Lane,  No.  8044 
Fed.  Cas.,  2  Low.  22>2>-  But  see 
Forsaith  v.  Merritt,  No.  4946  Fed. 
Cas.,  I  Saw.  336;  In  re  Shepard, 
No.  12754  Fed.  Cas.,  3  Ben.  347; 
Smith  V.  McLean,   No.    13074  eFd. 


Cas.,  10  N.  B.  R.  260.  See  also 
Johnston  v.  Strauss,  26  Fed.  Rep. 
57- 

'"  Coxe  V.  Hale,  No.  3310  Fed. 
Cas.,  ID  Blatch.  56;  Catlin  v.  Hoff- 
man, No.  2521  Fed.  Cas.,  2  Saw. 
486;  Ashuelot  Sav.  Bank  v.  Frost, 
19  Fed.  Rep.  237. 

"/n  re  Gregg,  No.  5797  Fed. 
Cas.,  4  N.  B.  R.  456. 

'^  Silberstein  v.  Stahl,  4  Am.  B. 
R.  626;  In  re  Klingaman,  loi  Fed. 
Rep.  691,  4  Am.  B.  R.  254;  In  re 
Andrews,  135  Fed.  Rep.  599,  14 
Am.  B.  R.  247. 

"York  Mfg.  Co.  V.  Cassell,  201 
U.  S.  344,  50  L.  Ed.  782,  15  Am. 
B.  R.  633;  Hewit  v.  Berlin  Mfg. 
Co.,  194  U.  S.  296,  48  L.  Ed.  986, 
II  .\m.  B.  R.  709;  In  re  Shirley 
(C.  C  .A.  6th  Cir.),  112  Fed.  Rep. 
301.  7  Am.  B.  R.  299;  In  re  Cav- 
agnaro,  143  Fed.  Rep.  668,  16  Am. 
B.   R.   320.     See   Sec.    152a,  ante. 

^  In  re  Butterwick,  131  Fed.  Rep. 


PREFERENCES    AND    LIENS. 


581 


cases  that  the  trustee  occupied  the  position  of  a  judgment  or 
attaching  creditor  from  the  date  of  the  fihng  of  the  petition 
in  bankruptcy,  which  was  held  to  have  the  effect  of  an  at- 
tachment or  seizure  under  legal  process.-^  \A'hen  the  question 
reached  the  supreme  court,  it  held  that  an  adjudication  in 
bankruptcy  is  not  equivalent  to  a  seizure  or  an  attachment 
of  the  debtor's  property,  and  that  a  conditional  sale  valid  as 
between  the  bankrupt  vendee  and  the  vendor  at  the  time  of 
bankruptcy  under  the  state  law  is  valid  as  against  the  trus- 
tees." If  such  conditional  sale  contract  is  invalid  as  against 
creditors  at  the  date  of  bankruptcy  it  may  be  avoided  by  the 
trustee  under  Section  67a  of  the  bankruptcy  act. 

§  197.     Mortgages. 

The  law^  applicable  to  mortgages  and  liens  is  much  too 
extensive  to  be  discussed  at  length  in  this  treatise.  The 
present  inquiry  will  be  confined  to  what  constitutes  a  prefer- 
ence by  way  of  mortgages  under  the  bankrupt  law.  A  debt 
may  be  secured  by  a  mortgage  on  real  estate  or  personal 
property.  The  principles,  so  far  as  bankruptcy  proceedings 
are  concerned,  ar^  substantially  the  same  with  reference  to 
real  estate  and  chattel  mortgages. 

It  is  as  much  the  policy  of  the  bankruptcy  act  to  uphold  mort- 
gages when  valid,  as  it  is  to  set  them  aside  when  invalid.  A 
mortgage  valid  under  the  state  law,  which  is  not  a  violation 
of  any  of  the  provisions  of  the  bankruptcy  act,  will  be  re- 
spected and  enforced  by  a  court  of  bankruptcy.^     The  mort- 


371,  12  Am.  B.  R.  536;  In  re  Garce- 
Wich  (C.  C.  A.  2d  Cir.),  115  Fed. 
Rep.  87,  8  Am.  B.  R.  149;  In  re 
Carpenter,  125  Fed.  Rep.  831,  il 
Am.  B.  R.  147;  In  re  Rasmus- 
sen's  Estate,  136  Fed.  Rep.  704,  14 
Am.  B.  R.  462.  See  Sec.  152a, 
ante. 

"In  re  Rodgers  (C.  C.  A.  7th 
Cir.),  125  Fed.  Rep.  169,  11  Am. 
B.  R.  79 ;  hi  re  Pekin  Plow  Co. 
(C.  C.  A.  8th  Cir.).  112  Fed.  Rep. 
308,    7    Am.    B.    R.    369;    Dolle    v. 


Cassell  (C  C.  A.  6th  Cir.),  135 
Fed.  Rep.  52,  14  Am.  B.  R.  52; 
Chesapeake  Shoe  Co.  v.  Seldner 
(C.  C.  A.  4th  Cir.),  122  Fed.  Rep. 
593,  10  Am.  B.  R.  466;  In  re  But- 
tcrwick,  131  Fed.  Rep.  371,  12  Am. 
B.  R.  536;  In  re  Ducker  (C.  C  A. 
6th  Cir.),  134  Fed.  Rep.  43,  13  Am. 
B.  R.  760. 

"York   Mfg.   Co.  v.    Cassell,  201 
U.  S.  344,  50  L.  Ed.  782,  15  Am.  B. 

'  B.   A.    1898,    Sees.   60  and   67c?; 


582  LAW     AND    TROCEEDINGS    IN     BANKRUPTCY. 

gage  which  the  law  condemns  is  one.  first,  which  constitutes 
a  preference,-  or,  second,  which  is  invahd  as  against  the  claims 
of  creditors  under  the  state  law;'  or,  third,  which  was  given 
with  the  intent  to  hinder,  delay  or  defraud  creditors.* 

A  valid  mortgage  may  be  extinguished  by  accepting  part 
payment  of  the  debt  and  releasing  the  remainder  so  that  it 
can  not  be  asserted  subsecjuently  in  bankruptcy  proceedings.""^ 

With  reference,  to  mortgages,  the  trustee  takes  the  prop- 
erty of  the  bankrupt  in  the  same  plight  in  which  the  bankrupt 
held  it  at  the  time  the  petition  in  bankruptcy  was  filed.  He 
does  not  take  as  a  purchaser,"  or  as  an  attachment  or  judg- 
ment creditor.^  He  simply  stands  in  the  shoes  of  the  bank- 
rupt with  no  better  right  or  title  to  the  bankrupt's  property 
than  belonged  to  the  bankrupt  or  to  his  creditors  at  the  time 
when  the  trustee's  title  accrued.^  A  mortgage,  therefore, 
which  is  valid  as  against  the  bankrupt  at  the  date  of  the  bank- 
ruptcy, under  the  state  law  and  not  voidable  under  any  pro- 
vision of  the  bankruptcy  act,  is  valid  as  against  the  trustee 
in  bankruptcy  of  the  mortgagor,  except  in  so  far  as  creditors 
have  vested  rights  at  that  lime,  which  are  valid  as  against 
the  mortgagee.  In  such  cases  the  trustee  may  be  subrogatec 
to  the  rights  of  such  creditors  for  the  benefit  of  the  estate.^ 
A  trustee  in  bankruptcy  is  entitled,  upon  paying  a  mortgagee, 

Thompson  v.  Fairbanks,  196  U.   S-  sell,  201  U.   S.  344,  50  L.  Ed.  782, 

516,  49  L.   Ed.   577,   13  Am.   B.   R.  15  Am.  B.  R.  633. 

437;   Humphrey  v.  Tatman,   198  U.  'York  Manufacturing  Co.  v.  Cas- 

S.  91,  49  L.  Ed.  956,  14  Am.  B.  R.  sell,    201    U.    S.    344,    50    L.    Ed. 

74;   Crim  V.   Woodford    (C.   C.   A.  782,    15   Am.   B.   R.   633;    Hewit  v 

4th    Cir.),     136    Fed.    Rep.    34,     14  Berlin   Machine   Works,    194  U.    S. 

Am.  B.  R.  302.  296,  48  L.   Ed.   986    11   Am.   B.   R. 

^  B.  A.  1898,  Sec.  60.  709 ;   In  re  Standard  Laundry  Co., 

^B.  A.  1898,  Sees.  67a  and  Sje.  112    Fed.    Rep.    126,    7   Am.    B.    R. 

*  B.  A.   1898,   Sec.  6ye.     See   Sec.  254 ;   In   re  Lurkens,   138  Fed.   Rep. 

160,  ante.  188,   14  Am.   B.  R.  683. 

°/m   re  Thompson    (C.   C.   A.   2d  '  B.   A.    1898,    Sec.    67&.      In   re 

Cir.),    128    Fed.    Rep.    575,    11    Am.  Beede,    138   Fed.   Rep.  441,   14  Am. 

B.  R.  719.  B.  R.  697;  First  National  Bank  v. 

°  Hewit  V.  Berlin  Machine  Works,  Staake,   202   U.    S.    141,   50  L.   Ed. 

194  U.  S.  296,  48  L.  Ed.  986,  II  Am.  967,  15  Am.  B.  R.  639;  In  re  N.  Y. 

B.  R.  709.  Economical  Printing  Co.   (C.  C.  A. 

'York  Manufacturing  Co.  v.  Cas-  2d  Cir.),   no  Fed.  Rep.  514,  6  Am 

B.  R.  615. 


PREFERENCES    AND    LIENS.  583 

to  have  the  mortgage  assigned  to  him  for  the  benefit  of  the 
estate.'" 

It  may  be  observed  that  a  trustee  is  expressly  authorized 
to  avoid  a  mortgage,  as  a  preference,  which  is  vaHd  as  be- 
tween the  bankrupt  and  the  mortgagee,"  or  one  given  within 
the  four  months'  period  to  hinder,  delay  or  defraud  creditors,^" 
which  could  not  be  set  aside  by  the  bankrupt,  or  one  which 
for  want  of  record  or  other  reason  is  not  valid  as  a  lien  as 
against  the  claims  of  creditors,'^  although  it  is  valid  as  between 
the  mortgagor  and  mortgagee.  In  these  cases  the  trustee  is 
vested  with  the  rights  of  creditors  in  addition  to  the  title  of 
the  bankrupt. 

§  197a.     Mortgages  made  in  good  faith  for  a  present  con- 
sideration. 

The  bankrupt  act  expressly  recognizes  as  valid  mortgages 
"given  or  accepted  in  good  faith  and  not  in  contemplation  of 
or  in  fraud  upon  this  act,  and  for  a  present  consideration, 
which  have  been  recorded  according  to  law,  if  record  there- 
of was  necessary  in  order  to  impart  notice."  '  No  express 
provision  appeared  for  this  class  of  security  in  the  act  of  1867, 
but  the  supreme  court  applied  this  rule  in  cases  arising  under 
that  act.^ 

To  come  A\ithin  the  protection  of  Section  (i/d  of  the  bank- 

"/n  re  Bacon,  132  Fed.  Rep.  157,  pose  be  honest,  and  the  object  not 

12  Am.  B.  R.  730.  fraudulent.     And   it   makes  no   dif- 

"  B.  A.   1898,  Sec.  60&.     See  also  ference    that    the    lender    had    good 

Sec.   I97i',  post.  reason   to   believe   the   borrower   to 

"B.  A.   189S,  Sec.  67^.     See  also  be  insolvent,  it  the  loan  was  made 

Sec.  160,  ante.  in  good  faith,  and  without  any  in- 

"  B.  A.    1898,  Sec.  67a.     See  also  tcntion   to  defeat  the   provisions  of 

Sees.    I97f   and    I97<f,   post.  the   bankrupt    act.      It    is   not    diffi- 

'  B.   A.    1898.   Sec.   67(f.  cult  to  sec  that  in  a  season  of  pres- 

'  Tn   Tiffany   v.    Boatman's   Tnsti-  sure  the  power  to  raise  money  may 

tution,   18  Wallace,  yj'^.  388,   21   L.  be  of  immense  value  to   a  man   in 

Ed.   868.   the   court   said:  embarrassed    circumstances.      With 

"There  is  nothing  in  the  bank-  it  he  might  be  saved  from  bank- 
rupt law  which  interdicts  the  lend-  ruptcy,  and  without  it  financial  ruin 
I'ng  of  money  to  a  man  in  Darby's  would  be  inevitable.  Tf  the  strug- 
condition  fan  insolvent],  if  the  pur-  gle    to    continue    his    business    be 


584  LAW     AND    PROCEEDINGS    IN     BANKRUPTCY. 

ruplcy  act  it  is  essential,  ///\s7,  that  the  mortgage  he  given  and 
accepted  in  good  faith  without  any  fraudulent  intent  or  pur- 
pose ;  second,  that  it  be  given  for  a  present  consideration,  and 
third,  that  it  be  recorded  if  recording  is  necessary  to  its  validity 
under  the  state  law. 

There  is  no  limitation  as  to  time.  It  may  be  made  within 
four  months  prior  to  the  filing  of  the  petition  in  bankruptcy.^ 

The  fact  that  the  mortgagor  was  insolvent  at  the  time  the 
mortgage  is  given  and  that  the  mortgagee  knew  it  does  not 
affect  the  validity  of  a  mortgage  given  in  good  faith  and  for 
a  present  consideration.*  The  reason  is  that  the  debtor's 
estate  is  not  impaired  or  diminished  in  consequence,  as  he  gets 
a  present  equivalent  for  the  security  pledged  for  the  money 
borrowed.  Nor  in  doing  this  does  he  prefer  one  creditor  over 
another,  which  is  one  of  the  great  objects  of  the  bankrupt  law 
to  prevent.  A  preference  can  only  arise  in  case  of  an  ante- 
cedent debt. 

First.  A  mortgage  to  be  sustained  under  Section  67d  of  the 
bankrupt  act  must  be  given  and  accepted  in  good  faith  and 
not  in  contemplation  of  or  in  fraud  upon  the  bankrupt 
act.  It  is  essential  that  the  transaction  should  be  bona 
fides.  The  purpose  must  be  honest  and  the  object  not 
fraudulent.  If  the  parties  act  in  good  faith,  contem- 
plating no  fraud  upon  the  act,  the  security  is  valid,''  while 
mala  fides  will  render  the  mortgage  invalid.®  In  the  case  of 
bad  faith,  the  mortgage  may  be  invalidated  by  Section  67e.'' 

an    honest    one,    and    not    for    the  ^  In  re  Soudan  Mfg.  Co.,  113  Fed. 

fraudulent    purpose   of    diminishing  Rep.  804,  8  Am.  B.  R.  45;  Phillipps 

his  assets,   it  is  not  only  not   for-  v.  Kahn,  96  App.  Div.  N.  Y.   Sup. 

bidden,   but   is   commendable."  Ct.   166,  89  N.   Y.   Supp.  250. 

^Crim    V.    Woodford    (C.    C    A.  ^ In  re  Pease,  129  Fed.  Rep.  446, 

4th  Cir.),  136  Fed.  Rep.  34,  14  Am.  12  Am.  B.  R.  66;   Rogers  v.   Page 

B.  R.  302;  In  re  Durham,  114  Fed.  (C  C.  A.  6th  Cir.),  140  Fed.  Rep. 

Rep.  750,  8  Am.  B.  R.   115;   Davis  596,    15    Am.    B.    R.    502;    Clayton 

V.  Turner   (C.  C.  A.  4th  Cir.),  120  v.   Exchange   Bank    (C.    C.    A.    5th 

*  In  re  Soudan  Mfg.  Co.,  113  Fed.  Cir.),  121  Fed.  Rep.  630,  10  Am.  B. 

Fed.  Rep.  605,  9  Am.  B.  R.  704.  R.   173,  reversing  In  re  Josephson, 

Rep.  804,  8  Am.  B.  R.  45;  Davis  v.  116  Fed.  Rep.  404,  8  Am.  B.  R.  423. 

Turner    (C.    C.    A.    4th    Cir.),    120  ^Pollock  v.  Jones   (C.  C.  A.  4th 

Fed.  Rep.  605,  9  Am.  B.  R.  704.  Cir.),  124  Fed.  Rep.  163,  10  Am.  B. 


PREFERENCES    AND    LIENS. 


585 


Whether  the  mortgage  is  given  or  accepted  in  good  faith  is 
a  question  of  fact  to  be  determined  by  the  facts  and  circum- 
stances of  each  particular  case. 

Second.  It  is  essential  to  the  validity  of  a  mortgage  under 
67d  that  the  debt  to  be  secured  is  created  at  the  time  that 
the  mortgage  is  given.  If  the  debt  existed  at  that  time  a 
preference  may  arise  under  Section  60.  A  mortgage  given 
within  four  months  of  bankruptcy  to  secure  a  loan  made  at 
the  time,  is  valid,  provided  the  purpose  be  honest  and  the 
object  not  fraudulent.^  The  mere  fact  that  the  mortgagor 
intends  to  use  the  money  to  pay  other  creditors  and  thereby 
create  a  preference  will  not  invalidate  the  security.^ 

A\'here  a  mortgage  is  given  to  secure  a  present  loan  and  a 
preexisting  debt,  it  may  be  sustained  to  the  extent  of  the 
loan  made  at  the  time  the  mortgage  was  given  and  be  invalid 
to  the  extent  of  the  pre-existing  debt  secured  thereby.^*'  Mort- 
gages have  been  sustained  when  given  in  pursuance  of  a  valid 
promise  made  at  the  time  of  the  loan,  where  it  was  shown  that 
the  promise  was  to  give  a  specific  security  and  that  the  promise 


R.  6i6,  affirming  In  re  Jones,  ii8 
Fed.  Rep.  673,  9  Am.  B.  R.  262; 
In  re  McLam,  97  Fed.  Rep.  922, 
3  Am.  B.  R.  245;  In  re  Steininger 
Mercantile  Co.  (C.  C.  A.  5th  Cir.), 
107  Fed.  Rep.  669,  6  Am.  B.  R. 
68;  In  re  Schuller,  108  Fed.  Rep. 
591,  6  Am.  B.  R.  278;  In  re  Pease, 
129  Fed.  Rep.  446,  12  Am.  B.  R. 
66;  In  re  Hill,  140  Fed.  Rep.  984, 
15  Am.  B.  R.  499;  In  re  IMoody, 
134  Fed.  Rep.  628,  14  Am.  B.  R. 
272.    See  Sec.  160,  ante. 

'Crim  V.  Woodford  (C.  C.  A. 
4th  Cir.),  136  Fed.  Rep.  34,  14  Am. 
B.  R.  302;  In  re  Clifford,  136  Fed. 
Rep.  475;  14  Am.  B.  R.  281;  In  re 
Josephson,  116  Fcrl.  Rep.  404,  8 
Am.  B.  R.  423,  reversed  on  ques- 
tion fact  of  bona  fides  in  Clayton 
V.  Exchange  Bank  (C.  C.  A.  5th 
Cir.),  121  Fed.  Rep.  630,  10  Am. 
B.  R.   17.3. 


"In  re  Davidson,  109  Fed.  Rep. 
882,  s  Am.  B.  R.  528;  Stedman  v. 
Bank  of  Monroe,  117  Fed.  Rep. 
237.  9  Fed.  Rep.  4;  In  re  Soudan 
Mfg.  Co.,  113  Fed.  Rep.  804,  8 
Am.  B.  R.  45. 

'"  City  National  Bank  v.  Bruce 
(C.  C.  A.  4th  Cir.),  109  Fed.  Rep. 
69,  6  Am.  B.  R.  311;  Stedman  v. 
Bank  of  Monroe,  117  Fed.  Rep. 
2T,7,  9  Am.  B.  R.  4;  In  re  Durham. 
114  Fed.  Rep.  750,  8  Am.  B.  R.  115; 
In  re  Dismal  Swamp  Construction 
Co.,  135  Fed.  Rep.  415,  14  Am. 
B  R.  175;  In  re  Sawyer,  130  Fed. 
Rep.  384,  12  Am.  B.  R.  269;  In 
re  Hull,  115  Am.  B.  R.  858,  8  Am. 
B.  R.  302;  hi  re  Wolf,  98  Fed. 
Rep.  84,  3  Am.  B.  R.  555;  In  re 
I'urse  &  Co.  (C.  C.  A.  4th  Cir.), 
127  Fed.  Rep.  690,  11  Am.  B.  R. 
733- 


-^S6 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


Nvas  given  as  an  indnccnicnt  npon  which  the  loan  was  made." 
But  a  chattel  mortgage,  given  within  four  months  in  pur- 
suance of  an  agreement  "to  give  security"  generally,  made 
at  the  time  of  the  loan  prior  to  that  period,  can  not  be  sus- 
tained as  a  mortgage  made  in  good  faith  for  a  present  consid- 
eration.^" 

A  mortgage  has  been  held  valid  when  given  to  secure  future 
advances  to  be  made  to  the  debtor.^^  A  mortgage  may  be 
taken  in  exchange  for  a  prior  valid  security  without  affecting 
its  validity.^*  This  is  an  exchange  of  securities,  which  ordi- 
narily is  not  deemed  a  violation  of  the  bankrupt  law/''^  but  if 
the  security  surrendered  to  the  bankrupt  is  of  less  value  than 
the  mortgage  given  there  may  be-  a  preference  created  to  the 
extent  of  the  difference. ^*^  A  mortgage  may  be  renewed 
within  the  four  months'  period  without  invalidating  it." 

Third.  How  far  the  failure  to  record  a  mortgage  affects  its 
validity  depends  upon  the  local  law  as  construed  by  the  courts 
of  the  state. ^^     Under  the  ruling  of  the  supreme  court  in  the 


"  In  re  Jackson  Iron  Manufac- 
turing Co.,  No.  7153  Fed.  Cas.,  15 
N.  B.  R.  438;  Brudock  v.  Jackson, 
15  N.  B.  R.  318;  Douglass  v. 
Vogeler,  6  Fed.  Rep.  52 ;  Gattman 
V.  Honea,  No.  5271  Fed.  Cas.,  12 
N.  B.  R.  493;  Sabin  v.  Camp,  98 
Fed.  Rep.  974,  3  Am.  B.  R.  578. 

^' In  re  Ronk,  iii  Fed.  Rep.  154, 
7  Am.  B.  R.  731  ;  In  re  Dismal 
Swamp  Construction  Co.,  135  Fed. 
Rep.  415,  14  Am.  B.  R.  175;  Pol- 
ock  V.  Jones  (C.  C.  A.  4th  Cir.), 
124  Fed.  Rep.  163,  10  Am.  B.  R. 
616;  Lloyd  V.  Strobridge,  No.  8435 
Fed.  Cases,  16  N.  B.  R.  107. 

"£,r  parte  Ames,  No.  323  Fed. 
Cases,  I  Low.  561  ;  In  re  Durham. 
114  Fed.  Rep.  750,  8  Am.  B.  R.  115. 

"  Sawyer  v.  Turpin,  91  U.  S. 
114,  23  L.  Ed.  235;  Burnhisel  v. 
Firman,  22  Wall.  170,  22  L.  Ed.  766; 
In  re  Davidson,  109  Fed.  Rep.  882, 
5  Am.  B.  R.  528. 


"Cook  V.  Tullis,  18  Wall.  340, 
21  L.  Ed.  933;  Clark  v.  Iselin,  21 
Wall.  360,  22  L.  Ed.  568. 

"  In  re  Manning,  123  Fed.  Rep. 
181,  10  Am.  B.  R.  500. 

"In  re  Little  River  Lumber  Co., 

92  Fed.  Rep.  585,  i  Am.  B.  R.  483; 
Chattanooga  National  Bank  v. 
Rome  Iron  Co.,  102  Fed.  Rep.  755. 
4  Am.  B.  R.  441  ;  Deland  v.  Miller 
and    Cheney    Bank,    119    Iowa   368, 

93  N.  W.  Rep.  304;  In  re  Noel,  137 
Fed.  Rep.  694,  14  Am.  B.  R.  715. 

^^  In  re  Beede,  138  Fed.  Rep.  441, 
14  Am.  B.  R.  697;  In  re  Clifford,, 
136  Am.  B.  R.  475,  14  Am.  B.  R. 
281;  In  re  Ducker  (C.  C.  A.  6th 
Cir.),  134  Fed.  Rep.  43,  13  Am.  B 
R.  760;  In  re  Antigo  Screen  Door 
Co.  (C.  C.  A.  7th  Cir.),  123  Fed. 
Rep.  249,  10  Am.  B.  R.  359;  In  re 
Shirley  (C.  C.  A.  6th  Cir.),  112 
Fed.  Rep.  301,  7  Am.  B.  R.  299. 


PREFERENCES    AND    LIENS.  587 

case  of  York  Manufacturing  Company  v.  Cassell  '•'  the  failure 
to  record  does  not  invalidate  a  mortgage  as  between  the  mort- 
gagee and  the  trustee  in  bankruptcy,  unless  creditors  could 
successfully  attack  the  mortgage  at  the  time  bankruptcy  pro- 
ceedings were  instituted.'" 

§  197b.    Mortgages  as  preferences. 

A  mortgage,  otherwise  valid,  may  be  avoided  as  a  lien 
because  it  constitutes  a  preference  in  bankruptcy.  This  is  so, 
not  because  such  mortgages  are  fraudulent  at  common  law, 
or  by  the  statutes  of  the  states,  or  are  immoral  or  dishonest, 
but  simply  because  tlie  statute  says  they  are  voidable.  Such 
mortgages  are  valid  as  between  a  mortgagee  and  the 
bankrupt.  A  trustee,  taking  only  the  title  of  the  bankrupt, 
could  not  attack  their  validity,  except  as  power  is  expressly 
given  him  by  the  bankrupt  act.  Such  power  is  conferred  on- 
him  by  Section  60b. 

In  order  that  a  mortgage  security  for  a  debt  may  be  set 
aside  as  a  voidable  preference,  four  things  must  concur;^ 
namely,  First,  the  mortgage  must  have  been  given  by  an 
insolvent  person  to  a  creditor ;  second,  the  effect  of  such  mort- 
gage must  be  to  enable  such  creditor  to  obtain  a  greater 
percentage  of  his  debts  than  any  other  of  such  creditors  of  the 
same  class;  third,  the  creditors  receiving  the  mortgage  must 
have  had  reasonable  cause  to  believe  that  it  was  intended 
thereby  to  give  a  preference;  and,  fourth,  the  mortgage  must 
have  been  made  within  four  months  before  filing  the  petition 
in  bankruptcy  or  after  filing  the  petition  and  before  the  adju- 
dication. 

If  any  element  of  the  combination  is  wanting,  the  morteaee 
being  valid  under  the  state  law,  there  is  no  infringement  of 
the  bankrupt  law.^. 

"201  U.  S.  344,  50  L.  Ed.  782,  15  these    elements    as    to    preferences 

Am.  B.  R.  633.  gencrall.v,  see  Sections  194  et  seq. 

""See  Sec.   197 J,  post.  'Humphrey  v.  Tatman,  198  U.  S. 

'  B.  A.  1898,  Sec.  60.    In  re  Hunt,  91,   49   L.    Ed.   956,    14   Am.    B.    R. 

139   Fed.   Rep.   283,    14   Am.   B.    R.  74;     Thompson   v.    Fairbanks,    196 

416.      For   further   consideration   of  U.    S.   b'^.  49   E.   Ed.   577,    13   Am. 


588  LAW    AM)   i'Rori:i;i)i.\Gs  in   bankruttcy. 

First.  Tl  will  not  constitute  a  preference  for  a  person  other 
than  a  bankrupt  to  mortgage  his  own  property  to  secure  the 
debt  of  a  bankrupt,  or  where  a  solvent  debtor  gives  a  mort- 
gage, even  within  the  four  months'  period,  to  secure  his  own 
debt.' 

The  mortgage  must  be  given  to  a  creditor,  but  if  it  is  given 
to  a  third  person  in  trust  for  him,  it  does  not  prevent  its  being 
a  preference.'* 

Scco)id.  The  effect  of  such  a  mortgage  must  be  to  enable 
the  creditor  to  obtain  a  greater  percentage  of  his  debt  than 
any  other  of  such  creditors  of  the  same  class.  This  can  occur 
only  in  the  case  of  security  gi\en  for  a  pre-existing  debt.'^  If  a 
chattel  mortgage  executed  at  the  time  the  loan  is  made,  creates 
at  that  time  a  lien  on  specific  chattels,  no  preference  is  created ; 
but  if  the  mortgage  is  to  an  unidentified  part  of  a  mass,  a  lien 
is  not  created  until  there  is  a  separation  and  at  that  time  is 
for  an  antecedent  clebt  and  so  a  preference."  A  mortgage 
given  to  secure  a  pre-existing  debt,  although  a  promise  to 
give  "security  when  required"  was  made  at  the  time  wdien  the 
debt  was  created,  is  invalid.^  But  it  is  otherwise  where  the 
promise  was  to  give  specific  security  as  an  inducement  for  an 
advance.^  Where  a  mortgage  is  given  to  secure  a  present 
loan  and  a  pre-existing  debt,  it  is  invalid  as  a  preference  to 
the  extent  of  the  pre-existing  debt  secured  thereby.^ 

B.  R.  437;  McNair  v.  Mclntyre  ^Pollock  v.  Jones  (C.  C.  A.  4th 
(C.  C.  A.  4th  Cir.),  113  Fed.  Rep.  Cir.),  124  Fed.  Rep.  163,  10  Am.  B. 
113,  7  Am.  B.  R.  638;  In  re  Clif-  R.  616;  In  re  Dismal  Swamp  Con- 
ford,  136  Fed.  Rep.  475,  14  Am.  B.  struction  Co.,  135  Fed.  Rep.  415,  14 
R.  281;  Empire  State  Trust  Co.  v.  Am.  B.  R.  175;  In  re  Ronk,  iii 
Fisher  Co.,  67  N.  J.  Eq.  88;  In  re  Fed.  Rep.  154.  7  Am.  B.  R.  731. 
Virginia  Hardwood  Mfg.  Co.,  139  ^  Douglass  v.  Vogeler,  6  Fed. 
Fed.  Rep.  209,  15  Am.  B.  R.  135.  Rep.  52;  In  re  Jackson  Iron  Man- 

^  Empire  State  Trust  Co.  v.  Fisher  facturing  Co.,  No.  7153  Fed.   Cas., 

Co.,  67  N.  J.  Eq.  88.    See  Sec.  194a,  15  N.  B.  R.  438;  Burdock  v.  Jack- 

ante.  son,   15  N.  B.  R.  318;   Gattman  v. 

*  In  re  Wright  Lumber  Co.,   114  Honea,  No.  5271   Fed.   Cas.,   12   N- 

Fed.  Rep.  ion.  8  .A.m.  B.  R.  345.  B.  R.  493;  Sabin  v.  Camp,  98  Fed. 

''  In    re    Clififord,    136    Fed.    Rep.  Rep.  974,  3  Am.  B.  R.  578. 

475,  14  Am.  B.  R.  281.  °  City  National  Bank  v.  Bruce  (C. 

■^  First   Nat.    Bank   of   Holdredge  C.  A.  4th  Cir.),   109  Fed.  Rep.  69. 

V.  Johnson.  68  Neb.  641,  10  Am.  B.  6  Am.  B.  R.  311;  Stedman  v.  Bank 

R.   208.  of   Monroe,    117    Fed.    Rep.    237,   g 


PREFERENCES    AND    LIENS. 


589 


It  has  been  held  that  a  note  of  a  partner  given  to  pay  a  firm 
debt,  which  was  secured  by  mortgage  upon  the  individual  prop- 
erty of  the  partner,  was  a  fraudulent  preference/"  The  reason 
is  that  it  was  in  effect  an  appropriation  of  so  much  of  the 
separate  estate  of  the  partner  to  the  payment  of  one  creditor's 
debt  to  the  prejudice  and  wrong  of  other  creditors  of  the  firm 
to  whom  any  surplus  of  such  estate,  after  the  payment  of  his 
individual  debts,  justly  belonged.  But  a  mortgage  by  a  part- 
nership of  partnership  property  does  not  create  a  preference 
in  favor  of  the  mortgagee  as  against  the  trustee  in  bankruptcy 
of  one  of  the  partners. ^^ 

Third,  It  is  an  essential  element  of  a  preference  that  the 
mortgagee  have  reasonable  cause  to  believe  that  it  w^as  intend- 
ed to  give  him  a  preference.^'  The  rules  relating  to  what  con- 
stitutes "a  reasonable  cause  to  believe  a  preference  was  in- 
tended to  be  given"  have  been  considered  in  another  place  and 
what  is  there  said  is  applicable  to  mortgages. ^^ 

Fourth.  It  is  an  essential  element  of  a  mortgage  preference, 
which  may  be  avoided  by  a  trustee,  that  the  mortgage  be  given 
within  four  months  before  filing  the  petition  in  bankruptcy 
or  after  filing  the  petition  and  before  the  adjudication.^* 

A  mortgage  valid  under  the  state  law,  made  before  the 
four  months'  period,  is  valid  as  against  the  trustee  of  the 
mortgagor.^^     Where  such  a  mortgage  covers  after  acquired 


115  Fed.  Rep.  858,  8  Am.  B.  R.  302; 
In  re  Wolf,  98  Fed.  Rep.  84,  3  Am. 
B.  R.  555;  In  re  Furse  &  Co.  (C. 
CS.  A.  4th  Cir.),  127  Fed.  Rep.  690, 
II  Am.  B.  R.  yT,T,. 

'"In  re  Parker,  11  Fed.  Rep.  397. 

"  In  re  Sanderlin,  109  Fed.  Rep 
857,  6  Am.  B.  R.  384,  affirmed  in 
McNair  v.  Mclntyre  (C.  C.  A.  4th 
Cir.),  113  Fed.  Rep.  113,  7  Am. 
B.   R.   638. 

"/n  re  Virginia  Hardwood  Mfg. 
Co.,  139  Fed.  Rep.  209,  15  Am.  B. 
R-  1.35;  Grant  v.  National  Bank,  97 
U.  S.  80,  24  L.  Ed.  971 ;  Stuckey 
V.  Savings  Bank,   108  U.   S.  74,  27 


Am.  B.  R.  4;  In  re  Durham,  114 
Fed.  Rep.  750,  8  Am.  B.  R.  115; 
In  re  Dismal  Swamp  Construction 
Co.,  135  Fed.  Rep.  415,  14  Am.  B 
R.  175;  In  re  Sawyer,  130  Fed.  Rep. 
384,  12  Am.  B.  R.  269;  In  re  Hull, 
L.  Ed.  640;  Summerville  v.  Stock- 
ton IMilling  Co.,   142  Cal.  529. 

"  Sec.  194^,  ante. 

"B.  A.  1898,  Sec.  60. 

for  a  discussion  of  this  element 
generally,  see  Sec.  194^,  ante. 

"^  Humphrey   v.    Tatman,    198    I' 
S.  91.  49  L.  Ed.  956,  14  Am.  B.  R. 
74;    Thomp.son    v.    Fairbanks,    196 
U.   S.   516,  49  L.   Ed.   577,    13  Am. 


590 


LAW     AXD    PROCEEDINGS    IN     BANKRUPTCY. 


property,  it  is  not  a  preferential  transfer  for  a  mortgagee 
to  take  possession  of  snch  after-acquired  property  within 
the  four  months'  period,  although  the  mortgagee  may  have 
known  that  the  mortgagor  was  insolvent  and  considering 
going  into  bankruptcy  and  a  petition  be  filed  within  four 
months  thereafter.^"  If  it  appears  that  the  taking  of  pos- 
session of  mortgaged  property  is  done  to  hinder,  delay  or 
defraud  creditors  such  transfer  would  be  invalid  under  Sec. 
67r  of  the  bankruptcy  law.^^ 

Prior  to  the  amendment  of  February  5,  1903/^  it  was  gen- 
erally held  that  the  four  months'  period  began  to  run  from  the 
date  the  mortgage  was  made  and  not  from  the  date  of  record- 
ing/® The  amendment  provides  that  "where  a  preference 
consists  in  a  transfer  such  period  of  four  months  shall  not 
expire  until  after  the  date  of  recording  or  registering  of  the 
transfer,  if  by  law  such  recording  or  registering  is  required."  '° 


B.  R.  437;  Curry  v.  McCauley,  20 
Fed.  Rep.  583;  Judson  v.  Courier 
Co.,  25  Fed.  Rep.  705 ;  Meyer  Bros 
Drug  Co.   V.   Pipkin   Drug   Co.    (C. 

C.  A.  5th  Cir. ),  136  Fed.  Rep.  396 
14  Am.  B.  R.  477;  Carton  v.  Booze, 
68  N.  J.  Chan.  771,  57  Atl.  Rep. 
1029;  In  re  Hunt,  139  Fed.  Rep. 
283,  14  Am.  B.  R.  416 ;  In  re  N.  Y. 
Economical  Printing  Co.  (C.  C.  A. 
2d  Cir.),  no  Fed.  Rep.  514,  6  Am. 
B.  R.  615. 

It  should  be  borne  in  mind  that 
the  time  hmit  under  the  original 
act  of  1867,  Sees.  35  and  39  (R.  S. 
Sec.  5128),  was  four  months.  But 
this  was  changed  to  two  months  by 
the  act  of  June  22,  1874,  Sees.  10 
and  II,  18  Stat,  at  L.  180;  Auff- 
m'ordt  V.  Rasin,  102  U.  S.  620,  26 
L.  Ed.  262. 

"Thompson  v.  Fairbanks,  196 
U.  S.  516,  49  L.  Ed.  577.  I3  Am. 
B.  R.  437;  Humphrey  v.  Tatman, 
198  U.  S.  91,  49  L-  Ed.  956,  14  Am. 


B.  R.   74;   Fisher  v.   Zollinger    (C. 

C.  A.  6th  Cir.),  149  Fed.  Rep.  54; 
In  re  National  Valve  Co.,  140  Fed. 
Rep.  679,  15  Am.  B.  R.  524;  In  re 
Rogers  &  Woodward,  132  Fed.  Rep. 
560,  13  Am.  B.  R.  75.  See  also  In 
re  Sentenne  and  Green  Co.,  120 
Fed.  Rep.  436,  9  Am.  B.  R.  648. 

But  see  In  re  Marine,  etc.,  Dock 
Co.  (C.  C.  A.  2d  Cir.),  144  Fed. 
649,    16   Am.    B.   R.   325. 

"  In  re  Pease,  129  Fed.  Rep. 
446,  12  Am.  B.  R.  66;  Thompson 
V.  Fairbanks,  196  U.  S.  516,  49  L. 
Ed.  577,  13  Am.  B.  R.  437;  In  re 
Antigo  Screen  Door  Co.  (C.  C.  A. 
7th  Cir.),  123  Fed.  Rep.  249,  10 
Am.  B.  R.  359.     See  Sec.  160,  ante. 

"32  Stat,  at  L.  797. 

'"  Humphrey  v.  Tatman,  198  U. 
S.  91,  49  L.  Ed.  936,  12  Am.  B.  R. 

74- 

-"  B.  A.  1898,  Sec.  6oa,  as  amend- 
ed Feb.  5,  1903,  :i2  Stat,  at  L.  797. 


PREFERENCES    AND    LIENS.  591 

In  applying"  this  provision  the  courts  differ  as  to  the  meaning 
of  the  word  "required."  The  better  rule  is  that  if  a  mortgage 
is  subject  to  record  under  the  laws  of  the  state  it  is  required 
to  be  recorded  within  the  meaning  of  this  provision.-^  The 
reason  for  this  amendment  and  the  construction  to  be  given  it 
has  already  been  considered. -" 

In  computing  the  four  months,  the  first  day  is  excluded  and 
the  last  is  included  unless  the  last  day  falls  on  a  Sunday  or  a 
holiday,  in  which  event  the  last  day  included  shall  be  the  next 
day  thereafter  which  is  not  Sunday  or  a  legal  holiday. 


23 


§  197c.     Mortgages  invalid  under  state  laws. 

Any  mortgage  or  other  claim  which,  for  want  of  record  or 
other  reason,  is  not  a  valid  lien  as  against  the  claims  of  the 
creditors  of  the  bankrupt,  is  not  a  lien  against  his  estate.^ 

The  validity  of  such  mortgages  or  claims  does  not  depend 
upon  the  time  at  which  they  are  made  or  recorded,  unless  in- 
validated for  this  reason  under  provisions  of  the  state  law. 
There  is  no  four  months'  limitation  as  in  the  case  of  prefer- 
ences. 

Whether  and  to  what  extent  a  mortgage  or  claim  of  this 
kind  is  valid  is  a  local  question  and  the  decisions  of  the  state 
court  will  be  followed  by  the  courts  of  bankruptcy."  If  at  the 

"  Loeser  v.  Savings  Deposit  Bank  Am.  B.  R.  571 ;  Butcher  v.  Wright, 

&  Trust  Co.    (C.   C.   A.  6th   Cir.),  94  U.  S.  553,  24  L.  Ed.   130. 

148  Fed.  Rep.  975 ;  First  Nat.  Bank  '  B.  A.   1898,  Sec.  67a.     Bank  of 

V.  Connett  (C.  C.  A.  8th  Cir.),  142  Leavenworth  v.  Hunt,  11  Wall.  391, 

Fed.    Rep.   33,    15   Am.   B.   R.   662;  20  L.   Ed.    190;    Blennerhassett    v. 

English  V.  Ross,  140  Fed.  Rep.  630,  Sherman,  105  U.  S.  100,  26  L.  Ed. 

15  Am.  B.  R.  370.  1080,    Stewart   v.    Piatt,    loi    U.    S. 

But  see  Meyer  Drug  Co.  v.  Pip-  73^,   25    L.    Ed.    8r6;    In   re    Birck 

kin  Drug  Co.   (C.  C.  A.  5th  Cir.),  (C.  C.  A.  7th  Cir.),  142  Fed.  Rep. 

1.36   I'>d.    Rep.   396,    14  Am.    B.   R.  438,  15  Am.  B.  R.  694;  Jn  re  Hem- 

477;    In    re    Hunt,    139    Fed.    Rep.  street,    139   Fed.    Rep.  958,    14  Am. 

283,  14  Am.  B.  R.  416.  B.   R.  823;   In  re   Miller,   118  Fed. 

"  See  Sec.  194^/.  Rep.  360,  9  Am.  B.  R.  274. 

''B.  A.  1898,  Sec.  31;  In  re  Hill,  -Humphrey  v.  Tatman,  198  U-  S. 

140  Fed.  Rep.  984,  15  Km.  B.  R.  499;  91,  49  L.  Ed.  956,  14  Am.  B.  R.  74; 

Jones   V.    Stephens,  94   Me.    582,   5  Thompson  v.   Fairbanks,   196  U.  S. 


592 


LAW     AND    PROCEEDINGS    IN     BANKRUPTCY. 


date  of  bankruptcy  a  creditor  has  a  claim  or  mortgage  valid 
as  against  the  bankrupt  and  other  creditors  under  the  state 
law  and  not  contrary  to  any  provision  of  the  bankruptcy  act,  it 
is  valid  as  against  the  trustee  in  bankruptcy,^  But  if  a  mort- 
gage or  other  claim  is  invalid,  as  a  lien,  in  wliole  or  in  part, 
under  the  local  law  as  against  the  bankrupt  or  any  of  his 
creditors  at  the  date  of  bankruptcy  it  may  be  avoided  by  the 
trustee  to  the  extent  of  such  invalidity.*  In  such  cases  the 
trustee  is  vested  with  the  title  of  the  bankrupt  together  with 
the  rights  of  creditors  at  the  date  his  title  accrues.^  Where  a 
creditor  is  prevented  from  enforcing  his  rights  as  against  a 
lien  created  or  attempted  to  be  created  by  the  bankrupt  the 
trustee  may  be  subrogated  to  his  rights  and  enforce  them  for 
the  benefit  of  the  estate." 

It  has  been  held  that  a  mortgage  upon  property  exempt  by 
the  state  statute  is  valid  and  the  security  is  preserved  notwith- 
standing the  bankruptcy  of  the  debtor.^    Where  property  lying 


516,  49  L.  Ed.  577,  13  Am.  B.  R. 
437;  /«  re  Shirley  (C.  C.  A.  6th 
Cir.),  112  Fed.  Rep.  301,  7  Am. 
B.  R.  299;  In  re  Andrae  Co.,  117 
Fed.  Rep.  561,  9  Am.  B.  R.  135. 

'  Hewit  V.  Berhn  Mach.  Wks., 
194  U.  S.  296,  48  L.  Ed.  986,  II 
Am.  B.  R.  709;  York  Mfg.  Co.  v. 
Cassell,  201  U.  S.  344,  50  L.  Ed. 
782,  15  Am.  B.  R.  633;  Thompson 
V.  Fairbanks,  196  U.  S.  516,  49  L. 
Ed.  577,  13  Am.  B.  R.  437 ;  Humph- 
rey V.  Tatman,  198  U.  S.  91,  49 
L.  Ed.  956,  14  Am.  B.  R.  74. 

*B.  A.  1898,  Sec.  67a.  Second 
Bank  of  Leavenworth  v.  Hunt,  11 
Wall.  391,  20  L.  Ed.  190;  Blenner- 
hassett  v.  Sherman,  105  U.  S.  100, 
26  L.  Ed.  1080 ;  Stewart  v.  Piatt,  loi 
U.  S.  731,  25  L.  Ed.  816;  In  re 
Birck  (C.  C.  A.  7th  Cir.),  142  Fed. 
Rep.  438,  IS  Am.  B.  R.  694;  In  re 
Hemstreet,  139  Fed.  Rep.  958,  14 
Am.  B.  R.  823;  In  re  Miller,  118 
Fed.  Rep.  360,  9  Am.  B.  R.  274 


'Hewit  V.  Berlin  Mach.  Wks., 
194  U.  S.  296,  48  L.  Ed.  986,  II 
Am.  B.  R.  709 ;  In  re  Economical 
Printing  Co.  (C.  C.  A.  2d  Cir.), 
no  Fed.  Rep.  514,  6  Am.  B.  R. 
615 ;  In  re  Lukens,  138  Fed.  Rep. 
188,  14  Am.  B.  R.  683;  First  Na- 
tional Bank  v.  Staake,  202  U.  S. 
141,  149,  50  L.  Ed.  967,  15  Am.  B. 

R.  639. 

"B.  A.  1898,  Sec.  67b.  First 
Nat'l  Bank  v.  Staake,  202  U.  S.  141, 
50  L.  Ed.  967,  15  Am.  B.  R.  639; 
In  re  Beede,  138  Fed.  Rep.  441,  14 
Am.  B.  R.  697 ;  In  re  Economical 
Printing  Co.  (C.  C.  A.  2d  Cir.), 
no   Fed.    Rep.   514,   6   Am.   B.    R. 

61S. 

'Long  V.  Bullard,  117  U.  S.  617, 
29  L.  Ed.  1004;  Schlitz  v.  Schatz, 
No.  12459  Fed.  Cas.,  2  Biss.  248; 
Rix  V.  Capital  Bank,  No.  11869  Fed. 
Cas.,  2  Dill.  367. 


PREFERENCES    AND    LIENS.  593 

m  two  states  is  mortgaged  in  one  deed,   it  may  be  a  valid 
security  as  to  the  property  in  one  state  and  not  as  to  the  prop- 
erty in  the  other.^     Where  the  taking  of  possession  of  after- 
acquired  property  under  a  vaHd  mortgage  is  vahd  under  the 
state  law   it  is  valid  as  against  the  trustee   in  bankruptcy.'* 
Where  a  chattel  mortgage  is  given  wdth  leave  to  the  mortgagor 
to  sell  or  use  a  part  of  the  property  covered  by  the  mortgage 
the  mortgage  is  usually  good  as  to  the  property  unsold  or 
unused  at  the  date  of  bankruptcy  and  invalid  as  to  the  property 
sold.'*"    An  agreement  to  allow  the  mortgagee  to  dispose  of  the 
property,  by  whicli  the  proceeds  of  the  goods  are  applied  to 
the  payment  of  the  mortgage  debt,  may  be  sustained.''    Where 
property  is  delivered  to  the  vendee  for  consumption  or  sale  or 
to  be  dealt  with  in  any  way  inconsistent  with  the  ownership 
of  the  seller,  or  so  as  to  destroy  his  lien  or  right  of  property, 
the  transaction  will  not  be  upheld  as  a  conditional  sale,  because 
it  is  a  fraud  upon  the  creditors  of  the  vendee.'-     Mortgages 
which  are  fraudulent  and  could  not  be  enforced  in  a  court  of 
equity,  irrespective  of  the  bankruptcy  law,  may  be  avoided  in 
bankruptcy.'^     Where  a  deed,  which  purports  to  transfer  the 
title  to  land  to  a  creditor  to  secure  a  debt,  but  which  is  void 
for  usury  can  not  be  enforced  as  to  other  creditors  in  bank- 

'/«    re    Soldiers,    Business,    Mes-  "7m   re   Durham,    114   Fed.    Rep. 

senger     Dispatch     Co.,     No.     13163  750,  8  Am.  B.  R.  115. 
Fed.  Cas.,  3  Ben.  204.  "In  re  Garcewich    (C.   C.  A.  2d 

•Humphrey  v.  Tatman,  198  U.  S.  Cir.),   115  Fed.  Rep.  87,  8  Am.  B. 

91,  49   L.    Ed.   956,    14   Am.   B.   R.  R.    149;  In  re  Carpenter,   125  Fed. 

74;    Thompson    v.    Fairbanks,    196  Rep.  831,   ir  Am.  B.  R.  147;  In  re 

U.   S.  516,  49  L.   Ed.  577,    13  Am.  Rowland,  109  Fed.  Rep.  869,  6  Am. 

^-  R-  437-  B.    R.  495;   In   re   Ramussen's   Es- 

'"/m  re  Soudan  Mfg.  Co.    (C.  C.  tate,   136  Fed.  Rep.  704,  14  Am.  B. 

A.  7th  Cir.),   113  Fed.   Rep.  804,  8  R.  462. 

Am.  B.  R.  45 ;  In  re  Ball,  123  Fed.  "  Robinson  v.  Elliott,  22  Wall. 
Rep.  164,  10  Am.  B.  R.  564;  In  re  513,  22  L.  Ed.  758;  Crooks  v.  Stu- 
Antigo  Screen  Door  Co.,  123  Fed.  art,  7  Fed.  Rep.  800;  In  re  Hem- 
Rep.  249,  10  Am.  B.  R.  359;  In  re  street,  139  Fed.  Rep.  958,  14  Am. 
Marine  Dry  Dock  Co.,  135  Fed.  B.  R.  823; /u  ;v  Hull,  115  Fed.  Rep. 
Rep.  921,  14  Am.  B.  R.'466;  In  re  858,  8  Am.  B.  R.  302. 
Hull,    115    Fed.    Rep.    858,    8    Am. 

B.  R.  302. 


594  LAW    AND    TROCEEDINGS    IN     BANKRUPTCY. 

riiptcy."  \Miere  a  state  statute  provides  that  "any  chattel^ 
mortgage  securing  notes,  which  do  not  state  upon  their  face 
the  fact  of  such  security,  shall  be  absolutely  void,"  the  holder 
of  such  a  note  and  of  a  chattel  mortgage  purporting  to  secure 
the  same  has  no  lien  upon  the  property,  even  though  he  has 
taken  possession  of  the  same,  which  can  be  enforced  as  against 
the  trustee  in  bankruptcy  of  the  mortgagor/'^ 

Whether  or  not  a  mortgagee  waives  or  loses  his  lien  by 
attaching  the  mortgaged  property  depends  upon  the  state 
law. 

§  I97d.     Mortgages  and   other  liens   invalid   for  want    of 
record. 

A  mortgage,  conditional  sale  or  other  claim  to  property  may 
be  avoided  as  a  lien  for  want  of  record  if  it  would  not  have 
been  a  valid  lien  as  against  the  claims  of  creditors.^ 

In  sucli  cases  the  trustee  is  vested  not  only  with  the  title  of 
the  bankrupt,  but  also  that  of  the  creditors  at  the  date  when  his 
title  accrues.-  Whether  the  date,  at  which  the  riglits  of  cred- 
itors as  to  unrecorded  liens  are  fixed,  is  the  date  the  petition 
is  filed  or  the  date  of  adjudication,  has  not  been  determined  by 
the  courts.  The  title  of  the  trustee  vests  as  of  the  date  of  the 
adjudication,^  but  he  takes  the  class  of  property  which  is 
ordinarily  subjected  to  mortgage  and  other  liens,  owned  by 
the  bankrupt  at  the  date  the  petition  in  bankruptcy  is  filed.* 
It  is  fair  to  conclude  that  the  date  of  filing  the  petition  in 
bankruptcy  is  the  date  at  which  the  rights  of  the  bankrupt 
and  the  creditors  are  fixed  with  respect  to  record. 

"7«  re  Miller,  ii8  Fed.  Rep.  360,      In   re   N.   Y.   Economical    Printing 
9  Am.  B.  R.  274.  Co.    (C.    C.   A.   2d   Cir.),    no   Fed. 


16 


7m  re  Birck  (C.  C.  A.  7th  Cir.),  Rep.    514,    6    Am.    B.    R.    615;    ist 

142   Fed.   Rep.   438,    15  Am.   B.   R.  Nat'l    Bank    v.    Staake,    202    U.    S. 

694.  141.  50  L.   Ed.  967,   15   Am.   B.   R. 

'B.  A.  1898.  Sec.  673.  639;    In   re    Beede,    138   Fed.    Rep. 

'Hewit    V.    Berlin    Mach.    Wks.,  441.    14    Am.    B.    R.    697. 

194   U.    S.   296,   48  E.   Ed.  986,    II  'B.   A.    1898,   Sec.   70a. 

Am.  B.  R.  709;  In  re  Eukens.   138  '  B.   A.    1898,    Sec.    70a,   clause   5. 
Fed.   Rep.   188,   14  Am.   B.   R.  683; 


PREFERENCES    AND    LIENS.  595 

For  a  time  the  courts  held  that  a  trustee  could  avoid  any 
lien  for  want  of  record,  which  was  invalidated  as  to  an  attach- 
ment or  execution  creditor.^  This  doctrine  was  founded  upon 
the  observation  of  the  supreme  court  in  Mueller  v.  Nugent " 
"that  the  filing  of  the  petition  is  a  caveat  to  all  the  world  and 
in  effect  an  attachment  and  injunction."  The  bankruptcy- 
proceedings  were  therefore  in  effect  a  seizure  or  attachment  by 
all  the  creditors.  The  trustee  representing  them  was  held  to 
succeed  to  their  rights  as  creditors  having  fastened  upon  the 
property  by  legal  process.  When  the  question  was  presented 
to  the  supreme  court  it  decided  that  the  trustee  was  not  vested 
with  such  power.'  Bankruptcy  proceedings,  therefore,  do  not 
clothe  the  trustee  with  any  greater  power  in  this  respect  than 
the  creditors  would  have  had  if  bankruptcy  had  not  intervened. 
He  can  do  for  the  estate  what  the  creditors  could  have  done 
and  no  more. 

The  recording  or  registering  laws  of  the  several  states  are 
not  alike.  The  effect  of  failing  to  record  a  security  varies  ac- 
cording to  these  statutes  as  construed  by  the  local  courts.^  It 
is  necessary  to  consult  the  law  as  declared  by  the  statutes  and 
decisions  of  the  state,  which  control  in  the  particular  case,  to 
determine  whether  a  mortgage  or  other  lien  is  invalid  for  want 
of  record  as  against  creditors  in  such  state.  If  so,  it  is  invalid 
to  the  same  extent  in  case  of  the  bankruptcy  of  the  mortgagor 
or  lienor.  The  invalidity  of  liens  for  want  of  record  depends 
upon  the  law  of  the  state  where  the  property  is  located.^ 

•Vn    re    Ducker    (C.    C.    A.    6th  A.  6th  Cir-),  201   U.  S.  344,  50  L. 

Cir.),  134  Fed.  Rep.  43,  13  Am.  B.  Ed.  782,  15  Am.  B.  R.  633. 

R.  760;  In  re  Pekin  Plow  Co.   (C.  ^ In    re    International    Mahogany 

C.  A.  8th  Cir.),  112  Fed.  Rep.  308,  Co.    (C.    C.   A.   2d    Cir.),    147   Fed- 

7  Am.  B.  R.  369;  Chesapeake  Shoe  Rep.   147;  In  re  Shirley   (C.  C.  A. 

Co.  V.  Seldner  (C.  C.  A.  4th  Cir.),  6th  Cir.),  112  Fed.  Rep.  301,  7  Am. 

122   Fed.   Rep.    593,    10  Am.    B.   R.  B.  R.  299;  Thompson  v.  Fairbanks, 

466;  In  re  First  Nat'l  Bank  (C.  C  196  U.    S.   516,   49   L.   Ed.   577,    13 

A.  6th  Cir.),   135  Fed.  Rep.  62,  14  Am.  B.  R.  437. 

Am.  B.  R.  180.  "/u    re    Greene,    134    Fed.    Rep. 

°  184  U.  S.  I,  46  L.  Ed.  405,  7  .'\m.  137,  13  Am.  B.  R.  504;  In  re  Lcgg", 

B.  R.  224.  96  Fed.  Rep.  326 ;  In  re  Andrae  Co., 
'York  Mfg.  Co.  v.  Cassell  (C.  C.  117    Fed.    Rep.    561,    9   Am.    B.    R. 

133- 


596  LAW    AND     PROCEEDINGS    IN     BANKRUPTCY. 

In  some  state  s  an  unrcconlcd  inongage  or  conditional  sale 
contract  is  invalid  as  a  lien,  as  against  the  claims  of  general 
creditors  of  the  mortgagor  or  vendor.'"  In  such  states  the 
owner  of  the  unrecorded  security  ranks  with  and  has  no 
priority  over  the  claims  of  the  other  creditors. 

In  some  states  an  unrecorded  mortgage  or  conditional  sale 
contract  is  invalid  as  a  lien  only  as  against  the  claims  of 
creditors  who  have  actually  seized  the  property  under  the 
legal  process,  as  by  levy  of  execution  or  an  attachment.'' 
Where  property  is  sold,  price  paid  and  possession  taken  under 
a  contract  of  sale,  but  the  deed  is  not  executed  or  recorded 
until  after  a  judgment  creditor  levies  on  the  property,  the 
judgment  creditor's  rights  are  superior  to  those  of  the  grantee 
under  the  unrecorded  deed  and  they  may  be  enforced  by  the 
trustee  of  the  grantor.'" 

In  some  states  a  mortgage  or  conditional  sale  contract  is 
invalid  as  a  lien,  as  against  the  claims  of  subsequent  contract 
creditors  without  notice.''  It  may  be  a  valid  lien  as  to  the 
claims  of  antecedent  creditors  or  subsequent  creditors  with 
notice.  It  has  been  held  that  where  the  assets  of  the  bankrupt 
covered  by  such  a  mortgage  were  not  sufficient  to  pay  subse- 
quent creditors,  they  take  the  whole  fund  to  the  exclusion  of 
antecedent  creditors.""  The  reason  for  this  is  that  as  the 
mortgage  is  valid  as  to  the  antecedent  creditors,  all  claims  of 
the  antecedent  creditors  are  extinguished  by  the  mortgage,  and 
as  between  the  mortgagee  and  subsquent  creditors,  the  rights 
of  the  latter  must  prevail. 

•"/m    re    Andrae    Co.,    117    Fed.  "First    Nat'l.    Bank    v.     Staake, 

Rep.  561,  9  Am.  B.  R.  135;  English  202  U.    S.    141,   50  L.   Ed.  967,    15 

V.    Ross    (C.   C.   A.   8th   Cir.),    140  Am.   B.    R.   639. 

Fed.  Rep.  630,   15  Am.   B.   R.  370;  "/n    re   Ducker     (C.     C.   A.   6th 

In  re   Lukens,    138   Fed.    Rep.    188,  Cir.),  134  Fed.  Rep.  43-  U  Am.  B. 

14  Am.  B.  R.  683;  In  re  Montague,  R.  760;  In  re  Sewell,  in  Fed.  Rep. 

143  Fed.  Rep.  428,  16  Am.  B.  R.  18.  791,  7  Am.  B.  R.   133;  In  re  Can- 

"In  re  Beede,  138  Fed.  Rep.  441.  non,  121  Fed.  Rep.  582.  10  Am.  B. 

14  Am.  B.  R.  697;  York  Mfg.  Co.  R.  64;   In  re   Cavagnaro,   143  Fed. 

V.  Cassell,  201  U.  S.  344,  5°  L.  Ed.  Rep.  668,  16  Am.  B.  R.  320. 

782,  15  Am.  B.  R.  633;  in  re  Shir-  "/«    re    Cannon,    121    Fed.    Rep. 

ly    (C.    C    h.   6th   Cir.),    112    Fed.  582,   10  Am.  B.  R.  64. 
Rep.  301,  7  .'\m.  B.  R.  299. 


PREFERENCES    AND    LIENS.  59/ 

As  a  general  rule  the  failure  to  record  or  register  a  mort- 
gage does  not  invalidate  it  as  a  lien,  but  merely  postpones  it 
to  superior  claims ;  thus,  an  unrecorded  mortgage  is  subordi- 
nate to  a  subsequent  mortgage  which  has  been  duly  recorded, 
but  it  may  be  valid  as  to  general  creditors  or  antecedent  cred- 
itors or  subsequent  creditors  with  notice.  The  courts  of  bank- 
ruptcy will  enforce  the  rights  of  creditors  as  they  exist  under 
the  state  law  at  the  time  of  bankruptcy. 

The  taking  possession  by  a  mortgagee  under  a  chattel  mort- 
gage or  conditional  sale  is  equivalent  to  recording.  The 
effect  of  such  taking  possession  is  to  be  determined  by  the  state 
law  and  the  courts  of  bankruptcy  will  follow  the  decisions  of 
the  state  courts  as  to  the  effect  of  such  proceeding.^^ 

The  mere  fact  of  failing  to  record  a  mortgage  or  conditional 
sale  contract  or  to  take  possession  of  the  propert}'  is  not 
sufficient  to  render  it  invalid,  as  has  been  pointed  out  in  this 
section,  but  if  the  mortgagee  or  vendee  withholds  the  instru- 
ment from  record  by  a  deliberate  agreement  for  the  purpose 
cf  aiding  the  credit  of  the  mortgagor  or  vendor,  or  to  allow 
the  four  months  to  run  so  as  to  defeat  the  provisions  of  the 
bankruptcy  act  relating  to  preferences  and  intending  so  to  do 
when  he  took  it,  such  acts  constitute  a  fraud  upon  the  cred- 
itors and  renders  the  mortgage  or  conditional  sale  contract  in- 
valid." 

It  should  be  observed  that  a  failure  to  record  an  instrument 
or  the  recording  of  it  within  four  nionths  may  render  it  invalid 
as  a  preference,  provided  the  other  elements  necessary  to  con- 
stitute a  preference  exist.^^ 

"Thompson  v.  Fairbanks,  196  U.  Cir.),    121    Fed.    Rep.   630.    10   Am. 

S.  516,  49  L.  Ed.  577,  13  Am.  B.  R.  B.    R.    173;    Rogers    v.    Page.    140 

437:   Humphrey  v.  Tatman,  198  U.  Fed.  Rep.  596,   15  Am.   B.   R.  502; 

S.  91,  49  L.  Ed.  956,  14  Am.  B.  R.  In   re   Noel.    137   Vi^d.   Rep.   694,    14 

74:    Fisher  v.   Zollinger    fC.   C.   \.  Am.    B.    R.    715:    In   re    Ewald    & 

6th  Cir.),   149  Fed.  Rep.  54;  In  re  Brainard.     135    Fed.    Rep.     168,    14 

Marine,   etc.    Dock   Co.    fC.    C.    A.  Am.  B.  R.  267. 

2d  Cir.),  144  Fed.  Rep.  649.  16  Am.  "As   to   the    effect   of   failing  to 

^-  R-  ^~S-  record,  see  Sec.   194^/,  ante.     As  to 

'"  Bcnnerhassctt   v.    Sherman,    105  tlie    elements    necessary    to    consti- 

U.  S.  100,  26  L.  Ed.  1080;  Clayton  ttite  a   preference,   see   Sec.    194  et 

V.    Exchange    Bank    (C.   C.    A.   sth  scq.,  ante. 


598 


LAW      AM)     PROCEEDINGS    IN     BANKRUPTCY. 


§  198.    Pledges. 

A  sccurit)-  by  way  of  pledge  or  pawn  is  a  species  of  mort- 
gage. The  difference  ordinarily  recognized  between  a  mort- 
gage and  a  pledge  is,  that  the  title  is  transferred  by  the  former 
and  possession  by  the  latter.  Indeed,  possession  may  be  con- 
sidered as  of  the  very  essence  of  a  pledge. 

A  pledge  is  confined  to  personal  property  capable  of  delivery 
and  is  created  by  the  mere  delivery  of  such  property  to  some 
other  person  as  security  for  money  advanced  or  to  be  advanced. 
Collateral  security  is  the  term  generally  used,  to  designate  a 
pledge  of  negotiable  paper,  corporate  stocks  or  other  incor- 
poreal personality,  as  distinguished  from  a  pledge  of  corporeal 
chattels. 

An  equitable  interest  in  property  incapable  of  delivery  can 
not  be  pledged,  but  an  equitable  lien  may  be  impressed  upon 
the  property  which  will  be  enforced  by  a  court  of  equity.^ 
A  pledge  dift'ers  from  a  lien  in  that  a  pledgee  may  enforce  his 
security  without  the  aid  of  a  court,  but  a  lien  can  only  be 
enforced  through  judicial  proceedings. 

In  order  to  constitute  a  pledge  an  actual  or  symbolic  deliv- 
ery of  property  capable  of  personal  possession  is  essential  and 
to  preserve  it  the  pledgee  must  retain  possession." 


'  In  Chattanooga  Nat.  Bank  v. 
Rome  Iron  Co.,  102  Fed.  Rep.  755, 
4  Am.  B.  R.  441,,  an  equitable 
right  which  was  incapable  of  de- 
liver}' was  pledged  by  a  contract  in 
writing.  This  transaction  was  prop- 
held  to  raise  an  equitable  lien,  but 
it  is  not  accurate  to  call  it  a  pledge. 

In  McDonald  v.  Daskam  (C.  C. 
A.  7th  Cir.),  116  Fed.  Rep.  276,  8 
Am.  B.  R.  543,  the  court  sustained 
an  equitable  lien,  and  said :  "We 
can  not  consider  this  agreement 
as  a  common  law  pledge,  and  void 
because  the  policies  were  not  given 
into  the  possession  of  Daskam  or 
the  bank.     It  was  not  a  pledge   of 


marketable    security    or    of    salable 
property." 

See  also  In  re  Elm  Brewing  Co., 
132  Fed.    Rep.  299,    12   Am.   B.   R. 

'''  Union  Trust  Co.  v.  Wilson,  198 
U.  S.  530,  49  L.  Ed.  1154,  14  Am.  B. 
R.  109;  Security  Warehousing  Co. 
v.  Hand  (C.  C.  A.  7th  Cir.),  143 
Fed.  Rep.  32,  16  Am.  B.  R.  49; 
Love  V.  Export  Storage  Co.  (C. 
C.  A.  6th  Cir.),  143  Fed.  Rep.  i, 
16  Am.  B.  R.  171 ;  In  re  Rodgers 
(C.  C.  A.  7th  Cir.),  125  Fed.  Rep. 
169,  II  Am.  B.  R.  79;  reversed  for 
want  of  jurisdiction  sub  nom.;  ist 
Nat'l    Bank   v.   Title   &  Trust   Co., 


PREFERENCES    AXD    LIENS.  599 

The  manual  delivery  and  possession  of  the  thing  pledged 
is  the  simplest  form.  Where  bills  of  exchange,  promissory 
notes,  corporate  stock,  etc.,  are  pledged  there  should  be  some 
evidence  thereof  by  way  of  endorsement  or  assignment,  with- 
out which  the  pledgee  could  not  recover  thereon.  They  remain 
the  assets  of  the  pledgor  and  subject  to  the  pavment  of  his 
debts  unless  validly  transferred.  A  negotiable  instrument 
payable  to  bearer  may  be  pledged  by  delivery  only.  Where 
a  part  of  a  thing  in  bulk  is  pledged,  such  part  must  be  separated 
and  set  apart,  unless  the  pledgee  has  possession  of  the  whole 
bulk.'  If  the  possession  of  the  whole  is  in  the  pledgee,  then 
the  part  pledged  must  also  be  there. 

The  possession  need  not  be  actual.  It  may  be  constructive; 
as  where. tiie  key  of  a  warehouse  containing  the  goods  pledged 
IS  delivered,  or  a  bill  of  lading  is  assigned.  In  such  case,  the 
act  done  will  be  considered  as  a  token,  standing  for  actual 
delivery  of  the  goods.  It  puts  the  propertv  under  the  power 
and  control  of  the  creditor.*  Where  the  debtor  executed  and 
delivered  to  a  bank  a  bill  of  sale,  absolute  on  its  face,  of  bil- 
lets of  iron,  which  by  reason  of  their  weight  and  bulk  were 
permitted  to  remain  on  the  premises  of  the  vendor,  the  billets 
however  being  marked  by  a  sign  posted  on  the  several  piles 
setting  out  that  they  were  the  property  of  the  bank,  it  was  held 
a  valid  pledge.^ 

A  mere  contract  or  agreement  to  give  a  pledge  is  not  suf- 
ficient to  constitute  a  pledge."  \Vhere  a  creditor\akes  posses- 
sion of  goods  within  four  months  of  bankruptcv  in  pursuance 
of  an  agreement  made  prior  to  such  period,  the  pledge  may 

198  a   S^  280,  49  L.  Ed.    1051,   14  =i.st   Nat'I   Rank   v.    Penn.   Trust 

An,    B^R    102;   Casey  v.  Cavaroc,  Co.    (C.   C.   A.   3d   Cir.).    124   Fed. 

96  U.  S.  467,  24  L.  Ed.  779;  Casey  Rep.  968,  10  Am.  B    R    78^ 

V.  Schneuler.  96  U.  S.  496.  24  L.  Ed.  « /«    re    Sheridan,    98    Fed.    Rep. 

^^S'p;.  ,.,     T  ^  ^"^'    ^    '^"'-    ^-    ^-    554;    Nisbit   V. 

1  .del.ty  Ins.,  etc.,  Co.  v.   Roan-       Macon  Bank  &  Trust  Co     i-  Fed 
oke  Iron  Co..  81  Fed.  Rep.  439.  445.       Rep.  686;   Copeland  v.   Barnes    147 

Casey  v.  Cavaroc,  96  U.   S.  467.       Mass.   388. 
477.  24  L.  Ed.  779.  But  'see    Wilder    v.    Watts,    138 

Fed.  Rep.  427,  15  Am.  B.  R.  57. 


600  LAW     AXn     PROCEEDINGS    IN     BAxVKRUPTCV. 

be  avoided  by  the  trustee  as  a  ])referenee,  because  the  pledg-e 
^vas  made  within  the  i)rohil)ited  period.'  Ikit  where  the  agree- 
ment, made  at  the  time  oi  the  loan,  is  to  pledge  a  particular 
thing,  which  is  subsequently  delivered  to  the  pledgee,  the  date 
of  making  the  pledge  relates  back  to  the  time  of  the  contract 
and  constitutes  a  valid  pledge  which  can  not  be  disturbed  by  a 
trustee.'^  So  renewal  notes  given  within  four  months  secured 
by  the  same  pledge  as  the  original  indebtedness,  which  was 
created  and  the  pledge  made  prior  to  that  period,  is  not  a 
preference." 

The  actual  possession  may  be  held  by  a  third  person  for 
the  pledgee.  Such  person  will  be  considered  the  pledgee's 
agent.  One  chattel  may  be  pledged  to  secure  two  debts  to  two 
ditTerent  persons,  one  holding  it  as  agent  for  the  other  to  the 
extent  of  his  debt.^*^  A  pledge  of  fire  insurance  policies  has 
been  sustained,  where  a  solvent  company  placed  the  policies 
of  insurance  upon  its  mill,  warehouse,  etc.,  in  the  hands  of  two 
of  its  directors,  which  it  agreed  should  remain  in  the  directors' 
possession  as  pledges  to  secure  loans  which  had  been  or  which 
misfht  thereafter  be  made  to  it  bv  creditors,  there  being  no 
formal  assignment  and  consent  of  the  insurance  company." 

\\'hen  the  actual  delivery  is  to  a  carrier  or  warehouseman 
and  a  bill  of  lading  or  warehouse  receipt  is  given  therefor, 
the  transfer  of  the  instrument  and  its  delivery  to  the  pledgee 
is  a  delivery  of  possession  to  the  pledgee  of  the  property 
represented  by  the  instrument.^-  It  is  a  necessary  condition 
of  such  possession  by  the  pledgee  that  the  property  itself  be  in 

Vn    re    Sheridan,    98    Fed.    Rep.  '"In    re    Wiley,    No.    17654    Fed. 

406,  3  Am.  B.  R.  554;  Nisbit  v.  Ma-  Cas.,  4  Biss.  71. 

con  Bank  &  Trust  Co.,  12  Fed.  Rep.  "  Stout    v.    Yaeger    Milling    Co., 

686;  Copeland  v.  Barnes,  147  Mass.  13  Fed.  Rep.  802. 

38a.  See  McDonald  v.  Daskam  (C.  C. 

'Wilder  v.  Watts,  138  Fed.  Rep.  A.  7th  Cir.),   116  Fed.  Rep.  276,  8 

427,  15  Am.  B.  R.  57;  Union  Trust  Am.    B.    R.    543,   where   fire   insur- 

Co.  V.  Bulkeley  (C.  C.  A.  6th  Cir.),  ance  policies  were  not  pledged,  but 

150  Fed.  Rep.  .  enforced  as  an  equitable  lien. 

'Chatt.  Nat.  Bank  v.  Rome  Iron  ''Union  Trust  Co.  v.  Wilson,  198 

Co.,    102   Fed.   Rep.  755,  4  Am.   B.  U.  S.  530,  49  L.  Ed.   11 54,  14  Am. 

R.  441.  B.  R.  109. 


PREFERENCE    AND    LIENS.  601 

the  possession  of  some  person  other  than  the  pledgor/^  The 
supreme  court  has  said  that  "when  there  is  conscious  control, 
the  intent  to  exclude  and  the  exclusion  of  others,  with  access 
to  the  place  of  custody  as  of  right,  there  are  all  the  elements 
of  possession  in  the  fullest  sense."  ^*  A  warehousing  company- 
has  been  held  to  have  possession  of  property  pledged  where 
it  had  it  under  lock  and  key  in  a  place  to  which  it  had  a  legal 
title  and  right  of  access  by  lease  from  the  debtor  and  no  one 
else  could  get  such  access  without  breaking  in,  the  outside  of 
the  depositary  being  placarded  with  signs  stating  in  large  let- 
ters that  the  premises  were  occupied  by  the  company  as  a  pub- 
lic warehouse ;  ^^  and  also  where  it  had  piles  of  lumber  on 
property  leased  by  it,  but  not  enclosed,  the  corners  of  the 
premises  and  each  pile  of  lumber  placarded  and  the  lumber 
placed  in  the  custody  of  an  agent,  who  was  stationed  in  the 
lumber  yard  to  assert  control  and  prevent  others  from  interfer- 
ing A\ith  the  lumber,^'"'  and  also  where  a  warehousing  company 
leased  a  part  of  the  owner's  premises,  which  was  marked  off 
by  signboards  to  indicate  the  fact  and  the  material  for  which 
a  warehouse  receipt  was  given  being  distinguished  by  stakes, 
cords  and  tags  and  in  charge  of  a  warehouse  custodian.^^ 
But  where  an  attempted  warehousing  of  seed  on  the 
owner's  premises  consisted  of  a  lease  to  the  warehouse- 
man, a  tagging  of  the  bags  of  seed  without  any  ex- 
terior sign  on  the  premises,  the  warehouseman  having  no 
key  to  the  premises  and  no  custodian  to  prevent  the  bankrupt 
from  doing  with  it  as  he  would,  it  was  held  that  the  possession 
was  not  changed  from  the  debtor  to  the  warehouseman.^® 

"Security    Warehousing-    Co.    v.  U.  S.  530,  49  L.  Ed.  1154,   14  Am. 

Hand  (C.  C.  A.  7th  Cir.).  143  Fed.  B.  R.  109. 

Rep.   32,   6   Am.    B.    R.    49 ;    /;;    re  '"  Love    v.    Export    Storage    Co. 

Rodgers    (C.    C.   A.   7th   Cir.),    125  (C.  C.  A.  6th  Cir.),  143  Fed.  Rep. 

Fed.    Rep.    169,    11    Am.   B.   R.   79;  t,  16  Am.  B.  R.  171. 

reversed    for   want   of  jurisdiction,  "  Bush    v.    Export    Storage    Co., 

198  U.  S.  280,  49  L.  Ed.   1051,   14  136  Fed.   Rep.  918,    14  Am.   B.   R. 

Am.  B.  R.   ro2.  138. 

"  Mr.    Justice    FTohnes    in    Union  ''''  Security    Warehousing    Co.    v, 

Trust  Co.  V.  Wilson,  198  U.  S.  530,  TFand  (C.  C.  A.  7th  Cir.),  143  Fed, 

49  L.  Ed.  1 154,  14  Am.  B.  R.  T09.  Rep.  2>~y   ^6  Am.  B.  R.  49. 

''Union  Trust  Co.  v.  Wilson,  198 


602 


LAW    AND    rROCEEDIXGS    IN    BANKRUPTCY. 


If  the  possession  be  once  given  up,  the  pledge,  as  such,  is 
extinguished.^*'  Hence  a  redehvery  of  the  thing  pledged  to 
the  debtor  ordinarily  teminates  the  pledge,  A  redelivery  for 
a  mere  temporary  purpose,  as  for  shoeing  a  horse  which  had 
been  pledged  and  is  owned  by  the  farrier,  or  for  repairing  a 
carriage  which  has  been  pledged  and  is  owned  by  the  maker, 
does  not  amount  to  an  interruption  of  the  pledgee's  possession. 
The  owner  is  but  a  mere  special  bailee  for  the  creditor.-"  So 
when  the  debtor  is  employed  in  the  creditor's  service  his 
temporary  use  of  the  pledged  article  in  the  creditor's  business 
does  not  effect  a  restoration  of  the  possession  of  the  debtor. ^^ 
When  a  security  is  redelivered  for  the  purpose  of  exchanging 
it  for  other  security,"  or  where  collateral  security  is  trans- 
ferred by  the  borrower  to  the  lender  for  collection,  the  pledge 
is  not  terminated  by  such  redelivery.-^  It  lias  been  held  that 
the  fact  that  placards  on  billets  of  iron,  stored  on  owner's 
premises,  had  fallen  off  for  a  period  of  several  months  did 
not  end  the  possession  of  the  pledgee,  who  replaced  them  as 
soon  as  he  knew  the  fact."* 


§  198a.    Rights  of  pledgee  and  trustee  in  property  pledged, 

Where  a  pledge  is  valid  under  the  state  law  and  not  in 
violation  of  any  provision  of  the  bankruptcy  law  it  will  be 
respected  and  may  be  enforced  by  a  court  of  bankruptcy.^  State 
statutes  regulating  pledges  and  warehousemen  are  controlling 


"  Case}'  V.  Cavaroc,  96  U.  S.  467, 
24  L.  Ed.  779. 

^  Casey  v.  Cavaroc,  96  U.  S.  467, 
24  L.  Ed.  779. 

■'  Reeves  v.  Capper,  5  Bing.  N.  C. 
136. 

^'Hays  V.  Riddle,  i  Sandf.  (N. 
Y.^)  24a. 

^  Clark  V.  Tselin,  21  Wall.  360.  22 
L.  Ed.  568. 

^'  1st  Nat.  Bank  v.  Penn.  Trust 
Co.  (C.  C.  A.  3d  Cir.).  124  Fed. 
Rep.  968,   10  Am.  B.   R.  7S2. 

^  Union  Trust  Co.  v.  Wilson,  iq8 


U.  S.  530,  49  L.  Ed.   1 1 54,   14  Am. 

B.  R.  109;  Wm.  Firth  Co.  v.  S.  C. 
L.  &  T.  Co.  (C.  C.  A.  4th  Cir.),  122 
Fed.  Rep.  569;  In  re  Waterloo  Or- 
gan Co.  (C.  C.  A.  2d  Cir.),  134 
Fed.  Rep.  345,  13  Am.  B.  R.  477; 
Love    v.    Export    Storage    Co.    (C. 

C.  A.  6th  Cir.),  143  Fed.  Rep.  i,  16 
Am.  B.  R.  171;  1st  Nat.  Bank  v. 
Penn.  Trust  Co.  (C.  C.  A.  3d  Cir.), 
124  Fed.  Rep.  968,  10  Am.  B.  R. 
782 ;  Yeatman  v.  Savings  Institu- 
tion, 95  U.  S.  764.  24  L.  Ed.  £89. 


PREFERENCE    AND    LIENS.  603 

in  a  court  of  bankruptcy  in  determining  the  validity  and  effect 
of  pledges." 

In  case  one  pledgee  holds  two  separate  pledges  for  two 
separate  debts  and  it  turns  out  that  the  security  for  one  debt  is 
too  small  and  there  is  a  surplus  from  the  other  pledge,  the 
pledgee  can  not  apply  the  surplus  to  the  payment  of  the  defi- 
ciency in  the  absence  of  a  special  contract  that  the  security 
stand  for  both  debts.  The  reason  for  this  is  that  the  surplus 
is  a  trust  fund  in  possession  of  the  pledgee  and  not  a  debt.  It 
can  not  therefore  be  set  off  against  the  debt. 

A  stockbroker  who  purchases  and  carries  stocks  on  account 
of  a  customer  on  margins  furnished  by  such  customer  holds 
the  same  as  pledgee,  and  on  his  bankruptcy  the  customer  is 
entitled  to  the  stock  on  payment  of  the  amount  due  thereon, 
or  to  the  surplus  realized  from  its  sale  by  the  trustee,  to  the 
exclusion  of  the  bankrupt's  creditors.^ 

The  trustee  may  redeem  property  pledged,  under  the  direc- 
tion of  the  court,  by  tendering  performance  of  the  contract  of 
pledge  or  discharging  the  debt  for  w^hich  the  property  is  held.* 
This  will  be  done  only  where  the  property  is  considered  of 
greater  value  than  the  debt.  The  trustee  of  an  estate  of  a 
bankrupt,  who  has  repledged  property  held  by  him  as  a  pledge, 
may  redeem  the  property  for  the  estate  of  the  bankrupt  by 
paying  the  bankrupt's  debt.  He  takes  it  subject  to  the  right 
cf  the  original  owner  to  redeem,  because  he  has  only  the  bank- 
rupt's interest,  which  is  that  of  pledgee. 

The  trustee  may  sell  the  interest  of  the  bankrupt  in  the 
property  pledged  by  direction  of  the  court  without  making  the 
pledgee  a  party.''  In  such  case  the  property  conveyed  sub- 
ject to  the  claim  of  the  pledgee. 

''Casey  v.  Cavaroc,  96  U.   S.  467,  496,   24   L.   Ed.    790;    Hardeman   v. 

24  L.  Ed.  779;  Security  Warehous-  Etheridge   (C.  C.  A.  5th  Cir.),  112 

ing    Co.    V.    Hand    (C.    C.    A.    7th  Eed.  Rep.  619. 

Cir.),    143    Fed.    Rep.    32;    16    Am.  ^  In  re  Boiling,  147  Fed.  Rep.  786. 

B.  R.  49 ;  Union  Trust  Co.  v.  Wil-  *  Yeatman  v.  Savings  Institution, 

son,  198  U.  S.  530,  49  L.  Ed.  1154,  95  U.  S.  764,  768;  24  L.  Ed.  589. 
14  Am.  B.  R.  109;  Adams  v.  Mer-  "Yeatman  v.   Savings  Institution, 

chants'     Xat.    Bank,    2    Fed.    Rep.  95  U.  S.  764.  768;  24  L.  Ed.  589. 
174;   Casey  v.  Schneider,  96  U.  S. 


604  LAW    AXl)    I'ROCKKDINGS    TN    BANKRUPTCY. 

The  trustee  may,  inulor  order  "of  court,  sell  the  property 
free  from  the  Hen  of  the  pledgee.  The  trustee  can  not  com- 
I'el  a  sale  of  this  character  without  the  consent  of  the  pledgee, 
because  the  property  is  in  the  possession  of  the  pledgee  and 
the  statute  does  not  provide  for  bringing  in  parties  to  deter- 
mine controversies  of  this  kind,  where  the  property  is  not  in 
the  custody  of  the  court,  l^he  pledgee  may  consent.  In  that 
case  proceedings  to  sell  property  may  be  instituted  by  a 
petition  by  the  trustee  for  leave  to  sell  the  pledge  at  private 
or  public  sale,  the  pledgee  consenting.  The  fund  will  stand  for 
the  property.  A  rule  to  show  cause  why  the  sale  should  not 
be  had  is  issued  by  the  court  to  the  creditors,  giving  them 
ten  days'  notice  of  the  hearing.  An  order  directing  the  trustee 
to  make  such  sale  is  then  entered  and  the  sale  made  by  the 
trustee  cooperating  with  the  pledgee.  The  sale  is  then  con- 
firmed by  the  court  and  the  money  distributed  as  in  other  cases. 
The  pledgee  may  proceed  upon  default  to  sell  the  pledge 
in  the  usual  way,  although  the  pledgor  may  have  been  ad- 
judged a  bankrupt."  and  the  court  will  not  interfere  with  a 
pledgee  selling  a  thing  pledged,  under  the  power  of  sale  given 
by  the  terms  of  his  contract,  when  there  is  no  claim  that  such 
power  is  exercised  in  a  fraudulent  or  oppressive  manner.'' 
Notice  of  such  sale  should  ordinarily  be  given  to  the  trustee, 
provided  he  has  been  appointed  before  the  sale.  The  pledgee 
may  rely  wholly  upon  his  security  and  refuse  to  prove  his  claim 
in  the  bankruptcy  court.  In  such  a  case  he  loses  only  the 
privilege  in  participating  in  the  distribution  of  the  bankrupt's 
estate.  He  may  surrender  his  preference  and  prove  his  claim 
as  an  unsecured  creditor.^ 

Where  the  pledge  is  in  fraud  of  the  bankrupt  law  it  is 
void,  and  the  trustee  may  disregard  the  contract  of  pledge  and 

*  Jerome   v.   McCarter,   94  U.   S.  762,  5  Am.  B.  R.  220;  In  re  Mer- 

734,  24  L.  Ed.   136;  In  re  Browne,  tens    (C.  C.  A.  2d  Cir.),   144  Fed. 

104    Fed.    Rep.    762,    5    Am.    B.    R.  Rep.   818,    15   Am.    B.    R.   362;    re- 

220;   In   re   Mertens    (C.   C.   A.   2d  versing   134  Fed.  Rep.   lOi,   14  Am. 

Cir.),    144    Fed.    Rep.   819.    15   Am.  B.   R.  226. 

B.   R.  362.              ^  "*  B.  A.  1898,  Sec.  S7g- 

'  In    re    Browne,    104    Fed.    Rep. 


PREFERENCE    AND    LIENS.  605 

recover  the  property  for  the  benefit  of  the  creditors.  In 
order  to  constitute  a  preferential  pledge  under  Section  60  it 
must  have  been,  first,  pledged  by  an  insolvent  person  to  a 
creditor,  and,  second,  Aith  the  effect  to  enable  the  creditor  to 
obtain  a  greater  percentage  of  his  debt  than  any  other  of 
such  creditors  of  the  same  class,  and,  third,  such  creditor 
must  have  had  reasonable  cause  to  believe  that  it  was  intend- 
ed to  give  him  a  preference,  and,  fourth,  the  pledge  must 
have  been  within  four  months  before  filing  a  petition  in 
bankruptcy,  or  after  filing  the  petition  and  before  the  adjudi- 
cation." If  the  effect  of  the  transaction  is  not  to  give  a 
pledge,  the  creditor  stands  as  a  common  instead  of  a  preferred 
creditor  of  the  bankrupt's  estate.^" 

* 

§  199.     As  to  liens  generally. 

The  bankrupt  law  recognizes  and  preserves  liens  given  or 
accepted  in  good  faith,  and  not  in  contemplation  of,  or  in 
fraud  upon  the  act,  and  for  a  present  consideration  which 
has  been  recorded  according  to  law,  if  record  thereof  is  nec- 
essary to  impart  notice.^ 

In  order  that  a  lien  be  valid  under  the  bankrupt  act  it  is 

•For     further     consideration     of  126,  7  Am.  B.  R.  254;  Chattanooga 

these  elements  consuh   Preferences  Nat.   Bank   v.   Rome   Iron   Co.,   102 

by   transfer,    Sec.    194   et  seq.     For  Fed.  Rep.  755.  4  Am.  B.  R.  441 ;  Mc- 

examples    of    invahd    pledges,     see  Donald   v.    Daskam    (C.   C.   A.   7th 

Ogden  V.  Jackson,  i  Johns  (N.  Y.)  Cir.),  116  Fed.  Rep.  276,  8  Am.  B. 

370;   Adams   v.   Nat.   Bank,   2   Fed.  R.  543;  First  National  Bank  v.  Pa. 

Rep.     174;    Security     Warehousing  Trust  Co.    (C.   C   A.  3d  Cir.),   124 

Co.  V.   Hand    (C.   C.  A.   7th   Cir.),  Fed.  Rep.  968,  10  Am.  B.  R.  782;  In 

143  Fed.  Rep.  :i2,  16  Am.  B.  R.  49;  re  Hanna,  105  Fed.  Rep.  587,  5  Am. 

In  re  Sheridan,  98  Fed.   Rep.  406,  B.    R.    127;   In   re   Graff,    117   Fed. 

3  Am.  B.  R.  554;  Casey  v.  Cavaroc,  Rep.  343,  8  Am.  B.  R.  744;  In   re 

96  U.  S.  467,  24  L.  Ed.  779.  Nicholas,  12^  Fed.  Rep.  299,  10  .Am. 

"Casey  v.  Cavaroc,  96  U.  S.  467,  B.   R.  291;   Mctcalf  v.   Barker.    187 

24  L.  Ed.  779;  Adams  v.  National  U.  S.  165,  47  L.  Ed.  122.  9  \m.  B. 

Bank,  2  Fed.  Rep.   174.  R.   36;   In   re   Goldsmith,    118   Fed. 

'  B.  A.  1898,  Sec.  676 :  In  re  Li!-  Rep.  763,  9  Om.  B.  R.  419;  In  re 

lington  Lumber  Co.,   132  Fed.  Rep.  Mitchell,   116  Fed.   Rep.  87,  8  Am. 

886,  13  Am.  B.  R.  153;  In  re  Stan-  B.    R.   324. 
dard   Laundry    Co.,    112    Fed.    Rep. 


606 


LAW     AND    PRCWJKEDINGS    IX    1?AX  KRUPTCY. 


necessary  that,  lirsl,  it  should  lia\c  l)ccii  gi\cu  or  accepted  in 
good  faith  anil  for  a  present  consideration,  and,  second,  tliat 
it  shtndd  lia\e  been  recorded  if  tlic  local  law  re(|uires  record 
to  impart  notice.  There  is  no  four  nioiUhs'  limitation  to  liens 
created  other  than  hy  transferring  property  or  through  legal 
proceedings.  But  claims  which,  for  want  of  record,"  or 
for    other    reasons,    would    not    have    been    valid    liens    as 

against  the  claims  of  the  creditor  of  the  bankrupt,  are  not 
liens  against  his  estate.^ 

AX'henever  a  creditor  is  prevented  from  enforcing  his  rights 
as  against  a  lien  created,  or  attempted  to  be  created,  by  his 
debtor,  who  afterwards  becomes  a  bankrupt,  the  trustee  of  the 
estate  of  such  bankrupt  shall  be  subrogated  to  and  may  enforce 
such  rights  of  such  creditor  for  the  benefit  of  the  estate.* 

Liens  may  be  divided  into  three  classes. 

First.  Common  law  or  retaining  liens,  such  as  the  lien  of 
tradesmen  upon  the  specific  goods  in  their  hands,  for  their 
labor  and  expense  in  improving  or  altering  them;^  livery- 
stable  keepers,  for  care  and  keep  of  horses ;  °  common  carriers 
of  goods,  for  their  services  and  expenditure  with  reference  to 
carriage  of  goods 7  or   inn-keepers,   upon  the  luggage,  car- 


^  Bank  v.  Herbert,  8  Cranch,  36, 
3  L.  Ed.  479;  In  re  Brunque.st,  No. 
2055  Fed.  Cas.,  7  Biss.  208.  See 
Sec.  197^,  ante. 

^B.  A.  1898,  Sec.  67a;  Spencer 
V.  Duplan  Silk  Co.,  112  Fed.  Rep. 
638.  7  Am.  B.  R.  563 ;  In  re  Garce- 
wicli  (C.  C.  A.  2d  Cir.),  115  Fed. 
Rep.  87,  8  Am.  B.  R.  149;  In  re  N. 
Y.  Economical  Printing  Co.  (C. 
C.  A.  2d  Cir.),  no  Fed.  Rep.  514, 
6  Am.  B.  R.  615;  Chesapeake  Shoe 
Co.  V.  Seldner  (C.  C.  A.  4th  Cir.), 
122  Fed.  Rep.  593,  10  Am.  B.  R. 
466;  In  re  Hull,  115  Fed.  Rep.  858, 
8  Am.  B.  R.  302;  In  re  Andrae 
Co.,   117   Fed.   Rep.   561,  9  Am.   B. 

R.  135. 


*B.  A.  1898,  Sees.  67&  and  (i^f; 
First  Nat.  Bank  v.  Staake,  202  U. 
S.  141,  50  L.  Ed.  967,  IS  Am.  B.  R. 
639;  In  re  N.  Y.  Economical  Print- 
ing Co.  (C.  C.  A.  2d  Cir.),  no  Fed. 
Rep.  514,  6  Am.  B.  R.  615;  Pat- 
ten V.  Carley  (Sup.  Ct.  N.  Y. 
App.  Div.),  8  Am.  B.  R.  482. 

^  Ex  parte  Deeze,  i  Atk.  228; 
Franklin  v.  Hosier,  4  B.  &  Aid. 
34r. 

"Jackson  v.  Cummins,  5  M.  & 
W.  342 ;  Judson  v.  Etheridge,  i 
Cr.  &  M.  743. 

'Aspinwall  v.  Pickford,  3  B.  & 
P.  44  n. ;  Rushforth  v.  Hadfield,  6 
East.  519;  Wright  v.  Snell,  5  B. 
&  Aid.  350. 


PREFERENCE    AND    LIENS. 


607 


riage  or  horses  of  a  guest,  for  debts  incurred  while  in  their 
keeping;^  etc.,  etc. 

Second.  Liens  created  by  statute,  such  as  mechanics' 
liens,  which  will  be  further  considered  hereafter.'* 

Third.  Equitable  liens.  The  term  "lien"  is  especially 
applicable  to  the  common  law  lien,  but  it  has  by  analogy 
been  applied  to  other  cases  where  a  right  to  prepayment 
exists  out  of  the  particular  property,  or  a  particular  estate 
or  interest  in  property,  either  by  contract  express  or  implied 
by  the  implication  of  a  trust  or  statute,  altho\igh  the  prop- 
erty itself  may  not  be  in  the  possession  of  or  vested  in  the 
pefson  claiming  the  lien.^° 

Liens  of  this  description  are  in  the  nature  of  equitable 
charges.  Mortgages  which  have  already  been  considered  ^^ 
may  also  be  regarded  as  equitable  liens,  but  for  convenience 
they  have  been  classed  under  the  head  of  mortgages.  A 
familiar  example  of  an  equitable  Hen  is  that  of  a  vendor  for 
the  purchase  money  ^-  and  that  of  a  judgment  creditor. 

It  has  been  held  that  a  vendee  under  a  contract  for  the  sale 
of  land  who  has  recorded  a  bond  for  the  deed  and  paid  the 
purchase  money  is  entitled  to  prove  his  claim  as  one  secured 
by  an  equitable  lien  on  the  land,  which  had  not  been  transferred 
by  the  vendor  to  him  prior  to  the  bankruptcy  of  the  vendor," 
and  w^here  a  landlord  had  made  an  equitable  assignment  of 
the  rents  pro  tanto  wdiich  had  come  into  the  hands  of  the 


'Mulliner  v.  Florence,  3  Q.  B. 
Div.  484;  Turrill  v.  Crawley,  13 
Ad.  and  El.  (N.  S.)  197. 

"  Sec.  200,  ct  scq. 

'"In  re  Chatt.  Nat.  Bank,  102 
Fed.  Rep.  755,  4  Am.  B.  R.  441; 
McDonald  v.  Daskam  (C.  C.  A. 
7th  Cir.),  1 16  Fed.  Rep.  276,  8 
Am.  B.  R.  543 ;  Elm  Brewing  Co., 
132  Fed.  Rep.  299,  12  Am.  B.  R. 
623;  3  Pomeroy  Eq.  Jur.,  Sec.  1235; 
Walker  v.  Brown,  165  U.  S.  654, 
41   L.   Ed.  865. 


"  Sec.  197,  ct  seq.,  ante. 

'' In  re  Portuondo  Co.,  135  Fed. 
Rep.  592,  14  Am.  B.  R.  S37;  In  re 
Bryan,  No.  2062  Fed.  Cas.,  3  N. 
B.  R.  no;  Hall  v.  Scovel,  No.  5945 
Fed.  Cas.,  10  N.  B.  R.  295;  In  r"e 
Brooks,  No.  1943  Fed.  Cas.,  2  N.  B. 
R.  466;  In  re  Perdue,  No.  10975 
Fed.  Cas.,  2  N.  B.  R.  183;  In  re 
flutto.  No.  6960  Fed.  Cas.,  3  N.  B. 
R.  78;. 

"  In  re  Peasley,  137  Fed.  Rep. 
190,   14  \m.  B.  R.  496. 


608  LAW    AND    TROCEEDINGS    IN    BANKRUPTCY. 

trustee  that  it  created  a  lien  on  the  fund  in  the  hands  of  the 
trustee.'^ 

Where  a  vahd  Hen  exists  the  Hen-holder  has  the  same 
courses  open  to  him  as  any  other  secured  creditor/^  The 
court  of  bankruptcy  may  authorize  the  trustee  to  redeem 
the  property  antl  discharge  the  lien,  or  it  may  order  the  en- 
tire property  to  be  sold  and  ascertain  the  amount  of  the  debt 
?ecured  by  the  lien  In  such  case  the  debt  will  be  preferred 
in  the  distribution  of  the  proceeds  and  the  purchaser  of  the 
estate  will  take  it  discharged  of  all  incumbrances.  Or,  on  the 
other  hand,  the  court  may  allow  the  trustee  to  sell  the  prop- 
erty subject  to  the  lien  on  the  bankrupt's  estate,  to  be  finally 
settled  without  any  determination  of  the  rights  claimed  un- 
der the  lien.  In  such  case  the  petitioner  will  retain  those 
rights  as  against  the  purchaser  of  the  property.  If  his  lien 
is  not  sufBcient  to  secure  the  whole  debt  he  may  prove  the 
balance  of  such  claim  over  the  value  of  such  Hen,  but  for 
only  such  excess. ^"^ 

§  200.     Mechanics'  liens. 

A  mechanic's  lien  is  created  by  a  state  statute.  It  gives  a 
lien  to  material  men  and  laborers  upon  specific  property  for 
the  payment  for  materials  furnished  for  and  labor  performed 
on  that  property. 

What  constitutes  a  vaHd  mechanic's  lien,  when  it  attaches, 
and  what  is  necessary  to  be  done  in  order  to  complete  and 
preserve  the  lien,  varies  in  different  states.  Whether  a  me- 
chanic's Hen  is  a  valid  claim  against  the  estate  of  the  bank- 
rupt depends  upon  the  local  law  as  construed  by  the  highest 
court  of  the  state.^  If  a  valid  lien  has  attached  under  the 
state  law  before  proceedings  in  bankruptcy  have  been  com- 
menced the  lien  will  be  respected  by  the  court  of  bankrupt- 
cy.^    But  if  for  want  of  record  or  for  other  reasons  it  would 

''*  Jn  re  Oliver,  132  Fed.  Rep.  588,  ^  In    re    Grissler    (C.    C.    A.    2d 

12  Am.   B.  R.  694.  Cir.),  136  Fed.  Rep.  754,  13  Am.  B. 

"Sec.  202,  post.  R.  508;  In  re  Emslie  (C.  C.  A.  2d 

"B.   A.    1898,   Sec.   56fc.  Cir.),  102  Fed.  Rep.  291,  4  Am.  B. 


PREFERENCE    AND    LIENS. 


609 


not  have  been  a  valid  lien  as  against  the  claims  of  the  cred- 
itors of  the  bankrupt,  it  is  not  a  lien  against  his  estate. " 
Where  a  mechanic's  lien  is  valid  as  against  a  debtor  or  his 
general  assignee  under  the  state  law  when  notice  of  lien  is 
recorded  after  bankruptcy,  it  is  valid  as  against  his  trustee  in 
bankruptcy,^  and  a  suit  in  a  state  court  to  enforce  the  lien  will 
not  be  stayed  by  a  court  of  bankruptcy.* 

The  adoption  of  the  state  statutes  with  reference  to  liens 
is  constitutional.^  The  uniformity  required  by  the  constitu- 
tion relates  to  national  legislation  only,  and  therefore  the 
laws  of  the  several  states  may  be  left  in  force,  and  to  such  an 
extent  as  congress  may  see  fit. 

Where  the  trustee  delays  in  electing  to  take  the  property 
subject  to  the  lien,  the  holder  of  such  lien  may  bring  a  suit 
in  the  proper  state  court  to  foreclose  it.''  The  reason  for 
this  is,  that  if  the  court  of  bankruptcy  should  abstain  from 
ascertaining  the  lien,  and  from  providing  for  its  satisfaction 
out  of  the  property  or  proceeds  of  a  sale  thereof,  the  lien 


R.  126;  In  re  Kerby-Dennis  Co. 
(C.  C  A.  7th  Cir.),  95  Fed. 
116,  2  Am.  B.  R.  402;  In  re  Coe- 
Powers  Co.  (C.  C.  A.  6th  Cir.), 
109  Fed.  550,  6  Am.  B.  R.  i ;  In  re 
Falls  City  Shirt  Mfg.  Co.,  98  Fed. 
Rep.  592,  3  Am.  B.  R.  437;  In  re 
West  Norfolk  Lumber  Co.,  112  Fed. 
Rep.  759,  7  Am.  B.  R.  648;  In  re 
Georgia  Handle  Co.  (C.  C.  A.  5th 
Cir.),  109  Fed.  Rep.  632,  6  Am.  B. 
R.  472;  South  End  Imp.  Co.  v. 
Harden  (N.  J.),  52  Atl.  1127. 

'B.  A.   1898,  Sec.  67a. 

In  re  Brunquest,  No.  2055  Fed. 
Cas.,  7  Biss.  208;  Bank  v.  Her- 
bert, 8  Cranch,  36. 

Un  re  Grissler  (C.  C.  A.  2d 
Cir.),  136  F"ed.  Rep.  754,  13  y\m. 
B.  R.  508;  overruling  In  re  Roeber 
(C.  C.  A.  2d  Cir.),  121  Fed.  Rep. 
449,  9  Am.  B.  R.  303;  Mott  v. 
Wissler  Mining  Co.    (C.  C.   A.  4th 


Cir.),  135  Fed.  Rep.  697,  14  Am. 
B.  R.  321 ;  In  re  West  Norfolk 
Lumber  Co.,  112  Fed.  Rep.  759,  7 
Am.  B.  R.  648;  In  re  Lillington 
Lumber  Co.,  132  Fed.  Rep.  886,  13 
Am.  B.  R.  153. 

*  In  re  Grissler  (C.  C.  A.  2d  Cir.), 
136  Fed.  Rep.  754,  13  Am.  B.  R. 
508. 

*  Darling  v.  Berry,  13  Fed.  Rep. 
668;  In  re  Beckerford,  No.  1209 
Fed.  Cas.,  i  Dill.  45 ;  In  re  Jordon, 
No.  7514  Fed.  Cas.,  8  N.  B.  R.  180; 
In  re  Jordan,  No.  7515  Fed.  Cas., 
10  N.  B.  R.  427 ;  In  re  Kean,  No. 
7630  Fed.  Cas.,  2  Hughes,  322. 

"  Marston  v.  Stickney,  55  N.  H. 
383 ;  Clifton  v.  Foster,  103  Mass. 
233;  Bryant  v.  Small,  35  Wis.  205; 
Dotiglass  V.  Zinc  Co.,  56  Mo.  388; 
Keller  V.  Denmead,  68  Penn.  St. 
449. 


610 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


might  he  lost  under  the  state  law/  Nearly  every  state, 
which  has  a  mechanic's  lien  law,  has  provided  for  bringing  a 
suit  to  enforce  the  lien  within  a  limited  time  or  the  lien  is 
lost.*  The  trustee  in  bankruptcy,  if  one  has  been  appointed, 
should  be  made  a  party  to  such  suit.  If  the  trustee  does  not 
appear  to  contest  either  the  suit  or  the  lien,  the  lien  may  be 
foreclosed  and  the  property  sold.  If  he  does  appear  to  con- 
test the  suit  the  state  court  will  ordinarily  continue  the  case 
to  await  the  action  of  the  bankruptcy  court.  The  lien  is 
preserved  by  the  bringing  of  the  suit  in  the  state  court. 

The  jurisdiction  of  the  court  of  bankruptcy  is  sufficient  to 
enforce  a  mechanic's  lien  in  that  court,  without  any  petition 
being  filed  or  suit  instituted  in  the  state  court  to  preserve  and 
continue  it,  provided  the  bankruptcy  court  has  lawful  custody 
of  the  property  to  which  the  lien  is  claimed.''  Before  be- 
ginning a  suit  in  the  state  court,  if  bankruptcy  proceedings 
have  been  commenced,  no  application  need  be  made  to  the 
bankruptcy  court  for  leave  to  foreclose  the  lien  in  the  state 
court.'" 

§  201.     Admiralty  liens. 

There  is  a  class  of  maritime  liens  for  materials  and  supplies 
furnished  to  vessels.  Where  such  a  lien  exists  a  court  of 
bankruptcy  will  enforce  it  with  the  same  efTect  as  it  would 
have  in  admiralty.'     A  court  of  bankruptcy  will  also  enforce 


'  In  Bryant  v.  Small,  35  Wis.  209, 
the  court  said :  "This  court  has 
held  that  the  lien  exists  by  virtue 
of  the  statute.  .  .  .  But,  never- 
theless, the  party  must  file  his  peti- 
tion and  commence  his  action  with- 
in the  period  described  to  enforce 
it,  or  it  will  be  lost."  This  is  the 
usual  rule  in  this  respect. 

'  Bryant  v.  Small,  35  Wis.  205 ; 
Clifton  V.  Foster,  103  Mass.  233. 

°  B.  A.  Sec.  2;  Chauncey  v.  Dyke 
Bros.  (C.  C.  A.  8th  Cir.),  119  Fed. 
Rep.    I.   9   Am.    B.    R.    444:    South 


End  Imp.  Co.  v.  Harden  (N.  J.), 
52  Atl.  1 127;  In  re  Lemnion  & 
Gale  Co.  (C.  C.  A.  6th  Cir.),  112 
Fed.  Rep.  296,  7  Am.  B.  R.  291 ; 
In  re  Kellogg,  113  Fed.  Rep.  120, 
7  Am.  B.  R.  623. 

'"In  re  Grissler  (C.  C.  A.  2d 
Cir.),  136  Fed.  Rep.  754,  13  Am. 
B.  R.  508. 

^  The  Ironsides,  No.  7069  Fed. 
Cas.,  4  Biss.  518;  In  re  Scott,  No. 
12517  Fed.  Cas.,  i  Abb.  U.  S.  336; 
In  re  Kirkland,  No.  7842  Fed.  Cas., 
12   Am.    Law   Reg.    300. 


PREFERENCE    AND    LIENS. 


611 


a  lien  for  supplies  aiifl  materials  furnished  to  a  vessel,  founded 
upon  a  state  statute,  and  not  of  a  strictly  maritime  character.- 

§  202.     Rights  of  a  secured  creditor. 

A  "secured  creditor""  is  a  creditor  who  has  security  for 
his  debt  upon  the  property  of  the  bankrupt  of  a  nature  to  be 
assignable  under  the  bankrupt  act,  or  who  owns  such  a  debt 
for  which  some  endorser,  surety,  or  other  persons  secondarily 
liable  for  the  bankrupt  has  such  security  upon  the  bankrupt's 
assets.^  A  creditor,  whose  debt  is  secured  by  the  property  or 
sole  obligation  of  a  person  other  than  the  bankrupt,  is  not  a 
"secured  creditor"  within  the  meaning  of  the  bankrupt  act.^ 

Where  a  creditor  has  received  security  for  his  debts  valid 
under  the  bankrupt  act,  three  courses  are  open  to  him,  pro- 
vided the  trustee  does  not  elect  to  redeem  b}'  paying  the  debt 
or  to  take  the  property  as  assets  of  the  bankrupt,  subject  to 
the  security.    They  are  : 

First.  The  secured  creditor  may  rely  upon  his  lien  and 
neither  prove  his  debt  in  bankruptcy  nor  release  his  security. 
In  such  case  the  security  is  preserved,  notwithstanding  the 
bankruptcy  of  the  debtor.^ 

Second.  The  secured  creditor  may  rely  upon  his  security 
and  prove  for  such  sum  as  may  be  owing  above  the  value  of 
his  security.*  The  value  of  securities  held  by  secured  cred- 
itors is  determined  by  converting  the  same  into  money,  ac- 


^  In  re  Scott,  No.  12517  Fed. 
Cas.,  I  Abb.  U.  S.  336.  This  prin- 
ciple is  also  recognized  in  The 
Edith,  94  U.  S.  518,  24  L.  Ed.  167; 
The  Belfast,  7  Wall.  624,  19  L.  Ed. 
266;  Leon  V.  Galceran,  11  Wall. 
185,  20  L.  Ed.  74. 

'  B.  A.  1898,  Sec.  I,  clause  23. 

'Gorman  v.  Wright  (C.  C.  A. 
4th  Cir.),  136  Fed.  Rep.  164,  14  Am. 
B.  R.  135;  In  re  Mertens  (C.  C. 
A.  2d  Cir.),  144  Fed.  Rep.  818,  15 
Am.   B.   R.  362. 

'Long  V.  Bullard.   117  U.   S.  617, 


29  L.  Ed.  1004;  Dudley  v.  Easton, 
104  U.  S.  103,  26  L.  Ed.  668;  Mc- 
Henry  v.  La  Societe  Francaise,  95' 
U.  S.  58,  24  L.  Ed.  370;  Porter  v. 
Lazear,  109  U.  S.  84,  27  L.  Ed.  865; 
Thompson  v.  Fairbanks,  196  U.  S. 
516,  49  L.  Ed.  577,  13  Am.  B.  R, 
437;  In  re  Grisslcr  (C.  C.  A.  2d 
Cir.),  136  Fed.  Rep.  754,  I3  Am. 
B.  R.  508. 

'B.  A.  1898,  Sec.  56Z?  and  Sec. 
57^.  Official  Form  No.  32,  Form 
No.  55,  post. 


612 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


cording  to  the  tcniis  of  the  agreement,  pursuant  to  which 
such  securities  were  dehvered  to  such  crecUtors,  or  by  such 
creditors  and  the  trustee,  by  agreement,  arbitration,  com- 
promise or  Htigation,  as  the  court  may  direct,  and  the  amount 
of  such  value  credited  upon  such  claims,  and  a  dividend  paid 
only  on  the  unpaid  balance." 

TJiird.  A  secured  creditor  may  surrender  his  security  and 
then  prove  his  debt  as  an  unsecured  creditor/'  In  1813  Lord 
Eldon  said :  '  "The  practice  has  been  long  established  in 
bankruptcy  not  to  suffer  a  creditor  holding  a  security  to 
prove,  unless  he  will  give  up  that  security,  or  the  value  has 
been  ascertained  by  the  sale  of  it.  The  reason  is  obvious ; 
till  his  debt  has  been  reduced  by  the  ])roceeds  of  that  sale, 
it  is  impossible  correctly  to  say  what  the  actual  amount  of  it 
is,  and  with  this  further  consideration  that,  in  the  event  of 
any  doubt  attaching  upon  his  right  to  retain  the  security,  he 
is  enabled  in  a  contest  with  the  rest  of  the  creditors  to  sustain 
his  title  in  a  situation  of  predominate  advantage."  The  bank- 
ruptcy act  of  1867  '^  expressly  provided  for  the  application 
of  the  rule,  as  does  the  present  English^bankruptcy  act.^ 

The  trustee  may,  however,  elect  to  take  the  property  of  the 
bankrupt  subject  to  the  valid  liens  of  creditors.^*'  In  such  case 
the  court  may,  in  its  discretion,  order  the  property  sold,  sub- 
ject to  the  lien  or  free  from  the  lien.^^     If  it  is  sold  subject  to 


»B.   A.    1898,   Sec.   S7h. 

"In  re  Conner,  No.  31 18  Fed. 
Cas.,  I  Low.  532 ;  In  re  Kipp, 
No.  7836  Fed.  Cas.,  4  N.  B.  R.  593 ; 
In  re  Leland,  No.  8230  Fed.  Cas., 
7  Ben.  156;  In  re  Stephens,  No. 
13365  Fed.  Cas.,  3  Biss.  187;  In  re 
Evans,  No.  4552  Fed.  Cas.,  3  N. 
B.   R.  261. 

'  In  Ex  parte  Smith,  2  Rose  64. 

"In  Cooke's  Bankrupt  Laws  the 
rule  in  bankruptcy  is  attributed  to 
legislative  enactment,  and  is  thus 
stated  :  'The  aim  of  the  legislatures 
in  all  the  statutes  concerning  bank- 
rupts    being     that      the     creditors 


should  have  an  equal  proportion  of 
the  bankrupt's  effects,  creditors  of 
every  degree  must  come  in  equal- 
ly.' "  Lord  Coltenham,  in  Mason 
V.  Bogg,  2  Myl.  &  Cr.  446. 

'R.   S.   Sec.  5084. 

'Act  of  1883,  46  and  47  Vict.  c. 
52,   Sec.   39,   clauses  9  to    16. 

'"  See  Title  to  bankrupt's  prop- 
erty, Sec.  149,  ante;  Gibson  v.  War- 
den, 14  Wall.  244,  20  L.  Ed.  797; 
Jerome  v.  McCarter,  94  U.  S.  734, 
24  L.  Ed.  136. 

"  Houston  V.  City  Bank,  6  How. 
486,  12  L.  Ed.  526;  Fowler  v.  Hart, 
13  How.  j,7i,   14  L.  Ed.  186;  In  re 


PREFERENCE    AND    LIENS. 


613 


the  lien  the  creditor  still  has  his  claim  preserved  against  the 
new  purchaser.  If  it  is  sold  free  of  the  lien  he  has  his  claim 
preserved  against  the  proceeds  of  the  sale  for  the  amount  of 
his  deht.  The  trustee  is  authorized  to  convey  property  to 
the  purchaser.^'- 

A  secured  creditor  may  come  into  a  court  of  bankruptcy 
and  petition  it  to  enforce  his  security  against  the  bankrupt's 
estate,  in  case  the  trustee  does  not  elect  to  sell  the  property 
cither  subject  to  or  free  from  liens.  But  such  creditor  can 
not  compel  a  court  of  bankruptcy  to  do  this  as  a  matter  of 
right."  It  is  sometimes  desirable  and  convenient  to  pursue 
this  course  and  the  court  has  ample  power  to  enforce  such  se- 
curity, preserving  to  the  secured  creditor  all  of  his  rights  aris- 
ing therefrom.'*  \\'here  a  secured  creditor  has  availed  himself 
of  the  bankruptcy  court  and  its  process  to  collect  his  claim  it 
is  only  right  that  he  bear  his  share  of  the  cost  of  such  pro- 
ceeding.'^ The  referee  and  trustee  are  entitled  to  commissions 
on  all  moneys  disbursed  to  such  creditor  by  the  trustee.'^ 

§  203.     Suits  to  set  aside  fraudulent  conveyances  and  pref- 
erences— Jurisdiction,  etc. 

The  trustee  is  authorized  to  sue  for  and  recover  that  which 
was  conveyed  in  fraud  of  the  rights  of  creditors  or  its  value.^ 


Sanborn,  96  Fed.  Rep.  551,  3  Am. 
B.  R.  54 ;  /;/  re  Gerdes,  102  Fed. 
Rep.  318,  4  Am.  B.  R.  346;  In  re 
Styer,  3  Am.  B.  R.  424,  98  Fed. 
Rep.  290;  In  re  Gerry,  112  Fed. 
Rep.  957,  7  Am.  B.  R.  461  ;  In  re 
Keet,  128  Fed.  Rep.  651,  11  Am. 
B.  R.  117.  See  Sees.  256  and  257, 
post. 

"B.   A.    1898,    Sec.   70c. 

"In  re  Cogley,  107  Fed.  Rep. 
73,  5  Am.  B.  R.  731;  In  re  Keet, 
128  Fed.  Rep.  651,  11  Am.  B.  R. 
117. 

"  See  Sec.  257,  post. 

''In  re  Utt  (C.  C.  A.  7th  Cir.), 
105    Fed.    Rep.    754,    5    Am.    B,    R. 


383 ;  In  re  Alison  Lumber  Co.,  137 
Fed.  Rep.  643,  14  Am.  B.  R.  78; 
In  re  Cogley,  ro7  Fed.  Rep.  73,  5 
Am.  B.  R.  731;  McNair  v.  Mcln- 
tyre  (C.  C.  A.  4th  Cir.),  113  Fed. 
Rep.  113,  7  Am.  B.  R.  638;  In  re 
Goldsmith,  118  Fed.  Rep.  763,  9 
Am.  B.  R.  419. 

'"  B.  A.  1898,  Sees.  40  and  48,  as 
amended  by  the  act  of  Feb.  S,  1903, 
32  Stat,  at  L.  797. 

*  B.  A.  1898,  Sees.  67 e  and  70^'; 
Johnston  v.  For.syth  Mercantile  Co., 
127  Fed.  Rep.  845,  11  Am.  B.  R. 
669;  Gregory  v.  Atkinson,  127  Fed. 
Rep.  183,  II  Am.  B.  R.  495;  Mc- 
Nulty    V.    Feingold,    129    Fed.    Rep. 


0l4  LAW    AND    I'ROCEEDINGS    IN    BANKRUPTCY. 

1l  makes  no  difference  wlielher  the  conveyance  is  construct- 
ively fraudulent  under  a  statute  of  frauds  or  under  a  special 
provision  of  the  bankrupt  law.'  The  trustee  is  also  author- 
ized to  set  aside  all  fraudulent  preferences  which  creditors 
have  received  and  to  recover  the  property  or  its  value  from 
vSuch  persons. - 

The  trustee  must  bring  the  suit.^  It  can  not  be  maintained 
by  a  creditor.* 

Whom  the  Trustee  Represents. — For  most  purposes 
the  trustee  represents  the  bankrupt,  hut  in  respect  to  suits  to 
avoid  fraudulent  preferences  and  conveyances  he  represents 
the  oreneral  or  unsecured  creditors.  In  such  cases  he  has  all 
the  rights  of  a  judgment  creditor,  as  well  as  the  powers  spe- 
cifically conferred  by  the  bankrupt  act.^  Hence,  what  would 
have  been  an  invalid  conveyance  or  preference  at  the  suit  of 
a  creditor  is  voidable  as  against  the  trustee.^  In  cases  of  this 
nature  the  trustee  has  nothing  to  do  wMth  the  disputes  of 
secured  creditors  among  themselves,  unless  it  becomes  neces- 
sary for  him  to  interfere  in  order  to  settle  their  rights  in  the 
general  estate  or  to  determine  whether  there  is  an  e^icess  of 
property  over  what  is  required  for  the  purposes  of  the  secu- 

looi,  12  Am.  B.   R.  338;  Horskins  *  Moyer  v.  Dewey,  103  U.  S.  301, 

V.    Sanderson,    132    Fed.    Rep.    415,  26  L.  Ed.  394;  Glenny  v.  Langdon, 

13    Am.    B.    R.    loi;    Lawrence    v.  98  U.  S.  20,  25  L.  Ed.  43;  King  v. 

Lowrie,  133  Fed.  Rep.  995,  13  Am.  Dietz,    12   Penn.    St.    156;    Lane   v. 

B.  R.  297.  Nickerson,  99   111.   284;   Lessure  v. 

^B.  A.  Sec.  60b;  In  re  Noel,  137  Weaver,   108  111.  App.  616. 

Fed.  Rep.  694,   14  Am.   B.   R.  715;  °  Dudley    v.    Easton,    .104    U.    S. 

Horskins    v.    Sanderson,    132    Fed.  103,    26    L.    Ed.    688;    Mueller    v. 

Rep.  415,   13  Am.  B.  R.   loi.  Bruss,   112  Wis.  406,  8  Am.  B.   R. 

^Trimble    v.    Woodhead,    102    U.  442;   Andrews  v.   Mather,   134  Ala. 

S.   647,   26  L.    Ed.   290;    Glenny  v.  358,  9  Am.   B.   R.  296;   Beasley  v. 

Langdon,   98   U.    S.   25,   24   L.    Ed.  Coggins,  48  Fla.  215,  12  Am.  B.  R. 

43;    Allen    &    Co.    v.    Montgomery,  355,   2>7    So.    Rep.    213;    Sheldon   v. 

48   Miss.    loi  ;    In    re    Meyers,    No.  Parker,   66   Neb.   610,   630,    11    Am. 

9518  Fed.  Cas.,  2  Ben.  424;  In  re  B.  R.   152,   169;   Hood  v.   Blair  St. 

Gray,   47   App.    Div.    (N.   Y.)    554,  Bank,  91    N.   W.   R.   701. 

3  Am.  B.   R.  647;   Falco  v.  Kaup-  In  First  Nat.  Bank  v.  Staake,  202 

isch  Creamery  Co.   (Ore.),  70  Pac.  U.   S.   141,   50  L.  Ed.  967,   15   Am. 

R.  286;  Thompson  v.  Fir.st  National  B.  R.  639,  the  supreme  court  said: 

Bank,  84  Miss.  54.  'The    rule    that    the    trustee    takes 


PREFERENCE    AND    LIENS.  615 

rity."  The  trustee's  duties  in  this  respect  relate  chiefly  to  the 
interests  of  the  general  creditors. 

The  bankrupt  act  provides  that,  in  case  it  is  for  the  benefit 
of  the  general  estate,  the  trustee  may  be  subrogated  to  the 
rights  of  a  particular  creditor  for  the  benefit  of  all  the  cred- 
itors. Thus,  whenever  a  creditor  is  prevented  from  enforc- 
ing his  rights  as  against  a  lien  created,  or  attempted  to  be 
created,  by  his  debtor,  who  afterwards  becomes  a  bankrupt, 
the  trustee  of  the  estate  of  such  bankrupt  shall  be  subro- 
gated to  and  may  enforce  such  rights  of  such  creditor  for  the 
benefit  of  the  estate.^ 

So  also  a  preference  created  by  a  levy,  judgment,  attach- 
ment or  other  lien  obtained  through  legal  proceedings  against 
a  person  who  is  insolvent  at  any  time  within  four  months 
prior  to  the  filing  of  a  petition  in  bankruptcy  against  him  is 
ordinarily  null  and  void.  But  the  court  may,  upon  notice, 
order  that  the  right  under  such  levy,  judgment,  attachment 
or  other  lien  shall  be  preserved'  for  the  benefit  of  the  estate, 
and  thereupon  the  same  may  pass  to  and  be  preserved  by  the 
trustee  for  the  benefit  of  the  estate.^ 

It  will  be  observed  that  neither  of  the  provisions  referred 
to  above  militate  against,  but  especially  protect,  a  bona  fide 
purchaser  for  a  fair  present  consideration,  and  also  a  creditor 
who  has  honestly  received  a  preference,  which  is  valid  under 
the  act.  The  right  of  action  to  recover  property  by  a  trustee 
lies  against  the  creditor,  who  received  the  preference  or  fraud- 
ulent transfer.**    A  trustee  can  not  reach  third  parties  to  whom 

the  estate   of  the  bankrupt   in   the  Rep.  441,  14  Am.  B.   R.  697;   First 

same  plight  as  the  bankrupt  held  it  Nat.    Bank    v.    Staake,    202    U.    S. 

is  not  applicable  to  liens,  which  al-  141,  50  L.  Ed.  967,   15  Am.  B.   R. 

though  valid  as  to  the  bankrupt,  are  ()t,(). 

invalid  as  to  creditors.  » B.   A.    1898,   Sees.  67   c  and  f] 

'McHenry    v.    La    Societe    Fran-  First  National  Bank  v.  Staake,  202 

caise,  95  U.  S.  58,  24  L.  Ed.  370;  U.  S.  141,  50  L.  Ed.  967,  15  Am.  B. 

Dudley    v.    Easton,    104    U.    S.    99,  R.  639. 

26^  L.  Ed.  668.  »  Hackney  v.  First  Nat.  Bank,  68 

'B.  A.  1898,  Sec.  67b;  In  re  Eco-  Neb.  594;  Bush  v.  Export  Storage 

nomical  Printing  Co.   (C.  C.  A.  2d  Co.,   136  Fed.  Rep.  914,   14  Am.  B. 

Cir.),    no    Fed.    Rep.    si4,    6    Am.  R.    138. 
B.   R.  615;   In  re  Beede,   138  Fed. 


616 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


money  may  have  been  paid  or  property  transferred  in  good 
faith  for  a  vahiable  consideration  by  such  creditor.  But  where 
property  is  fraudulently  transferred  by  a  debtor  his  trustee 
may  recover  it  in  the  hands  of  one  having  notice  of  the  fraud. 

In  What  Court  such  Proceedings  may  be  Instituted. 
— A  difference  of  opinion  existed  for  some  time  with  reference 
to  the  extent  of  the  jurisdiction  of  a  court  of  bankruptcy  over 
suits  to  recover  fraudulent  conveyances  and  preferences.  The 
question  was  finally  settled  by  the  supreme  court,  which  held 
that  a  court  of  bankruptcy  had  no  jurisdiction,  without  the 
proposed  defendant's  consent,  to  entertain  proceedings  to  re- 
cover property  conveyed  to  the  defendant  by  the  bankrupt  in 
fraud  of  the  bankruptcy  act.^^ 

By  the  amendment  of  Feb.  5,  1903,  jurisdiction  was  con- 
ferred upon  the  courts  of  bankruptcy  of  suits  for  the  recovery 
of  property  under  Sec.  60b,  Sec.  67e  and  Sec.  70e.'^'^  In  re- 
spect to  this  class  of  suits  the  courts  of  bankruptcy  and  the 
state  courts  now  have  concurrent  jurisdiction.  It'  has  been 
held  that  this  is  true  even  where  adjudication  of  bankruptcy 
was  before  the  passage  of  the  amendment  of  Feb.  5,  1903, 
authorizing  such  suits  to  be  brought  in  courts  of  bankruptcy." 

Section  25b  was  amended  by  the  Act  of  1903,  by  adding 
the  words  "except  suits  for  the  recovery  of  property  under 
Sec.  60b  and  Sec.  67c,"  making  no  reference  to  Sec.  70e. 
It  has  been  held  that  congress  intended  thereby  to  confer 
jurisdiction  on  the  bankruptcy  courts,  irrespective  of  the  con- 
sent of  the  defendant,  of  suits  to  recover  preferences  under 


'"  Bardes  v.  Hawarden  Bank,  178 
U.  S.  524,  44  L-  Ed.  1175,  4  Am. 
B.  R.  163;  Mitchell  v.  McClure, 
178  U.  S.  539,  44  L.  Ed.  1 182,  4 
Am.  B.  R.  177; 
U.  S.  541,  44 
B.  R.  178;  Wa 
244-  45  L-  Ed.  845, 
727. 

"32  Stat,  at  L.  797.  Horskins  \ 
Sanderson,  132  Fed.  Rep.  415,  i 
Am.  B.  R.  loi ;  In  re  Noel,  137  Fee 


±3.  K.  103;  iviitcneu  V.  ivici^mr 
178  U.  S.  539,  44  L.  Ed.  1 182,  ^ 
Am.  B.  R.  177;  Hicks  v.  Knost,  178 
U.  S.  541,  44  L.  Ed.  1 183,  4  Am. 
B.  R.  178;  Wall  V.  Cox,  181  U.  S. 
/i:;    T..    F.d.   8.1  ■;.    5   Am.    B.    R. 


Rep.  694,  14  Am.  B.  R.  715;  Mc- 
Nulty  V.  Feingold,  129  Fdd.  Rep. 
looi,  12  Am.  B.  R.  338;  Johnston 
V.  Forsyth  Mercantile  Co.,  127  Fed. 
Rep.  845,  II  Am.  B.  R.  669. 

'"  Pond  V.  N.  Y.  Exchange  Bank, 
ID  Am.  B.  R.  343,  124  Fed.  Rep. 
992 ;  In  re  Knickerbocker,  121  Fed. 
Rep.   1004,  10  Am.  B.  R.  381 

But  see  In  re  Hartman,  121  Fed. 
Rep.  940,  10  Am.  B.  R.  387. 


PREFERENCE    AND    LIENS. 


617 


Sec.  60b  and  fraudulent  transfers  made  within  four  months 
of  bankruptcy  under  Sec.  67^?^  but  that  the  consent  of  the  de- 
fendant is  requisite  in  a  suit  under  Sec.  70c  to  recover  fraudu- 
lent transfers  made  more  than  four  months  prior  to  bank- 
ruptcy.^^ 

It  is  sometimes  the  case  that  the  court  of  bankruptcy  in 
which  the  original  proceedings  are  pending  can  not  obtain 
jurisdiction  of  the  person  and  subject-matter  for  the  reason 
that  it  is  beyond  the  reach  of  its  process.  In  such  cases  it  is 
necessary  to  go  into  a  court  which  has  jurisdiction.  The 
trustee  may  maintain  such  a  suit  in  a  court  of  bankruptcy  in 
a  district  other  than  that  in  which  the  decree  of  bankruptcy 
was  made.^*  A  bill  or  petition  for  this  purpose  should  show 
what  proceedings  have  taken  place  in  the' principal  court  with 
reference  to  the  commencement  of  the  proceedings  and  the 
adjudication  of  bankruptcy,  etc.  Suits  of  this  character  are 
not  dependent  upon  the  citizenship  of  the  parties. 

Suits  to  avoid  a  preference  or  conveyance  may  be  main- 
tained in  the  circuit  courts  of  the  United  States  only  when 
they  fall  within  the  provisions  of  Section  23  with  reference 
to  citizenship  and  the  amount  involved.  Under  the  act  of 
1867  such  suits  might  be  prosecuted,  irrespective  of  the  citi- 
zenship of  the  parties,  on  the  ground  that  a  federal  question 
was  involved/^  But  the  rule  is  clearly  changed  by  the  pro- 
visions of  Section  23.^"     A  simple  contract  creditor  can  not 


"  Gregory  v.  Atkinson,  127  Fed. 
Rep.   183,   II  Am.  B.  R.  495. 

"  Lawrence  v.  Lowrie,  133  Fed. 
Rep.  995,  13  Am.  B.  R.  297;  In  re 
Benedict,  140  Fed.  Rep.  55,  15  Am. 
B.  R.  232;  In  re  Peiser,  115  Fed. 
Rep.  199,  7  Am.  B.  R.  690;  Lathrop 
V.  Drake,  91  U.  S.  516,  23  L.  Ed. 
414;  Sherman  v.  Bingham,  No. 
12762  Fed.  Cas.,  3  CHf.  552;  Ex 
parte  Martin,  No.  9149  Fed.  Cas., 
5  Law  Rep.  158.  See  also  ancillary 
jurisdiction,    Sec.    21,   ante. 


"  Smith  V.  Mason,  14  Wall,  419, 
20  L.  Ed.  748;  Marshall  v.  Knox, 
16  Wall.  551,  21  L.  Ed.  481; 
Lathrop  v.  Drake,  91  U.  S.  516, 
23  L.  Ed.  414;  Eyster  v.  Gaff,  91 
U.  S.  521,  23  L.  Ed.  403;  Burbank 
V.  Bigelow,  92  U.  S.  179,  23  L.  Ed. 
542;  Dudley  v.  Easton,  104  U.  S. 
103,  26  L.  Ed.  668;   Sec.  25,  ante. 

"  Goodier  v.  Barnes,  94  Fed. 
Rep.  798,  2  Am.  B.  R.  328;  Bush 
V.  Elliott,  202  U.  S.  477,  50  L.  Ed. 
1 114,  15  Am.  B.  R.  656. 


618  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

maintain  a  suit  in  a  circuit  court  to  set  aside  a  fraudulent  con- 
veyance under  Section  23  of  the  bankrupt  act/^ 

§  203a.   Pleading  and  practice  in  suits  to  recover  property. 

To  recover  property  conveyed  by  the  bankrupt  in  fraud  of 
the  act,  either  as  a  preference  or  a  fraudulent  conveyance,  is 
not  a  proceeding  in  bankruptcy/  For  this  purpose  there  must 
be  a  plenary  suit  at  law  or  in  equity  according  to  the  nature 
of  the  case."  Such  suits  may  be  actions  at  law  in  ejectment, 
trover,  assumpsit,  etc.,  or  suits  in  equity,  as  a  bill  to  set  aside 
a  fraudulent  conveyance,  etc.^  What  kind  of  a  suit  will  lie 
to  recover  property  for  the  estate  of  a  bankrupt  depends  upon 
the  law  governing  the  practice  in  the  particular  court  in  which 
the  suit  is  brought.  It  has  been  held  that  an  action  for  assump- 
sit will  not  lie,  but  that  the  action  should  be  one  of  trover.* 

It  is  not  necessary  for  a  trustee  to  obtain  a  judgment  and 
have  execution  returned  nulla  bona,  before  he  can  resort  to 
a  court  of  equity  to  recover  a  preference  or  set  aside  a  fraud- 
ulent conveyance.^     The  supreme  court  has  said  "as  to  such 

"Viquesney  v.   Allen    (C.   C.   A.  v.  Black,  143  Fed.  Rep.  560,  16  Am. 

4th  Cir.),  131  Fed.  Rep.  21,  12  Am.  B.  R.  202. 
B.  R.  402.  *  Lyon  v.   Clark,   129  Mich.   381 ; 

'Pond  V.  N.  Y.  Exchange  Bank,  Weeks  v.  Fowler   (N.  H.),  53  Atl. 

ID  Am.   B.   R.   343,   124  Fed.   Rep.  Rep.  543.    But  see  In  re  Reynolds, 

992;    Delta    Nat.    Bank   v.    Easter-  133   Fed.   Rep.   584,    13  Am.   B.   R. 

brook  (C.  C.  A.  5th  Cir.),  133  Fed.  245. 
Reo.  521,  13  Am.  B.  R.  338.  ^Mueller  v.  Bruss,  112  Wis.  406, 

Vn   re  Knickerbocker,    121    Fed.  8    Am.    B.     R.     442;     Andrews    v. 

Rep.  1004,  10  Am.  B.  R.  381 ;  Louis-  Mather,  134  Ala.  358,  9  Am.  B.  R. 

ville   Trust    Co.    v.    Cominger,    184  296;    Beasley    v.    Coggins,    48    Fla. 

U.  S.  18,  46  L.  Ed.  413,  7  Am.  B.  215,  12  Am.  B.  R.  355,  37  So.  Rep. 

R.  421;  Jaquith  v.  Rowley,  188  U.  213;    Sheldon   v.    Parker,   66    Neb. 

S.  620,  47  L.  Ed.  256,  9  Am.  B.  R.  610,   613,    11   Am.   B.   R.    152,    169; 

525;  Parker  v.  Black,  143  Fed.  Rep.  Hood  v.  Blair  State  Bank,   (Neb.) 

560,  16  Am.  B.  R.  202.  91  N.  W.  R.  701 ;  Mitchell  v.  Mitch- 

'  Pond  V.  N.  Y.  Exchange  Bank,  ell,  147  Fed.  Rep.  280. 
10  Am.   B.  R.   343,   124  Fed.  Rep.  See    also    McNulty    v.    Feingold, 

992;   Wall  V.   Cox,    loi    Fed.   Rep.  129  Fed.  Rep.  looi,   12  Am.  B.  R. 

403,  4  Am.  B.  R.  659;  reversed  on  338;   Wright   v.   Skinner,    136   Fed. 

another  point,  181  U.  S.  244,  45  L.  Rep.  694,  14  Am.  B.  R.  500;  Wall 

Ed.  845,  5  Am.  B.  R.  727;  Parker  v.  Cox,  loi  Fed.  Rep.  403,  4  Am. 


PREFERENCE    AND    LIENS. 


619 


preferences  and  com-eyances  he  has  all  the  right  of  a  judg- 
ment creditor  as  well  as  the  power  specifically  conferred  by 
the  bankruptcy  act."  ** 

Where  resort  is  had  to  a  suit  in  equity  in  a  court  of  bank- 
ruptcy, that  court  has  the  powers  usually  vested  in  courts  of 
equity.  It  may  grant  an  injunction  to  prevent  the  defendant 
from  disposing  of  the  property  sought  to  be  recovered/  or  a 
writ  of  sequestration  to  prevent  its  removal  from  the  district,* 
or  it  may  appoint  a  receiver  to  take  custody  of  the  property. 

The  suit  must  be  prosecuted  by  the  trustee.^  It  can  not  be 
maintained  by  a  creditor.^"  It  is  not  necessary  for  the  trustee 
to  obtain  leave  of  the  court  of  bankruptcy  to  bring  the  suit.^^ 
No  previous  demand  is  required  in  suits  of  this  character.^' 
The  commencement  is  itself  a  demand. 

A  court  of  bankruptcy  or  a  circuit  court  of  the  United 
States  will  not  ordinarily  require  security  for  costs  of  a  trus- 
tee, but  mav  do  so  in  its  discretion. ^^ 


B.  R.  659,  reversed  for  want  of  Fed- 
eral jurisdiction,  181  U.  S.  244,  45 
L.  Ed.  845,  5  Am.  B.  R.  ^zT,  Off 
V.  Hakes  (C.  C.  A.  7th  Cir.),  142 
Fed.   Rep.   364,   15  Am.   B.   R.  696. 

"  Mr.  Justice  Waite,  in  Dudley  v. 
Easton,  104  U.  S.  99,  103,  26  L.  Ed. 
668. 

'  Blake  v.  Nesbet,  144  Fed.  Rep. 
279,  16  Am.  B.  R.  269;  Lawrence  v. 
Lowrie,  133  Fed.  Rep.  995,  13  Am. 
B.  R.  297;  Horner-Gaylord  Co.  v. 
Miller    &    Bennett,    147    Fed.    Rep. 

295. 

'  Horskins  v.  Sanderson,  132  Fed. 
Rep.  415,  13  Am.  B.  R.  loi. 

"  Trimble  v.  Woodhead,  102  U. 
S.  647,  26  L.  Ed.  290;  Glenny  v. 
Langdon,  98  U.  S.  20,  25  L.  Ed. 
43;  Thompson  v.  ist  Nat.  Bank,  84 
Miss.  54;  In  re  Gray,  47  N.  Y. 
Supr.  Ct.  App.  Div.  554;  3  Am.  B. 
R.  647;  Allen  &  Co.  v.  Montgom- 
ery, 48  Miss.  loi ;  Barker  v.  Frank- 


lin, 75  N.  Y.  Supp.  305,  8  Am.  B. 
R.  468. 

"  Moyer  v.  Dewey,  103  U.  S. 
301,  26  L.  Ed.  394;  Glenny  v. 
Langdon,  98  U.  S.  20,  25  L.  Ed. 
43 ;  Leseure  v.  Weaver,  108  111.  .\pp. 
616;  King  V.  Dietz,  12  Pa.  St.  156; 
Lane  v.  Nickerson,  99  111.  284. 

"  Callahan  v.  Israel,  186  Mass. 
383 ;  Chism  v.  Citizens'  Bank,  "]"] 
Miss.  599;  Chism  v.  Bank  of  Friar's 
Point  (Supr.  Ct.  of  Miss.),  5  Am. 
B.  R.  56. 

See  also  the  observations  of 
Judge  Hammond,  In  re  Baber,  119 
Fed.  Rep.  520,  9  Am.  B.  R.  406. 

'"  Kaufman  v.  Tredway,  195  U. 
S.  271,  49  L.  Ed.  190,  12  Am.  B.  R. 
682 :  Wright  V.  Skinner,  136  Fed. 
Rep.  694,  14  Am.  B.  R.  500;  John- 
ston V.  Forsyth  Mercantile  Co.,  127 
Fed.  Rep.  845,  11  Am.  B.  R.  669. 

'•'  In  re  Barrett,  132  Fed.  Rep.  362, 
12  Am.  B.  R.  626. 


(>20  LAW     A.ND    I'RUCEEDiNGS    IN    BANKRUPTCV. 

A  jiulgment  of  a  state  court  tlctennining  the  same  issues 
may  be  pleaded  iu  bar  of  a  suit  l)y  the  trustee  iu  a  court  of 
hankruptcy/*  But  the  right  of  a  trustee  to  uiaintain  a  suit 
to  recover  a  prefereuce  is  not  barred  by  his  faiku-e  to  contest 
the  claim  presented  by  the  preferred  creditor  against  the  bank- 
rupt's estate.*'"'  The  reason  is  that  a  suit  l)y  the  trustee  against 
a  creditor  to  reco\-er  property  belonging  to  the  bankrupt's 
estate  presents  a  different  cause  of  action  from  a  demand  by 
that  creditor  against  the  bankrupt's  estate,  and  hence  is  not 
res  judicata.  Such  suits  must  be  brouglit  within  two  years 
after  tlie  estate  has  been  closed.*"  A  court  of  bankruptcy  may 
in  its  discretion  reopen  the  estate  of  a  bankrupt  to  permit  the 
trustee  to  maintain  an  action  to  recover  property.*^  An  ac- 
tion by  a  trustee  in  a  state  court  may  be  barred  by  the  state 
statute  of  limitations.*^ 

The  defendant  in  a  suit  to  recover  property  by  a  trustee 
should  be  the  creditor,  who  has  received  the  property  by  way 
of  preference  or  fraudulent  conveyance,  or  any  person  receiv- 
ing it  from  him  with  knowledge  of  the  fraud.*"  Where  the 
property  has  been  transferred  by  such  creditor  to  a  bona  fide 
purchaser  for  a  consideration,  the  trustee  can  not  recover  the 
specific  property.'^  His  remedy  is  a  suit  for  the  value  only, 
from  the  creditor  or  any  person  holding  it  with  notice  of  the 
fraud. ■**  The  bankrupt  is  not  a  necessary  party  to  a  suit  to 
i-et  aside  a  fraudulent  conveyance  or  recover  property  as  a 
preference." 


21 


"/w  re  Reynolds,   133  Fed.   Rep.  See    Bryan    v.     Bernheimer,     181 

585,  13  Am.  B.  R.  244.  U.  S.  188,  197,  45  L-  Ed.  814,  5  Am. 


15 


Buder    v.    Columbia    Dist.    Co.,  B.  R.  523. 

96  Mo.  App.  558,  9  Am.  B.  R.  33i-  '°  B.   A.    1898,    Sec.   67/  and   eye. 

"B.  A.  1898,  Sec.  iirf.  Hackney  v.  ist  Nat.  Bank,  68  Neb. 

"/w   re   Goldman    (C.    C.    A.   2d  594;    Bush  v.  Export   Storage  Co., 

Cir.),  129  Fed.  Rep.  212,  11  Am.  B.  136   Fed.   Rep.   918,    14   Am.   B.   R. 

R.  707;  In  re  Paine,  127  Fed.  Rep.  138. 

246,  II   Am.  B.  R.  351.  ''Cox  V.  Wall,  99  Fed.  Rep.  546, 

''Harrod  v.  Farrer,  68  Kan.  153.  3  Am.  B.  R.  664;  Buffington  v.  Har- 

'' Hackney   v.    ist   Nat.    Bank,   68  vey,  95  U.  S.  99,  24  L.  Ed.  381. 

Neb.  594;  Bush  v.  Export  Storage  But  see  Carter  v.  Hobbs,  92  Fed. 

Co.,  136  Fed.  Rep.  918,  14  Am.  B.  Rep.  594,  i  Am.  B.  R.  215. 
R.     138;    Walbrun    v.    Babbitt,     16 
Wall.  577,  21  L.  Ed.  489. 


PREFERENCE    AND    LIENS. 


621 


The  trustee  may  bring  an  independent  suit  in  any  court, 
state  or  federal,  having  jurisdiction,  or  file  an  intervening 
petition  in  the  bankruptcy  proceedings  for  the  recovery  of 
property  for  the  estate."'  An  intervening  petition  should  be 
filed  with  the  clerk  and  not  with  the  referee.'"'  Whatever 
method  is  adopted  the  defendant  must  be  brought  in  by  service 
of  summons,  unless  he  voluntarily  appears  and  pleads.  There 
is  some  doubt  as  to  the  power  of  a  court  of  bankruptcy  to 
compel  a  defendant  to  answer  a  suit  to  recover  a  fraudulent 
conveyance  under  Section  70c.'^  Such  courts  have  ample 
power  to  do  this  in  suits  to  recover  preferences  under  Section 
60^  and  fraudulent  conveyances  under  Section  67c.-''  In 
case  the  property  is  within  the  jurisdiction  of  the  federal 
court  and  the  defendant  is  a  non-resident  of  the  district,  he 
may  be  brought  in  by  an  order  and  service  by  publication.^"" 

In  a  suit  to  set  aside  a  preference  or  fraudulent  convey- 
ance it  is  not  necessary  to  allege  the  citizenship  of  the  par- 
ties -where  the  suit  is  brought  in  a  court  of  bankruptcy  or  in 
a  state  court.'^  If  the  suit  is  brought  in  a  circuit  court  of 
the  United  States  it  is  necessary  to  show  that  diverse  citizen- 
ship exists  between  the  bankrupt  and  the  creditor  and  that 
the  amount  in  controversy  exceeds  the  sum  of  two  thousand 
dollars  exclusive  of  costs  and  interest.-^  The  citizenship  of 
the  trustee  is  immaterial   in  that  court.-^ 


~  See  Sec.  203,  ante. 

''In  re  Steuer,  104  Fed.  Rep.  976, 
5  Am.  B.  R.  209,  a  petition  filed 
with  referee  was  sustained  al- 
though irregular. 

**  Gregory  v.  Atkinson,  127  Fed. 
Rep.  183,  II  Am.  B.  R.  495. 

"^B.  A.  1898,  Sec.  23fc,  as  amend- 
ed Feb.  s,  1903,  32  Stat,  at  L.  797. 
In  re  Noel,  137  Fed.  Rep.  694,  14 
Am.  B.  R.  715;  Ilorskins  v.  San- 
derson, 132  Fed.  Rep.  415.  13  .A.m. 
B.  R.  loi  ;  Johnston  v.  Forsyth 
Mercantile  Co.,  127  Fed.  Rep.  845, 
II  Am.  B.  R.  669. 


""R.  S.  Sec.  738,  as  amended  by 
the  act  of  March  3,  1875,  Sec.  8, 
18  Stat,  at  L.  470,  and  preserved 
\^'  act  of  ]\Iarch  3,  1888,  Sec.  6, 
25  Stat,  at  L.  433;  Horskins  v. 
Sande'^son,  132  Fed.  Rep.  415,  13 
Am.  B.  R.  loi. 

Sec  Loveland's  Forms  of  Fed. 
Prac,  Nos.  63  to  69. 

^  Wright  V.  Skinner,  136  Fed. 
Rep.  694,  14  Am.  B.  R.  500. 

'''B.  A.  1898,  Sec.  23a.  Bu-sh  v. 
Elliott,  202  U.  S.  477.  50  L.  Ed. 
1 1 14,  15  Am.  B.  R.  656. 

="Bush  V.  Elliott,  202  U.  S.  477, 
SO  L.  Ed.  1 1 14,  15  .Am.  B.  R.  656. 


622 


LAW     AND    I'ROCEEUINGS    IN    BANKRUPTCY. 


A  suit  to  set  aside  a  preference  and  recover  the  property  for 
the  estate  under  Section  60b  is  different  from  a  suit  to  set 
aside  a  fraudulent  conveyance  under  Section  67c  and  Sec- 
tion 70i\  In  the  first  case  there  need  be  no  actual  fraud  in- 
volved in  the  transaction,  it  is  fraudulent  because  the  stat- 
ute makes  it  so.  A  suit  under  the  last  two  sections  is  founded 
upon  actual  fraud.  A  bill,  which  stated  one  transaction  and 
alleged  it  to  be  either  a  preference  or  a  fraudulent  conveyance 
and  sought  to  have  it  set  aside,  was  held  not  to  state  two  in- 
consistent causes  of  action  for  equitable  relief. ^° 

In  a  suit  to  recover  a  preference  the  trustee  should  allege 
and  prove  the  filing  of  the  petition  in  bankruptcy,  the  adjudi- 
cation and  his  appointment  and  qualification  as  trustee  of  the 
estate  of  the  bankrupt.  He  should  also  allege  and  prove 
all  the  statutory  elements  constituting  a  preference,  and  that 
the  pe-son  receiving  it,  or  his  agent,  had  a  reasonable  cause 
to  believe  that  it  was  intended  to  be  a  preference ;  ^^  that  is  to 
say,  he  must  aver,  first,  the  insolvency  of  the  debtor  at  the 
time  the  judgment  was  entered  or  the  transfer  made  in  favor 
of  the  creditor;^'-  second,  that  this  was  done  within  four 
months  of  bankruptcy ;  ^^  third,  that  the  efi^ect  of  which  was 
that  the  defendant  obtained  a  greater  percentage  of  his  debt 
than  any  other  creditor  of  the  bankrupt  of  the  same  class ;  ^* 
and  fottrth,  that  the  defendant  or  his  agent  ^"  had  reason- 
able grounds  to  believe  that  it  was  intended  by  such  transfer 
of  property  (or  judgment)  to  give  a  preference  to  the  de- 
fendant within  the  meaning  of  the  acts  of  Congress  relat- 


^  Wright  V.  Skinner,  136  Fed. 
Rep.  694,  14  Am.  B.  R.  500. 

"  B.  A.  1898,  Sees.  60a  and  60b. 
See  Sees.  194  et  scq.,  ante,  where 
these  elements  are  considered.  For 
Form  of  Petition,  see  Form  No. 
34a,  post. 

'"  See  Sec.  194a,  ante.  Martin  v. 
Bigelow,  36  Misc.  Rep.  (N.  Y.) 
298  7  Am.  B.  R.  218;  Chism  v. 
Bank    of    Friar's    Point    (Sup.    Ct. 


Miss.),  5  Am.  B.  R.  56;  Deland  v. 
Miller  &  Chaney  Bank  (la.),  93  N. 
W.  Rep.  304;  Severin  v.  Robinson 
(Ind.  App.),  60  N.  E.  Rep.  966. 

^^  Sec.  194^,  ante. 

^'  See  Sec.  194??,  ante.  Kimball  v. 
Dresser,  98  Me,  519;  Baden  v.  Ber- 
tenshaw,  68  Kan.  32. 

^^  Plummer  v.  Myers,  137  Fed. 
Rep.  660,  14  Am.  B.  R.  805. 


PREFERENCE    AND    LIENS. 


623 


ing  to  bankruptcy."'"     If  the  trustee  fails  to  allege  any  one 
of  these  elements,  his  bill,  declaration  or  petition  is  bad  on 
demurrer.'*'     If  he  fails  to  prove  all  of  these  elements  judg- 
■  ment  should  be  entered  for  the  defendant. 

In  a  suit  to  set  aside  a  fraudulent  conveyance  or  transfer 
under  paragrapli  one  of  Section  die  the  trustee  should  allege 
£nd  p'-ove,  first,  the  filing  of  the  petition  in  bankruptcy,  the 
adjudication  of  the  debtor,  and  his  appointment  and  quali- 
fication as  trustee  of  the  estate  of  the  bankrupt;  second,  that 
the  transfer  was  made  within  four  months  prior  to  the  filing 
of  the  petition  in  bankruptcy;  and,  third,  that  it  was  made 
with  the  intent  and  purpose  on  the  debtor's  part  to  hinder, 
delay  or  defraud  his  creditors.  The  phrase  "to  hinder,  delay 
or  defraud  his  creditors"  as  used  in  the  bankruptcy  act  has 
been  construed  to  have  the  same  meaning  as  the  same  words 
used  in  statutes  against  conveyances  fraudulent  as  against 
creditors  from  the  time  of  the  statute  of  13  Elizabeth.^*  This 
allegation  should  state  facts  sufficient  to  make  a  case  under 
the  statute  of  frauds.^^  Insolvency  is  not  a  statutory  element 
necessary  to  recovery  in  this  class  of  cases.  It  is  not  necessary 
to  aver  insolvency  except  as  it  may  be  involved  in  establisli- 
ing  a  transfer  to  hinder,  delay  or  defraud  creditors.  In  case 
the  defendant  is  an  assignee  of  the  fraudulent  grantee,  the 
trustee  should  show  that  he  had  knowledge  of  the  fraud.  The 
defendant  may  plead  as  a  defense  to  the  action  that  he  is  a 


^  See  Sec.  I94r,  ante.  Turner  v. 
Fisher,  133  Fed.  Rep.  594,  13  Am. 
B.  R.  243;  Crooks  v.  People's  Nat. 
Bank,  3  Am.  B.  R.  238;  In  re  Blair, 
102  Fed.  Rep.  987,  4  .\m.  B.  R.  220 ; 
Peck  V.  Conncll  (Siipr.  Ct.  of  Pa.), 
8  Am.  B.  R.  500;  Levor  v.  Seiter 
(Sup.  Ct.  N.  Y.,  App.  Div.),  8  Am. 
B.  R.  459;  Brown  v.  Guichard  (Sup. 
Ct.  N.  Y.),  7  Am.  B.  R.  515;  Taft 
V.  Fourth  Nat.  Bank  (Sup.  Ct. 
Cir.),  2  X.  B.  N.  1 145.  8  Ohio  N. 
P.  Rep.  59 

"Peck  V.  O'ConnclI  (Super.  Ct. 
Pa.),  8  Am.   B.   R.   500;   Hicks  v. 


Langhorst  (Hamilton  Co.  Common 
Pleas,  Ohio),  6  Am.  B.  R.  178; 
Martin  v.  Bigelow,  36  Misc.  Rep. 
(N.  Y.)  298,  7  Am.  B.  R.  218. 

'"Githens  v.  Shiffler,  112  Fed. 
Rep.  505,  7  Am.  B.  R.  453;  Lansing 
Boiler  &  Engine  Wks.  v.  Ryerson 
(C.  C.  A.  6th  Cir.),  128  Fed.  Rep. 
701,   II  Am.  B.  R.  558. 

Tn  what  cases  property  may  be 
recovered,  see  Sec.  160,  ante. 

'"  Johnston  v.  Forsyth  Mercantile 
Co..  127  Fed.  Rep.  845,  11  Am.  B. 
R.  669. 


024  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

purchaser  in  good  faith  for  a  fair  present  consideration  and 
ihe  burden  is  upon  him  to  estabhsh  it.*** 

The  trustee  may  make  a  case  under  the  third  paragraph  of 
Section  67r  by  alleging  ami  proving,  first,  the  filing  of  the 
petition  in  bankruptcy,  the  adjudication,  and  his  appointment 
and  qualitication  as  trustee  of  the  estate  of  the  bankiupt; 
second,  the  insolvency  of  the  debtor  at  the  time  the  transfer 
was  made;  tii'ird,  tliat  the  transfer  was  made  within  four 
monthr^  prior  to  the  filing  of  the  petition  in  bankruptcy;  and, 
fourth,  that  such  transfer  is  null  and  void  under  the  laws  of 
the  stale,  territory  or  district  in  which  said  property  is  situate. 
This  last  allegation  should  include  all  that  would  be  necessary 
for  a  creditor  to  allege  in  the  state  court  if  he  were  suing  to 
recover  the  property  had  bankruptcy  not  intervened.  It  seems 
that  he  should  also  show  that  he  has  not  sufficient  assets  in 
his  hands  to  satisfy  the  claims  of  the  creditors  of  the  bank- 
rupt.*' 

In  a  suit  to  set  aside  a  fraudulent  conveyance  under  Section 
70e  the  trustee  should  allege  and  prove  the  filing  of  the  peti- 
tion in  bankruptcy,  the  adjudication,  and  his  appointment  and 
qualification  as  trustee  of  the  estate  of  the  bankrupt.  He 
should  then  state  facts  to  show  that  the  transfer  complained 
of  was  fraudulent  as  against  creditors  under  the  state  laws  as 
construed  by  the  courts  of  the  state.*^  It  is  not  necessary  to 
allege  that  the  transfer  was  within  four  months.*^  He  should 
show  that  he  has  not  sufficient  funds  in  his  hands  to  satisfy 
the  claims  of  the  creditors  of  the  bankrupt.** 

In  a  suit  to  set  aside  a  preference  or  fraudulent  conveyance 
the  burden  is  upon  the  trustee  to  establish  that  the  preference 

^'McNulty    V.    Wiesen,    130    Fed.  Mather,  134  Ala.  358,  9  Am.  B.  R. 

Rep.  1012,  12  Am.  B.  R.  341;  Law-  296;    Schreyer  v.   Scott,    134  U.   S. 

rence  v.  Lowrie,  133  Fed.  Rep.  995,  405,  409,  33  L.  Ed.  955. 

13  Am.  B.  R.  297 ;  Horner-Gaylord  As  to  what  transfers  may  be  set 

Co.  V.  Miller  &  Bennett,    147  Fed.  aside,  see  Sec.   158,  ante. 

Rep.  295.  "/n   re    Schenck,    116   Fed.    Rep. 

"Mueller  v.  Bruss,  ri2  Wis.  406,  554,  8  Am.  B.  R.  927;  In  re  Scrin- 

8  Am.  B.  R.  442.  opskie,  10  Am.  B.  R.  221. 

*'In  re  Mullen.  loi  F"ed.  Rep.  413,  "Mueller  v.  Bruss,  112  Wis.  406, 

4   Am.    B.    R.     224;     Andrews     v.  8  Am.  B.  R.  442. 


PREFERENCE    AND    LIENS.  625 

or  transfer  is  fraudulent  under  the  bankruptcy  act.^'"'  The 
burden  is  upon  the  defendant  to  estabhsh  the  affirmative  de- 
fense of  bona  fide  purchaser  for  vakie/" 

The  books  of  the  bankrupt,  the  schedules  and  appraise- 
ment are  competent  evidence  on  the  question  of  insolvency 
within  four  months  of  the  date  of  the  filing  of  the  petition, 
but  are  not  conclusive.*^  Where  the  quantity  and  value  of 
the  bankrupt's  assets  were  not  materially  diminished  from  the 
time  of  the  transfer  until  the  commencement  of  the  proceed- 
ings in  bankruptcy,  the  court  and  jury  may  find  that  the 
debtor  was  insolvent  when  he  made  the  transfer.*^  The  mere 
fact  that  a  debtor  is  adjudged  a  bankrupt  raises  no  presump- 
tion of  insolvency  prior  to  the  filing  of  the  petition,*"  unless 
the  question  of  insolvency  is  adjudged  in  determining  an  act 
of  bankruptcy  in  an  involuntary  proceeding.  In  that  case 
the  effect  of  insolvency  at  the  date  the  act  was  committed 
may  be  deemed  as  established  by  the  adjudication.^"  The 
question  of  insolvency  is  one  of  fact  to  be  submitted  to  the 
jury  under  proper  instructions  when  the  case  is  tried  to  a 
jury.^^ 

Whether  a  creditor  has  reasonable  cause  to  believe  that  a 
preference    is   given    is   determined   by   the    conduct   of    the 

Ct.    Rep.    14,    10   Am.    B.    R.    762;  Hackney   v.    Hargreaves    Bros.,    68 

Capital    Nat.    Bank    v.    Wilkerson,  Neb.  625,  13  Am.  B.  R.  164,  over- 

(Ind.)     72    N.    E.    Rep.    247;    In  ruling  10  Am.  B.  R.  213. 

re    Rome    Planing    Mills,    96    Fed.  ^*  Clarion  Bank  v.  Jones,  21  Wall. 

Rep.  812,  3  Am.  B.  R.  123,  128;  In  325,  22  L.  Ed.  542. 

re  Gilbert,  112  Fed.  Rep.  951,  8  Am.  '"/n  re   Rome    Planing  Mills,  96 

B.  R.   loi ;   Kimball  v.  Dresser,  98  Fed.   Rep.   812,  3   Am.   B.   R.    123; 

Me.   S19;    Edwards  v.   Milling   Co.,  Kimball    v.    Dresser,    98    Me.    519; 

108    Mo.    App.     275;     Halbert     v.  Edwards   v.    Milling   Co.,    108   Mo. 

Pranke,  91   Minn.  204.  App.  275;  In  re  Chappell,  113  Fed. 

"Lawrence   v.   Lowrie,    133   Fed.  Rep.   545,   7  Am.    B.   R.   608. 

Rep.  995,    13  Am.   B.   R.  297;   Mc-  ="  DeGraff    v.    Lang,     87     N.     Y. 

Nulty    V.    Wiesen,    130    Fed.    Rep.  Supp.  78,  92  N.  Y.  Supr.  Ct.  (App. 

1012,  12  .'\m.  B.  R.  341.  Div.)    564. 

"  In    re    Docker-Fisher    Co.,    123  °'  Kaufman  v.  Treadway,   195  U. 

Fed.  Rep.    igo,   10  Am.   B.  R.  584;  S.  271,  49  L.  Ed.  190,  12  Am.  B.  R. 

In  re  Mandel,  127  Fed.  Rep.  863,  10  682;    Upson    v.    Mt.    Morris    Bank 

Am.  B.  R.  774;  Bank  of  N.  Y.  v.  (N.  Y.  Sup.  Ct.,  App.  Div.),  14  Am. 

Southern  Nat.  Bank,  170  N.  Y.   i ;  B.  R.  6. 


626  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

parties  and  the  nature  of  the  transaction. "'''"  Whether  or  not 
the  facts  ami  circumstances  in  tiie  possession  of  the  creditor 
at  the  time  the  alleged  preference  was  made,  were  sufficient 
li>  cause  an  ordinaril}-  prudent  business  man  to  conclude  a  pref- 
erence was  intended  is  a  question  for  the  jury  and  not  for 
the  court  in  a  jury  trial. "'^ 

Whether  the  defendant  is  a  purchaser  in  good  faith  for  a 
present  fair  consideration  is  a  question  for  the  jury  under 
instructions."'"'* 

AX'here  a  preference  is  set  aside  the  creditor's  debt  is  extin- 
guished by  a  discharge,  unless  he  comes  in  and  proves  his 
debt  like  any  other  creditor.^^ 

The  decree  annulling  a  fraudulent  conveyance  or  trans- 
fer may  contain  a  direction  for  a  conveyance  by  a  person 
holding  title  to  the  trustee  in  bankruptcy.^"  Under  the  present 
act  it  may  be  doubted  if  it  is  necessary  to  direct  such  a  con- 
veyance because  the  title  is  vested  in  the  trustee  by  operation 
of  law-.  If  the  purchase  w^as  joint  the  judgment  or  decree  of 
recovery  should  be  joint."  Where  real  estate  has  been  con- 
veyed to  a  bona  fide  purchaser  by  bankrupt's  grantee  before 
commencement  of  a  suit  to  recover,  the  judgment  should  not 
provide  that  the  conveyance  from  bankrupt  be  set  aside,  as 
this  w'ould  cloud  the  bona  fide  purchaser's  title.^^ 

°- Hackney   v.    Hargreaves    Bros.,  C.  A.  2d  Cir.),  133  Fed.  Rep.  900, 

68  Neb.  625,  13  Am.  B.  R.  164,  over-  13    Am.    B.    R.    326;    Sundheim    v. 

ruling  10  Am.  B.  R.  213;   Sebring  Ridge    Ave.    Bank,    138    Fed.    Rep. 

V.    Wellington,     N.     Y.     Supr.    Ct.  951,   15   Am.   B.   R.    132;   Evans  v. 

(.■\pp.    Div.),    671,    6    Am.    B.    R.  Nat.    Broadway    Bank,     88     N.    Y. 

671.  Supr.   Ct.    (App.   Div.)    549,  85   N. 

In  Wilson  v.   Nelson,    183  U.   S.  Y.  Sup.  loi. 

191,    46    L.    Ed.    147,    the    supreme  ^*  Montgomery  v.  McNicholas,  138 

court  says  "the  act  of   1898  makes  Fed.  Rep.  956,  15  Am.  B.  R.  93. 

the   result  obtained  by  the  creditor  °^  See      Provable      Debts,      Chap, 

and   not  the   specific   intent   of  the  XIII. 

"Barbour    v.    Priest,    103    U.    S.  '"Keating    v.    Keefer,    No.    7635 

293,  26  L.   Ed.  478;   Keith  v.  Get-  Fed.  Cas.,  5  N.   B.   R.   133;   Burk- 

tysburg  Nat.  Bank,  23  Pa.  Superior  holder   v.    Stump,     No.    2165    Fed. 

debtor,  the  essential  fact."  Cas.,  4  N.  B.  R.  597. 

°'  Kaufman     v.     Treadway,      195  "  Schulenburg  v.  Kabwrech,   No. 

y.  S.  271,  49  L.  Ed.  190,  12  Am.  B.  12487  Fed.  Cas.,  2  Dill.  132. 

R.  682;  Wetstein  v.  Franciscus  (C.  '' Skillin  v.   Maibrunn,  78   N.  Y. 

Supp.  436. 


PREFERENCE    AND    HENS. 


627 


It  has  been  held  that  an  assignee  for  the  benefit  of  creditors 
who  has  proceeded  under  the  state  law  to  distribute  the  prop- 
erty of  the  bankrupt  can  not  be  held  personally  liable  for  the 
assets  which  came  into  his  hands  and  were  distributed.  But 
the  trustee  "must  seek  his  remedy  against  those  who  have 
received  payments  from  the  defendant  in  contravention  of  the 
bankrupt  act."  ^''  A  conveyance  or  transfer  should  be  set  aside 
///  toto  when  the  trustee  elects  to  avoid  it  at  all.''*' 

The  express  provision  of  the  bankrupt  act  is  that  the  trus- 
tee may,  in  case  of  a  fraudulent  preference  or  transfer,  recover 
the  property  or  the  value  of  it  from  the  person  so  receiving  it 
or  so  to  be  benefited  by  it.'''^  Wliere  property  has  been  sold 
at  a  judicial  sale,  or  where  a  bona  fide  sale  for  a  valuable  con- 
sideration has  been  subsequently  made  by  the  person  taking 
the  property  in  fraud  of  creditors,  it  can  not  be  recovered  in 
specie.''"  The  only  remedy  of  the  trustee  is  for  the  value  of  it. 
The  measure  of  damages  in  such  cases  is  the  actual  value  of 
the  property  at  the  time  of  the  conveyance."^  The  trustee  is 
not  bound  by  the  price  paid  by  a  purchaser  at  a  judicial  sale 
or  otherwise  as  the  value  of  the  property.  All  kinds  of  dam- 
ages are,  strictly  speaking,  for  the  jury,  and  however  clear 
and  plain  may  be  the  rule  of  law  on  which  the  damages  are  to 
be  founded,  the  act  of  finding  is  for  it.*^*  The  trustee  is 
entitled  to  interest  from  the  commencement  of  the  suit."^ 


°°  Cragin  v.  Thompson,  No.  3320 
Fed.  Cas.,  2  Dill.  513,  per  Judge 
Dillon;  In  re  Cohn,  No.  2966  Fed. 
Cas.,  6  N.  B.  R.  370;  Jones  v.  Kin- 
ney, No.  7473  Fed  Cas.,  5  Ben.  239; 
Anshutz    V.    Hoerr,    i     Fed.    Rep. 

594-5- 

"Wehl  V.  Wald,  3  Fed.  Rep.  93. 

"  ?>.  A.  1898,  Sec.  60*  and  Sec. 
7or. 

"Hackney  v.  First  Nat.  Bank,  68 
Neb.  594,  11  Am.  B.  R.  240. 

"  Frank  v.  Musliner,  28  N.  Y.  L. 
J.  765.  9  Am.  B.  R.  229;  Clarion 
Bank  v.  Jones,  21  Wall.  339,  22  L. 
Ed.  542 ;  Conard  v.  Insurance  Co., 


6  Pet.  274,  8  L.  Ed.  392;  Comly  v. 
Fisher,  No.  3053  Fed.  Cas.,  s.  c. 
Taney,  121 ;  Marshall  v.  Knox,  16 
Wall.  559,  21  L.  Ed.  481;  Eby  v. 
Schomacher,  29  Penn.  St.  40 ; 
Davis  V.  Anderson,  No.  3623  Fed. 
Cas.,  6  N.  B.  R.  145;  In  re  Rosen- 
berg, No.  12055  Fed.  Cas.,  3  Ben. 
366;  Smith  V.  Kehr,  No.  13071,  2 
Dill.  so. 

^  Alder  V.  Keighley,  15  M.  &  W. 
ir7;  Clarion  Bank  v.  Jones,  21 
Wall.  325,  22  L.  Ed.  542. 

"  Kaufman  v.  Treadway,  195  U. 
S.  271,  49  L.  Ed.  190,  12  Am.  B.  R. 
682. 


628  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


CHAPTER  XIX. 


EXAMINATIONS. 


§  204.     When  a  bankrupt  may  be  examined. 

The  bankrupt  may  be  examined  when  he  is  present  at  the 
first  meeting  of  his  creditors  and  at  such  other  times  as  the 
court  shall  order.^  The  order  referring  a  case  to  a  referee 
must  name  a  day  upon  which  the  bankrupt  shall  attend  be- 
fore the  referee."  For  convenience  the  same  day  is  usually 
selected  as  that  upon  which  the  first  creditors'  meeting  is 
held.  The  examination  may  be  had  at  any  time  after  the 
petition  is  filed  either  in  voluntary  or  involuntary  bank- 
ruptcy.^ The  first  examination  is  regularly  made  at  the  first 
creditors'  meeting. 

A  bankrupt  may  be  examined  as  many  times  as  the  judge  or 
referee  shall  order.  The  fact  that  one  creditor  has  examined 
the  bankrupt  is  no  reason  for  withholding  the  privilege  from 
another  creditor.'*  The  referee  should,  in  the  exercise  of  a 
sound  discretion,  so  regulate  the  time,  manner  and  courses  of 
examination  as  to  protect  the  bankrupt  from  annoyance, 
and  oppression,  and  mere  delay.  At  the  same  time  full  and 
fair  opportunity  should  be  allowed  to  the  creditors  to  inquire 
into  such  matters  as  the  statute  permits.^  Where  one  full 
examination  of  the  bankrupt  has  been  made,  a  subsequent 
examination  will  not  ordinarily  be  permitted  except  for  cause.^ 

'  B.    A.    1898,    Sec.    7,    clause    9.  Ben.  7 ;  In  re  Gilbert,  No.  5410  Fed. 

Compare  R.  S.  Sec.  5086.  Cas.,  i  Low.  340;  In  re  Vogel,  No. 

-  Gen.  Ord.   12 ;   B.  A.   1898,  Sec.  16984  Fed.  Cas.,  5  N.  B.  R.  393. 

55&.  ^In    re    Horgan     (C.     C.     A.     2d 

^  In  re   Price,  91    Fed.   Rep.   635,  Cir.),  98  Fed.  Rep.  414,  3  Am.  B. 

I  Am.  B.  R.  419.  R.  253 ;  In  re  Mellen,  97  Fed.  Rep. 

*  In    re   Price,   91    Fed.    Rep.   635,  326,  3  Am.   B.  R.  226. 

I  Am.  B.  R.  419;   In  re  Mellin,  97  " /«    re    Frisbie,    No.     5131     Fed. 

Fed.  Rep.  326,  3  Am.  B.  R.  226;  In  Cas.,  13  N.  B.  R.  349;  In  re  Isidor, 

re  Adams,  No.  40  Fed.   Cas.,  c.  3  No.  7105  Fed.  Cas.,  2  Ben.  123;  In 


EXAMINATIONS.  629 

Where  an  examination  is  sought  or  carried  on  for  the  purpose 
of  gratifying  mahce  or  mere  curiosity,  it  may  be  arrested/ 

An  examination  may  be  adjourned  to  a  certain  day,  but  if 
it  is  adjourned  without  day  a  new  notice  of  examination  is 
necessary.** 

It  will  sometimes  be  necessary  to  determine  at  what  stage 
in  the  proceedings  does  the  right  to  examine  the  bankrupt 
cease.  There  can  be  no  doubt  that  this  right  extends  up  to 
the  final  adjudication  upon  his  application  for  a  discharge.'' 
The  hearing  upon  a  petition  for  a  discharge  may  be  contin- 
ued for  the  purpose  of  affording  an  opportunity  to  examine 
the  bankrupt  in  a  proper  case."  It  has  been  held  that  a 
bankrupt  can  be  compelled,  after  his  discharge,  to  submit 
to  an  examination.^^  This  was  a  matter  of  express  enactment 
in  the  act  of  1867.^"  There  is  no  limitation  in  the  statute  of  the 
court's  jurisdiction  over  his  person  in  respect  to  the  time  of 
his  discharge.  The  language  of  Section  21  authorizes  the 
court,  by  order,  to  require  the  bankrupt  to  appear  in  court  or 
before  a  referee  or  the  judge  of  any  state  court,  to  be  exam- 
ined concerning  the  acts,  conduct,  or  property  of  a  bankrupt 
whose  estate  is  in  process  of  administration  in  bankruptcy. 
The  only  limitation,  with  reference  to  time,  seems  to  be  that 
the  estate  shall  still  be  in  the  process  of  administration.  ^There 
can  be  no  doubt  of  the  right  to  examine  a  bankrupt,  upon  a 
proper  application  being  made  for  that  purpose,  after  his 
discharge  is  suspended  or  vacated. 

If,  at  the  time  of  preferring  his  petition,  the  debtor  shall 
be  imprisoned,  the  court,  upon  application,  may  order  him 
to  be  produced  upon  habeas  corpus,  by  the  jailor  or  any  ofifi- 

re   Frizellc,   No.   5153   Fed.   Cas.,   5  Ren.    7;    In   re    Frizclle,    No.    5132 

N.  B.  R.  122;  In  re  Price,  91  Fed.  Fed.  Cas.,  5  N.  B.  R.  119. 

Rep.  635,  I  Am.  R.  R.  419.  '"  In    re    Seckendorf,    No.    12600 

'  In    re    Salkey,    No.    12252    Fed.  Fed.  Cas.,  2  Ben.  462 ;  In  re  Maw- 

Cas.,  5  Biss.  486.  son,  No.  93210  Fed.  Cas.,   i   N.   B. 

"/n  re  Price,  i  Am.  B.  R.  419,  91  R.  271. 

Fed.  Rep.  635.  "  In  re  Westfall  Bros.  Co.,  8  Am 

"Gen.  Ord.   12;  In  re  Solis,   No.  B.  R.  431. 

13165  Fed.  Cas.,  4  Ben.   143;  In  re  '"  R.  S.  Sec.  5104. 
Vcttcrlein,   No.    16926  Fed.   Cas.,  5 


030  LAW    AND    I'ROCEEDINGS    IN    BANKRUPTCY. 

ccr  in  whose  custody  he  may  be,  before  the  referee,  for  the 
purpose  of  testifying  in  any  matter  relating  to  his  bank- 
ruptcy.^" The  examination  of  such  persons  rests  in  the  dis- 
cretion of  the  court.  A  creditor  can  not  demand  the  examina- 
tion of  a  particular  person  as  of  right. ^* 

Where  the  bankrupt  is  about  to  leave  the  district  in  which 
he  resides  or  has  his  principal  place  of  business,  to  avoid 
examination,  he  may  be  arrested  and  kept  in  custody,  not 
exceeding  ten  days,  until  he  shall  be  examined  and  released 
or  give  bail  to  appear  for  examination,  from  time  to  time, 
not  exceeding  in  all  ten  days,  as  required  by  the  court,  and 
for  his  obedience  to  all  lawful  orders  made  in  reference 
thereto.^^  It  has  been  held  that  a  court  of  bankruptcy  is  with- 
out power  to  make  an  order  for  the  extradition  of  a  bankrupt, 
after  he  had  escaped  into  another  district,  for  the  purpose  of 
an  examination, ^°  and  that  a  bankrupt  can  not  be  examined 
by  the  order  of  a  court  of  bankruptcy  other  than  the  one  in 
which  the  bankruptcy  proceedings  are  pending  in  the  exercise 
of  ancillary  jurisdiction.^' 

§  205.  When  persons  other  than  a  bankrupt  may  be  ex- 
amined. 
■  The  statute  expressly  authorizes  the  referee  to  exercise  the 
powers  vested  in  courts  of  bankruptcy  for  the  administering 
of  oaths  to,  and  the  examination  of  persons  as  witnesses,  and 
for  requiring  the  production  of  documents  in  proceedings 
before  them,  except  the  power  of  commitment.'^ 

A  court  of  bankruptcy  may,  upon  application  of  any  officer, 
bankrupt  or  creditor,  by  order  require  any  designated  person, 

"Gen.  Orel.  30;  In  re  Gilbert,  2  "/n    re    Hassenbusch     (not    re- 

N.  B.  N.  378.  ported),  but  affirmed  In  re  Hassen- 

"/m  re  Andrews,   130  Fed.  Rep.  busch  (C.  C.  A.  6th  Cir.),  108  Fed. 

383,  12  Am.  B.  R.  267;  In  re  Ab-  Rep.  35,  47  C.  C.  A.  177." 

bey  Press   (C.  C.  A.  2d  Cir.),  134  " /n   re  Williams,   123  Fed.  Rep. 

Fed.  Rep.  51,  13  Am.  B.  R.  11.  321,   10  Am.   B.   R,   538.     See   Sec. 

"B.  A.   1898,  Sec.  gh.     For  pro-  210a,   post. 

ceedings  to   detain   a  bankrupt   for  But   see  In   re   Sutter   Bros,    131 

examination,   see  When  a  bankrupt  Fed.  Rep.  654,  11  Am.  B.  R.  632. 

may  be  arrested,  Sec.  2ig,  post.  '  B.  A.   1898,  Sec.  38,  clause  2. 


EXAMINATIONS.  631 

iiiclutliiig  the  bankrupt  and  his  wife,  to  appear  in  court  or 
before  a  referee  or  the  judge  of  any  state  court,  to  be  exam- 
ined concerning  the  acts,  conduct  or  property  of  a  bankrupt 
whose  estate  is  in  process  of  administration  under  this  act, 
provided  that  the  wife  may  Ije  examined  only  touching  busi- 
ness transacted  by  her  or  to  which  she  is  a  party,"  and  to 
determine  the  fact  whether  she  has  transacted  or  been  a  party 
to  any  business  of  the  bankrupt.^ 

The  language  of  these  provisions  is  very  general.  They 
give  the  referee  power  to  summon  any  person  who  could 
give  evidence  in  a  court  at  law.*  They  authorize  the  exam- 
ination of  him  upon  all  matters,  which  are  likely  to  arise  in 
respect  to  the  bankrupt  or  his  property.  The  only  limita- 
tion as  to  time  within  w'hich  this  power  may  be  exercised  is 
that  the  estate  shall  be  in  process  of  administration  in  bank- 
ruptcy. The  judge  or  referee  may  therefore  summon  a  wit- 
ness at  any  time  after  the  commencement  of  proceedings 
until  the  estate  is  closed  by  order  of  court.  The  referee  of 
course  can  only  summon  witnesses  wdiiie  the  case  is  pending 
before  him  upon  reference. 

Prior  to  the  amendment  of  Feb.  5,  1903.  only  persons,  who 
were  competent  witnesses  under  the  laws  of  the  state  in  which 
the  proceedings  were  pending,  could  be  examined. °  This  is 
the  rule  with  reference  to  examination  of  witnesses  in  pro- 
ceedings instituted  prior  to  the  amendment.  A  wn'fe  not  com- 
petent to  testify  under  the  law^  of  the  state  can  not  be  compelled 
to  testify  in  such  bankruptcy  proceedings."  In  proceedings 
instituted  since  the  amendment  of  Feb.  5,  1903.  the  com- 
petency of  witnesses  under  the  state  law^  is  immaterial.    A  wife 

^B.  A.  1898,  Sec.  21,  as  amended  In   re   Pursell,    114  Fed.   Rep.   371, 

Feb.  5,  1903,  32  Stat,  at  L.  797.    In  8  Am.  B.  R.  96. 

re  -Andrews,  130  Fed.  Rep.  383,   12  '/«  re  Price,  91  Fed.  Rep.  635,  i 

Am.  B.  R.  267.  Am.  B.  R.  419;  In  re  Westfall  Bros. 

'B.  A.  1898,  Sec.  210,  as  amend-  Co.,  8  Am.  B.  R.  431. 

ed  Feb.  5,  1903,  32  Stat,  at  L.  797.  "In    re    Jefferson,    96    Fed.    Rep. 

Compare  R.  S.  Sec.  5087.  826,  3  Am.  B.  R.  174;  In  re  Fowler, 

M'liis  includes  a  triustee  in  insol-  93    Fed.  Rep.  417,  i  Am.  B.  R.  555. 
vency  under  a  state  proceeding.    See 


632 


LAW    AM)    I'ROLKEDIXGS    IN    BANKRUl'TCY. 


iiiav  be  examined  only  toncliing-  bnsincss  transacted  by  her  or 
to  which  she  i^  a  i)arty  and  to  determine  the  fact  whether  she 
has  transacted  or  been  a  i)arty  to  any  business  of  the  bank- 
rupt's." 

§  206.    How  to  obtain  an  order  for  an  examination. 

The  judge  or  referee  may  make  the  order  for  an  examina- 
tion.^ The  referee  usually  makes  the  order  for  examination 
after  the  order  requiring  the  bankrupt  to  attend  before  the 
referee,  which  is  made  by  the  judge  in  the  order  of  reference." 
Orders  for  examinations  of  a  bankrupt  subsequent  to  the  first 
Dne  are  regularly  made  only  upon  application  and  for  cause 
shown " 

It  has  been  held  that  a  court  of  bankruptcy  has  no  special 
ancillary  power  under  the  bankruptcy  statute  to  make  an  order 
on  the  application  of  the  trustee  of  a  bankrupt  whose  estate 
is  being  administered  in  another  district,  requiring  persons 
residing  within  the  district  to  appear  before  a  referee  for 
examination  concerning  the  acts,  conduct,  and  property  of  the 
bankrupt.  A. court  having  charge  of  the  administration  of  a 
bankrupt's  estate  has  power  to  order  that  any  person  having 
knowledge  "concerning  the  acts,  conduct,  or  property  of  the 
bankrupt,"  but  who  resides  without  the  district  or  state,  and 
more  than  100  miles  from  the  court,  shall  be  examined  before 
a  commissioner  in  accordance  with  the  provisions  of  the  gen- 
eral statutes  or  practice  in  equity  cases,  and  that  persons  so 
ordered  to  be  examined  may  be  compelled  by  proper  process, 
as  in  other  cases,  to  appear  and  testify.* 


'  B.  A.  1898,  Sec.  2ia,  as  amend- 
ed Feb.  5,  1903,  32  Stat,  at  L.  797; 
In  re  Worrell,  125  Fed.  Rep.  159, 
10  Am.  B.  R.  744. 

'  B.  A.  1898,  Sec.  21 ;  Sec.  i, 
clause  7;  Sec.  38,  and  Official  Form 
No.  28,  see  Form  No.  47,  post. 

'  Gen.    Ord.    12. 

^In  re  Frisbie,  No.  5 131  Fed. 
Cas.,  13  N.  B.  R.  349;  In  re  Isidor, 
No.  7105  Fed.  Cas.,  2  Ben.  123;  In 


re  Frizelle,  No.  5133  Fed.  Cas.,  5 
N.   B.   R.   122. 

^  In  re  Williams,  123  Fed.  Rep. 
321,  ro  Am.  B.  R.  538. 

This  was  done  In  re  Carley,  106 
Fed.  Rep.  862,  S  Am.  B.  R.  554, 
and  In  re  Sturgeon  (C.  C.  A.  2d 
Cir.),  139  Fed.  Rep.  608,  14  Am. 
B.  R.  68t. 

See  also  In  re  Watkinson  &  Co., 
130   Fed.    Rep.   218,    12   Am.    B.    R. 


EXAMINATIONS. 


633 


The  application  for  an  order  requiring  the  bankrupt  or  other 
person  to  appear  for  examination  may  be  made  by  any  officer, 
bankrupt  or  creditor.^  A  receiver  '^  or  a  trustee  '  are  buch 
officers  A  creditor  is  entitled  to  an  order  for  an  examination 
before  he  has  filed  proof  of  his  claim  in  set  form.^  The  ref- 
eree should  be  satisfied  that  the  party  applying  for  the  order 
is  in  fact  a  creditor  of  the  bankrupt.  It  seems  sufficient  proof 
if  the  party  is  named  in  the  schedules  attached  to  the  petition 
in  bankruptcy.'*  A  creditor  is  not  entitled  as  of  right  to 
examine  any  person  he  may  name,  if  in  the  judgment  of  the 
trustee  and  referee  that  it  is  not  desirable  or  in  the  interest  of 
the  estate.^'' 

The.  application  is  usually  made  by  petition  or  motion.  The 
petition  must  designate  the  persons  to  be  examined,  but  it  need 
not  specify  the  particular  matters  concerning  which  an  ex- 
amination is  sought.^^  In  a  proper  case  a  letter  or  a  verbal 
request  may  be  sufficient  upon  which  to  make  the  order  for 
examination.^^  Less  proof,  of  course,  is  required  from  an 
officer,  as  a  trustee,  than  from  a  creditor.^-  The  proceeding 
is  ex  parte,  and  no  previous  notice  is  required  to  be  given  to 
any  party.^^  The  form  of  the  order  for  an  examination  of  a 
bankrupt  is  prescribed  by  the  supreme  court/*  It  should  be 
entered  of  record  among  the  proceedings  before  the  referee. 


370;  In  re  Hemstreet,  117  Fed. 
Rep.    568,   8   Am.    B.    R.    760. 

"  B.  A.  1898,  Sec.  21. 

*  In  re  Fixen,  96  Fed.  Rep.  748, 
LAW.  104 

2  Am.  B.  R;  822. 

'  In  re  Howard,  95  Fed.  Rep.  415, 
2  Am.  B.  R.  582. 

"In  re  Jehu,  94  Fed.  Rep.  638,  2 
Am.  B.  R.  498;  In  re  Walker,  96 
Fed.  Rep.  550,  3  Am.  B.  R.  35;  In 
re  Price,  91  Fed.  Rep.  635,  i  Am. 
B.   R.  419. 

"In  re  Jehu.  94  Fed.  Rep.  638, 
2  Am.  B.  R.  498. 


'*/n  re  Andrews,  130  Fed.  Rep. 
383,  12  Am.  B.  R.  267;  In  re  Ab- 
bey Press  (C.  C.  A.  2d  Cir.),  134 
Fed.   Rep.   51,    13  Am.   B.  R.    11. 

"/^^  re  Howard,  95  Fed.  Rep. 
415,  2  Am.  B.  R.  582;  In  re  Abbey 
Press  (C.  C.  A.  2d  Cir.),  134  Fed. 
Rep.  SI,  13  Am.  B.  R.  11. 

"In  re  McBrien,  No.  8665  Fed. 
Cas.,    2    Ben.    513 

"In  re  Macintire,  No.  8821  Fed. 
Cas.,  I  Ben.  277. 

"Official  Form  No.  28;  see  Form 
No.  47,  post. 


U34  LAW    AND    I'ROCEEDINGS    IN    BANKRUPTCY. 


§  207.     Notice  of  examination  to  bankrupts,  creditors  and 
witnesses. 

A  copy  of  the  order  for  examination  of  the  l^ankrupt,  signed 
by  the  referee,  should  l)e  dehvered  to  the  bankrupt  as  sooiii  as 
may  be.^  A  copy  of  the  order  is  used  in  place  of  a  summons 
or  subjXTena.  Where  service  is  made  upon  a  bankrupt  by 
delivering-  him  a  copy  of  the  order,  proof  of  service  may  be 
made  Ly  affidavit  of  the  person  delivering  it  or  by  a  written 
acceptance  of  service  by  the  bankrupt.  If  the  bankrupt  ap- 
pears, he  waives  any  irregularity  in  the  service.  A  bankrupt 
is  a  party  to  the  proceedings,  and  is  required  to  comply  with 
all  lawful  orders  of  the  judge  or  referee."  If  he  disobeys  or 
resists  any  lawful  order  of  a  referee,  he  is  liable  to  be  com- 
mitted by  the  judge  for  contempt.^ 

The  bankrupt  can  not  be  required  to  attend  at  or  for  an 
examination  at  a  place  more  than  one  hundred  and  fifty 
miles  distant  from  his  home  or  principal  place  of  business,  un- 
less ordered  bv  the  court  or  a  judge  thereof  for  cause  shown. ^ 
He  is  not  entitled  to  witness  fees  in  any  case  ^  But  he  is  al- 
lowed his  actual  expenses  from  the  estate  when  examined  or 
required  to  attend  at  any  place  other  than  the  city,  town  or  vil- 
lage of  his  residence.'' 

When  the  bankrupt  is  present  before  the  court  or  referee  he 
may  be  examined  without  previous  notice  being  given  him.'' 
In  other  cases  the  bankrupt  is  entitled  to  a  reasonable  notice 
cf  his  examination. 

A  reasonable  notice  is  such  time  as  will  enable  him  to  reach 
and  appear  before  the  court  or  referee  with  such  knowledge  as 
may  be  under  his  control  upon  the  matters  of  the  investigation 
or  information  asked  for.     "This  depends  upon  the  circum- 

'  Official  Form  No.  28.    See  Form  2  Ben.  144;  In  re  McNair,  No.  8907 

No.  47,  post.  Fed.  Cas.,  2  N.  B.  R.  219. 

'  B.  A.  1898,  Sec.  7,  clause  2.  °  B.  A.  1898,  Sec.  7,  clause  9. 

^B.  A.  1898,  Sec.  41a  and  Sec.  2,  '  R.  A.   1898,  Sec.  7,  clause  9;  In 

clause  16.  re  Bromley  &  Co.,  3  N.  B.  R.  86; 

*  B.  A.  1898,  Sec.  7,  clause  9.  In  re  Brandt,   No.   1812  Fed.  Cas., 


In  re  Okcll.  No.  10475  Fed.  Cas.,       2  N.  B.  R.  215. 


EXAMINATIONS.  635 

stances  and  facts  surrounding  the  bankrupt,  tlie  distance  he 
is  from  the  court  or  the  place  of  his  examination,  and  also  up- 
on what,  if  any.  particular  facts  he  is  to  be  examined.  If  the 
defendant  is  a  merchant,  and  has  been  doing  a  large  and  com- 
j;licated  business,  and  he  is  notified  that  his  examination  is  to 
cover  his  entire  business  operations,  a  reasonable  time  would 
manifestly  be  much  longer  than  in  a  case  where  the  notice  of 
examination  was  in  regard  to  a  few  items  of  his  property."  ^ 

The  referee  is  also  required  to  give  at  least  ten  days'  notice 
to  all  his  creditors  of  all  examinations  of  the  bankrupt.**  This 
notice  is  regularly  sent  by  mail  to  the  respective  addresses  of 
the  creditors  as  they  appear  in  the  list  of  creditors  of  the  bank- 
rupt, or  as  afterwards  filed  with  the  papers  in  the  case  by  the 
creditors.^**  The  creditors  may  waive  notice  in  writing.^^  No 
notice  to  creditors  of  the  examination  of  witnesses,  other  than 
the  bankrupt,  is  required. 

Where  a  person  is  not  a  party  to  the  proceedings,  and  there- 
fore not  bound  to  obey  the  orders  made  therein,  he  must  be 
brought  before  the  court  for  examination  by  process  of  sum- 
mons. A  bankrupt,  as  has  just  been  stated,  is  a  party,  and 
need  not  be  served  with  summons.  A  creditor  who  has  proved 
his  claim  is  bound  to  obev  all  the  orders  of  the  court  touching 
his  alleged  debt,  and  therefore  may  be  summoned  by  service 
of  a  copy  of  the  order  for  an  examination  of  him  in  respect 
lo  his  claim. ^-  The  form  of  summons  is  prescribed/'^  This 
must  issue  out  of  court  under  the  seal  thereof  and  be  tested 
by  the  clerk. ^*  Blanks  with  the  signature  of  the  clerk  and 
the  seal  of  the  court  may  be  furnished  to  the  referee  upon 
application.^^ 

"  In  re  Bromlej'  &  Co.,  3  N.  B.  R.  6   N,    B.    R.    132 ;    In   re    Pease,   29 

692-3.  Fed.   Rep.   593. 

°B.  A.   1898,  Sec.  58a.  "Official  Form  No.  30.  see  Form 

"B.  A.  1898,  Sec.  58a;  Gen.  Orel.  No.  49,  post. 

21,  par  2.  "  Gen.  Ord.  3 :  Official  Form  No. 

"  B.  A.  1898,  Sec.  58a.  30.  see  Form  No.  49,  post. 

"Gen.  Ord.  21,  par.  6;  In  re  Ky-  '°  Gen.  Ord.  3;  In  re  Abbey  Press 

ler,  No.  7956  Fed.  Gas.,  2  Ben.  414;  (C.  C.  A.  2d  Cir.).  134  Fed.  Rep. 

In  re  Paddock,  No.  T0657  Fed.  Cas.,  51,  13  Am.  B.  R,  11. 


636 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


The  summons  may  be  served  by  any  person.  The  return 
is  in  the  form  of  an  affidavit  of  personal  service  prescribed  in 
Form  No.  30. 

It  may  be  served  upon  witnesses  living  without  the  district, 
but  within  one  hundred  miles  of  the  place  of  testifying.^^  '  But 
no  person  can  be  required  to  attend  as  a  witness  before  a  ref- 
eree at  a:  place  outside  of  the  state  of  his  residence,  and  more 
than  one  hundred  miles  from  such  place  of  residence,  and  only 
in  case  his  lawful  mileage  and  fee  for  one  day's  attendance 
shall  be  first  paid  or  tendered  to  him.^^ 

A  person  who  disobeys  a  summons  to  appear  before  a  ref- 
eree to  be  examined  as  a  witness  may  be  punished  for  con- 
tempt."® 


§  208.    How  an  examination  is  made. 

At  the  time  and  place  appointed,  the  bankrupt,  creditor  or 
other  witness  must  present  himself  for  examination.  The 
bankrupt  can  not  refuse  to  be  sworn  by  reason  of  his  claim- 
ing that  he  has  an  off-set  which  extinguishes,  or  that  the  stat- 
ute of  limitations  has  run  against,  the  claim  of  the  creditor 
upon  whose  r.pplication  he  is  to  be  examined.  So  long  as 
die  debt  stands  proved  and  unimpeached  the  bankrupt  may 
be  sworn  and  examined.^    A  person  is  exempt  from  arrest  or 


"R.  S.  Sec.  876;  In  re  Wood- 
ward, No.  18000  Fed.  Cas.,  8  Ben. 
112. 

"B.  A.  1898,  Sec.  41a;  In  re  Cole 
133  Fed.  Rep.  414,  13  Am.  B.  R. 
300;  In  re  Hemstreet,  117  Fed.  Rep. 
568,  8  Am.  B.  R.  760. 

"B.  A.  1898,  Sec.  41  and  Sec.  2, 
clause  16;  In  re  Kerber,  125  Fed. 
Rep.  653,  10  Am.  B.  R.  747,  it  was 
held  that  his  mileage  and  fee  for 
one  day's  attendance  must  be  paid 
or  tendered  witness  before  he  could 
be  attached  for  contempt. 

'  In    re    Kingsley,    No.    7818   Fed. 


Cas.,  6  Ben.  300;  In  re  Winship, 
No.  17878  Fed.  Cas.,  7  Ben.  194; 
In  re  Howard,  95  Fed.  Rep.  415,  2 
Am.  B.  R.  582. 

An  examination  was  allowed 
when  the  creditor's  claims  had  been 
proved  and  protest  filed  against 
them.  In  re  Belden,  No.  1241  Fed. 
Cas.,  4  N.  B.  R.  194;  In  re  Scott, 
95  Fed.  Rep.  815,  i  Am.  B.  R.  49, 
it  was  held  that  a  witness  was 
bound  to  take  the  oath  although 
not  bound  to  answer  incriminating 
questions. 


EXAMINATIONS.  637 

service  of  process  while  attending  as  a  witness  before  the 
judge  or  referee." 

The  testimony  before  a  referee  is  usually  taken  orally.  It 
ii>  the  duty  of  the  referee,  upon  application  of  any  party  in 
interest,  to  preserve  the  evidence  taken,  or  the  substance  there- 
cf,  as  agreed  upon  by  the  parties  before  them  when  a  steij- 
ographer  is  not  in  attendance.^  In  practice,  the  evidence  taken 
before  a  referee  is  usually  taken  down  in  writing  by  him  or 
under  his  direction  in  the  form  of  narrative,  unless  he  deter- 
mines the  examination  should  be  taken  by  question  and  an- 
swer.* He  is  authorized,  upon  the  application  of  the  trustee, 
lo  employ  a  stenographer  at  the  expense  of  the  estate  at  a 
compensation  not  to  exceed  ten  cents  per  folio  for  reporting 
and  transcribing   the   evidence.^ 

The  examination  of  witnesses  before  the  referee  may  be 
conducted  by  the  party  in  person  or  by  his  counsel  or  attorney, 
and  the  witnesses  shall  be  subject  to  examination  and  cross 
examination,  which  shall  be  had  in  conformity  with  the  mode 
now  adopted  in  the  courts  of  law.'' 

A  witness  is  not  entitled  to  be  attended  or  represented  by 
counsel  during  his  examination.^  The  bankrupt,  being  a  party 
to  the  proceedings,  is  entitled  to  have  the  assistance  of  counsel. 
The  true  rule,  with  reference  to  what  assistance  he  is  entitled 
to,  is  thus  stated  by  Judge  Lowell :  "The  questions  to  a 
bankrupt  are  usually  concerning  matters  of  fact,  and  in  the 
vast  majority  of  cases  involve  nothing  requiring  advice  or  con- 
sultation; and  the  presence  of  counsel,  with  the  right  to  object 
to  improper  questions,  and  to  uphold  the  rights  of  the  bankrupt 

'In    re    Kimball,    No.    7767    Fed.  391;    In   re   Bragg,    No.    1799    Fed. 

Cas.,  2  Ben.  38.     See  ajso   Service  Cas.,  s.  c.  5  Law  Rep.  323. 

of  subpoena,  Sec.  72,  ante.  ^  In  re  Abbey  Press  (C.  C.  A.  2d 

'B.  A.  1898,  Sec.  39,  clause  9.  Cir.),  134  Fed.  Rep.  51,  13  Am.  B. 

*  Gen.  Ord.  22.  R.    11;   In   re   Comstock,    No.   3080 

"B.  A.   1898,  Sec.  38,  clause  5.  Fed.  Cas.,  3  Saw.  517;  In  re  Fred- 

'  Gen.  Ord.  22.  enberg,  No.  5070  Fed.  Cas.,  2  Ben. 

The  bankrupt   may   be   cross-ex-  133 ;    In   re    Stuyvesant    Bank,    No. 

amined,   see  In   re   Levy.   No.  8296  13582  Fed.   Cas.,  6  Ben.   t,:^,;   In   re 

Fed.  Cas.,  i  Bon.  496;  In  re  Leach-  Feinbcrg.    No.    4716     Fed.     Cas.,    j 

man,  No.  8157  Fed.  Cas.,  i  N.  B.  R.  Ben.  1C2. 


638 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


ill  substantially  the  same  manner  that  he  would  do  if  his  client 
were  called  to  the  stand  in  his  own  cause  in  any  other  court, 
and  with  the  further  reserved  right  to  advise  with  him  con- 
cerning his  answers  when  the  referee  can  see  cause  therefor, 
meets,  as  it  seems  to  me,  all  the  requirements  of  justice  in  this 
regard."  **  The  wife  of  the  bankrupt  is  not  entitled  to  the  as- 
sistance of  counsel  any  more  than  any  other  witness,  and  the 
bankrupt's  counsel  has  no  right  to  advise  her  while  under  ex- 
amination.'' Where  time  is  needed  to  refresh  the  meniory  by 
referring  to  books  or  papers,  or  for  the  production  of  any  writ- 


10 


ten  instruments  or  documents,  it  should  be  granted. 

When  objections  are  made  to  cjuestions  and  answers  in 
the  course  of  the  examination,  the  grounds  of  the  objection 
and  the  ruling  of  the  referee  should  be  noted  by  the  referee. 
It  is  the  duty  of  the  referee  to  rule  upon  objections.  Gen. 
Ord.  22  expressly  requires  him  to  note  "his  decision."  But 
he  should  not  exclude  evidence  offered,  although  he  may 
decide  it  to  be  incompetent,  immaterial  or  irrelevant.^^  He 
fhould  receive  all  the  evidence  offered  and  make  a  record  of 
all  that  transpires  on  the  examination  of  the  witness.  Ques- 
tions, objections,  rulings,  exceptions  and  answers  should  all  be 
taken  down  for  the  use  of  the  court.  This  is  true  whether  he 
is  acting  in  his  judicial  capacity  as  referee,  or  as  a  master  under 
an  order  to  report  facts  and  conclusions  of  law,  or  taking 
a  deposition  under  a  commission.  The  reason  is  that  in  the 
first  instance  the  matter  may  be  reviewed  by  the  judge,  who 
may  differ  with  the  referee  with  respect  to  the  admissibility  of 
the  evidence ;  and  in  case  he  is  acting  as  a  master  or  commis- 


*  In  re  Tanner,,  No.  13745  Fed. 
Cas.,  I  Low.  215.  See  also  in  re 
Judson,  No.  7562  Fed.  Cas.,  2  Ben. 
210 ;  In  re  Lord,  No.  8502  Fed.  Cas., 
3  N.  B.  R.  243.  See  In  re  Cobb  7 
Am.  B.  R.  104,  as  to  the  right  of 
bankrupt  to  cross-examine  witness- 
es. 

"  In  re  Schonberg,  No.  12477 
Fed.  Cas.,  7  Ben.  211. 


"/»  re  Tanner,  No.  13745  Fed. 
Cas.,  I   Low.  215. 

'* /w  re  Sturgeon  (C.  C.  A.  2d 
Cir.),  139  Fed.  Rep.  608,  14  Am. 
B.  R.  681 ;  Bank  of  Ravenswood 
V.  Johnson  (C.  C.  A.  4th  Cir.), 
143  Fed.  Rep.  463,  16  Am.  B.  R. 
206;  In  re  Romine,  138  Fed.  Rep. 
837,  14  Am.  B.  R.  78s ;  In  re  Lipset, 
119  Fed.  Rep.  379,  9  Am.  B.  R.  32. 


EXAMINATIONS.  639 

sioner,  the  court,  which  is  to  decide  the  matter,  is  entitled 
lo  have  all  of  the  evidence  for  that  purpose  and  to  decide 
what  evidence  shall  be  excluded  and  what  may  be  considered. 
The  proper  practice  is  for  the  referee  to  make  his  ruling  and 
diereupon  require  the  question  to  be  answered.  If  his  ruling 
be  against  the  question  and  the  court  shall  reverse  his  finding, 
it  will  not  be  necessary  to  have  a  re-examination  of  the  wit- 
ness. If  the  court  shall  affirm  his  ruling,  the  answer  may 
properly  be  disregarded  by  the  court. ^■" 

The  referee  need  not  stay  the  examination  for  the  purpose 
of  certifying  each  question  to  the  judge  for  his  decision.^^ 
The  examination  should  continue  and  the  question  be  certified 
after  the  deposition  is  complete  to  prevent  delay.  If  either 
party  persists  in  offering  incompetent,  immaterial  or  irrevelant 
matter  in  evidence  over  the  objection  and  ruling  of  the  referee 
die  remedy  of  the  other  party  is  to  apply  to  the  court  for 
costs."  The  court  is  expressly  given  "power  to  deal  with  the 
costs  of  incompetent,  immaterial  or  irrevelant  depositions,  or 
parts  of  them,  as  may  be  just."  ^^ 

In  case  a  witness  refuses  to  be  sworn  or  to  answer  any  par- 
ticular question,  the  referee  should  rule  upon  the  question.  If 
either  party  is  dissatisfied  with  his  ruling,  he  may  have  the 
L  uestion  certified  to  the  judge  for  review.^**  The  examination 
may  be  adjourned  pending  the  decision  of  the  judge  upon  such 
question. 

Where  a  bankrupt  or  a  witness  refuses  to  answer  a  ques- 
tion when  ordered  to  do  so  by  the  referee,  the  matter  may 
also  be  brought  to  the  attention  of  the  judge  upon  an  appli- 

But  see  In  re  Wilde's  Sons,  131  ''In    re    Sturgeon    (C.    C.    A.    2(1 

Fed.  Rep.  142,  11  Am.  B.  R.  714.  Cir.),  139  Fed.  Rep.  608,  14  Am.  R. 

'-In  re  De  Gottardi,  114  l<\^d.  Rep.  R.    681. 

328,  7  Am.  B.  R.  723,  746.  '=  Gen.  Ord.  22. 

'"In    re    Romine,    138    Fed.    Rep.  '"Gen.  Ord.  27,  Official  Form  56. 

837,    14   Am.    B.    R.    785;    Bank   of  see  Form  No.   136,  post.     Bank  of 

Ravensvvood  v.  Johnson    (C.  C.  A.  Ravenswood  v.  Johnson    (C.  C.  A. 

4th    Cir.),    143    Fed.    Rep.    463,    t6  4th  Cir.).  143  Fed.  Rep.  463,  16  Am. 

Am.  B.  R.  206.  B.  R.  206. 


640 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


cation  to  commit  for  contempt. ^^  So  also  where  the  bank- 
rupt makes  an  unsatisfactory  answer  which  is  untrue,  as  that 
"he  does  not  remember,"  or  "is  unable  to  tell,"  the  court 
may  commit  him  for  contempt.  In  luis^land  it  has  been  held 
that  a  bankrupt  may  be  committed  by  the  court  for  answers 
upon  his  examination,  which  on  the  whole  are  unsatisfactory, 
and  which  do  not  really  and  truly  impart  information, 
which  the  bankrupt  must  possess;  as  where  his  answers  are 
so  clearly  of  an  improbable  character  that  they  can  not  be 
believed.^*  In  one  case  ^^  bankrupts  were  committed  for  con- 
lempt  because  they  refused  to  account  for  more  than  twenty 
thousand  dollars'  worth  of  property  which  had  been  traced  in- 
to their  possession.  Where  a  bankrupt  withdraws  from  the 
office  of  the  referee  before  the  completion  of  his  examination, 
he  may  be  punished  for  contempt.""  It  has  been  held  that  a 
state  court  has  no  jurisdiction  to  punish  a  party  for  perjury 
committed  in  the  course  of  an  examination  before  a  referee.'^ 

When  the  examination  is  completed,  the  deposition  must 
be  read  over  to  the  witness  and  signed  by  him  in  the  presence 
of  the  referee.'^  The  referee  must  note  upon  the  deposition 
any  question  objected  to,  with  his  decision  thereon ;  and  the 
court  may  deal  with  the  cost  of  incompetent,  immaterial  and 
irrelevant  depositions,  or  any  parts  of  them,  as  may  be  just.^^ 

The  examination  may  be  adjourned  from  time  to  time  as 
may  suit  the  convenience  of  the  parties. 


"B.  A.  1898,  Sec.  410  and  b. 
In  re  Romine.  138  Fed.  Rep.  837, 
14  Am.  B.  R.  785. 

"£.r  parte  Lord,  16  Mees.  &  W. 
462;  In  re  Bradbury,  11  Jur.  189, 
14  C.  B.  is;  In  re  Taylor,  8  Ves. 
328;  Ex  parte  Nowlan,  6  Durn.  & 
East,  58,  6  T.  R.  118.  As  to  power 
of  the  English  rule  upon  American 
cases,  see  In  re  Mooney,  No.  9748 
Fed.  Cas.,  14  Blatch.  204. 

"/n  re  Salkey,  No.  12253  Fed. 
Cas.,  6  Biss.  269,  affirmed  on  peti- 
tion for  habeas  corpus  to  discharge 


the  prisoners,  No.  12254  Fed.  Cas., 
6  Biss.  280. 

Consult  also  In  re  How.  No.  6747 
Fed.  Cas.,  18  N.  B.  R.  565;  In  re 
Dresser,  No.  4077  Fed.  Cas.,  3  N. 
B.  R.  557;  In  re  Mooney,  No.  9748 
Fed.  Cas.,  14  Blatch  204. 

-"In  re  Vogel,  No.  16984  Fed. 
Cas.,  5  N.  B.  R.  393- 

=^  State  V.  Pike,  15  N.  H.  83. 
Consult  Commonwealth  v.  Walker, 
108  Mass.  309. 

""  Gen.  Ord.  22. 

*'  Gen.  Ord.  22. 


EXAMINATIONS. 


641 


The  testimony  of  a  bankrupt  should  be  achnittecl  in  evidence 
even  where  he  failed  to  sis'n  it."* 


§  209.     Upon  what  topics  the  bankrupt  may  be  examined. 

The  bankrupt  may  be  examined  concerning  the  conducting 
of  his  busine.-jS,  the  cause  of  his  bankruptcy,  his  dealings  with 
Lis  creditors  and. other  persons,  the  amount,  kind  and  where- 
cbouts  of  his  property,  and,  in  addition,  all  matters  which  may 
affect  the  administration  and  settlement  of  his  estate.^ 

He  must  answer  all  questions  relating  to  these  subjects  fully 
and  completely."  A  large  latitude  of  inquiry  is  allowed  in 
the  examination  of  the  bankrupt  and  other  persons  closely  con- 
nected with  him  in  his  business  dealings  for  the  purpose  of 
discovering  the  assets  and  unearthing  frauds  and  upon  any 
reasonable  surmise  that  they  have  the  assets  of  the  debtor.* 
Where  questionable  proceedings  have  been  disclosed  greater 


^  In  re  Bard,  108  Fed.  Rep.  208, 
5  Am.  B.  R.  810. 

'  B.  A.  1898,  Sec.  7,  clause  9. 
Compare  R.  S.  Sec.  5086. 

^In  re  Salkey,  No.  12253  Fed. 
Cas.,  6  Biss.  269. 

^  In  re  Horgan  (C.  C.  A.  2d 
Cir.),  98  Fed.  Rep.  414,  3  Am.  B. 
R.  253 ;  In  re  Foerst,  93  Fed.  Rep. 
190,  I  Am.  B.  R.  259 ;  In  re  Carley, 
106  Fed.  Rep.  862,  5  Am.  B.  R.  554 ; 
People's  Bank  v.  Brown  (C.  C.  A. 
3d  Cir.),  112  Fed.  Rep.  652,  7  Am. 
B.  R.  475 ;  In  re  Cliff e,  97  Fed.  Rep. 
540,  3  Am.  B.  R.  257. 

In  U.  S.  V.  Wechsler,  16  Am. 
B.  R.  I,  Judge  Holt,  in  charg- 
ing the  jury  in  a  trial  of  the  bank- 
rupt for  perjury  u^es  this  lan- 
guage: "It  is  a  broad  field  of 
inquiry  and  intended  to  be  so, 
and  this  section  (21  of  the  bank- 
rupt act)  is  the  section  under  which 
the  investigations  usually  take  place 
about  the  property  of  the  bankrupt, 
particularly  in  cases  where  there  is 


any  suspicion  that  there  has  been 
any  attempt  to  take  property  and 
conceal  it  from  creditors.  As  soon 
as  a  receiver  is  appointed,  if  he  has 
any  such  suspicion,  he  gets  one  of 
these  orders;  the  bankrupt  is 
brought  up  for  examination ;  and 
the  question  then  is  what  property 
he  has.  If  there  have  been  recent 
transfers  of  property  or  payments 
of  money  on  the  eve  of  bankruptcy, 
that  is  a  suspicious  fact,  particular- 
ly if  they  have  been  transferred  to 
relatives  and  connections.  All  such 
transfers  become  material  subjects 
of  inquiry  ;  and  in  order  to  ascer- 
tain what  the  truth  is  about  them 
the  party  examining  the  bankrupt 
is  not  confined  to  a  mere  inquiry, 
or  a  mere  explanation  of  what  it 
was  transferred  for,  but  coun.sel 
have  a  right  to  inquire  into  all  the 
surrounding  circumstances  in  the 
case  in  order  to  ascertain  what  the 
truth  is  in  that  respect." 


642 


LAW    AMD     rUOCEEDINGS    IN    BANKRUPTCY, 


latitiuk'  in  tltc  i)i\)secuti()n  of  inquiries  should  be  allowed.' 
Where  a  bankrupt  fails  to  testify  fully  and  fairly  and  truth- 
fully, the  court  or  referee  is  at  liberty  to  accept  his  testimony 
as  it  may  seem  to  be  supported  by  other  witnesses,  or  it  un- 
worthy of  credit  it  may  be  rejected  altogether.^ 

The  bankrupt  may  be  examined  with  reference  to  property 
which  has  come  into  his  possession  and  not  been  accounted 
for,*'  or  with  relation  to  his  wdfe's  property  if  it  is  shown 
that  he  may  possibly  have  an  interest  in  it.'  or  any  other 
property  in  which  he  may  possibly  have  an  interest,^  or  in 
leference  to  matters  wdiich  transpired  before  the  creation  of 
the  debt,"'  or  for  the  purpose  of  eliciting  facts  to  be  used  in 
opposing  his  discharge.^"  He  may  be  required  to  furnish  the 
trustee  with  the  combination  to  his  safe."  When  he  seeks  to 
be  discharged,  he  must  submit  himself,  if  required,  to  be  ex- 
amined, with  a  view  to  show  whether  he  has  made  a  full  and 
fair  surrender  of  his  property  and  statement  of  his  debts. ^" 
But  it  IS  not  competent  for  the  referee  to  summon  witnesses 
wdio  niay  know,  or  be  suspected  of  knowing,  facts  pertinent 
to  or  that  might  be  serviceable  in  the  preparation  of  specifica- 
tions against  his  discharge.^"  In  regard  to  such  facts,  a  cred- 
itor is  left  to  establish  them  on  the  trial  as  parties  do  in  ordi- 
nary trials  at  law.  It  is  not  a  sufficient  excuse  for  not  answer- 
ing a  question  put  to  the  bankrupt  that  he  has  replied  to  it  at 
a  former  examination  held  at  the  instance  of  some  other  cred- 
itor or  the  assignee. ^" 


*  In  re  Foerst,  93  Fed.  Rep.  190, 
I  Am.  B.  R.  259. 

^  In  re  Tudor,  100  Fed.  Rep.  796, 
4  Am.  B.  R.  78;  In  re  Leslie,  119 
Fed.  Rep.  406,  9  Am.  B.  R.  561. 

°/«  re  Salkey,  No.  12253  Fed. 
Cas.,  6  Biss.  269;  In  re  McBrien, 
No.  8666  Fed.  Cas.,  3  Ben.  481. 

'/«  re  Horgan  (C.  C.  A.  2d  Cir.), 
98  Fed.  Rep.  414,  3  Am.  B.  R.  253 ; 
In  re  Craig.  No.  ^^22,  Fed.  Cas.,  4 
N.  B.  R.  50;  In  re  Clark,  No.  2805 
Fed.  Cas.,  4  N.  B.  R.  237. 


"/«  re  Bonesteel,  No.  1628  Fed. 
Cas.,  2  N.  B.  R.  440;  In  re  Brun- 
dage.  100  Fed.  Rep.  613,  4  Am.  B. 
R.  47- 

'''  In  re  Craig,  No.  3322  Fed.  Cas., 
3  Ben.  353. 

"'In  re  Brandt,  No.  1812  Fed. 
Cas.,  2  N.  B.  R.  215;  In  re  Price, 
91  Fed.  Rep.  635,  i  Am.  B.  R.  419. 

"  In  re  Hooks  Smelting  Co.,  138 
Fed.  Rep.  954,  15  Am.  B.  R.  83. 

''/n  re  Vogel,  No.  16984  Fed. 
Cas.,  5  N.  B.  R.  393. 


EXAMINATIONS. 


643 


On  the  other  hand,  a  bankrupt  can  not  be  examined  touch- 
ing matter  wholly  irrelevant  to  and  not  bearing  on  his  bank- 
ruptcy. The  bankrupt  must,  however,  plead  his  privilege,  if 
any  pr'vilege  legally  exists,  to  the  particular  questions  pro- 
pounded/' He  is  privileged  from  being  examined  in  respect 
to  property  which  has  been  accjuired  since  the  adjudication  in 
ihe  bankruptcy  proceedings ;  ^*  and  also  with  reference  to 
property  which  he  does  not  own  or  have  an  interest  in/^  He 
can  not  be  examined  upon  matters  simply  to  gratify  malice  or 
curiosit-y/" 

The  bankrupt  can  not  be  compelled  to  answer  a  question  the 
answer  of  which  will  tend  to  incriminate  him,^'  but  if  the 
court  is  convinced  that  the  answer  to  the  question  can  not  by 
any  pc?sibility  incriminate  him  he  will  be  required  to  answer 
it."  The  witness  may  rely  on  that  portion  of  the  fifth  amend- 
ment of  the  Tonstitution  of  the  United  States  which  declares 
that  "no  person  .  .  .  shall  be  compelled  in  any  criminal  case 
10  be  a  witness  against  himself."  ^°  The  bankruptcy  act  pro- 
vides tliat  "no  testimony  given  by  him  shall  be  offered  in  evi- 
dence against  him  in  any  criminal  proceeding."  ""    The  reason 

"/«  ;t  Mellen,  97  Fed.  Rep.  326,      Am.   B.    R.   511;   In   re   Rosser,  96 
3  Am.  B.  R.  226. 

"In  re  Patterson,  No.  10815  Fed. 
Cas.,  I  Ben.  508;  In  re  Levy,  No. 
8296  Fed.  Cas.,  i  Ben.  496. 

''In  re  Van  Tuyl,  No.  16880 
Fed.  Cas.,  i  N.  B.  R.  636. 

'"  In  re  Salkey,  No.  12252  Fed. 
Cas.,  5  Biss.  486. 

"/«  re  Nachman,  114  Fed.  Rep. 
995,  8  Am.  B.  R.  180;  U.  S.  v. 
Goldstein,  132  Fed.  Rep.  789,  12 
.'\m.  B.  R.  755;  In  re  Feldstein,  103 
Fed.  Rep.  269,  4  Am.  B.  R.  321 ;  In 
re  Kanter,  117  Fed.  Rep.  356,  9  Am. 
B.  R.  104 ;  In  re  Scott,  95  Fed.  Rep. 
815,  I  Am.  B.  R.  49;  In  re  Shera, 
114  Fed.  Rep.  207,  7  Am.  B.  R. 
552;  In  re  Walsh,  104  Fed.  Rep. 
518,  4  Am.  B.  R.  693;  In  re  Frank- 
lin Syndicate,   114  Fed.  Rep.  205,  4 


Fed.  Rep.  305,  2  Am.  B.  R.  755. 

But  see  Mackel  v.  Rochester  (C. 
C.  A.  9th  Cir.),  102  Fed.  Rep.  314, 
4  Am.  B.  R.  I ;  Counselman  v. 
Hitchcock,  142  N.  S.  562,  35  L.  Ed. 
1 1 10. 

'"  In  re  Hess,  136  Fed.  Rep.  988,  14 
Am.  B.  R.  826,  s.  c.  134  Fed.  Rep. 
109,  14  Am.  B.  R.  559;  In  re  Levin, 
131  Fed.  Rep.  388,  11  Am.  B.  R. 
382. 

"  Counselman  v.  Hitchcock,  142 
U.  S.  562,  35  L.  Ed.  mo;  Burroll 
V.  Montana,  194  U.  S.  572,  48  L. 
Ed.   1122,  12  Am.  B.  R.  132. 

'"  B.  A.  1898,  Sec.  7«.  /"  re  Hess, 
134  Fed.  Rep.  109,  14  Am.  B.  R. 
559,  136  Fed.  Rep.  988;  Burrell  v. 
Montana,  194  U.  S.  572,  48  L.  Ed. 
1 122,   12  Am.   B.   R.    132. 


644  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

for  the  rule  '^^  that  this  provision  does  not  grant  him  the  im- 
munity contemphitecl  by  Sec.  5  of  the  Constitution.  It  can 
have  no  other  effect  than  to  protect  the  bankrupt  against  the 
use  of  his  te-.timony  in  any  prosecution  in  the  courts  of  the 
United  States.  It  wouhl  be  no  answer  to  a  prosecution  which 
might  be  instituted  in  the  state  courts  which  are  not  created 
by  acts  of  congress  and  which  prescribe  their  own  rules  of 
proceeding  independently  of  congress.  It  has  been  held  that 
the  bankrupt  v\'aives  the  privilege  to  refuse  to  deliver  the 
books  of  account  kept  by  him  to  his  trustee  on  the  ground 
that"  the  matter  contained  therein  might  tend  to  incriminate 
him  by  filing  a  voluntary  petition  in  bankruptcy."^  He  has 
been  required  to  produce  his  books  when  testimony  was  intro- 
duced to  show  that  they  disclosed  nothing  of  an  incriminating 
character."  It  has  been  held  that  he  may  be  required  to 
state  whether  he  has  played  cards  or  faro  or  any  other  games 
of  chance  with  certain  persons  prior  to  the  proceedings  in 
bankruptcy,  although  the  answer  may  tend  to  degrade  him.-^ 

§  210.     Upon  what  topics  witnesses,  other  than  bankrupts, 
may  be  examined. 

When  a  witness  is  brought  before  the  referee  he  may  be 
examined  concerning  "the  acts,  conduct,  or  property  of  a 
bankrupt  whose  estate  is  in  the  process  of  administration."  ^ 

Such  witnesses  must  answer  all  questions  concerning  the 
acts,  conduct,  or  property  of  the  bankrupt,  and  their  dealings 
with  him,  even  though  their  answers  may  furnish  evidence 
to  be  used  in  a  civil  case  brought,  or  to  be  brought,  on  behalf 

°'  In  re  Sapiro,  92  Fed.  Rep.  340,  But  see  In  re  Feldstein,  103  Fed. 

I  Am.  B.  R.  296.  Rep.  269,  4  Am.  B.  R.  321. 

But  see   U.    S.   v.   Goldstein,    132  '  B.  A.  1898,  Sec.  21a,  as  amended 

Fed.  Rep.  789,  12  Am.  B.  R.  755.  Feb.    5,    1903,   32    Stat,   at   L.    797; 

^In  Hess,  136  Fed.  Rep.  988,  14  People's  Bank  v.  Brown  (C.  C.  A. 

Am.  B.  R.  826,  134  Fed.  Rep.   109,  3d  Cir.),  112  Fed.  Rep.  652,  7  Am. 

14  Am.  B.  R.  559.  B.  R.  475;  In  re  Carley,   106  Fed. 

"^  In  re  Richards,  No.  1 1769  Fed.  Rep.  862,  5  Am.  B.  R.  554. 
Cas.,  4  Ben.  303. 


EXAMINATIONS. 


645 


cf  the  trustee.-  In  respect  to  the  subject  prescribed  by  tlie 
statute  upon  which  he  may  be  examined,  the  parties  are  en- 
titled to  a  full  discovery  and  disclosure  by  him.^  Thus  a 
I.erson  who  has  purchased  claims  against  a  bankrupt  may  be 
examined  in  respect  to  the  consideration  paid  therefore  and 
where  he  obtained  the  money."'  A  president  may  be  required 
1o  give  the  consideration  of  a  judgment  obtained  by  his  bank.-^ 
It  is  nD  excuse  for  not  answering,  that  his  answer  would  re- 
veal his  own  private  business  unnecessarily,  and  possibly  to 
his  prejudice  in  another  suit  then  pending."  A  witness  may 
be  required  to  produce  books  of  account  and  other  papers  re- 
lating to  the  affairs  of  the  bankrupt.^  But  a  person  is  not 
required  to  answer  an  irrelevant  question  not  relating  to  any 
matter  of  fact  in  issue  where  the  answer  would  tend  to  degrade 
l.im,^  or  produce  books  or  papers  not  relevant  to  the  affairs 
of  the  bankrupt.^ 

The  amendment  of  1903  provides  "that  the  wife  may  be 
examined  only  touching  businesss  transacted  by  her  and  to 
which  she  is  a  party,  and  to  determine  the  fact  whether  she 
has  transacted  or  been  a  party  to  any  business  of  the  bank- 
rupt."^" 


-In  re  Faj'-,  No.  4708  Fed.  Cas., 
3  Ben.  660;  In  re  Pioneer  Paper 
Co.,  No.  1 1 178  Fed.  Cas.,  7  N.  B. 
R.  250;  Garrison  v.  Markley,  No. 
5256  Fed.  Cas.,  7  N.  B.  R.  246;  In 
re  Cliffe,  3  Am.  B.  R.  257,  97  Fed. 
Rep.  540. 

^  In  re  Stuyvesant  Bank,  No. 
13582  Fed.  Cas.,  6  Ben.  2,2>'<  In  re 
Trask,  No.  14141  Fed.  Cas.,  7  Ben. 
60 ;  In  re  Lathrop,  No.  8106  Fed. 
Cas.,  4  N.  B.  R.  93. 

*  In  re  Lathrop,  No.  8106  Fed. 
Cas.,  4  N.  6.  R.  93;  In  re  Trask, 
No.  14141  Fed.  Cas.,  7  Ben.  60. 

''  /))  re  Pioneer  Paper  Co.,  No. 
11178  Fed.  Cas.,  7  N.  B.  R.  250. 

"/«  re  Trask,  No.  14141  Fed. 
Cas.,   7    Ben.   60;    In    re   Danforth, 


No.  3560  Fed.  Cas.,  i  Pa.  Law  J. 
148. 

'  In  re  Fixen  &  Co.,  96  Fed. 
Rep.  748,  2  Am.  B.  R.  822;  In  re 
Carley,  106  Fed.  Rep.  862,  5  Am. 
B.  R.  554. 

Vn  re  Lewis,  No.  8312  Fed  Cas., 

4  Ben.  67. 

''In  re  Carley,  106  Fed.  Rep.  862, 

5  Am.  B.  R.  554;  In  re  Romine, 
138  Fed.  Rep.  837,  14  Am.  B.  R. 
783. 

'"  B.  A.  1898,  Sec.  20a,  as  amend- 
ed Feb.  5,  1903,  32  Stat,  at  L. 
797;  In  re  Foerst,  93  Fed.  Rep. 
190,  I  Am.  B.  R.  259;  In  re  Wor- 
rell. 125  Fed.  Rep.  159,  10  Am.  B. 
R.  744- 


646  l.A\\'     AXD    PROCF.KDINUS    IN     HAN  KKU  PTCV. 

Altb.oui^h  a  witness  is  roquirctl  to  (.lisclosc  all  matters  touch- 
mi;'  the  trade,  property  aiul  conduct  of  a  bankrupt,  he  is  en- 
titled to  the  usual  privileges  and  exemptions  in  regard  to 
answering  ((uestions."  The  question  of  privilege  of  com- 
munications nu)st  frc(|uentl}'  arises  with  rel'erence  to  attorneys 
at  law.  A  person  who  claims  to  have  acted  as  counsel  for  a 
bankrupt  can  not,  on  that  ground,  refuse  to  be  sworn  as  a 
w'itness.^"  1'he  privilege  can  not  be  interposed  until  a  ques- 
tion is  asked  which  invades  the  privilege.  The  privilege  of 
attorneys  ex'.ends  only  to  information  deri\-ed  from  their 
clients  as  such.  Information  derived  from  other  persons,  or 
i>ource3,  although  derived  or  obtained  wdiile  acting  as  attor- 
ney, is  not  privileged. ^•'  The  principle  of  the  rule  does  not 
apply  to  the  discovery  of  facts  within  the  knowledge  of  the 
attorney,  which  were  not  communicated  or  confided  to  him  by 
his  client,  although  he  became  acquainted  with  the  facts  while 
engaged  in  his  professional  duty  as  the  attorney  of  the  client. 
Thus  he  mav  be  required  to  answer  questions  in  regard  to 
the  acts  relating  to  a  conveyance  of  land  to  and  by  him,^'*  or 
the  superintendence  of  an  auction  sale  of  a  stock  of  goods 
and  the  disposition  of  the  proceeds,^^  or  wdiether  he  drew  or 
directed  the  drawing  of  a  certain  deed,^*'  or  a  certain  declara- 
tion of  trust  between  the  bankrupt  and  certain  peisons 
named, ^^  or  whether  at  a  certain  date  the  witness  received 
any  checks  drawn  to  the  order  of  the  bankrupt  by  a  certain 
named  person  and  what  disposition  was  made  of  such  checks 
so  received,^"  or  what  affairs  of  the  bankrupt  were  the  subject 
of  conversation  between  him  and  other  persons.' 


IG 


"  In   re   Kreugcr,   No.   7942   Fed.       pinwall,  No.  591  Fed.  Cas.,  7  Ben. 
Cas.,  2  Low.   182.  433;    Spenceley    v.    Schulenberg,    7 


13 


'/m    re    Woodward,    No.    17999  East.  357. 

Fed.  Cas.,  4  Ben.   102.  "  In    re    Bellis,     No.     1274    Fed. 

"People's    Bank    v.    Brown     (C.  Cas.,    3    Ben.    386     (partial    report 

C.  A.  3d  Cir.),   112  Fed.  Rep.  652,  only),  3  N.   B.  R.   199. 

7  Am.  B.  R.  475;  In  re  O'Donohoe,  "/«    re    O'Donohue,    No.    10435 

No.    10435    Fed.    Cas.,   3    N.    B.    R.  Fed.  Cas.,  3  N.  B.  R.  245. 

245;    In   re    Bellis,    No.    1274    Fed.  '"/«   re  Aspinwall,  No.   591    Fed. 

Cas.,    3    Ben.    386    (partial    report  Cas.,  7  Ben.  433. 
only),  3  N.  B.  R.   199;  In  re  As- 


EXAMINATIONS.  647 

Where  a  witness  declines  to  testify  on  the  ground  of  privi- 
leged communication  it  is  for  the  court,  and  not  for  the  wit- 
ness, to  determine  whether  the  communication  is  privileged/' 
For  this  purpose  the  witness  may  be  subjected  to  such  ques- 
tions as  may  be  necessary  to  enable  the  court  to  determine  the 
question. 

A  person  other  than  the  bankrupt  can  not  be  compelled  to 
give  testimonv  which  may  tend  to  incriminate  him/* 

Evidence  taken  before  a  referee  in  bankruptcy  may  be  used 
in  civil  suits  pending  in  either  state  or  federal  courts  for  the 
purpose  of  impeaching  a  witness/'' 

§  2ioa.    Examination   of  witnesses   residing  without  the 
district. 

A  witness,  who  resides  beyond  the  district  or  state  and 
more  than  one  hundred  miles  from  the  court,  can  not  be 
compelled  to  appear  for  examination  before  a  referee  of  the 
court  in  wh'ch  bankruptcy  proceedings  are  pending.^  The 
examination  of  such  witnesses  may  be  by  deposition. 

The  bankrupt  act  provides  that  the  right  to  take  depositions 
in  proceedings  under  this  act  shall  be  determined  and  enjoyed 
according  to  the  United  States  laws  now  in  force,  or  such  as 
may  be  hereafter  enacted  relating  to  the  taking  of  depositions, 
except  as  herein  provided."  The  United  States  laws  make 
ample  provisions  for  such  examinations.  Depositions  dc  bene 
esse  may  be  taken,"  or  a  dedimiis  potestatum  or  a  commission 
may  be  issued,*  or  depositions  may  be  taken  under  the  equity 
lules.^  Amp'e  provision  is  made  for  the  issuance  of  a  sub- 
poena by  the  clerk  of  any  court  in  the  United  States  where 
(he  witnesses  reside,  to  take  the  testimony  of  such  absent  wit- 

"  People's    Bank    v.    Brown,    112  B.    R.    300;    In    re    Hemstreet,    117 

Fed.  Rep.  652,  7  Am.  B.  R.  475.  Fed.  Rep.  568.  8  Am.  B.  R.  760. 
-     "/«  re  Smith,  7  Am.  B.  R.  213,  '  B.   A.    i8y8.   Sec.  21b. 

ri2  Fed.  Rep.  509.  "  R.   S.   Sec.  863. 

"  Knowlton  v.  ATosely,  105  Mass.  '  R.  S.  Sec.  866. 

136.  '' R.  S.  Sees.  862,  917;  F)q.  Rules 

'  B.    A.     1898,    Sec.    41(7.      /;/    re  67  and  71. 
Cole,    133    Fed.    Rep.    414,    13    Am. 


648  LAW     AND    PROCEEDINGS    IN    BANKRUl'TCY. 

nesses  before  n  commissioner  appointed  b)^tlie  court  where  the 
proceedings  are  pending,  and  a  neglect  or  refusal  to  attend  or 
testify  can  be  enforced  by  the  judge  of  the  court  which  issues 
ihe  subpoena."  A  subpoena  duces  tecum  may  be  had  and  en- 
forced in  such  an  examination/  The  subpoena  may  run  to 
any  district  within  one  hundred  miles  of  the  place  of  holding 
court,  but  a  person  can  not  be  compelled  to  attend  as  a  witness 
at  a  distance  of  more  than  one  hundred  miles,  and  he  can  not 
be  compelled  to  leave  the  state  wherein  he  resides.^ 

It  seems  therefore  that  a  court  having  charge  of  the  ad- 
ministration of  a  bankrupt's  assets,  may  order  that  any  person 
having  knowledge  "concerning  the  acts,  conduct  or  property 
of  a  bankrupt,"  but  who  resides  beyond  the  district  or  state 
and  more  than  one  hundred  miles  from  the  court, -shall  be 
examined  before  a  commissioner  appointed  for  the  purpose.® 
Any  officer,  bankrupt  or  creditor  may  apply  to  the  court  ad- 
ministering the  bankrupt's  assets  for  an  order  to  take  the  depo- 
sitions of  absent,  as  well  as  resident,  witnesses/"  The  court 
will  then  make  an  order,  in  a  proper  case,^  for  a  commission 
to  issu^"^  to  a  referee  or  other  person  residing  in  the  same  dis- 
trict as  the  witnesses,  authorizing  him  to  take  the  depositions. 
Notice  of  the  taking  of  the  depositions  must  be  filed  with  the 
referee  in  every  case."  When  depositions  are  to  be  taken  in 
opposition  to  the  allow^ance  of  a  claim  notice  must  also  be 
served  upon  ihe  claimant,  and  when  in  opposition  to  a  dis- 
charge notice  must  be  served  upon  the  bankrupt." 

If  the  witness  refuses  to  answer  a  question  the  judge  of  the 
bankruptcy  cuurt  in  the  district  in  which  the  examination  is 

"R.   S.   Sec.  868.  554;   In   re  Sturgeon    (C.   C.   A.   2\\ 

'  R.  S.  Sees.  868,  869.  Cir.),  139  Fed.  Rep.  608,  14  Am.  B. 

*  R.  S.  Sec.  876.    B.  A.  1898,  Sec.  R.  681 ;  In  re  Watkinson  Co.,   130 

41a;    In    re    Cole,    133    Fed.    Rep.  Fed.   Rep.  218,   12  Am.   B.  R.  370; 

414,  13  Am.  B.  R.  300;  In  re  Hem-  In    re    Hemstreet,     117    Fed.    Rep. 

street,  117  Fed.  Rep.  568,  8  Am.  B.  568,  8  Am.  B.  R.  760. 

R.  760.  ""  B.  A.  1898,  Sec.  2ia,  as  amend- 

^  In   re   Williams,    123    Fed.   Rep.  ed  Feb.  5,  1903,  32  Stat,  at  L.  797. 

321,  10  Am.  B.  R.  538;  In  re  Car-  "  B.   A.    1898,   Sec.   2ir, 
ley,  106  Fed.  Rep.  862,  5  Am.  B.  R. 


EXAMINATIONS. 


649 


being  had  is  the  proper  person  to  whom  to  apply  to  compel 
the  witness  to  answer/- 

§  2iob.    When    testimony    may   be    used    in    subsequent 
proceedings. 

Testimony  taken  upon  the  examination  of  the  bankrupt  is 
taken  in  the  whole  pending  proceeding  and  may  be  introduced 
and  read  upon  the  hearing  of  a  petition  for  a  discharge.^ 
The  testimony  of  officers  of  a  bankrupt  corporation  has  been 
admitted  in  a  subsec[uent  proceeding  by  the  trustee,  to  require 
them  to  surrender  money  or  property  of  the  estate  alleged 
to  be  under  their  control."  But  the  testimony  of  persons 
other  than  the  bankrupt  is  not  admissible  in  subsequent  pro- 
ceedings or  upon  the  hearing  of  a  petition  for  a  discharge.^ 
\\liere  a  claimant  was  not  in  fact  a  party  and  could  not  exer- 
cise the  right  of  cross  examination  at  the  time  tlie  witnesses 
were  examined,  the  witnesses,  including  the  bankrupt,  must 


'■/«  re  Carley,  io6  Fed.  Rep. 
862,  5  Am.  B.  R.  554;  R.  S.  Sees. 
868.   869. 

^In  re  Wilcox  (C.  C.  A.  2d 
Cir.),  109  Fed.  Rep.  62S,  6  Am.  B. 
R.  362;  In  re  Wiesen  Bros.,  135 
Fed.  Rep.  442,  14  Am.  B.  R.  347; 
In  re  Alphin  &  Lake  Cotton  Co.," 
131  Fed.  Rep.  824,  12  Am.  B.  R. 
653;  In  re  Cooke,  109  Fed.  Rep. 
631,  5  Am.  B.  R.  434;  In  re  Bard, 
108  Fed.  Rep.  208,  5  Am.  B.  R. 
810. 

'^  In  re  Alphine  &  Lake  Cotton 
Co.,  131  Fed.  Rep.  824,  12  Am.  B. 
R.  653. 

'/h  re  Wiesen  Bros.,  135  Fed. 
Rep.  442,  14  Am.  B.  R.  347;  In  re 
Alphin  &  Lake  Cotton  Co.,  131 
Fed.  Rep.  824,  12  Am.  B.  R.  653. 

In  re  Wilcox,  109  Fed.  Rep.  628, 
6  Am.  B.  R.  366,  the  circuit  court 
of  appeals  for  the  second  circuit 
said:   "The  testimony  of  lliird  per- 


sons upon  these  roving  attempts  at 
discovery  is  not  directed  to  a  de- 
fined issue,  and  therefore  the  rules 
of  evidence  are  not  carefully  ap- 
plied, and  testimony  is  liable  to  be 
given  which  is  not  carefully  guard- 
ed and  may  be  unconsciously  de- 
rived from  hearsay.  Inasmuch  as 
no  issue  has  been  framed,  the  bank- 
rupt or  his  counsel  can  not  al- 
ways perceive  the  inferences  which 
inay  be  drawn  from  the  testimony. 
and  therefore  will  not  produce  re- 
butting facts.  The  danger  in  us- 
ing the  information,  which  has 
thus  been  gathered  in  one  of  these 
'fishing  excursions,'  as  testimony 
upon  which  a  court  can  rely  in  an 
issue  between  the  bankrupt  and  his 
creditors,  is  such  as  to  render  its 
admission  inexpedient.  It  is  lia- 
ble to  produce  an  injustice,  and 
the  testimony  may,  therefore,  be 
regarded  as  inadmissible." 


650  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

be  recalled  unless  the  party  ccinsents  to  the  use  of  the  testi- 
niouy   as  it  appears  iu  the  proceedings.' 

Evidence  taken  before  a  referee  in  l)ankruptcy  may  be  used 
in  civil  suits  pending  in  either  state  or  federal  courts  for  the 
l.urpose  of  impeaching-  a  witness.  But  testimony  taken  in  one 
proceeding  can  not  be  used  as  evidence  in  another  proceeding 
except  by  the  consent  of  parties.^ 

V»    re    Keller.     109    Fed.    Rep.  'In  re  Rosenberg,   116  Fed.   Rep 

118,  6  Am.  B.  R.  334-  402,  8  Am.  B.  R.  624. 


THE    BANKRUPT DUTIES,     PROTECTION,     ETC.  651 


CHAPTER  XX. 

THE    BANKRUPT DUTIES,     PROTECTION    AND    EXTRADITION. 

§  211.     Who  is  a  bankrupt. 

The  word  "bankrupt"  as  used  in  the  bankrupt  act  is  de- 
fined to  "include  a  person  against  whom  an  invokmtary  peti- 
tion or  an  appHcation  to  set  a  composition  aside  or  to  revoke 
a  discharge  has  been  filed,  or  who  has  filed  a  voluntary  peti- 
tion, or  who  has  been  adjudged  a  bankrupt."  ^ 

§  212.    His  duty  to  attend  meetings. 

The  bankrupt  must  attend  the  first  meeting  of  his  cred- 
itors, if  directed  by  the  court,  or  a  judge  thereof,  to  do  so/ 
But  he  is  not  required  to  attend  the  first  or  any  subsequent 
meeting  -  of  his  creditors  unless  specially  ordered  to  do  so. 
And  in  no  case  can  he  be  required  to  attend  such  meeting  at 
a  place  more  than  one  hundred  and  fifty  miles  distant  from 
his  home  or  principal  place  of  business.^  The  bankrupt  is 
entitled  to  his  actual  expenses  from  the  estate  when  required 
to  attend  at  any  place  other  than  the  city,  town,  or  village 
of  his  residence.^  But  he  can  not  be  allowed  illegitimate  ex- 
penses, for  gambling  and  traveling  expenses.* 

It  is  the  dMty  of  the  bankrupt  to  attend  the  hearing  upon 
his  application  for  a  discharge,  if  filed,  without  an  order  of 
court,  or  service  of  notice,  or  process.^  He  can  not  object  to 
attending  on  account  of  the  distance,  where  the  hearing  is  at 
the  regular  place  of  holding  court. 

'  B.  A.  1898,  Sec.  I,  clause  4.  *  In  re  Tudor,  100  Fed.  Rep.  796, 

'B.  A.  1898,  Sec.  7,  clause  \',  In  4  Am.  B.  R.  78;  In  re  Wilson,  116 

re  Eagles,  99  F.  695,  3  Am.  B.  R.  ¥cd.  Rep.  419,  8  Am.  B.  R.  612. 

7,1.3.  °B.  A.  1898,  Sec.  7,  clause  i;  In 

^  See  In  re  Dumahaut,   No.  4124  re  Shanker,   138  Fed.   Rep.  862,   15 

Fed.  Cas.,  15  Blatch.  20.  Am.  B.  R.   109. 
B.    A.     1898,    Sec.     7      (proviso 

clause). 


652  LAW     AND     PROCEEDINGS    IN     BANKUri'TCY. 

§  213.     Duty  to  comply  with  the  orders  of  the  court. 

h  is  expressly  made  the  duty  of  the  bankrupt  to  comply 
n-ith  all  la\v''ul  orders  of  the  court/  1die  courts  of  bank- 
ruptcy are  empowered  to  enforce  obedience  by  bankrupts  to 
such  orders  by  tine  or  imprisonment  or  by  fine  and  imi)rison- 
mcnt." 

An  order  of  court  "does  not  mean  a  written  order  always, 
but  only  an  exercise  of  authority  constituting  a  require- 
ment." ■'  Where  an  order  has  actually  been  made  by  the  court 
including  a  referee  *  it  is  binding  upon  the  bankrupt  until  it 
is  set  aside  or  reversed,  even  though  the  court  making  it  is 
without  jurisdiction.''''  It  is  not  for  the  bankrupt  to  decide 
whether  the  order  is  lawful  or  not  and  then  act  according  to 
his  own  decision,*^  or  under  the  advice  of  counsel.^  Where 
a  bankrupt  has  used  due  diligence  to  comply  with  an  order  of 
court  he  is  not  guilty  of  contempt.®  He  will  not  be  punished 
for  contempt  for  refusing  to  turn  over  property  to  his  trustee 
if  he  shows  that  the  property  is  not  in  his  possession  or  under 
his  control.^ 

A  person  is  subject  to  the  orders  of  a  court  of  bankruptcy 
whenever  he  has  been  duly  served  with  process  or  a  legal 
notice,  or  whenever  he  has  voluntarily  submitted  himself  to 

'B.    A.    1898,    Sec.    7,    clause    2.  Mullcr,     No.     5577     Fed.     Cas.,    5 

Compare  R.  S.  Sec.  5104.  Blatch.    429;    Ulman    v.    Ritter,    "^2 

'^  B.    A.    1898,    Sec.    2,    clause    13.  Fed.  Rep.  1000;  Societe  v.  Western 

See   Contempt,   Chap.  XXII.  Distilling  Co.,  42  Fed.  Rep.  96. 

^Bridges  v.  Sheldon,  7  Fed.  Rep.  ^ In  re  Carpenter,  No.  2427  Fed. 

45.  Cas.,   I   N.  B.  R.  299. 

'B.  A.  1898,  Sec.  I,  clause  7,  and  '■"  Boyd    v.    Glucklich     (C.    C.    A., 

Sec.  41.  8th  Cir.),  116  Fed.  Rep.  131,  8  Am. 

°  Wagner  v.  U.  S.    (C.  C.  A.  6th  B.  R.  393;  Ex  parte  Comingor  (C. 

Cir.),  104  Fed.  Rep.   133,  4  Am.  B.  C.  A.  6th  Cir.),  107  Fed.  Rep.  89B, 

R.  596;  Worden  v.  Searles,  121  U.  5   Am.   B.  R.   537,  affirmed    184  U. 

S.   14,  30  L.  Ed.  853;  /n  re  Eaton,  S.   18,  46  L.  Ed.  413,  7  Am.  B.  R. 

51  Fed.  Rep.  804.  421;  In  re  Cole  (C.  C.  A.  ist  Cir.), 

"  See  Atlantic  Giant  Powder  Co.  144   Fed.   Rep.   392,    16  Am.   B.   R. 

V.  Dittman  Co.,  9  Fed.  Rep.  317.  302. 

'  Burr  V.  Kimbark,  29  Fed.  Rep.  '"  /;;  re  Harris,  3  N.  Y.  Leg.  Obs. 

432;  U.  S.  V.  Memphis,  etc.,  R.  R.  152. 
Co.,  6   Fed.   Rep.  238;   Goodyear  v. 


THE    BANKRUPT DUTIES^     PROTECTION,    ETC. 


653 


the  jurisdiction  of  the  bankruptcy  court.  This  he  may  do  by 
fihng  a  petition  ^"  or  by  proving  a  debt  ^^  or  by  entering  a  vol- 
untary appearance.^" 

The  statute  expressly  authorizes  a  court  of  bankruptcy  to 
make  the  order  adj  udging  a  person  to  be  a  bankrupt ;  "  to 
direct  him  to  attend  meetings  of  creditors  "  and  to  examine 
claims/^  to  execute  papers/''  or  order  him  to  be  arrested  and 
kept  in  custody/'  or  to  appear  for  examination ;  ^^  and  gener- 
ally to  make  such  orders,  issue  such  process,  and  enter  such 
judgments  in  addition  to  those  specifically  provided  for  as 
may  be  necessary  for  the  enforcement  of  the  provisions  of 
the  act.^^  Thus  the  court  may  order  a  bankrupt  to  deliver  to 
the  trustee  money  or  other  property,  which  is  properly  a  part 
of  his  assets  and  apparently  in  his  possession.-*^  But  such 
order  should  not  direct  a  commitment  in  case  of  failure  to 
comply  with  it  without  giving  the  defendant  a  day  in  court 
with  reference  to  that  part  of  the  order.-^  The  different  law- 
ful orders  which  a  court  of  bankruptcy  may  make  with  refer- 
ence to  the  bankrupt  are  much  too  numerous  to  be  collated 
at  this  point,  even  if  it  were  possible  to  do  so.  When  such 
an  order  is  made  it  is  the  duty  of  the  bankrupt  to  comply 
with  its  terms. 


"  In  re  Kyler,  No.  7956  Fed.  Cas., 
2  Ben.  414. 

"In  re  Ulrick,  No.  14327  Fed. 
Cas.,  3  Ben.  355;  In  re  Kirtland, 
No.  7851  Fed.  Cas.,  10  Blatch.  515. 

'•^  B.  A.  1898,  Sec.  2,  clause  i. 

"B.  A.  1898,  Sec.  7,  clause  i. 

'°  B.  A.  1898,  Sec.  7  (next  to  last 
clause). 

"  B.  A.   1898,   Sec.  7,  clause  4. 

"B.  A.   1898.  Sec.  9. 

"B.  .'\.  1898,  Sec.  7,  clause  9, 
and   Sec.  21a. 

'"  B.  A.  1898,  Sec.  2,  clause  15. 

°"  Sell  wear  v.  Brown  (C.  C.  A. 
8tli  dr.),  130  Fed.  Rep.  329,  12 
Am.  B.  R.  178;  In  re  Rosser  (C. 
C.  A.  8th  Cir.),  loi   Fed.  Rep.  562, 


4  Am.  B.  R.  153;  Ripon  Knitting 
Wks.  V.  Schreiber,  loi  Fed.  Rep. 
810,  4  Am.  B.  R.  299 ;  In  re  Schles- 
inger  (C.  C.  A.  2d  Cir.).  102  Fed. 
Rep.  117,  4  Am.  B.  R.  361;  In  re 
Wil.son.  116  Fed.  Rep.  419,  8  .\m. 
B.  R.  612;  In  re  Grcenberg.  106 
Fed.  Rep.  496,  5  Am.  B.  R.  840; 
In  re  Purvine  (C.  C.  A.  5th  Cir.), 
96' Fed.  Rep.  192,  2  Am.  B.  R.  787; 
In  re  Felson,  124  Fed.  Rep.  288,  10 
Am.   B.   R.   716. 

''In  re  Cole  (C.  C.  A.  1st  Cir.), 
144  Fed.  Rep.  392,  16  Am.  B.  R. 
302;  In  re  Davison,  143  Fed.  Rep. 
673,  16  Am.  B.  R.  ^2)7 '<  J^  re  Hersh- 
kowitz,  136  Fed.  Rep.  950,  14  Am. 
B.  R.  86. 


654  LAW     AM)     I'ROCKEDIXGS    IN     BAM  KkUPTCY. 

§  214.    Duty  with  respect  to  claims  against  his  estate. 

It  is  niatle  the  ilut\  of  ihc  hankrupt  to  oxaniiiic  the  correct- 
ness of  all  proofs  of  claims  tiled  ai;ainst  his  estate/  But  he 
can  not  he  recjuired  to  examine  them  except  when  presented 
to  him.  iniless  onlered  hy  the  court,  or  a  judj^e  thereof,  for 
catise  shown.-"  In  case  an}'  person  has  to  his  knowledge 
proved  a  false  claim  against  his  estate  it  is  his  duty  to  dis- 
close that  fact  immediately  to  his  trustee.''  In  fact,  it  is  his 
duty  immediately  to  inform  liis  trustee  of  any  attempt,  by  his 
creditors  or  other  persons,  to  evade  the  provisions  of  the  act, 
coming  to  his  knowledge.'' 

§  215.     Duty  to  execute  papers. 

It  is  the  duty  of  the  l)ankrupt  to  execute  and  deliver  such 
papers  as  may  be  ordered  by  the  court.'  Under  this  provis- 
ion the  court  may  order  the  bankrupt  to  execute  and  deliver 
to  the  trustee  the  proper  papers,  to  enable  him  to  prosecute 
or  defend  suits  pending  in  the  state  courts,  in  his  own  name 
in  the  same  manner  and  with  the  like  effect  as  they  might 
have  been  prosecuted  or  defended  by  the  bankrupt." 

As  the  bankrupt  statute  has  no  extra-territorial  effect,  real 
estate  situated  in  a  foreign  country  does  not  vest  in  the  trus- 
tee by  virtue  of  the  act.'^  It  is  therefore  made  the  duty  of 
the  bankrupt  to  execute  to  his  trustee  transfers  of  all  of  his 
property  in  foreign  countries.* 

§  216.     Duty  to  prepare  a  schedule  of  his  debts  and  assets. 

For  the  purpose  of  advising  the  court,  its  officers  and  per- 
sons interested  in  his  estate,  the  bankrupt  is  required  to  file 

^  B.  A.  1898.  Sec.  7,  clause  3.  "  See  In  re  Clark.  No.  2798  Fed. 

■  B.  A.   1898,   Sec.  7    (last  clause  Cas.,  4   Ben.  8S;    Clark  v.    Binnin- 

but  one).  ger,  39  How.  Prac.  363;  Samson  v. 

^B.  A.  1898,  Sec.  7,  clause  7;  In  Burton,  No.  12285  Fed.  Cas.,  5  Ben. 

re   Ankeny,    100    Fed.    Rep.    614,   4  325. 

Am.  B.  R.  72.  '  Oakey  v.   Bennett,   t  i    flow.  33, 

*B.  A.  1898,  Sec.  7,  clause  6.  13  L.  Ed.  593;  Barnett  v.  Poole,  23 

'  B.    A.    1898,    Sec.    7,    clause    4.  Texas,  517. 

Compare  R.  S.  Sec.  5051.  *  B.  A.  1898,  Sec.  7,  clause  5. 


THE    BANKRUPT DUTIES,     PROTECTION,     ETC.  655 

a  statement  of  his  financial  condition.  The  act  makes  it  his 
duty  to  "prepare,  make  oath  to,  and  file  in  court  within  ten 
days,  unless  further  time  is  granted,  after  the  adjudication, 
if  an  involuntary  bankrupt,  and  with  the  petition  if  a  volun- 
tary bankrupt,  a  schedule  of  his  property,  showing  the  amount 
and  kind  of  property,  the  location  thereof,  its  money  value  in 
detail,  and  a  list  of  his  creditors,  showing  their  residences,  if 
known,  if  unknown,  that  fact  to  be  stated,  the  amounts  due 
each  of  them,  the  consideration  thereof,  the  security  held  by 
them,  if  any,  and  a  claim  for  such  exemptions  as  he  may  be 
entitled  to.  all  in  triplicate,  one  copy  of  each  for  the  clerk,  one 
for  the  referee,  and  one  for  the  trustee."  ^ 

The  requisites  of  a  schedule  are  further  considered  in  con- 
nection with  th2  proceedings  in  voluntary  and  involuntary 
bankruptcy.- 

§  217.    Duty  to  submit  to  an  examination. 

It  is  made  the  duty  of  the  bankrupt,  when  present  at  the 
first  meeting  of  his  creditors,  and  at  such  other  times  as  the 
court  shall  order,  to  submit  to  an  examination  concerning  the 
conducting  of  his  business,  the  cause  of  his  bankruptcy,  his 
dealings  with  his  creditors  and  other  persons,  the  amount, 
kind  and  whereabouts  of  his  property,  and,  in  addition,  all 
matters  which  may  affect  the  administration  and  settlement  of 
his  estate;  but  no  testimony  given  by  him  shall  be  offered  in 
evidence  against  him  in  any  criminal  proceeding.^  This  sub- 
ject is  further  considered  in  another  place." 

§  218.    Protection  from  arrest. 

A  bankrupt  is  exempt  from  arrest  upon  civil  process  ex- 
cept in  the  following  cases :  First,  when  issued  from  a  court 
of  bankruptcy  for  contempt  or  disobedience  of  its  lawful  or- 
ders; second,  when  issued  from  a  state  court  having  jurisdic- 

'B.  A.  TR98.  Sec.  7,  clause  8.  also  In  re  Soper,  i  Am.  B.  R.  193: 
Mn  voluntary  bankruptcy.   Chap.  Gen.  Ords.  V  and  TX. 
IX.  ante:  in  involuntary  bankrupt-  '  B.  A.  1898,  Sec.  7.  clause  9. 
cy.  Chap.  X,  flH/r,-  in  bankruptcy  of  'See   Examination   of   tlic    Bank- 
partnership,    Chap.    XT,    ante.      See  rupt,  Chap.  XIX,  ante. 


656 


LAW     AND    PROCEEDINGS    IN     BANKRUPTCY. 


tion,  and  ser\od  within  sucli  stale,  uY>on  a  clcl)t  or  claim  from 
which  his  dischari^c  in  hankniptcy  would  not  be  a  release; 
and  in  such  case  he  shall  he  exempt  from  such  arrest  when  in 
attendance  upon  a  court  of  bankruptcy  or  engaged  in  the  per- 
formance of  a  duty  imposed  by  the  act.* 

The  object  of  this  provision  is  obviously  to  protect  a  bank- 
rupt from  arrest  in  a  suit  founded  on  a  debt  from  which  a 
discharge  in  bankruptcy  w  ill  he  a  release. '■  A  court  of  bank- 
ruptcy has  no  power  to  cause  the  arrest  of  a  bankrupt  for  debt. 
A  state  court  can  cause  the  arrest  of  a  bankrupt  only  on  judg- 
ments not  affected  by  bankruptcy  proceedings,  when  such  ar- 
rest is  permitted  by  laws  of  the  state  where  the  process  is 
issued  and  served.^  In  such  cases  he  is  exempt  from  such 
arrest  when  in  attendance  upon  a  court  of  bankruptcy  or  en- 


'B.  A.  1898,  Sec.  ga,  Gen.  Ord. 
30.  Compare  R.  S.  Sec.  5107.  In  re 
Dresser,  124  Fed.  Rep.  915,  10  Am. 
B.  R.  270;  In  re  Lewensohn,  99 
I^ed.  Jiy  3  Am.  B.  R.  594;  affirmed 
in  104  Fed.  Rep.  1006,  44  C.  C.  A. 

309- 

■Barrett  v.  Prince  (C.  C.  A.  7th 
Cir.),  143  Fed.  Rep.  302,  16  Am.  B. 
R.  64. 

Gen.  Ord.  30  provides  for  the 
release  if  a  debtor  is  committed 
after  the  filing  of  his  petition  upon 
process  in  any  civil  action  founded 
upon  a  claim  provable  in  bank- 
ruptcy. It  is  clear  that  claims  may 
be  provable  in  bankruptcy  which 
are  not  released  by  discharge.  In 
this  respect  the  general  order  must 
give  way  to  the  terms  of  the  stat- 
ute. This  was  the  interpretation  of 
general  order  27  under  the  act  of 
1867,  from  which  the  language  of 
general  order  30  is  evidently  taken. 
In  re  Glaser,  No.  4574  Fed.  Cas.,  2 
Ben.  180,  it  was  held  that  the  pro- 
visions of  general  order  27,  so  far 
as  they  authorize  the  discharge, 
from  arrest  or  imprisonment,  of  a 


bankrupt  arrested  on  process  found- 
ed on  a  claim  provable  in  bank- 
ruptcy, where  the  claim  was  one 
from  which  his  discharge  in  bank- 
ruptcy will  not  release  him,  were 
not  warranted  by  the  bankruptcy 
act  of  1867. 

That  the  bankrupt  can  not  be 
released  from  imprisonment  if  the 
arrest  is  based  upon  any  debt  from 
which  a  discharge  would  not  be  a 
release,  consult  In  re  Kimball,  No. 
7767  Fed.  Gas.,  2  Ben.  38;  In  re 
Whitehouse,  No.  17564  Fed.  Gas.,  i 
Low.  429;  In  re  Migel,  No.  9538 
Fed.  Gas.,  2  N.  B.  R.  481 ;  In  re 
Kimball,  No.  7769  Fed.  Gas.,  6 
Hlatch.  292,  affirming  No.  7768  Fed. 
Gas.,  2  Ben.  554;  In  re  Seymour, 
No.  12684  Fed.  Gas.,  i  Ben.  348; 
In  re  Robinson,  No.  1 1939  Fed. 
Gas..  6  Blatch.  253 ;  In  re  Patter- 
son, No.  10817  Fed.  Gas.,  2  Ben. 
155;  /;;  re  Williams,  No.  17700 
Fed.  Gas.,  2  Biss.  233. 

*  Knott  v.  Putnam.  107  Fed.  Rep. 
907,  6  Am.  B.  R.  80;  In  re  Mar- 
cus (C.  G.  A.  Tst  Gir.),  IDS  Fed. 
Rep.  907,  5  Am.  B.  R.  365. 


THE    BANKRUPT DUTIES,     PROTECTION,     ETC.  657 

gaged  in  the  performance  of  duty  imposed  by  the  bankruptcy 
act.  A  bankrupt  is  not  protected  from  arrest  on  execution  on 
a  judgment  for  costs  rendered  against  him  in  a  state  court 
after  adjudication  in  bankruptcy/ 

The  protection  of  a  debtor  from  arrest  upon  civil  process 
is  co-extensive,  in  point  of  time,  with  the  proceedings  in  bank- 
ruptcy. The  exemption  is  Hmited  to  bankrupts.  The  pro- 
tection begins  as  soon  as  the  debtor  is  deemed  bankrupt  under 
the  statute.  The  act  itself  defines  the  word  "bankrupt"  to 
"include  a  person  against  whom  an  involuntary  petition  or  an 
application  to  set  a  composition  aside  or  to  revoke  a  discharge 
has  been  filed,  or  who  has  filed  a  voluntary  petition,  or  who 
has  been  adjudged  a  bankrupt.^  It  is  therefore  clear  that 
it  is  not  necessary  that  the  debtor  shall  have  been  adjudged  a 
bankrupt.  The  protection  from  arrest  begins  immediately 
upon  filing  a  petition,  either  in  voluntary  or  involuntary  bank- 
ruptcy. It  extends  during  the  whole  period  of  the  pendency 
of  the  proceedings  in  bankruptcy.''  The  debtor  is  not  en- 
titled to  protection  from  arrest,  or  to  relief  if  arrested,  by 
virtue  of  the  provision  quoted  above,  after  the  termination  of 
the  proceedings  for  discharge.'^ 

The  protection  of  a  bankrupt  is  expressly  stated  to  be  an 
exemption  from  arrest  upon  civil  process.  The  exemption  ex 
tends  to  arrests  upon  any  civil  process.  There  is  no  distinc- 
tion between  an  arrest  on  mesne  and  final  process.®  But  there 
is  nothing  in  the  statute  to  prevent  a  bankrupt  being  arrested 
and  imprisoned  upon  criminal  process.^ 

The  protection  afforded  a  bankrupt,  by  Section  9  of  the 
act,  does  not  apply,  where  the  arrest  was  made  prior  to  the 
commencement  of  the  bankruptcy  proceedings,   although  he 

*/;i    re   Marcus    (C.     C.     A.    ist  Cas.,  2  Ben.  554,  6  Blatch.  292;  see 

Cir.),   105  Ih-(1.   Rep.  907.  5  Am.   B.  also    In    re    Dole.    No.    3964    Fed. 

R-  365-  Cas.,   II   Blatch.  499. 

"B.  A.  t8q8,  Sec.  i,  clause  4.  "In  re  Wiggers,   No.   17623   Fed. 

•  In  re  I>ewensohn,  99  Fed.  Rep.  Cas.,   2   Biss.    71 ;   In   re   Mifflin,    i 

73.  3  Am.  B.  R.  594;  affirmed,  104  Penn.  Law  Jour.  146. 

I'ed.  Rep.   1006.  44  C.  C.  A.  309.  "  See    Stockvvell    v.    Silloway,    105 

'/«    re    Kimball,    No.    7768    Fed.  Mass.  517. 


058 


I. AW    AM)    rui )».1':edings  in    uaiN  kkuitcy. 


10 


may  he  in  custody,  ov  in  pristMi  after  the  petition  is  tiled 
It  is  a  hankrnpt,  and  not  a  tlebtiM-.  who  is  exempt  from  arrest. 
'I  he  bankrupt  is  exempt  from  arrest  only  and  not  from  im- 
pris(.Miment.  Seetion  '',  tlu'refDre.  does  not  authori/.e  a  court 
vi  bankruptcy  to  release  a  banl^rnpt  from  custody  or  imprison- 
ment where  he  w  as  arrested  prior  to  the  tiling  of  the  petition/" 
\\  here  the  arrest  is  made  after  the  petition  is  hied,  the  court 
may  release  him  on  a  writ  of  habeas  corpus.^^  A  l)ankrupt  out 
on  bail  is  deemed  under  arrest,  to  all  intents  and  purposes, 
the  same  as  if  he  had  not  been  released  upon  bail.*-  He  may 
be  surrendered  to  the  jailor  by  his  bail.  A  ccnnt  of  bank- 
ruptcy can  not,  in  such  case,  order  his  release.  So  also  the 
restoring  a  debtor  to  confinement,  from  which  he  had  obtained 
a  temporary  relief,  pending  an  appeal,  is  not  an  arrest  within 
the  meaning  of  the  clause  under  consideration.^^  And  a  jailor 
has  the  right  to  pursue  a  bankrupt,  who  has  escaped,  and 
retake  him.  Such  a  person  is  still,  in  law,  and  for  the  benefit 
of  the  jailor,  considered  to  be  in  custody 


14 


§  219.     When  a  bankrupt  may  be  arrested. 

A  bankrupt  may  be  arrested  upon  a  criminal  process  issued 
from  a  court  of  bankruptcy,  or  other  court  of  the  United 
States,  or  a  state  court.     His  exemption  is  limited  to  arrests 


'"  In  re  Claiborne,  log  Fed.  Rep. 
74,  5  Am.  B.  R.  812;  In  re  Walker, 
No.  17060  Fed.  Cas.,  i  Low.  222; 
Hazelton  v.  Valentine,  No.  6287 
Fed.  Cas.,  i  Low.  270 ;  Minon  v. 
Van  No  strand,  No.  9542  Fed.  Cas., 
I  Low.  458,  affirmed  in  No.  9641 
Fed.  Cas.,  Holmes  251 ;  In  re  Chen- 
ey, No.  2636  Fed.  Cas.,  S  Law  Rep. 
19;  In  re  Rank,  No.  11566  Fed. 
Cas.,  Crabbe,  493 ;  In  re  Hoskins, 
No.  6712  Fed.  Cas.,  Crabbe,  466; 
Bank  v.  Hatch,  57  N.  H.  460;  Hus- 
sey  V.   Danforth,   yy  Me.    17. 

But   see   People  v.   Erlanger,   132 


Fed.  Rep.  883,  T3  Am.  B.  R.  197. 

"  Sec.  220,post. 

'■  In  re  Cheney,  No.  2636  Fed. 
Cas.,  5  Law  Rep.  19;  Hazleton  v. 
Valentine,  No.  6287  Fed.  Cas.,  i 
Low.  270;  In  re  Rank,  No.  11 566 
Fed.  Cas.,  Crabbe,  493 ;  Stockwell  v. 
Silloway,  100  Mass.  287.  But  see 
Foxall  V.  Levi,  No.  5015  Fed.  Cas., 
I  Cranch.  C.  C.  139;  Lingan  v. 
Bayley,  No.  8370  Fed.  Cas.,  I 
Cranch,  C.  C.  112. 

"  Stockwell  V.  Silloway,  100 
AL-iss.  287. 

'*  Anderson  v.  Hampton,  i  B.  & 
Aid.  308. 


THE    BANKRUPT DUTIES^    PROTECTION,     ETC.  659 

on  civil  process/  Power  is  expressly  conferred  upon  the 
courts  of  bankruptcy,-  and  the  circuit  courts,^  to  arraign,  try, 
and  punish  bankrupts  for  violations  of  the  bankrupt  statute. 
There  is  no  limitation  or  restriction  upon  state  courts  with 
respect  to  arrests  or  punishment  of  bankrupts  convicted  of 
crimes  or  misdemeanors  under  the  state  laws.* 

A  bankrupt  may  be  arrested  upon  civil  process,  either  mesne 
or  final,  in  three  classes  of  cases. 

First  :  For  Contempt. — A  bankrupt  may  be  arrested 
upon  civil  process,  when  issued  from  a  court  of  bankruptcy, 
for  contempt  or  disobedience  of  its  lawful  orders.'*  This  in- 
cludes contempt  committed  before  a  referee  and  the  disobe- 
dience of  a  lawful  order,  process,  or  writ  of  a  referee.*^  The 
power  to  enforce  obedience  by  bankrupts  to  all  lawful  orders, 
by  fine  or  imprisonment,  or  by  fine  and  imprisonment,  is  ex- 
pressly conferred  upon  courts  of  bankruptcy.'  Thus,  the 
bankrupt  is  brought,  at  all  times,  within  the  control  and  dis- 
position of  the  court. 

Second  :  Upon  a  Debt  not  Released  by  a  Discharge. — 
A  bankrupt  may  l)e  arrested  upon  civil  process,  issued  from 
a  state  court  having  jurisdiction,  and  served  within  such  state, 
upon  a  debt  or  claim  from  which,  liis  discharge  in  bankruptcy 
would  not  be  a  release,  and  in  such  case  he  is  exempt  from  such 
arrest  when  in  attendance  upon  a  court  of  bankruptcy  or  en- 
gaged in  the  performance  of  a  duty  imposed  by  the  act.*'  Such 
arrests  can  be  made  only  in  states  where  such  proceedings  are 
authorized  by  the  state  law. 

In  order  that  a  bankrupt  may  be  arrested  on  civil  process 


'  B.  A.  1898,  Sec.  9.  fined   to   "mean   the  court  of  bank- 

'  B.    A.    1898,    Sec.    2,    clause    4,  riiptcy    in    which    the    proceedings 

and  Sec.  29.  are  pending,  and   may   include  the 

'B.  A.  1898,  Sec.  23c.  referee."      B.    A.      1898,     Sec.     i, 

*  See   Stockwell   v.    Silloway,    105  clause  7. 

Mass.  517.  '  B.   A.    1898,   Sec.   2,   clauses   13 

°B.  A.  1898.  Sec.  ga.  and  16. 

"B.   A.    1898,    Sec.   4\a,   and   Sec.  "  B.  A.  1898,  Sec.  ga ;  In  re  Mar- 

2.  clause   16.  cus    (C.   C.   A.   1st  Cir.),    105   Fed. 

"Its"   equals   "court's"   and    is   flc-  Rep.   907,   5  Am.   B.   R.  365. 


OhO  T.AW     AM)     PROCEEDINGS    IN     HANKRUPTCY. 

issued  by  a  stale  court,  first,  it  must  be  served  within  the 
state  in  which  the  court  issuing  is  held;  and,  second,  the 
suit  must  be  founded  upon  a  debt  or  claim  from  which  a  dis- 
charge in  bankruptcy  will  not  release  him.  The  statute  pro- 
vides '•'  that  "a  tlischarge  in  bankruptcy  shall  release  a  bank- 
rupt from  all  his  provable  debts/"  except  such  as,  first,  are 
due  as  a  tax  levied  by  the  United  States,  the  state,  county, 
district  or  municipality  in  which  he  resides;  second,  are  lia- 
bilities for  obtaining  property  by  false  pretenses,  or  false 
representations,  or  for  wilful  and  malicious  injuries  to  the 
person  or  property  of  another,  or  for  alimony  due  or  to 
become  due,  or  for  maintenance  or  support  of  wife  or  child, 
or  for  seduction  of  an  unmarried  female,  or  criminal  con- 
versation; ////■;-(/,  have  not  been  duly  scheduled  in  time  for 
proof  and  allowance,  with  the  name  of  the  creditor,  if  known 
to  the  bankrupt,  unless  such  creditor  had  notice  or  actual 
knowledge  of  the  proceedings  in  bankruptcy;  or,  fourth,  ^fere 
created  by  his  fraud,  embezzlement,  misappropriation,  or  de- 
falcation while  acting  as  an  officer  or  in  any  fiduciary  ca- 
pacity." 

Where  the  debt  is  one  from  which  a  discharge  will  not  re- 
lease the  bankrupt,  and  the  process  is  served  within  the  state 
in  which  the  court  is  held,  he  can  not  be  relieved  by  a  court  of 
bankruptcy."  This  rule  is  subject  to  an  important  exception, 
namely,  that  a  bankrupt  can  not  be  arrested  when  in  attend- 
ance upon  a  court  of  bankruptcy,  or  engaged  in  the  perform- 
ance of  a  duty  imposed  by  the  act.^~  The  exemption  is  not 
restricted  to  particular  occasions  when  the  bankrupt's  physical 
attendance  in  court  is  required,  or  he  is  actually  engaged  upon 

'B.    A.     1898,     Sec.     17.      What  In  re  Kimball,  No.  77^7  Fed  Cas., 

debts     are      not      discharged      are  2    Ben.    38;    In    re    Sej^mour,    No. 

further  considered  in  another  place.  12684  Fed.  Cas.,  i  Ben.  348;  In  re 

See  Sees.  288,   et  seq.,  post.  Patterson,    No.    108 17   Fed.   Cas.,  2 

"As  to  what  debts  are  provable,  Ben.    155;   In  re   Pettis,  No.    11046 

see  Chap.  XTII.  Fed.    Cas.,   7   Am.    Law   Reg.   695; 

"/k    re    Marcus    (C.    C.    A.,    ist  Harter  v.  Harlan,  2  N.  B.  R.  238; 

Cir.),  105  Fed.  Rep.  907,  5  Am.  B.  In  re  Devoe,  No.  3843  Fed.  Cas.,  r 

R.  365;  In  re  Freche,  109  Fed.  Rep.  Low.  251;   Jn  re  Alsberg,   No.  261 

620,  6  Am.  B.  R.  479;  In  re  Glaser,  Fed.  Cas.,  16  N.  B.  R.  116. 

No.    5474   Fed.    Cas.,    2    Ben.    180;  "B.  A.  1898,  Sec.  9a,  clause  2. 


THE    BANKRUPT DUTIES^    PROTECTION,    ETC.  661 

some  required  duty  and  the  court  may  release  him  from  arrest 
upon  his  furnishing  bond  to  obey  the  orders  of  the  court  and 
not  depart  from  the  jurisdiction  during  the  continuance  of 
such  exemption/^ 

Third:  For  an  Examination. — A  bankrupt  may  be  ar- 
rested, under  certain  circumstances,  and  held  in  custody  for 
purposes  of  examination.  The  statute  provides  "the  judge 
may  at  any  time  after  the  filing  of  a  petition  by  or  against  a 
person,  and  before  the  expiration  of  one  month  after  the 
qualification  of  the  trustee,  upon  satisfactory  proof  by  the  affi- 
davits of  at  least  two  persons  that  such  bankrupt  is  about 
to  leave  the  district  in  which  he  resides  or  has  his  principal 
place  of  business  to  avoid  examination,  and  that  his  departure 
will  defeat  the  proceeedings  in  bankruptcy,  issue  a  warrant  to 
the  marshal,  directing  him  to  bring  such  bankrupt  forthwith 
before  the  court  for  examination."  ^^ 

It  will  be  observed  that  this  provision  providing  foi  the 
arrest  and  detention  of  a  bankrupt  is  quite  limited.  There  is 
no  provision  for  the  seizure  of  property.  The. bankrupt  can 
only  be  arrested  when  he  is  about  to  leave  the  district  to  avoid 
an  examination  and  thereby  defeat  the  proceedings.  It  has 
been  held  that  an  order  can  not  be  made  after  the  bankrupt  has 
actually  fled  from  the  district  as  a  ground  for  an  order  of 
extradition.^"'  If  he  is  about  to  depart  for  other  purposes, 
such  as  to  better  his  condition,  it  would  seem  that  this  pro- 
vision would  not  apply  to  him.  The  warrant  must  be  issued 
within  one  month  after  the  qualification  of  the  trustee.  He  can 
not  be  held  in  custody  more  than  ten  days,  and  can  not  l)e 
imprisoned  during  that  period. 

Proceedings  for  a  w^arrant  are  properly  instituted  by  a  jie- 
tition  or  motion  supported  by  affidavits  or  depositions  of  at 
least  two  persons.      The  prayer  should   not  be   included   in 

"In   re   Dresser,    124   Fed.    Rep.  '''In    re   Hasscnbusch    (C.    C.    A. 

915.  10  Am.  B.  R.  270;  In  re  Lew-  Cth  Cir.),  108  Fed.  Rep.  35,  47  C.  C. 

ensohn,  99  Fed.  Rep.  Ti,  3  Am.  B.  A.  177. 

R.  594;  affirmed  104  Fed.  Rep.  1004,  '"/«  re  McKibben,  No.  8859  Fed. 

44  C.  C.  A.  309.  Cas.,   12  N.  B.   R.  97;  hi  re  Had- 

"  I?.  A.    1898.   Sec.  9/;.     Compare  ley,   No.  5894  Fed.   Cas.,   12   N.   B. 

R.  S.  Sec.  5024.  R.  366. 


662  LAW    AND    I'ROCEEDINGS    IX     BANKRUPTCY. 

the  petition  in  bankruptcy,  but  should  be  a  separate  motion 
or  petition.""'  The  affulavits  or  depositions  should  show  the 
facts,  and  not  mere  opinions  or  holicf  of  the  ariKinls  or  depo- 
nents. The  material  facts  shouKl  ho  slated  upon  personal 
knowledge,  and  not  upon  information  and  belief.'" 

Satisfactory  proof  of  this  character  must  be  introduced  to 
show,  first,  that  the  bankrupt  is  about  to  leave  the  district 
in  which  he  resides  or  has  his  principal  place  of  business;" 
srco)id.  that  he  is  leaving  the  district  to  avoid  examination; 
and.  third,  that  his  departure  will  defeat  the  proceedings  in 
bankruptcy. 

The  court  will  probably  admit  counter  affidavits  to  be  filed 
by  the  bankrupt,  if  he  desires  to  take  issue  with  the  peti- 
tioning creditors.  This  was  manifestly  the  intent  of  con- 
gress. It  is  provided  that  the  warrant  issue  only  "upon  sat- 
isfactory proof,"  and  also,  "if  upon  hearing  the  evidence  of 
the  parties  it  shall  appear  to  the  court  or  judge  thereof  that 
the  allegations  are  true,  and  that  it  is  necessary,  he  shall  or- 
der the  marshal,"  etc.  This  implies  that  evidences  may  be 
introduced  by  both  parties,  and  tliat  a  hearing  shall  be  had. 
The  intent  of  congress,  with  reference  to  the  arrest  and  de- 
tention of  a  bankrupt,  as  gathered  from  the  whole  provision, 
is  not  to  permit  persecution  of  the  bankrupt  or  a  detention 
for  an  unreasonable  time,  nor  an  arrest,  unless  the  proof 
shows  conclusively  the  three  elements  mentioned  above.  At 
least  a  bankrupt  is  entitled  to  a  hearing  before  he  is  ordered 
to  be  kept  in  custody. 

Hie  affidavits  or  depositions  may  be  taken  before  a  ref- 
eree; an  of^cer  authorized  to  administer  oaths  in  proceedings 
before  the  courts  of  the  United  States,  or  under  the  laws  of 
the  state  where  the  same  are  to  be  taken ;  or  a  diplomatic  or 
consular  officer  of  the  United  States  in  any  foreign  country, 

"In  re  McKibben,  No.  8859  Fed.  v.  Burke,  4  H'eiskell    (Tcnn.)   614; 

Cas.,     12     N.     B.     R.    97;     In     re  Meyers    v.    Farrell,    47    Miss.    283; 

Hadley,  No.  5894  Fed.  Cas.,  12  N.  Elliott  v.  Keith.  32  Mo.  App.  585; 

B.  R.  i66.  Bonnet  v.  Avaiit,  2  Sneed   (Tenn.) 

'*  As  to  the  meaning  of  the  words  152. 
"about    to    leave,"    consult    Jackson 


THE    BANKRUPT DUTIES,     PROTECTION,    ETC.  663 

Any  person  conscientiously  opposed  to  taking  an  oath  may, 
in  lieu  thereof,  affirm.  Any  person  who  shall  affirm  falsely 
shall  be  punished  as  for  making  of  a  false  oath." 

''If  upon  hearing  the  evidence  of  the  parties  it  shall  ap- 
pear to  the  court  or  the  judge  thereof  that  the  allegations 
are  true  and  that  it  is  necessary,  he  shall  order  such  marshal 
to  keep  such  bankrupt  in  custody  not  exceeding  ten  days, 
but  not  imprison  him,  until  he  shall  be  examined  and  re- 
leased or  give  bail  conditioned  for  his  appearance  for  exam- 
ination, from  time  to  time,  not  exceeding  in  all  ten  days,  as 
required  by  the  court,  and  for  his  obedience  to  all  lawful  or- 
ders made  in  reference  thereto."  '^  The  arrest  is  in  no  man- 
ner for  security  or  satisfaction  of  a  creditor's  debt.  It  is 
simply  to  secure  the  attendance  of  the  respondent  from  time 
to  time,  for  a  period  of  ten  days,  as  the  court  shall  order,  for 
an  examination.  It  is  to  that  purpose  and  no  other  that  bail 
is  required  of  him.-** 

§  219a.    Ne  Exeat. 

Owing  to  the  very  limited  power  of  detention  under  Sec- 
tion 9b,  it  may  be  necessary  to  resort  to  a  writ  of  nc  exeat 
to  prevent  persons  departing  from  the  jurisdiction.  A  court 
of  bankruptcy  may  issue  a  writ  of  iie  exeat  to  restrain  a 
bankrupt  from  departing  out  of  the  jurisdiction  of  the  court. ^ 
whenever  it  may  be  necessary  for  the  enforcement  of  the  pro- 
visions of  the  bankrupt  act. 

§  220.     Proceedings  to  release  a  bankrupt  from  imprison- 
ment— Habeas  corpus. 

A  bankrupt  may  apply  to  a  court  of  bankruptcy  for  a  re- 
lease from  imprisonment,   when  he  has  been  arrested  after 

"B.  A.  1S9S.  Sec.  20.  Sec.    717.     In    re   Cohen.    136   Fed. 

"  B.  A.  1898,  Sec.  gb;  In  re  Shec-  Rep.  999,  14  Am.  B.  R.  355;  In  re 

han,  No.   12737  Fed.  Cas.,  8  N.   B.  Lipkc,  98  Fed.  Rep.  970,  3  Am.  B. 

R-   .34.>  R.      569;      lloffsclilacgcr      Co.      v. 

Mi.  A.   189S.  Sec.  2,  cl.  15;  R.  S.  Young  Nap.    12  Am.  B.  R.  510. 


(»()4 


LAW     AND     rUOCEKDIN'GS     IN     1!A  \  KIU' 1' ICV. 


tl\e  coninieticcnicnt  of  proceedings  in  bankrnptcy.'  It  is 
ininiatorial  whether  the  i)rocess  for  arrest  was  issued  by  a 
state  or  a  federal  court.  It  has  been  held  that  when  the 
arrest  is  made  by  a  state  court  the  application  for  release 
should  be  made  to  that  court,  in  order  to  avoid  a  conflict  of 
jurisdiction.-  The  refusal  of  a  state  court  to  grant  a  release 
can  not  be  considered  as  final  and  l)inding.''  It  is  the  duly 
of  the  court  of  bankruptcy  to  see  that  a  suitor  within  its 
jurisdiction  is  protected  in  the  manner  contemplated  by  law. 
After  a  bankrupt  has  received  his  discharge  in  bankruptcy, 
the  state  cotut  will,  ordinarily,  upon  proper  application,  re- 
lease him  from  arrest,*  or  the  bankrupt  may  apply  to  the 
court  of  bankruptcy.'^  A  court  of  bankruptcy  of  one  dis- 
trict may  enjoin  a  creditor  from  proceeding  with  an  arrest 
made  in  another  district,  if  the  creditor  is  wdtliin  the  juris- 
diction of  the  court  making  the  order." 

The  proper  course  to  pursue  is  to  apply  for  a  writ  of  Jia- 
beas  corpus.'  The  application  for  a  wn-it  is  regularly  made 
to  the  judge  of  the  bankruptcy  court  by  a  petition  signed 
by  the  bankrupt,  for  wdiose  relief  it  is  intended,  setting 
forth  the  facts  concerning  the  detention  of  him,  in  whose 
custody  he  is  detained,  and  by  virtue  of  what  claim  or 
authority,  if  known.  The  facts  set  forth  in  the  complaint 
slrould  be  verified  by  the  oath  of  the  person  making  the 
application. 

The  judge,  to  wdiom  the  application  is  made,  will  award  a 
writ  of  habeas  corpus,  unless  it  appears   from  the  petition 


'  In  re  Glaser,  No.  5474  Fed. 
L'as.,  2  Ben.  180;  Ex  parte  Miflin, 
No.  9537  Fed.  Cas.,  i  Penn.  Law 
J.  146;  In  re  Winthrop,  No.  17900 
Fed.  Cas.,  5  Law  Rep.  24;  U.  S. 
V.  Dobbins,  No.  1497 1  Fed.  Cas.,  5 
Law.  Rep.  81 ;  In  re  Wiggers,  No. 
17623   Fed.   Cas.,   2   Biss.   71. 

-In  re  O'Mara,  No.  10509  Fed. 
Cas.,  4  Biss.  506;  In  re  Migel,  No. 
95387  Fed.  Cas.,  2  N.  B.  R.  481. 

^  In  re  Wiggers,   No.   17623  Fed. 


Cas.,  2  Biss.  71 ;  In  re  Williams, 
No.  17700  Fed.  Cas.,  6  Biss.  22i2,- 

*  Jones  V.  Emerson,  i  Caines  (N. 
Y.)  487;  Comstock  v.  Grout,  17 
Vt.  512. 

'^  In  re  Simpson,  No.  12879  Fed. 
Cas.,  2  N.  B.  R.  47. 

"Hazelton  v.  Valentine,  No.  6287 
Fed.  Cas.,  i  Low.  270. 

''Ex  parte  Williams,  No.  17700 
Fed.  Cas.,  6  Biss.  233. 


« 


THE    BANKRUPT DUTIES,     PROTECTION,    ETC.  665 

itself  that  the  party  is  not  entitled  to  it.''  The  writ,  so 
issued,  is  directed  to  the  person  in  whose  custody  the  party 
is  detained.  The  person  to  whom  the  writ  is  directed  mal<es 
a  return  of  it  by  certifying  the  true  cause  of  the  detention 
of  the  bankrupt.  He  then  brings  the  bankrupt  before  the 
judge  who  granted  the  writ.  A  day  is  set  for  the  hearing  of 
the  case.  At  this  hearing  the  bankrupt  may  deny  any  of 
the  facts  set  forth  in  the  return,  or  may  allege  any  other 
facts  that  may  be  material  in  the  case.  Such  denials  or  al- 
legations should  be  made  under  oath.  The  return  and  all 
other  suggestions  made  against  it  may  be  amended  by  the  leave 
of  the  court  before  or  after  they  are  filed,  so  that  thereby  the 
material  facts  may  be  ascertained.  The  court  or  judge  pro- 
ceeds in  a  summary  way  to  determine  the  facts  of  the  case 
by  hearing  the  testimony  and  arguments,  and  thereupon  to 
dispose  of  the  party  as  law  and  justice  requires. 

Where  the  arrest  is  made  upon  process  issued  from  a  state 
court  it  is  not  clear  how  far  a  court  of  bankruptcy  will  go 
behind  the  face  of  the  papers,  if  it  all,  to  determine  the  ques- 
tions of  fact  on  which  the  petitioner's  right  to  discharge  or 
the  creditor's  right  to  continue  the  imprisonment  depends. 
11ie  statute  contains  no  directions  as  to  the  specific  evidence 
required.  There  is  a  conflict  of  authority  on  this  point  in 
the  decision  under  the  act  of  1867. 

Some  judges  were  of  the  opinion  that  the  scope  of  inquiry  , 
should  be  limited  to  the  question  w^hether  the  state  court 
had  founded  its  arrest  on  a  claim,  which,  on  the  face  of  the 
papers  which  were  filed  before  it  as  the  foundation  for  the 
arrest,  was  a  claim  from  wlu'ch  the  debtor  would  not  be  dis- 
charged in  bankruptcy."  The  theory  of  this  position  was 
that  the  complaint  or  affidavits  and  facts  stated  therein  in  the 
state  proceedings   were  binding  upon  the  bankruptcy  court. 

"Ex  parte  Milligan,  4  Wall,   no,  Kimball,  No.  7768  Fed.  Cas.,  2  Ben. 

18  L.  Ed.  281.  554,    affirmed    in    No.     7769     Fed. 

'/«  re  Valk,  No.  16814  Fed.  Cas.,  Cas..  6   Blatch.   292;   fn  re   Dcvoe, 

3   Ben.   431 ;    In   re   Robinson,    No.  No.  3843  Fed.  Cas.,  T  Low.  251. 
11939  I-'ed.  Cas.,  6  Blatrli.  253;  hi  re 


c 


666  l.WV    AND    PROCKEDINGS    IN     BANKRUPTCY. 

Jiulg-e  Bradford,  after  rcfcrriiij;-  to  the  cases  Iciuliiig-  to  limit 
the  scope  of  the  iiuiuiiv.  aptly  observed:  '" 

"Where  tlie  Hberty  of  tlie  prisoner  depends  upon  the  fact 
that  his  ileht  is  discharg^eable  by  his  discharge  in  bank- 
ruptcy, and  he  tenders  proof  to  maintain  the  allegation,  is  it 
not  a  strange  proposition  that  he  shall  be  denied  the  right  to 
prove  his  right  to  release  iwnn  imprisonment,  because  an 
ex  [>artc  affidavit  has  been  made  in  the  state  courts  that  he 
had  contracted  the  debt  under  such  circumstances  of  fraud  as 
that  his  debt  would  not  be  released  by  his  discharge  in  bank- 
ruptcy? This  appears  strange,  because  it  affects  the  personal 
liberty  of  the  bankrupt.  But  the  rights  of  the  creditors  to 
arrest  for  debts  not  dischargeable  in  bankruptcy  are  equally 
sacred,  and  the  proposition  to  me  is  equally  strange  that  they 
should  be  denied  the  power  to  hold  under  arrest  one  legally 
arrested  for  other  reasons  filed  than  those  which  will  release 
the  debt,  when  they  make  the  allegation,  and  ofTer  to  sustain 
it  by  proof,  that  the  petitioner  can  not  bring  himself  within 
the  exemption  from  arrest  granted  by  congress,  by  reason  of 
the  fact  that  the  debt  on  which  he  was  arrested  was  con- 
tracted in  fraud." 

On  the  other  hand,  there  were  judges  who  thought  that  it 
was  the  duty  of  the  court  of  bankruptcy  to  examine  dili- 
gently all  legal  evidence  brought  before  it.  from  any  quarter 
whatever,  tending  to  show  that  a  debt  not  dischargeable  by 
the  discharge  of  the  bankrupt,  had  or  had  not  been  con- 
tracted." The  theory  of  this  position  was  that  the  cases  in 
wliich  the  bankrupt  was  exempt  from  arrest,  and  also  cases 
in  which  the  creditor  was  entitled  to  have  his  imprisonment 
continued,  were  expressly  stated  in  the  bankrupt  law.  The 
liability   to   imprisonment   or   immunity    from   the   same   de- 

'"/«    re    Alsberg,    No.    261    Fed.  No.    7767    Fed.    Cas.,     2     Ben.    38. 

Cas.,  16  N.  B.  R.  it6.  Judge     Blatchford,     who     decided 

"In  re  Williams,  No.  17700  Fed.  these    last    two    cases,    afterwards 

Cas.,   6   Biss.   233;    In   re   Alsberg,  expressly    disapproved    of    his    dc- 

No.    261    Fed.    Cas.,    16    N.    B.    R.  cision    in    these    cases.      See    In    re 

116;    In   re   Glaser,   No.   5474   Fed.  Kimball,    No.    77C^^    Fed.    Cas.,    2 

Cas.,    2    Ben.    180;    In   re   Kimball,  Ben.  554. 


THE    BANKRUPT DUTIES,    PROTECTION,    ETC.  66/ 

pended  upon  whether  the  debt,  for  which  the  bankrupt  was 
arrested  by  the  state  authority,  was  dischargeable  or  not  by 
the  discharge  in  bankruptcy.  It  did  not  depend  in  any  de- 
gree upon  the  reason  or  ground  of  arrest  given  in  the  affi- 
davits filed  in  the  state  court.  W'hat  was  the  nature  of  the 
debt,  upon  which  the  arrest  was  founded,  was  deemed  a  ques- 
tion which  the  bankruptcy  court  had  a  right  to  determine. 
The  bankrupt  law  being  paramount,  and  giving  exclusive 
jurisdiction  to  the  bankruptcy  court,  it  was  considered  the 
duty  of  that  court  to  see  that  a  suitor  wnthin  its  jurisdiction 
was  protected  in  the  manner  contemplated  by  law.  The 
statements  made  in  a  declaration  or  complaint  or  affidavit 
filed  in  a  state  court  were  therefore  held  not  to  be  binding 
upon  the  court  of  bankruptcy. 

It  should  be  observed,  however,  that  where  a  judgment 
has  been  rendered  in  an  action  for  fraud  in  a  state  court,  the 
bankruptcy  court  is  bound  by  the  judgment.^'"  The  bank- 
ruptcy court  will  not  reverse  the  finding  of  a  state  court.  In 
such  cases  the  court  w'ill  look  to  the  record  of  the  state  court 
to  see  if  material  and  traversable  allegations  of  fraud  appear, 
which  must  have  been  found  true  in  order  to  render  the  judg- 
ment. 

When  a  bankrupt  is  arrested  upon  civil  process,  issuing 
from  a  court  of  bankruptcy,  pending  bankru])tcy  proceedings, 
the  order  of  the  court  should  be  to  release  the  prisoner,  llie 
only  exception  to  this  rule  is  when  tlie  arrest  and  commitment 
is  for  contempt  or  disobedience  of  its  lawful  orders. 

When  the  bankrupt  is  arrested,  by  the  authority  of  the  state 
law,  and  claims  immunity  and  privilege  from  arrest,  he  must 
make  it  appear  to  the  satisfaction  of  the  court  that  his  case 
comes  within  tlie  exemption  or  privilege  granted.  If  he  does, 
he  should  be  discharged   from  arrest.^"*     If  he  does  not,  he 

"In  re  Patterson,  No.  10817  Fed.       429;   Slunnan  v.  Strauss,  52  N.  Y. 
Cas.,    2    Ben.     155:    /;;    re    White-       404. 

house,  No.  17564  Fed.  Cas.,  i  Low.  '''Knott  v.  Putnam  ,107  I-'od.  Ri.']). 

907,   6   Am.    P..   K.  80. 


668  J. AW      AND     I'KOtKKDlNGS     I.N     l!A  N  KRLU' I'LY. 

should  be  rciiumdcd  into  custody/'  If  he  makes  it  appear  that 
his  debt  is  dischargeable;  that  is.  that  it  is  not  tainted  with 
any  of  the  kinds  of  frauds  enumerated  in  Section  17  of  the  act, 
which  prevent  its  being-  released  by  the  discharge  of  the  bank- 
rupt, or  if  the  arrest  was  made  when  he  was  in  attendance 
upon  a  court  of  bankruptcy,  or  engaged  in  the  performance  of 
a  duty  imposed  by  the  act,  he  is  within  the  exemptions  extended 
by  Section  9.  If  he  can  not  do  this,  he  is  not  within  the  priv- 
ilege or  exemption,  and  must  be  remanded  into  custody. 

If  a  court  of  bankruptcy  orders  the  release  of  a  bankrupt 
in  custody  of  a  state  officer,  such  ofhcer  is  obliged  to  release 
him  and  can  not  be  punished  therefor  by  the  state  court.^^ 

§  221.    Extradition  of  bankrupts. 

\\'henever  a  warrant  for  the  apprehension  of  a  bankrupt  has 
been  issued,  and  he  is  found  within  the  jurisdiction  of  a  court 
other  than  the  one  issuing  the  warrant,  he  may  be  extradited 
in  the  same  manner  in  which  persons  under  indictment  are 
extradited  from  one  district  within  which  a  district  court  has 
jurisdiction  to  another.^ 

The  extradition  of  a  bankrupt  may  be  required  when  a 
warrant  is  issued  for  his  arrest,  in  case  he  is  accused  of  or 
indicted  for  an  offense  under  the  bankrupt  act,  or  in  case  he 
is  charged  with  contempt,  or  for  the  purpose  of  detaining 
him  for  any  examination.  In  order  to  support  extradition 
proceedings  it  is  necessary  that  a  warrant  shall  have  been 
issued  for  his  arrest,  and  that  he  be  found  beyond  the  juris- 
diction of  the  court  issuing-  it  and  within  the  jurisdiction  of 
another   court   of     bankruptcy.      Proceedings   in   extradition 

"In    re    Freche,    109    Fed.    Rep.  186,    4    Dall.    387;    Lyell    v.    Good- 

620,  6  Am.   B.  R.  479;   In  re  Clai-  win,      No.     8616     4     McLean     29; 

borne,  109  Fed.  Rep.  74,  5  Am.  B.  Thomas      v.    ?Iudson,    13   Mees.   & 

R.   812;    In   re   Marcus    (C.   C   A.  W.    353,     8r6,     884;      Norton     v. 

1st  Cir.),  105  Fed.  Rep.  907,  S  Am.  Walker,  3  Ex.  4^0. 

B.   R.   365.  'B.  A.   1898,  Sec.    10  and   Sec.  2, 

'^/;z    re   Kimball,    No.    7767   Fed.  clause   14;   In   re   Hassenbusch    (C 

Cas.,   2   Ben.   38;    Ex  parte   Hurst,  C.  A.  6th   Cir.).    loS   Fed.   Rep.  35, 

No.  6924  Fed.  Cas..   i   Wash.  C.  C.  47  C.  C.  A.  177, 


THE    BANKRUPT DUTIES^    PROTECTION^    ETC.  669 

cases,  under  a  treaty  between  the  United  States  and  a  foreign 
government,  stand  on  a  wholly  difterent  footing.-  Such 
proceedings  are  not  expressly  adopted  by  the  bankrupt  act. 

The  bankrupt  statute  adopts  the  provisions  relating  to 
transferring  a  person  under  an  indictment,  from  one  district 
to  another.  The  only  authority  for  holding  a  person  under 
indictment,  to  bail  in  one  district  to  answer  in  another  dis- 
trict, or  upon  his  failure  to  give  bail  to  order  him  to  be 
removed  into  another  district  w'here  the  offense  is  to  be  tried, 
is  found  in  Section  1014  of  the  Revised  Statutes.  This  pro- 
vision is  as  follows : 

"For  any  crime  or  offense  against  the  United  States,  the 
offender  may,  by  any  justice  or  judge  of  the  United  States, 
or  by  any  commissioner  of  a  circuit  court  to  take  bail,  or  by 
any  chancellor,  judge  of  a  supreme  or  superior  court,  chief 
or  first  judge  of  common  pleas,  mayor  of  a  city,  justice  of 
the  peace,  or  other  magistrate,  of  any  state  where  he  may  be 
found,  and  agreeably  to  the  usual  mode  of  process  against 
offenders  in  such  state,  and  at  the  expense  of  the  United 
States,  be  arrested  and  imprisoned,  or  bailed,  as  the  case 
may  be,  for  trial  before  such  court  of  the  United  States  as 
by  law  has  cognizance  of  the  offense.  Copies  of  the  process 
shall  be  returned  as  speedily  as  may  be  into  the  clerk '-s 
office  of  such  a  court,  together  with  the  recognizance  of  the 
witnesses  for  their  appearance  to  testify  in  the  case.  And 
where  any  offender  or  witness  is  committed  in  any  district 
other  than  where  the  offense  is  to  be  tried,  it  shall  be  the 
duty  of  the  judge  of  tlie  district  where  such  offender  or  wit- 
ness is  imprisoned,  seasonably  to  issue,  and  of  the  marshal 
to  execute,  a  warrant  for  his  removal  to  the  district  where 
the  trial  is  to  be  had." 

When  a  warrant  for  tlie  arrest  of  a  bankrupt  has  been 
issued,  and  he  is  found  in  another  district,  he  may  be  reached 
by  prr)ceedings  under  tin's  section.     He  niav  be  arrested  there 


2 


R.    S.    Sees.    5270-52S0;    In    re       Blatch.  41.4;  lu  re  Mnnning,  44  Pcd. 
Ilcnrich,    No.    6369    l-'ed.    Cas.,    5       Rep.  275. 


()70  l-AW      AND     I'KOCliEDl.XUS     1  .\      i;  A  .\  KRf  I' ICY. 

aihl  iraii>t\rrcil  in  llic  iiMial  inaniKT  iiiHk'i-  lliis  section.  He 
can  not.  lio\\c\cr.  ho  arrcstcil  upon  the  warianl  oia^inally 
issueil.  l)ccan>c  it  will  not  rnn  into  another  district.''  All 
proceetlings  ior  arrest,  hail,  coinnninuMit  and  rcnu)\al  are 
licKl  in  the  district  in  which  the  bankrupt  is  I'oinid,  and  not 
in  the  district  in  which  the  original  warrant  was  issued. ■* 

§  222.     Proceedings  to  remove  a  bankrupt  from  one  district 
to  another. 

The  proceediui;-  contenii)Iated  in  Section  1014  is  an  orig- 
inal and  independent  proceeding-  in  the  district  Avhere  the 
bankrupt  is  found.  It  is  based  upon  the  order  of  court  for  a 
warrant  or  upon  an  indictment  previously  issued  by  the  court 
having  jurisdiction  of  the  cause.  The  section  expressly  pro- 
vides that  the  proceeding  shall  be  "agreeably  to  the  usual 
mode  of  process  against  offenders  in  such  state."  It  seems 
that  the  effect  of  the  section  is  to  adopt  the  familiar  common 
law  proceeding  upon  complaint  for  the  arrest  and  commitment 
of  offenders  by  the  committing  magistrates,  subject  to  this 
provision,  adopting  procedure  of  the  several  states,  which  is, 
of  course,  itself  subordinate  to  the  provisions  of  the  consti- 
tution of  the  United  States.^  ■  Althougli  the  i)rocedure  is  not 
exactly  the  same  in  all  states,  it  is  substantially  so. 

§  223.    Proceedings  before  a  United  States  commissioner. 

The  proceedings  are  regularly  instituted  by  a  complaint 
under  oath,  made  before  a  United  States  commissioner,^  or 
any  magistrate  mentioned  in  Section  1014.  The  oath  may 
be  made  by  any    person    having    knowledge    of    the    facts. 

'^  Ex    parte    Graham,     No.     5657  A.  394;   U.   S.  v.   P.rawner,  7  Fed. 

Fed.  Cas.,  3  Wash.  C.  C.  456;  In  re  Rep.  86. 

Manning,  44  Fed.  Rep.  275;  In  re  'West  v.  Cabell,  153  U.  S.  87,  3^ 

Dana,  68  Fed.  Rep.  886.  L.    Ed.    643,     U.     S.     Const.,     4th 

*In  re  Dana,  68  Fed.   Rep.  886;  Amend't. 

In  re  Manning,  44  Fed.   Rep.  275 ;  '  For     form     of     complaint,    see 

In   re  Rurkhardt,  3;;^  Fed.  Rep.  25;  Loveland's  Forms  of  Federal  Prac- 

U.   S.  V.   Fowkes,  49  Fed.   Rep.   50,  tice,    No.   877. 
affirmed,   53   Fed.   Rep.    13,  3   C.   C. 


THE    BANKRUPT DUTIES,    PROTECTION,    ETC.  671 

Ordinarily,  a  certified  copy  of  the  indictment  or  the  order  of 
court,  and  a  warrant  furnished  to  the  United  States  attorney 
for  the  district  in  which  the  bankrupt  is  found,  is  sufficient 
to  justify  a  referee  in  bankruptcy  or  other  person  making  the 
required  affidavit.  Thereupon  the  commissioner  issues  a 
warrant,  directed  to  the  marshal  of  the  district,  commanding 
him  to  arrest  the  bankrupt  and  bring  him  before  a  commit- 
ting magistrate.  A  commissioner  is  not  authorized  to  issue 
a  warrant  except  upon  a  complaint  on  oath.-  The  oath 
should  be  made  within  the  district.  An  indictment  found 
by  a  grand  jury,  or  an  information  or  an  order  of  court,  in 
another  district,  is  not  such  a  complaint  on  oath  as  is 
required  to  authorize  a  warrant  for  arrest.^ 

The  bankrupt  is  then  arrested  and  brought  before  the  com- 
missioner. He  thereupon  pleads.  If  his  plea  is  guilty  he 
should  be  held  to  bail  or  committed.  If  his  plea  is  not 
guilty  he  may  waive  examination  or  demand  a  hearing. 
Unless  he  waives  examination  he  is  entitled  to  a  speedy 
hearing.  At  the  examination  before  the  commissioner  evi- 
dence may  be  introduced  for  and  against  the  bankrupt  and 
counsel  may  be  heard.  The  magistrate  must  determine  the 
identity  of  the  prisoner,  and  his  probable  guilt.  If  he  is 
satisfied  as  to  these  two  questions,  it  is  his  duty  to  admit  the 
bankrupt  to  bail  for  trial  before  such  court,  as  by  law  is 
cognizant  of  the  offense.*  If  the  l)ankrui)t  fails  to  tender  a 
sufficient  bail,  the  magistrate  may  then  commit  him  to  the 
custody  of  the  marshal  to  await  a  warrant  for  his  removal. 
If.  on  the  other  hand,  there  is  no  probable  cause  of  his  guilt 
or  his  identity  is  not  established,  the  bankrupt  is  entitled  to 
be  flischarged  by  the  commissioner.  \Mien  the  bankrupt  is 
discharged  or  admitted  to  bail  by  the  magistrate,  extradition 


2  ' 


'The    fourth    amendment    to    the  ^  Bagnall     v.     Ableman,    4    Wis. 

constitution    of    the    United    States  184.      For    form     of     warrant,    see 

provides    that    "no    warrants    shall  Loveland's       Forms      of      Federal 

issue  but  upon*  probable  cause,  sup-  Practice,  No.  871. 
ported  by  oath  or  affirmation."    Sec 
U.  S.  V.  Tureaud,  20  Fed.  Rep.  621. 


672  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

proceeding's  are  at  an  cntl.  l-'nrlhcr  steps  are  necessary  only 
when  the  l)ankrni)t  is  committed  to  cnstod)-.' 

An  Indictment  as  Evidence. — An  indictmenl  in  a  federal 
conrt  is  f>riina  facie  evidence  of  probable  cause  and  sufficient 
basis  for  removal  from  the  district  where  tlie  person  arrested 
is  found  to  the  district  where  the  indictment  was  found.'' 

The  extent  to  which  a  commissioner  in  extradition  may  in- 
(juire  into  the  validity  of  an  indictment  by  any  evidence  before 
him  as  proving  the  probable  guilt  lias  never  been  definitely 
settled,  although  the  supreme  court  has  held  that  technical 
objections  should  not  be  considered  and  that  the  legal  suf- 
ficiency of  the  indictment  is  only  to  be  determined  by  tlie 
court  in  which  it  is  found." 

In  Benson  V.  Hcnkcl '  the  supreme  court  said :  "Indeed,  it 
is  scarcely  seemly  for  a  committing  magistrate  to  examine 
closely  into  the  validity  of  an  indictment  found  in  a  federal 
court  of  another  district,  and  subject  to  be  passed  upon  by 
such  court  on  demurrer  or  otherwise.  Of  course,  this  rule 
has  its  limitations.  If  the  indictment  were  a  mere  information, 
or  obviously,  upon  inspection,  set  forth  no  crime  against  the 
United  States,  or  a  wholly  different  crime  from  that  alleged 
as  the  basis  for  proceedings,  or  if  such  crime  be  charged 
to  have  been  committed  in  another  district  from  that  to  which 
the  extradition  is  sought,  the  commissioner  could  not  probably 
consider  it  as  ground  for  removal.  In  such  cases  resort 
must  be  had  to  other  evidence  of  probable  cause. 

"While  the  principal  laid  down  in  some  of  the  earlier  cases 
in  this  court,  that  an  indictment  upon  a  statute  is  ordinarily 

*U.  S.  V.  Jacobi,  No.  15460  Fed.  Roberts  v.  Reilly,  116  U.  S.  80,  96. 

Cas.,  I  Flip.  108;  In  re  Bailey,  No.  29  L.   Ed.  544;   Greene  v.   Ilenkel, 

730  Fed.   Cas.,   i   Woodlw.  422;  U.  183  U.  S.  249,  260,  46  L.  Ed.   177; 

S.  V.  Shepard,  No.  16273  Fed.  Cas.,  Ex   parte    Reggel,    114   U.    S.    642, 

I  Abb.  U.  S.  431.  650,    29    L.    Ed.     250;     Horner    v. 

°  Beavers    v.    Henkel,    194    U.    S.  United    States,    No.    2,    143    U.    S. 

73,  48  L.  Ed.  882.  570,  577.  36  L.  Ed.  266;  Beavers  v. 

'Benson  v.  Henkel,  198  U.  S.   i,  Henkel,  194  U.  S.  73,  87,  48  L.  Ed. 

49    L.    Ed.    919;    Beavers    v.    Hau-  8S2. 
bert,   198  U.  S.  77,  49  L.  Ed.  919;  '198  U.  S.   i,  49  L.  Ed.  919. 


THE    BANKRUPT DUTIES,     PROTECTION,    ETC.  673 

sufficient  if  framed  in  the  language  of  the  statutes  has  been 
somewhat  quahfied  in  later  cases,  the  rule  still  holds  good  that 
where  the  statute  contains  every  element  of  the  offense,  and 
an  indictment  is  offered  in  evidence  before  the  extradition 
commissioner  as  proof  of  probable  cause,  it  is  sufficient  if 
framed  in  the  language  of  the  statute  with  the  ordinary  aver- 
ments of  time  and  place,  and  with  such  a  description  of  the 
fraud,  if  that  be  the  basis  of  the  indictment,  as  will  appraise  an 
intelligent  man  of  the  nature  of  the  accusation,  notwithstand- 
ing that  such  indictment  may  be  open  to  motion  to  quash  or 
motion  in  arrest  of  judgment  in  the  court  in  which  it  was 
originally  found.  An  extradition  commissioner  is  not  pre- 
sumed to  be  acquainted  with  the  niceties  of  criminal  pleading. 
His  functions  are  practically  the  same  as  those  of  an  examin- 
ing masfistrate  in  an  ordinarv  criminal  case,  and  if  the  com- 
plaint  or  the  indictment  offered  in  support  thereof  contains  the 
necessary  elements  of  the  offense,  it  is  sufficient,  although  a 
more  critical  examination  may  show  that  the  statute  does  not 
completely  cover  the  case." 

§  224.     Proceedings  before  the  judge  for  an  order  of  re- 
moval. 

\\nien  the  bankrupt  has  been  committed  to  the  custody  of 
the  marshal,  the  United  States  attorney  appears  before  the 
judge,usually  attended  by  the  marshal  with  the  prisoner, 
and  makes  an  application  for  an  order  or  a  warrant  of  re- 
moval. This  should  be  done  as  soon  as  possible  after  the 
commitment  by  the  commissioner. 

The  order  or  warrant  of  removal  is  not  issued  as  a  matter 
of  course.  It  is  the  duty  of  the  judge  to  determine  judicial- 
ly whether  the  prisoner  ought  to  be  taken  to  another  district 
for  trial  or  whether  he  is  entitled  to  his  freedom.  The  prac- 
tice in  the  several  districts  is  not  uniform  as  to  how  far  the 
judge  will  go  in  his  inquiry  before  he  takes  action  in  the 
shape  of  an  order,  either  granting  or  refusing  the  transfer  of 
the  prisoner.  He  must,  in  any  case,  be  satisfied  with  the 
proof  of  the  identity  of  the  prisoner.     And  if  no  opposition 


674  LAW     AM)     I'UOCEEDINGS    IN     BANKRUPTCY. 

is  made  ho  may  rely  upon  the  fintling  of  the  commissioner 
in  respect  to  probable  canse  of  guilt.  But  he  is  not  obliged 
to  do  so.  The  judge  may  allow  an  examination  dc  novo 
before  him  u]H>n  the  facts  to  determine  this  question.^  At 
such  a  hearing  it  seems  to  be  not  only  the  right  but  the  duty 
of  the  judge  to  look  into  the  indictment  and  probably  into 
an  order  of  court  so  far  as  to  be  satisfied  that  an  offense  is 
charged,  which  may  be  lawfully  tried  in  the  forum  to  which 
it  is  claimed  the  accused  should  be  removed. -' 

§  225.     The  order  of  court  granting  or  refusing  a  warrant. 

If  the  judge  is  satisfied  with  the  proof  of  the  identity  of 
the  prisoner  and  of  the  probable  cause  of  his  guilt,  he  issues 
an  order  or  warrant  for  removal'  This  warrant  is  directed 
to  the  marshal  of  the  district  within  which  tlie  prisoner  is 
found  and  the  extradition  proceedings  had.  It  commands 
him  to  remove  the  prisoner  to  the  particular  district  where 
the  offense  is  to  be  tried  and  deliver  him  to  the  United 
States  marshal  of  the  district  or  some  other  proper  officer 
authorized  to  receive  the  prisoner.  Only  one  writ  or  war- 
rant is  necessary  to  renio\e  a  prisoner  from  one  district  to 
another.-  A  marslial  of  the  district  where  the  prisoner  is 
found  may  deputize  the  marshal  of  the  district  in  which  the 
trial  is  to  be  held  to  execute  the  warrant  of  removal.^ 

If  upon  the  hearing  it  api)ears  that  the  removal  should 
not  be  made,  the  judge  \vill  refuse  the  warrant  and  order  the 
prisoner  discharged.''     He  may  admit  the  party  to  bail,  and 

'/»  re  Dana,  68  Fed.  Rep.  886;  land's    Forms  of   Federal   Practice, 

In  re  Wolf,  27  Fed.  Rep.  606.  No.  872. 

-  Horner  v.  U.   S.,  44  Fed.   Rep.  Horner  v.  U.  S.   143,  U.   S.  207, 

677,   143  U.  S.  214,  36  L.  Ed.  126;  36  L.  Ed.  126;  In  re  Burkhardt,  33 

Callan  v.  Wilson,  127  U.  S.  540,  32  Fed.   Rep.   25;   U.   S.  v.  White,  25 

L.  Ed.  223;  In  re  Palliser,   136  U.  Fed.  Rep.  716. 

S.  261,  34  L.  Ed.  514;  In  re  Ter-  ■  R.  S.  Sec.  1029. 

fell,  51  Fed.  Rep.  213;  In  re  Doig,  ^U.  S.  v.  Fletcher,  147  U.  S.  664, 

4  Fed.   Rep.    193;   U.   S.   v.    Braw-  37  L.  Ed.  322. 

ner,  7  Fed.  Rep.  86;  U.  S.  v.  Rog-  *  In   re   Dana,  68  Fed.  Rep.  886; 

ers,  23   Fed.   Rep.  658.  U.  S.  v.   Rogers,  23  Fed.  Rep.  658. 

'  For  form  of  warrant,  see  Love- 


THE    BANKRUPT DUTIES,     PROTECTION,    ETC.  675 

should  do  SO  if  the  party  can  furnish  bail,  and  to  this  end  he 
may  reduce  or  increase  the  bail  fixed  by  the  commissioner.^ 

§  226.    Habeas  corpus. 

If  a  bankrupt  is  unlawfully  held  in  custody  he  may  be  re- 
leased upon  a  writ  of  habeas  corpus.^  General  order  30  pro- 
vides that  if  the  debtor  is  "committed  after  the  filing  of  his 
petition  upon  process  in  any  civil  action  founded  upon  a  claim 
provable  in  bankruptcy,  the  court  may,  upon  like  application, 
discharge  him  from  such  imprisonment.  If  the  petitioner,  dur- 
ing the  pendency  of  the  proceedings  in  bankruptcy,  be  arrested 
or  imprisoned  upon  process  in  any  civil  action,  the  district 
court,  upon  his  application,  may  issue  a  writ  of  habeas  corpus 
to  bring  him  before  the  court  to  ascertain  whether  such  process 
has  been  isssued  for  the  collection  of  any  claim  provable  in 
bankruptcy,  and  if  so  provable  he  shall  be  discharged;  if  not, 
lie  shall  be  remanded  to  the  custody  in  which  he  may  lawfully 
be.  Before  granting  the  order  for  discharge  the  court  shall 
cause  notice  to  be  served  upon  the  creditor  or  his  attorney,  so 
as  to  give  him  an  opportunity  of  appearing  and  being  heard 
before  the  granting  of  the  order." 

This  general  order,  like  general  order  27  under  the  act  of 
1867,  provides  for  a  release  when  the  debtor  is  committed  in 
a  civil  action  founded  upon  a  claim  provable  in  bankruptcy 
instead  of  claims  released  by  a  discharge  as  provided  by  the 
statute."  In  this  respect  the  order  and  statute  conflict,  and  the 
statute  must  control.''' 

§  227.     Abatement. 

The  death  or  insanity  of  a  bankrupt  does  not  abate  the  pro- 
ceedings, but  the  same  are  conducted  and  concluded   in  the 

''U.   S.  V.   Brawner,  7  Fed.   Rep.  163.  a  writ  was  granted  1)\-  a  .state 

86;  U.  S.  V.  Rogers,  23  Fed.   Rep.  court    releasing   a    prisoner    in    the 

661;  In  re  Wolf,  27  Fed.  Rep.  615.  custody  of  a  U.  S.  marshal. 

'Gen.  Ord.  30;  In  re  Terrell,  51  *  B.   A.    1898,    Sec.  ga.     Compare 

Fed.    Rep.    213;    U.    S.   v.    Fowkes,  Sec.  26  of  the  act   of   1867,   R.   S. 

49    Fed.    Rep.    50,    affirmed    in    53  Sec.   5107. 

Fed.  Rep.  13,  s.  c.  3  C.  C.  A.  394.  "  Sec      Protection     from     arrest, 

Tn    Bagnall    v.    Abicman,    4    Wis.  Sec.   218,   note   2,   aute. 


676 


1  AW      AND     I'UOrKllDlXCS     IN'      1'.  A  N  K  KU  1' IXY. 


same  niannor.  so  far  as  possible,  as  ihoiigii  lie  Iiad  imt  died  or 
beeome  insane,  rrovidcd,  that  in  ease  of  death  the  widow 
and  ehilih'en  sliall  he  entitled  to  all  ris^hls  of  dower  and  allow- 
anee  thxed  by  the  laws  of  the  state  of  the  bankrnpt's  residence.^ 
Proceedings  do  not  abate  where  a  bankrupt  died  after  the  fil- 
ing of  a  petitii^n  and  before  the  return  day."  In  such  cases 
time  may  be  alk)wed  the  ailministrator  and  creditors  to 
appear  and  answer  the  petition.'-'  Proceedings  do  not  abate, 
where  a  corporation,  pending  bankruptcy  proceedings  against 
it.  is  dissolved  by  a  state  court.'" 

The  death  or  removal  of  a  trustee  does  not  abate  any  suit 
or  proceeding  which  he  is  prosecuting  or  defending  at  the  time 
of  his  death  or  removal,  but  the  same  may  be  proceeded  with 
or  defended  by  his  joint  trustee  or  successor  in  the  same  man- 
ner as  though  the  same  had  been  commenced  or  was  being 
defended  by  such  joint  trustee  alone  or  by  such  successor.* 


'  B.  A.  1898,  Sec.  8.  As  to  prac- 
tice in  case  of  insanity  of  bankrupt, 
see  In  re  Burka,  107  Fed.  Rep.  674, 

5  Am.  B.  R.  843 ;  In  re  Eisenberg, 
117  Fed.  Rep.  786,  8  Am.  B.  R. 
551  ;  In  re  Miller,  133  Fed.  Rep. 
1017,   13  Am.  B.   R.  345. 

^  In  re  Hicks,  107  Fed.  Rep.  910, 

6  Am.   B.   R.    i8j;   In   re   Spalding 


(C.  C.  A.  2d  Cir.),  137  Fed.  Rep. 
1020,  14  Am.  B.  R.  129;  Shutc  v. 
Patterson,   147   Fed.   Rep.   509. 

'  Scheuer  v.  Smith  and  Mont- 
gomery Book  Co  (C.  C.  A.  5th 
Cir."),  112  Fed.  Rep.  407.  7  Am.  B. 
R.   384. 

'  B.  A.  1898,  Sec.  46. 


OFFENSES,  677 


CHAPTER    XXI. 


OFFENSES. 


§  228.     Generally. 

The  bankrupt  statute  prescribes  that  certain  acts  shall  con- 
stitute offenses,  and  provides  penalties  therefor/  The  crimes 
or  offenses  defined  in  the  act  are  misdemeanors  -  as  distin- 
guished from  felonies. 

A  person  may  be  liable  to  prosecution  under  a  state  or 
federal  law,  if  the  offense  has  been  committed  in  bankruptcy 
proceedings,  as  perjury.  Where  a  person  makes  himself 
liable  to  such  punishment  or  penalty,  it  is  probable  that  he 
may  be  proceeded  against  under  such  state  or  federal  statute 
or  under  the  bankrupt  act.'^  But  he  can  not  be  punished  twice 
for  the  same  offense. 

It  will  be  observed  that  the  present  act  does  not  make  it 
an  off'ense  to  obtain  goods  by  false  pretenses  prior  to  being 
adjudged  a  bankrupt.  It  seems  that  congress  has  left  such 
offenses  to  be  dealt  with  under  the  state  law.  The  rule  was 
otherwise  under  the  act  of  1867.* 

§  229.     Misappropriation  of  property  by  the  trustee. 

It  is  made  an  offense  under  the  bankrupt  statute  for  any 
])erson  to  knowingly  and  fraudulently  appropriate  to  his  own 
use,  embezzle,  spend  or  unlawfully  transfer  any  property,  or 

'R.   A.    1898,    Sec.  29.     Compare  325;    U.    S.    v.   T.atorre,    No.    15567 

R.  S.  Sec.  5132.  Fed.  Ca.s.,  8  Blatch.   134. 

'U.  S.  V.   Block,   No.   14609  Fed.  "Commonwealth    v.    Wiilkcr,    loS 

Kimball,  No.  7768  Fed.  Cas.,  2  Ben.  Mass.  309.     But  see   State  v.   Pike, 

Cas.,  4   Saw.   211;   U.   S.   v.    Pres-  15  N.   II.  83. 

cott,   No.    16084   P'ed.   Cas.,   2   Biss.  '  R.    S.    Sec.   5132,   clauses  9  and 

10. 


678 


LAW      AM)     I'KOCEliDINGS    IN     MANKRUPTCY. 


secrete  or  destroy  aii)-  document  belonging  to  a  bankrupt 
estate  which  came  int^i  his  charge  as  trustee.^ 

Tlie  object  of  tins  i)rovision  is  to  protect  the  bankrupt  and 
the  creditors  in  case  of  a  dishonest  trustee.  But  it  shouhl  be 
observed  that  the  perversion  of  the  assets  must  be  tainted  with 
fraud  or  done  unlawfully  or  with  evil  intent  to  bo  an  offense. 
An  honest  nn'stake  is  not  sufficient  to  warrant  an  inlliction  of 
the  penalty,  altlunigh  the  results  to  the  assets  arc  equally  dis- 
astrous. 

The  penalty  for  this  offense  is  imprisonment  for  a  period 
not  exceeding  five  years. - 

A  trustee  can  not  be  compelled  to  give  testimony  wdiich  may 
tend  to  show  that  he  has  misappropriated  the  funds  of  the 
bankrupt's  estate.^ 


§  230.     Concealment  of  property  by  a  bankrupt. 

Another  offense  is  to  knowingly  and  fraudulently  conceal 
while  a  bankrupt,  or  after  his  discharge,  from  his  trustee  any 
of  the  property  belonging  to  his  estate  in  bankruptcy.^  '^Po 
conceal  is  defined  by  the  act  to  "include  secrete,  falsify  and 
mutilate."  " 

No  one  can  be  punished  for  this  offense  unless  he  is  or  has 
been  a  1)ankrupt.  The  officers  of  a  bankrupt  corporation  are 
not  liable  to  punishment  for  this  offense.^ 

The  act  of  concealment  must  be  done  knowingly  and  fraud- 
ulently.*   Thus,  where  property  is,  in  fact,  concealed  in  specie, 


'  B.  A.  189S,  Sec.  29a. 

=  B.  A.  1898.  Sec.  290. 

^  In  re  Smith,  112  Fed.  Rep.  509, 
7  Am.  B.  R.  213. 

'  B.  A.  1898,  Sec.  2gb,  clause  i. 

See    charge    to    jury     hy     Judge' 
Brawley   imder   this    section    in    U. 
S.  V.  Levinson,  13  Am.  B.  R.  29. 

^  B.  A.   1898,  Sec.    I,  clause  22. 

'Field  V.  U.  S.  (C.  C.  A.  8th 
Cir.),  137  Fed.  Rep.  6,  14  Am.  B. 
R.  507;  U.  S.  V.  Lake,  129  Fed. 
Rep.  499,   12  Am.  B.  R.  270. 


■*  U.  S.  V.  Goldstein,  132  Fed. 
Rep.  789,  12  Am.  B.  R.  755;  U.  S. 
V.  Lowenstein,  126  Fed.  Rep.  S84, 
II  Am.  B.  R.  134;  In  re  Frcund, 
98  Fed.  Rep.  81,  3  Am.  B.  R.  418; 
Smitli  V.  Keegan,  in  Fed.  Rep. 
157,  7  Am.  B.  R.  4;  In  re  Pierce, 
103  Fed.  Rep.  64,  4  Am.  B.  R.  554; 
In  re  Kaiser,  99  Fed.  Rep.  689,  3 
Am.  B.  R.  767;  In  re  Blalock,  i  r8 
Fed.  Rep.  679,  9  .Am.  B.  R.  266;  In 
re  Beebe,  116  Fed.  Rep.  48,  8  Am. 
B.  R.  597- 


OFFENSES. 


679 


cr  where  the  title  is  concealed  by  a  colorable  conveyance  to 
prevent  it  passing  into  the  possession  of  the  trustee,  it 
clearly  comes  within  this  provision,  and  is  an  offense  under 
the  act.  If,  however,  the  bankrupt  actually  transfers  his  prop- 
erty, although  it  is  done  fiaudulently  to  keep  it  from  his  cred- 
itors, still,  if  he  does  not  reserve  any  right  to  a  reconveyance  or 
any  beneficial  interest,  that  is,  unless  a  secret  trust  in  favor  of 
himself  is  established,  there  is  no  concealment  if  the  property 
is  omitted  from  his  schedules,"'  but  if  the  facts  show  that  the 
bankrupt  reserved  any  beneficial  interest  for  himself,  there  is 
a  concealment.**  ^^'here  a  preference  has  been  given  or  a  trans- 
fer made  within  four  months  prior  to  the  filing  of  the  petition, 
it  is  not  in  itself  mala  fides,  and  under  the  present  act,  the 
bankrupt  is  not  guilty  of  the  oft'ense  of  concealment  in  not 
setting  forth  such  property  in  his  schedule." 

It  is  not  an  offense  punishable  under  the  act  to  omit  to  name 
property  in  the  schedule  l)y  accident  or  mistake,**  or  property 
which  the  debtor  did  not  know  that  he  owned,"  or  a  mass  of 
obsolete  and  worthless  claims  and  demands  on  which  no  action 


For  charge  to  jury  on  indict- 
ment for  concealing  property  from 
trustee,  see  U.  S.  v.  Levinson,  13 
Am.   B.   R.  29. 

"/»  re  Dauchy,  122  Fed.  Rep. 
688,  10  Am.  B.  R.  527,  afifirmed  (C. 
C.  A.  2d  Cir.),  130  Fed.  Rep.  532, 
II  Am.  B.  R.  511;  In  re  Jacobs, 
144  Fed.  Rep.  868,  16  Am.  B.  R. 
482 ;  In  re  McGurn,  102  Fed. 
Rep.  743,  4  Am.  B.  R.  459;  In 
re  Goodalc,  109  I'"cd.  Rep.  783, 
6  Am.  B.  R.  493 ;  In  re  Fitchard, 
103  Fed.  Rep.  742,  4  Am.  B.  R. 
609;  In  re  Cornell,  97  F';d.  Rep. 
29,  3  Am.  B.  R.  172;  In  re  Crist, 
116  Fed.  Rop.  1007,  9  .'\m.  B.  R. 
i;  In  re  IIowcll,  T05  I'ed.  Rep. 
594,  3  .\m.  B.  R.  414a.  But  sec 
In  rr  Skinner.  97  I"cd.  Rep.  190,  3 
Am.   [',.  K.   1O3. 


"  /;;   re  Welch,   100   Fed.   Rep.  65, 

3  Am.  B.  R.  93;  In  re  Bemis,  104 
Fed.  Rep.  672,  5  Am.  B.  R.  36;  //;  re 
Becker,  106  Fed.  Rep.  54,  5  Am. 
B.  R.  43S;  Bragasa  v.  St.  Louis 
Cycle,  107  Fed.  Rep.  77,  5  Am.  B. 
R.  700;  In  re  Wilcox  (C.  C.  A. 
2d  Cir.),  109  Fed.  Rep.  628,  6  Am. 
B.  R.  362;  In  re  Gammon,  109 
Fed.  Rep.  312,  6  Am.  B.  R.  482; 
In  re  Quackenbush,  102  Fed.  Rep. 
282,  4  Am.  B.  R.  274;  U.  S.  V.  Lev- 
inson,   13  Am.    P..    R.   29,  1^2. 

'  In  re  Pierce,   103  Fed.  Rep.  64, 

4  .\m.  B.  R.  554. 

V;;  re  Wctmore,  99  I'od.  Rep. 
703,  3  Am.  B.  R.  700;  In  re  Mor- 
row, 97  I'Vd.  Rep.  574,  3  .\ni.  T>.  R. 
263. 

"In  re  Parker,  No.  10720  Fed. 
Cas.,  4  Biss.  501. 


680 


LAW     AND     PROCEEDIXr.S    IN     UANKUITTCY. 


could  be  niaiutaincil.""  or  property  which  the  bankrui)t,  in  g-ood 
faith,  thought  did  not  pass  to  the  trustee,"  or  where  the  evi- 
dence does  not  show  a  legally  consummated  gift  oi"  transfer.^'" 
The  fact  that  a  bankrupt's  interest  in  land  is  doubtful  and  if  it 
exists  may  be  exempt,  does  not  prevent  its  omission  from  the 
schedule  being"  a  concealment,  but  is  evidence  to  be  consid- 
ered in  determining-  whether  or  not  there  was  fraudulent  in- 
tent.'' 

A  claim  for  alimony  which  has  not  gone  to  judgment  is  not 
property  which  passes  to  the  trustee  and  its  omission  from  the 
schedule  is  therefore  not  an  offense, '■*  nor  is  the  concealment 
of  property  acquired  after  adjudication.'"'  It  has  also  been  said 
that  there  can  l)e  no  concealment  under  the  act  when  the  title 
to  all  the  bankrupt's  property  passed  to  a  receiver  before  bank- 
ruptcy proceedings.^''  The  offense  of  concealment  can  not 
be  imputed,  so  where  the  husband  of  an  innocent  bankrupt 
conceals  property  the  bankrupt  is  not  guilty  of  an  offense.'^  It 
is  not  a  concealment  of  property  for  a  husband  who  has  failed 
in  business  to  transact  business  in  the  name  of  his  wife  as  her 


18 


agent. 

The  failure  to  include  in  the  schedule  money  in  bank,  after 
the  bankrupt's  attention  has  been  called  to  it,  amounts  to  a 
concealment  although  if  it  had  been  included  the  assets  would 
not  amount  to  the  exemptions,'"  or  be  sufficient  to  pay  the  ex- 
penses of  the  proceedings."^   In  the  absence  of  any  explanation 


"/«  re  Pearce,  21  Vt.  611. 

"  Rugely  V.  Robinson,  19  Ala. 
404;  In  re  Adams,  104  Fed.  Rep. 
72,  4  Am.  B.  R.  696. 

"/«  re  Leeuw,  3  Am.  B.  R.  418. 

"In  re  Todd,  112  Fed.  Rep.  315, 
7  Am.  B.  R.  770. 

"  In  re  Le  Claire,  124  Fed.  Rep. 
654,  10  Am.  B.  R.  72,2,- 

^' In  re  Parish,  122  Fed.  Rep. 
553,  10  Am.  B.  R.  548. 

"■In  re  Lesser  (C.  C.  A.  2d 
Cir.),  114  Fed.  Rep.  83,  8  Am.  B. 
R.  15- 


"  In  re  Meyers,  105  Fed.  Rep. 
35.3'  5  Am.  B.  R.  4;  In  re  Hyman, 
97  Fed.  Rep.  195,  3  Am.  B.  R.  169. 

"/ii  re  Fitchard,  103  Fed.  Rep. 
742,  4  Am.  B.  R.  609;  In  re  Locks, 
104  Fed.  Rep.  7d<T„  5  Am.  B.  R.  136. 

"/m  re  Royal,  112  Fed.  Rep.  135, 
7  Am.  B.  R.  106. 

""  In  re  Lowenstein,  106  Fed. 
Rep.  51,  2  Am.  P..  R.  193.  See  also 
In  re  Roy.  96  Fed.  Rep.  400,  3  Am. 
B.  R.  37. 


OFFENSES. 


681 


the  omission  of  property  of  value  from  the  schedule  after  being- 
advised  that  it  should  include  all  property,  is  sufficient  to  show 
a  fraudulent  concealment.-'  So  also  is  the  failure  to  schedule 
an  interest  in  remainder  under  a  will  and  the  knowingly  send- 
ing to  a  false  address  the  notice  to  a  creditor,--  and  the  selling 
of  goods  at  wholesale  as  soon  as  purchased  and  paying  the 
proceeds  to  a  f riend,-^'  and  the  pa3mient  of  debts  due'  to^-ela- 
tives  when  such  debts  were  not  kept  in  books  of  account.'^  An 
unexplained  shrinkage  of  assets  is  evidence  of  concealment  -' 
and  is  held  to  raise  a  presumption  and  to  throw  the  burden 
strongly  on  the  bankrupt.-*^  If  accompanied  by  a  failure  to  keep 
account  books,  there  is  sufficient  proof  of  a  concealment.'"  but 
a  decision  based  merely  on  the  fact  that  there  was  an  unex- 
plained shrinkage  is  incorrect,  when  the  only  evidence  to  show 
that  there  ever  were  such  assets  is  a  statement  to  a  mercantile 
agency.^* 

Circumstances  to  establish  concealment  depend  more  or  less 
upon  the  circumstances  of  each  particular  case.-'*    Speaking  of 


^'Osborn  v.  Perkins  (C.  C.  A. 
1st  Cir.),  112  Fed.  Rep.  127,  7  Am. 

B.  R.  250;  In  re  Breitling,  133 
Fed.  Rep.  146,  13  Am.  B.  R.  126. 

~  In  re  Roosa,  119  Fed.  Rep.  542, 
9  Am.  B.  R.  531;  In  re  Gaile\-  (C. 

C.  A.  7th  Cir.),  127  Fed.  Rep.  538, 
II  Am.  B.  R.  539;  In  re  Breincr, 
129  Fed.  Rep.  155,  n  Am.  B.  R. 
684. 

See  also  Woods  v.  Little  (C.  C. 
A.  3d  Cir.),  134  Fed.  Rep.  229,  13 
Am.  B.  R.  742. 

^/«  re  Holsicin,  114  Fed.  Rep. 
794.  8  Am.  B.  R.   147. 

"/n  re  Greenberg,  114  Fed.  Rep. 
773,  8  Am.  B.  R.  94. 

^In  re  Leslie,  119  Fed.  Rep.  406, 
9  Am.  B.  R.  561;  In  re  Breitling, 
13.3  Fed.  Rep.  146,  13  Am,  B.  R. 
126. 

*" /«  re  Cashman,  if)3  I'\-(l.  Rep. 
67.  4  Am.   15.  R.  326;  In  re  Finkle- 


stein,  loi  Fed.  Rep.  418,  3  Am.  B. 
R.  800;  In  re  Morgan,  loi  Fed. 
Rep.  982,  4  Am.  B.  R.  402. 

'"In  re  Mendehsohn,  102  Fed. 
Rep.  119,  4  Am.  B.  R.  103;  /;;  re 
Ablowich,  99  Fed.  Rep.  81,  3  Am. 
B.  R.  586;  In  re  O'Gara,  97  Fed. 
Rep.  932,  3  Am.  B.  R.  349. 

'"^Inre  Lesser  (C.  C.  A.  2d  Cir.), 
114  Fed.  Rep.  83.  8  Am.  B.  R.   15. 

■"  In  the  following  cases  the 
bankrupt  was  held  to  have  con- 
cealed property.  /;;  re  Otto.  115 
Fed.  Rep.  860,  8  y\m.  B.  R.  305,  753; 
In  re  Kenyon,  112  Fed.  Rep.  658,  7 
Am.  B.  R.  527;  In  re  Bullwinkle, 
III  Fed.  Rep.  364,  6  Am.  B.  R. 
756;  In  re  Grossman,  rii  Fed. 
Rep.  507,  6  Am.  B.  R.  510;  In  re 
Hoffman,  102  Fed.  Rep.  979,  4  Am. 
B-  R.  3.31 ;  In  re  Quackenbush,  102 
Fed.  Rep.  282,  4  Am.  B.  R.  274;  In 
re   Bragasa,    103    Fed.    Rep.   936,   4 


6S2 


LAW     AND    PROCEEDINGS    IN     BANKRUPTCY, 


a  charge  of  concealing  property  to  defeat  a  cliscluirgc.  Judge 
Blatchford  said  f" 

"A  fraud  of  the  kind  here  alleged  is  one  that  can  seldom 
be  prc^ved  by  other  than  circumstantial  evidence.  The  parties 
to  the  transaction  are  generally,  as  in  this  case,  the  only  wit- 
nesses, and  if  their  stories  are  to  l)e  believed  as  told,  no 
fraud  can  be  established.  External  evidence  is  not  to  be  had, 
and  the  truth  must  be  reached  l)y  examining  the  evidence  of 
the  alleged  parties  to  the  frautl,  and  weighing  its  probabilities, 
and  scrutinizing  its  general  tenor  and  manner.  The  deter- 
mination of  the  question  of  fraud  or  no  fraud  must,  under 
such  circumstances,  depend  upon  the  impression  made  by  the 
evidence  of  the  parties  concerned.  Of  course  those  who  would 
commit  such  a  fraud  would  swear  falsely  to  carry  it  through. 
If  their  positive  testimony  to  the  honesty  of  the  transaction  is 
overborne  by  badges  and  indicia  of  fraud,  deduced  from  their 
own  testimony,  the  conclusion  must  be  that  there  was  fraud. 
If  their  positive  testimony  to  the  honesty  of  the  transaction 
is  true,  and  there  was  no  fraud,  there  will  not  be  found  in  their 
testimony  and  badges  and  indicia  of  fraud  sufficient  to  over- 
bear such  positive  testimony."  The  charge  of  concealment 
ought  to  be  substantiated  either  by  direct  testimony  or  by  such 
facts  as  afford  unequivocal  circumstantial  evidence  of  it.  It 
certainly  ought  not  to  be  taken  to  be  true  upon  any  slight  or 


Am.  B.  R.  519;  In  re  Ileyman,  104 
Fed.  Rep.  677,  4  Am.  B.  R.  735; 
In  re  Wood;  98  Fed.  Rep.  972,  3 
Am.  B.  R.  572;  III  re  Semmel,  118 
Fed.  Rep.  487,  9  Am.  B.  R.  351. 

In  the  following  cases  tlic  bank- 
rupt was  held  not  to  have  concealed 
his  property:  Fields  x.  Karter  (C. 
C.  A.  5th  Cir.),  115  Fed.  Rep.  950, 
8  Am.  B.  R.  351;  In  re  Miner,  114 
Fed.  Rep.  998,  8  Am.  B.  R.  248; 
In  re  Howden,  iii  Fed.  Rep.  yiT,, 
7  Am.  B.  R.  191 ;  In  re  Brj^ant,  104 
Fed.  Rep.  789,  5  Am.  B.  R.  114; 
In   re  Conn,    108  Fed.  Rep!  525,  6 


.\ni.  r..  R.  2T7;  In  re  Hansen,  107 
Fed.  Rep.  252,  5  Am.  B.  R.  747;  In 
re  SlinglufF,  105  Fed.  Rep.  502,  S 
Am.  B.  R.  76;  \n  re  Adams,  104 
Fed.  Rep.  72,  4  .\m.  B.  R.  696;  In 
re  Locks,  104  Fed.  Rep.  783,  5  Am. 
B.  R.  136;  Fellows  v.  Freudenthal, 
102  Fed.  Rep.  731,  4  Am.  B.  R. 
490;  In  re  Freund,  98  Fed.  Rep.  81, 
3  Am.  B.  R.  418;  In  re  Le  Claire, 
124  Fed.  Rep.  654,  10  Am.  B.  R. 
73.3. 

^"  In  re  Gondridge.  No.  5547  I'"ed. 
Cas.,  2  N.  B.  R.  324. 


OFFENSES. 


6cS3 


ambiguous  presumptions,  nor  upon  any  state  of  facts  which  do 
not  clearly,  and,  indeed,  almost  necessarily,  call  for  such  an 
inference."^  It  should  be  borne  in  mind  that  the  decree  of 
proof  here  spoken  of  is  not  that  necessary  to  convict  the  bank- 
rupt, but  that  necessary  to  sustain  specifications  in  opposition 
to  discharge.  To  convict,  the  proof  must  be  beyond  a  reason- 
able doubt. 

The  penalty  for  this  offense  is  imprisonment  for  a  period 
not  to  exceed  two  vears.^" 

§  231.    False  oath  or  account. 

It  is  an  offense  to  knowingly  and  fraudulently  make  a  false 
oath  or  account  in,  or  in  relation  to,  any  proceeding  in  bank- 
ruptcy.^    An  oath  includes  an  affirmation." 

An  offense  under  this  provision  may  arise  in  connection 
with  any  oath  or  affirmation  made  in  any  part  of  the  proceed- 
ings, as  an  oath  to  a  schedule  filed  by  a  bankrupt,  an  oath  to 
prove  the  debt  of  a  creditor,  an  oath  made  to  an  account  by  a 
trustee,  or  a  deposition  or  testimony  given  by  any  person  in 
the  course  of  the  proceedings.^  The  essential  elements  are  that 
it  be  made  knowingly  and  fraudulently,*  that  it  be  false,  and 


"  In  re  Lafleche,  109  Fed.  Rep. 
307,  6  Am.  B.  R.  483;  In  re  Green- 
berg,  114  Fed.  Rep.  'j']},,  8  Am.  B. 
R.  94;  In  re  Hovvden,  in  Fed. 
Rep.  723,  7  Am.  B.  R.  191 ;  In  re 
Ferris,  105  Fed.  Rep.  356,  5  Am. 
B.  R.  246;  In  re  Gaylord,  106  Fed. 
Rep.  833,  5  Am.  B.  R.  410 ;  \n  re 
Corn,  106  Fed.  Rep.  143,  5  Am.  B. 
R.  478;  In  re  Fitchard,  103  Fed. 
Rep.  742,  4  Am.  B.  R.  609;  In  re 
Steed,  107  Fed.  Rep.  682,  6  Am. 
B.  R.  Ti;  In  re  Leslie,  119  Fed. 
Rep.  406,  9  Am.  B.  R.  561 ;  In  re 
Blalock,  118  Fed.  Rep.  679,  9  Am. 
B.  R.  266. 

''  B.  A.  1898,  Sec.  29^. 

'  I'..  \.   1898,  29/7,  clause  2. 


"B.  A.   1898,  Sec.   I,  clause   17. 

^  In  re  Conroy,  134  Fed.  Rep. 
764,  14  Am.  B.  R.  249;  U.  S.  V. 
Wechsler,    16  Am.   B.   R.    i. 

*  Kentucky  Nat.  Bank  v.  Carley 
(C.  C.  A.  3d  Cir.),  127  Fed.  Rep. 
686,  12  Am.  B.  R.  119;  U.  S.  v. 
Simon,  146  Fed.  Rep.  89;  In  re 
Frcund,  98  Fed.  Rep.  81,  3  Am. 
B.  R.  418;  Smith  v.  Keegan,  iii 
Fed.  Rep.  157,  7  Am.  B.  R.  4;  In 
re  Pierce,  103  Fed.  Rep.  64,  4  Am. 
B.  R.  554;  In  re  Kaiser,  99  Fed. 
Rep.  689,  3  Am.  B.  R.  767;  In  re 
Blalock,  118  Fed.  Rep.  679,  9  Am. 
B.  R.  266;  In  re  Beebe,  116  Fed. 
Rep.  48,  8  Am.  B.  R.  597. 


684  LAW      AM)     I'UOi-  KEDINGS     1 X     llANKRUrTCY. 

that  it  be  in.  or  in  lolatiiMi  to.  a  proceeding  in  bankruptcy.'"'  It 
is  not  an  offense  punishable  under  the  act  to  unintentionally 
make  a  false  statement  umler  oath,  and  it  would  seem  that  Sec. 
7.  sub.  "-^  protects  the  bankrupt  if  he  intentionally  makes  a 
false  oath  on  his  examination."  The  mere  understatement  or 
overstatement  in  schedule,  of  the  amount  of  debts,  does  not 
warrant  the  conclusion  that  the  bankrupt  was  misrepresenting 
the  condition  of  his  estate;'  nor  is  i)ro()f  that  the  bankrupt 
made  statements  contrary  to  his  oath,  proof  that  the  oath  was 
false.^  The  fact  that  the  bankrupt  files  amended  schedules 
mcluding-  property  left  out  of  the  first  schedules  is  evidence 
that  the  false  oath  to  the  first  was  not  knowingly  made,  but  is 
not  conclusive,  and  if  the  first  was  knowingly  made,  the 
amended  schedule  would  not  work  a  cure."  Wdiere  the  offense 
of  concealment  is  committed  by  omitting  assets  from  the  sched- 
ule there  must  necessarily  be  a  false  oath,  as  the  schedule  must 
be  verified  by  the  bankrupt.^"  An  indictment  charging  per- 
jurv  for  omitting  assets  from  schedules  is  defective  unless  it 
charges  directly  that  there  was  other  property.^^  An  indict- 
ment charging  perjury  under  R.  S.  Sec.  5292  is  bad  on  de- 
murrer unless  it  charges  that  the  defendant  took  the  oath 
alleged  to  be  false  "willfully."  ^- 

So  also  a  person  who  is  recjuired  to  make  an  account  is 
guilty  of  an  offense  punishable  under  the  act  who  knowingly 

'■In    re    Blalock,    ii8    Fed.    Rep.  ' /;i  re  Miner,  114  Fed.  Rep.  988, 

679,  9  Am.  B.  R.  266;   Bauman  v.  8  Am.  B.  R.  248. 

Feist  (C.  C.  A.  8th  Cir.),  107  Fed.  '^  Bauman  v.  Feist    (C.  C.  A.  8th 

Rep.  83,  5  Am.  B.  R.  703.  Cir.),   107  Fed.   Rep.  83.  S  Am.  B. 

*U.   S.  V.   Simon,    146  Fed.  Rep.  R.  703- 

89,  17  Am.  B.  R.  41;  In  re  Gaylord  " /«  re  Raton,  no  Fed.  Rep.  731, 

(C.  C.  A.  2d  Cir.),   112  Fed.  Rep.  6  Am.  B.  R.  531. 

668,  7  Am.  B.  R.  I ;  In  re  Dow's  Es-  '"/«   re  Stoddart,    114  Fed.   Rep. 

tate,  105  Fed.  Rep.  889,  5  Am.  B.  R.  486,  7  Am.  B.  R.  762 ;  In  re  Boy- 

400;   In  re  Goodale.   109   Fed.   Rep.  den,   132  Fed.  Rep.  991,   13  Am.  B. 

783,  6  Am.  B.  R.  493 ;  In  re  Marx,  R-  269. 

102  Fed.  Rep.  676,  4  Am.  B.  R.  521.  "  Bartlctt    v.    United    States    (C. 

See   also    Burrell   v.    Montana,    194  C.  A.  9th  Cir.).  106  Fed.  Rep.  884, 

U.  S.  572,  48  L.  Ed.  1 122,  12  Am.  5  Am.  B.  R.  678. 

j3    j^    „2  "U.    S.    V.    Lake,    129    Fed.    Rep. 

499,    12   :\m.   B.   R.  270. 


OFFENSES.  685 

and  fraudulently  makes  a  false  one,  not. necessarily  under  oath. 
I'his  includes  the  schedule  of  a  bankrupt,  the  reports  of  the 
trustee,  receiver  and  other  officers  of  the  court,  and  any  person 
or  persons  required  by  the  court  to  furnish  an  account  of  prop- 
erty or  funds.  An  honest  mistake  or  an  omission  is  not  suffi- 
cient evidence  of  guilt.  It  must  have  been  intentional,  and  for 
the  purpose  of  deceiving,  to  render  the  person  making  it 
guilty  of  an  offense. 

A  charge  of  perjury  may  be  predicated  upon  false  testi- 
mony given  by  the  bankrupt  upon  the  examination  under  Sec- 
tion 21a  before  a  special  commissioner.^'^  It  is  neces- 
sary to  show  that  the  oath  was  administered  to  the  defendant 
by  a  person  properly  appointed  and  authorized  to  do  so,  but 
it  is  sufficient  to  support  the  charge  of  perjury  if  the  defendant 
take  the  oath  either  before  he  began  to  testify  or  when  he  got 
through  and  signed  his  name  to  the  testimony.^* 

The  penalty  for  this  offense  is  imprisonment  for  a  period 
not  exceeding  two  years.^^ 

§  232.     Presenting  false  claims. 

It  is  an  offense  punishable  under  the  bankrupt  statute  to 
knowingly  and  fraudulently  present  under  oath  any  false  claim 
for  proof  against  the  estate  of  a  bankrupt,  or  use  any  such 
claim  in  composition  personally  or  by  agent,  proxy,  or  attor- 
ney, or  as  agent,  proxy,  or  attorney.^ 

The  essential  elements  of  this  offense  are :  First,  the  pre- 
senting of  a  false  claim  under  oath  for  proof  against  the  estate 
of  the  bankrupt  or  to  use  any  such  claim  in  composition ;  and, 
secondly,  to  do  so  knowingly  and  fraudulently.  If  either  of 
these  elements  is  wanting,  it  is  not  a  punishable  offense.  The 
offense  may  be  committed  not  only  by  the  person  who  owns 
the  claims,  or  who  is  to  be  benefited  by  proving  it.  but  may 


13 


'U.    S.    V.    Wcchsler,     16    Am.  "  U.    S.   v.   Wcchsler,   16  Am.   B. 

B.  R.   I ;  U.  S.  V.  Simon,   146  Fed.       R.  i. 
Rep.  89,  17  Am.  P..  R.  41.  "  B.  A.   1898,  Sec.  2gb. 

'  B.  A.  1898,  Sec.  2gb,  clause  3. 


686  LAW      AM)     I'KOCEEDINGS    IN     liANKRUPTCY. 

be  conmiitted  by  any  ancnt.  proxy  or  attorney  who  actually 
presents  the  false  claim,  knowing-  it  to  be  false  and  with  intent 
to  practice  a  fraiul  upon  ihc  real  creditors. 

The  penalty  for  this  otYensc  is  imprisonment  for  a  period 
not  to  exceed  two  years. - 

§  233.     Receiving  property  from  a  bankrupt. 

It  is  a  punishable  offense  to  knowingly  and  fraudulently 
receive  any  material  amount  of  ])roperty  from  a  bankrupt 
after  the  filing  of  the  petition,  with  intent  to  defeat  the  act/ 

The  gist  of  the  offense  created  by  this  clause  is  to  receive 
property  from  a  bankrupt  after  bankruptcy  proceedings  have 
been  commenced,  with  intent  to  keep  property  from  the  trus- 
tee. The  bankrupt  who  so  transfers  property  is  guilty  of  the 
offense  of  concealing  property  under  the  first  clause  of  Section 
29.  This  clause  makes  the  person  receiving  such  property 
also  guilty  of  an  offense  punishable  under  the  act.  The  offense 
can  not  be  committed  unless  a  petition  has  been  filed  in  a  court 
of  competent  jurisdiction  in  which  a  trustee  can  be  appointed." 
It  is  also  essential  that  the  person  receiving  the  property  does 
so  knowingly  and  fraudulently  with  intent  to  defeat  the  act.^ 

The  penalty  for  this  offense  is  imprisonment  for  a  period  not 
to  exceed  two  years.* 

§  234,    Extorting  money  for  forbearing  to  act. 

It  is  a  punishable  offense  under  the  bankrupt  act  to  know- 
ingly and  fraudulently  extort  or  attempt  to  extort  any  money 
or  property  from  any  person  as  a  consideration  for  acting  or 
forbearing  to  act  in  bankruptcy  proceedings.^ 

Under  the  former  act  it  was  held  that  acting  or  forbear- 
ing to  act  in  bankruptcy  proceedings  was  not  such  a  consider- 
ation as  would  support  a  note."     But  tlie  ])resent  statute  goes 

=  E.  A.  1898,  Sec.  29&.  "P.   A.    1898,    Sec.   29?;. 

'  B.  A.  1898,  Sec.  29/7.  clause  4.  ^  B.   A.    1S98,    Sec.   29/;,  clause   5. 

-See  U.  S.  V.  Latoore,  No.  15567  ""  Rice  v.   Maxwell.   13   Smeads  & 

Fed.  Cas.,  8  Blatch.  134,  M.  (21  Miss.)  289;  Roll  v.  Leggett, 

'In  re  Luftig,  15  Am.  B.  R.  77.V  3  Selden   (7  N.  Y.)    178. 


OFFENSES.  687 

f 

further;  it  makes  it  an  offense  punishable  by  imprisonment 
for  a  period  not  to  exceed  two  years.^ 

§  235.    Offenses  by  referees. 

The  bankrupt  statute  specifies  three  offenses  which  may  be 
committed  by  a  referee.  They  are,  if  he  knowingly,  first, 
acts  as  a  referee  in  a  case  in  which  he  is  directly  or  indirectly 
interested;  or,  second,  purchases,  while  a  referee,  directly  or 
indirectly,  any  property  of  the  estate  in  bankruptcy  of  which 
he  is  referee;  or,  third,  refuses,  while  a  referee  or  trustee,  to 
permit  a  reasonable  opportunity  for  the  inspection  of  the  ac- 
counts relating  to  the  affairs  of,  and  the  papers  and  records 
of,  estates  in  his  charge  by  parties  in  interest  when  directed 
by  the  court  so  to  do.^ 

It  is  not  an  oft'ense  to  refuse  to  permit  an  inspection  of 
books,  etc.,  unless  such  an  inspection  has  been  ordered  by  the 
court.  If  an  inspection  is  denied  by  the  referee  or  trustee,  it  is 
assumed  that  the  refusal  is  based  upon  some  good  ground.  If 
it  is  not,  upon  application  to  the  court,  an  inspection  will  be 
allowed.  A  refusal  by  the  referee  or  trustee  after  the  order 
of  court  is  an  offense. 

The  penalty  in  case  of  any  of  the  offenses  mentioned  in 
this  section  is  a  fine  not  to  exceed  five  hundred  dollars  and  a 
forfeiture  of  the  office  of  referee.^  The  office  becomes  vacant 
immediately  ui)on  conviction. 

§  236.  What  court  has  jurisdiction  of  criminal  proceedings. 
Proceedings  to  punish  for  offenses  under  tlie  l)ankrupt  act 
may  be  instituted  by  a  court  of  bankruptcy  or  in  a  circuit  court 
of  the  United  States.  In  the  general  grant  of  powers  con- 
ferred by  Section  2  of  the  act.  upon  the  courts  of  bank- 
ruptcy, it  is  provided  that  they  "are  hereby  invested,  within 
their  respective  territorial  limits  as  now  established,  or  as 
they  may  be  hereafter  changed,  with  such  jurisdiction  at  law 
and  in  equity  as  will  enable  them  to  exercise  original  jurisdic- 
tion in  bankruptcy  proceedings,  in  vacation  in  cliambers,  and 

■■•  B.  A.  1898,  Sec.  2()b.  '  B.   A.    1898,   Sec.   igc. 


688  LAW     AND     rKOCEEDINCS    IN     1!  \.\  K  KT  I'TCY. 

during"  their  respccli\o  terms,  as  they  arc  n  nv  or  may  he 
hereafter  held,  to  ....  fourth,  arrait^n,  tr)-,  and  pun- 
ish bankrupts,  ofilcers  and  other  persons,  and  the  ai^ents,  offi- 
cers, members  of  the  board  of  (h'rectors  oy  trustees,  or  other 
siniihu-  controHing-  bodies,  of  corpt)rations.  for  violations  of 
this  act,  in  accortlance  with  the  laws  of  procedure  of  the 
United  States  now  in  ft)rce,  or  such  as  may  be  hereafter 
enacted,  reo'ulatin"'  trials  for  the  alleged  violation  of  laws  of 
the  I'nited  States."  and  Section  23c  provides  that 
"the  United  States  circuit  courts  shall  have  concurrent  juris- 
diction with  the  courts  of  bankruptcy,  w  ithin  their  respective 
territorial  limits,  of  the  offenses  enumerated  in  this  act." 

The  court  for  the  district  within  which  the  offense  is  com- 
mitted has  jurisdiction  to  punish  for  the  offense. 

§  237.     Practice  and  procedure. 

Proceedings  to  punish  a  person  for  an  offense  under  tlie 
bankrupt  act  are  criminal  in  their  nature.  In  such  trials  and 
proceedings  the  bankrupt  act  expressly  adopts  "the  laws  of 
procedure  of  the  United  States  now^  in  force,  or  such  as  may 
be  hereafter  enacted  regulating  trials  for  the  alleged  viola- 
tion of  law's  of  the  United  States."  ^  So  also  the  rig-ht  to 
submit  an  alleged  offense  under  the  act  to  a  jury  is  deter- 
mined and  enjoyed  according  to  the  United  States  laws  now 
in  force,  or  such  as  may  be  hereafter  enacted,  in  relation  to 
trials  by  jury.^ 

Criminal  proceedings  in  bankruptcy  are  regularly  insti- 
tuted by  an  indictment  found  by  a  grand  jury.  But  it  has 
been  held  that  where  the  crime  is  not  infamous,  within  the 
meaning  of  that  term  as  used  in  the  fifth  amendment  to  the 
constitution,  the  person  committing  it  may  be  prosecuted  by 
information.''  It  would  seem  that  all  offenses  under  the  pres- 
ent bankrupt  act,  except  those  punisliable  by  fine  only,  are 
infamous   within    the   meaning   of   that   term    given   by   the 


'B.   A.    189S.   .Sec.   2gc.  ='U.  S.  v.   Block.  No.   14609  Fed. 

B,  A.    1888,   Sec.    19c.  Cas.,  4  Saw.  211. 


2 


OFFENSES.  689 

supreme  court.*  It  has  been  said  that  "the  question  is  whether 
the  crime  is  one  for  which  tlie  statutes  authorize  the  courts  to 
award  an  infamous  punishment,  not  whether  the  punishment 
ultimately  awarded  is  an  infamous  one.  When  the  accused 
is  in  danger  of  being  subjected  to  an  infamous  punishment 
if  convicted,  he  has  the  right  to  insist  that  he  shall  not  be  put 
upon  his  trial  except  on  the  accusation  of  a  grand  jury."  ^ 

It  has  been  held  that  the  schedules  in  bankruptcy  can  not 
be  used  before  the  grand  jury  in  obtaining  an  indictment  of 
the  bankrupt  for  fraudulent  concealment  of  property  under 
Section  296.*'  It  has  also  been  held  that  books  and  papers 
taken  possession  of  by  a  trustee  or  receiver  appointed  by  a 
court  of  bankruptcy,  can  not  be  used  in  a  criminal  prosecution 
against  persons  from  whose  possession,  custody  or  control  the 
books  were  taken.^ 

General  averments  in  an  indictment  are  not  sufficient.  It 
must  show  an  offense,  and  must  convey  to  the  accused  the 
infonnation  necessary  to  enable  him  to  make  his  defense.^  It 
is  not  sufficient  in  an  indictment  to  aver  that  proceedings  in 
bankruptcy  were  duly  commenced.  It  must  be  pleaded  and 
proven,  in  order  to  convict,  that  a  petition  in  bankruptcy  was 
presented  to  the  bankruptcy  court  by  a  certain  creditor,  nam- 
ing him,  and  also  the  amount  of  the  debt  of  such  petitioning 
creditor,  and  the  alleged  cause  of  bankruptcy,  and  the  adjudi- 
cation of  bankruptcy.  It  must  appear  affirmatively  that  the 
creditor  had  a  right  under  the  law  to  prosecute  proceedings  in 
bankruptcy.  The  amount  of  his  debt  must  appear,  otherwise 
the  court  would  have  no  jurisdiction.^  The  word  "feloniously" 

*See  the   discussion  of  this   sub-  *U.    S.    v.    Chambers,    135    Fed. 

ject   by    Mr.    Justice    Gray,    in    Ex  Rep.  1023,  13  Am.  B.  R.  708. 

parte  Wilson,  114  U.  S.  424,  29  L.  'People    v.     Swarts     (Crim.    Ct. 

Ed.  89,   et  scq.      See  also   Medley,  Cook  Co.,   111.),  24  Nat.  Corp  Rep. 

Petitioner,    134    U.    S.    ifio.    ^^    L.  266,  8  .Am.   B.  R.  487. 

Kd.  835;   Mackin   v.   U.   S.,    117  U.  But  see  State  v.  Strait,  94  Minn. 

S.   348,   29  L.   Ed.   909;    Parkinson  384;  Boyd  v.  U.  S.,  116  U.  S.  6ifi, 

V.  U.  S.,  121  U.  S.  281,  30  L.  Ed.  29  L.   Ed.  746;   Blum  v.   State,  94 

959;  U.  S.  V.  De  Walt,  128  U.  S.  Md.  375. 

393.  .32  L.  YA.  485.  "Bartlett  v.  U.  S.   T06  Fed.   Rep. 

Mn   Ex  fxirfe  Wilson,   114   U.   S.  884.  5  Am.  B.  R.  678;  U.  S.  v.  La- 

426,  29  L.  Ed.  89.  torre,  No.  15567  Fed.  Gas.,  8  Blatch 


090  LAW      AM)     l'ia)C  KKDlXiiS     IN     IJANKIUrTCY. 

slioiilil  not  1)0  used,  as  tin-  olTense  is  c)nl\  a  niisdcnioanor. 
An  iiulictnient  cliai\^-ing  perjury  is  had  on  deiniuTer  unless 
it  cliavi^es  that  the  defendant  took  the  oath  alles^ed  to  he  false 
'•\villfnllv." '■'  L'ntier  an  indictment  for  perjurv  for  false  testi- 
mony gixen  1)\-  a  hankrujjt  upon  an  examination  under  Section 
2\o  he  fore  a  special  commissioner,  it  is  necessary  to  show  that 
the  oath  was  adnn'nistered  [o  the  defendant  hy  a  person  prop- 
erly appointed  and  authorized  t(^  do  so.  l)ul  it  is  sufficient  to 
show  that  the  defendant  took  the  oath  either  hefore  he  hegan  to 
testify  or  when  he  got  through  and  signed  his  name  to  the 
testimony.^"  It  has  been  held  that  a  failure  to  allege  specific- 
ally that  the  property  concealed  was  the  i)roperty  of  the  bank- 
rupt at  the  time  of  the  adjudication,  was  a  formal  defect  and 
not  fatal." 

The  proceedings  subsequent  to  the  indictment  are  such  as 
are  regularly  had  in  criminal  cases  in  federal  courts,  a  general 
consideration  of  which  is  not  within  the  scope  of  this  work. 

The  language  with  reference  to  who  may  be  punished  by  a 
court  of  bankruptcy  includes  bankrupts,  officers  and  other 
persons,  and  the  agents,  officers,  members  of  the  boards  of 
directors,  trustees  and  other  similar  controlling  bodies,  of 
corporations.^"  This  language  is  undoubtedly  broad  enough 
to  include  all  persons  who  conspire  \vith  the  bankrupt  to 
commit  the  offenses  mentioned  in  the  act.''*  It  has  been  held 
that  a  person  can  not  be  punished  under  Section  29  who  is  not 
or  has  not  been  a  bankrupt.    The  officers  of  a  bankrupt  corpo- 


134;   U.   S.  V.    Prescott,   No.   16084  '"  U.   S.  v.  Wechsler,   16  Am.  B. 

Fed.   Cas.,  2   Biss.   325;    U.    S.   v.  R.  i. 

Lake,    129   Fed.    Rep.   499,    12   Am.  "  U.   S.  v.  Jackson,  2  Fed.   Rep. 

B.  R.  270.  502. 

Consult    also    Reg.    v.    Lands,   33  '"  B.  A.   189(8,  Sec.  2,  clause  4. 

Eng.    Law    and    Eq.    536 ;    Rex    v.  '''  See  U.   S.  v.  Bayer,   No.   I4S47 

Jones,  24  E.  C.  L.  156;  Reg.  v.  Ew-  Fed.  Cas.,  4  Dill.  407. 

ington,   41    E.    C.   L.    178;    Reg.    v.  Consult  U.  S.  v  Stevens,  44  Fed. 

Boyd,  5  Cox  Cr.  Cas.  502.  Rep.   132;  U.  S.  v.  Snyder,  8  Fed. 

*U.    S.    V.    Lake,    129    Fed.    Rep.  Rep.  805,   14  Fed.  Rep.  554;  U.  S. 

499,  12  Am.  B.  R.  270.  V.   Houghton.   14  Fed,  Rep.  544. 


OFFENSES.  691 

ration  are  not  liable  to  punishment  for  this  reason/*  The 
indictment  must  be  found  or  information  filed  within  one  year 
from  the  commission  of  the  offense.^'^ 

"Field   V.   U.    S.    (C.    C.    A.   Sth       R.    507;    U.    S.    v.    Lake,    129    Fed 
Cir.),   137  Fed.  Rep.  6,   14  Am.  B.       Rep.  499,   12  Am.  B.  R.  270. 

'=  B.  A.  1898,  Sec.  jgd. 


692 


LAW     AXU     TROCEEDINGS    IN     BANKRUPTCY. 


CHAPTER    XXII. 


PROCEEDINGS  TO   PUNISH    FOR   CONTEMPT. 

^  238.     The  power  to  commit. 

The  power  to  punish  for  contempt  is  inliercnt  in  ah  courts 
of  the  I'nited  States.^  But  the  power  is  expressly  conferred 
upi>n  cmn-ts  o\  hankruptcy  to  enforce  obe(hence  by  bankrupts, 
officers  and  other  persons  to  ah  huvful  orders,  l)y  fine  or  iiu- 
prisonnient,  or  hue  and  imprisonment,  and  to  punish  persons 
for  contempts  committed  before  referees."  A  referee  has  no 
power  to  punisli  a  contempt.^ 

A  court  of  bankruptcy  may  undoubtedly  punisli  a  i)erson 
who  has  misbehaved  in  tlie  presence  of  the  court ;  *  or  so  near 
thereto  as  to  obstruct  the  administration  of  justice,  as  on  a 
piazza  adjoining-  the  court-room,''  or  in  a  jury-room  or  hall," 


'  Ex  parte  Robinson,  19  Wall.  510, 
2J  L.  Ed.  205;  Besette  v.  Con- 
koy  Co.,  194  U.  S.  324,  48  L.  Ed. 
997. 

■  B.  A.  1898,  Sec.  2,  clause  13 
and  16,  and  Sec.  41. 

In  Boyd  v.  Glucklich  (C.  C.  A. 
8tli  Cir.),  116  Fed.  Rep.  131,  8 
Am.  B.  R.  393,  the  court  constru- 
ing this  section,  said : 

"By  reference  to  section  41  it 
will  be  seen  that  'the  things  for- 
bidden in  this  section,'  concerning 
which  the  referee  is  required  to 
certify  the  facts  to  the  judge,  in- 
clude only  those  things  which 
would  be  punishable  as  contempts 
by  all  courts  of  record.  They  are 
the  common  and  familiar  heads  for 
the  exercise  of  this  jurisdiction  by 
all  courts  of  record.  No  new  or 
enlarged  jurisdiction  is  conferred, 
and  no  power  to  impose  a  punish- 
ment which  might  not  rightly  and 
lawfullj'  be  imposed,  on  a  similar 
state  of  facts,  by  any  other  United 
States  court.     Any  act,   matter,  or 


thing  which  any  United  States 
court  may  punish  as  a  contempt 
may  be  punished  as  such  by  a  court 
of  bankruptcy;  and  any  act,  matter, 
or  thing  which  can  not  be  pun- 
ished as  a  contempt  by  other  United 
States  courts  can  not  be  punished 
as  such  by  a  court  of  bankruptcy." 

'B.  A.  1898,  Sec.  41;  Bank  of 
Ravenswood  v.  Johnson  (C.  C.  A. 
4th  Cir.),  143  Fed.  Rep.  463,  16 
Am  B.  R.  206;  Smith  v.  Belford 
(C.  C.  A.  6th  Cir.),  106  Fed.  Rep. 
658,  5  Am.  P..  R.  291;  Boyfl  v. 
Glucklich  (C.  C.  A.  8th  Cir.),  116 
Fed.  Rep.  131,  8  Am.  B.  R.  393. 

■*  U.  S.  V.  Patterson,  26  Fed.  Rep. 
509;  Blight  V.  Fisher,  No.  1542  Fed. 
Cas.,   Pet.  C.  C.  41. 

°  United  States  v.  Carter,  No. 
14740,  3  Cranch,  C.  C.  423;  Ex 
parte  Salkey,  No.  12253  Fed.  Cas., 
6  Biss.  269,  affirmed  on  petition  for 
habeas  corpus,  No.  12254  Fed.  Cas., 
C\  Biss.  280. 

"  See  In  re  Savin,  131  U.  S.  267, 
33  L.  Ed.  150. 


CONTEMPT. 


693 


or  before  a  referee,'  or  where  there  has  been  misbehavior  of 
■  any  officer  of  the  court  in  his  official  transactions,  as  where 
one  of  its  officers  refuses  to  pay  over  money  due  from  him  in 
his  official  capacity,**  or  where  a  witness  refuses  to  be  sworn 
according  to  law,"  or  where  a  witness  refuses  to  answer  ques- 
tions in  court  or  before  a  referee,^"  or  where  there  has  been 
disobedience  or  resistance  by  a  bankrupt,  officer  or  other  per- 
son to  any  lawful  writ,  process,  order,  rule  or  deccree,  or  com- 
mand of  the  court, ^^  or  where  the  bankrupt  after  filing  petition 
surrendered  mortgaged  property  to  the  mortgagee,^"  or  where 
the  bankrupt  withdraws  from  the  office  of  the  referee  before 
the  completion  of  his  examination,^'*  or  where  there  has  been 
an  assault  on  an  officer  of  the  court,  as  upon  a  trustee  in  the 
performance  of  the  duties  of  his  office.^* 

It  is  a  contempt  to  disobey  or  resist  any  lawful  process  of 
the  court  duly  served,  as  a  subpoena  to  a  witness  to  testify  in 
court,"  or  before  a  referee/*'  or  to  produce  wTitten  docu- 
ments,^" or  a  final  decree  or  interlocutory  order  of  the  court. 


'  B.  A.  1898,  Sec.  2,  clause  16 ; 
Sharon  v.  Hill,  24  Fed.  Rep.  ^zd; 
United  States  v.  Anonymous,  21 
Fed.  Rep.  761. 

"/n  re  Pittman,  No.  11 184  Fed. 
Cas.,  I  Curtis  186;  Jeffries  v.  Lau- 
rie, 27  Fed.  Rep.  198;  In  re 
Paschal,  10  Wall.  491,  19  L.  Ed. 
992;  Bogart  V.  Supply  Co.,  2"]  Fed. 
Rep.  722. 

"  B.  A.  1898,  Sec.  2ia;  In  re  How- 
ard, 95  Fed.  Rep.  415,  2  Am.  B.  R. 
582. 

'"B.  A.  1898,  Sec.  2i<7.  U.  S. 
V.  Goldstein,  i;^2  Fed.  Rep.  789, 
12  Am.  B.  R.  755. 

"  B.  A.  1898,  Sec.  2,  clause  13 ; 
•Mueller  v.  Nugent,  184  U.  S.  i, 
46  L.  Ed.  405.  7  Am.  B.  R.  224. 

"/«  re  Arnett,  T12  Fed.  Rep. 
770.  7  Am.  15.  K.  522. 

"/«  re  Vogel.  No.  16984  Fed. 
Cas.,   5    N.    B.    R.   393. 


"  Ex  partt  O'Neal,  125  Fed.  Rep. 
967,  II  Am.  B.  R.  196. 

''"  B.  A.  1898,  Sec.  2ia;  Carman 
V.  Emerson,  71  Fed.  Rep.  264,  18 
C.  C.  A.  38 ;  United  States  v.  Cald- 
well, 2  Dull.  2ii',  Norris  v.  Hass- 
ler,  23  Fed.  Rep.  581 ;  In  re  EUer- 
be,   13  Fed.  Rep.  530. 

■"B.  A.  1898,  Sec.  2ia  and  Sec. 
41;  In  re  Howard,  95  Fed.  Rep. 
415,  2  Am.  B.  R.  582;  In  re  Spof- 
ford,  62  Fed.  Rep.  443;  Johnson 
Steel  Co.  V.  N.  B.  Steel  Co.,  48 
Fed.  Rep.  191  ;  In  re  Allen,  No. 
208  Fed.  Cas.,  13  Blatch.  271. 

In  re  Kerber,  125  Fed.  Rep.  653, ' 
10  Am.  B.  R.  747,  it  was  held  that 
mileage  and  fee  for  one  day's  at- 
tendance must  be  paid  or  tendered 
witness  before  he  could  be  at- 
tached  for  contempt. 

"B.    A.    1898,    .Sec.   41. 


094 


LAW      AND     l'Kt)l  i:i;i)l.\c;s     L\      15A.\  KRLl'I'CV. 


\\"hcro  a  person  lias  used  iluc  diligence  to  comply  w  illi  the 
orders  of  the  court,  he  is  not  guilty  of  C()ntein[)t."'  It  has 
been  said  that  an  t)rder  of  court  "does  not  mean  a  written 
ortler  al\va\s.  hut  onl\-  an  exercise  t)f  authority  constitutinsi' 
i(  recjuirenient.''  The  (|uesti()n  as  to  whether  the  act  con- 
stitutes a  contempt  of  an  order  of  court  usually  arises,  however, 
upon  a  writing-,  as  upon  an  order  to  deliver  property  by 
the  bankrupt,""  or  an  onler  of  injunction.  It  should  be  ob- 
served that  it  is  only  lawful  orders  the  disobedience  of  which 
may  be  punislKnl  for  conteiupt.  The  court  has  power  to  order 
a  bankrupt  to  pay  over  to  his  trustee  money  found  to  be  in  his 
possession  or  control  and  properly  belonging  to  his  estate, 
and  if  the  bankrupt  fails  to  obey  such  order  the  court  may 
commit  him  for  contempt  until  he  complies."'  The  same  rule 
has  been  applied  in  cases  of  an  agent  or  bailee  of  property  of 
the  bankrupt,""  or  in  case  of  failure  to  produce  books  of  ac- 
count w'hen  ordered.-^  The  court  may  require  petitioning 
creditors  to  pay  the  expenses  of  a  receivership  upon  dismiss- 
ing the  petition.-*  If,  however,  the  court  is  without  power  to 
make  the  order,   it  is  without  powder  to  punish  for  a  diso- 


"  In  re  Carpenter,  No.  2427  Fed. 
Cas.,   I   N.  B.   R.  299. 
''•'  Bridges  v.  Sheldon,  7  Fed.  Rep. 

45- 

'"  Mueller  v.  Nugent,  184  U.  S.  i, 
46  L.  Ed.  405,  7  Am.  B.  R.  224; 
In  re  Leinweber,  128  Fed.  Rep.  641, 
12  Am.  B.  R.  175;  In  re  Schlesinger 
(C.  C.  A.  2d  Cir.),  102  Fed.  Rep. 
117,  4  Am.  B.  R.  361;  In  re  Rosser 
(C.  C.  A.  8th  Cir.),  loi  Fed.  Rep. 
562,  4  Am.   B.  R.   153 

-^In  re  Rosser  (C.  C.  A.  8tli 
Cir.),  loi  Fed.  Rep.  562,  4  Am.  B. 
R.  153;  Ripon  Knitting  Wks.  v. 
Schreiber,  loi  Fed.  Rep.  810,  4 
Am.  B.  R.  299;  In  re  Schlesinger 
(C.   C.   \.  2d   Cir.),   102  Fed.   Rep. 


117,  4  Am  B.  R.  361;  in  re  \yil- 
son,  116  Fed.  Rep.  419,  8  Am.  B.  R. 
612;  In  re  Greenberg,  106  Fed. 
Rep.  496,  5  Am.  B.  R.  840;  In  re 
Purvine  (C.  C.  A.  5th  Cir.),  96 
I'ed.  Rep.  192,  2  Am.  B.  R.  787; 
In  re  Gerstel,  123  I^'ed.  Rep.  166,  IQ 
Am.   B.   R.  411. 

=' Mueller  v.  Nugent,  184  U.  S. 
I,  46  L.  Ed.  405,  7  Am.  B.  R.  224; 
In  re  Feldser,  134  Fed  Rep.  307, 
14  Am.  B.  R.  216. 

'^  In  re  Wilson,  116  Fed.  Rep. 
4r9,  8  Am.  B.  R.  612. 

'*  In  re  Lacov  (C.  C.  A.  2d  Cir.), 
142  Fed.  Rep.  960,  15  Am.  B.  R. 
290. 


CONTEMPT. 


695 


bedience  of  it.'^  \Miere  the  person  having  possession  of  prop- 
erty claimed  by  the  bankrupt  sets  up  an  adverse  claim  in 
himself  to  the  property,  he  is  entitled  to  a  plenary  suit.''  In 
such  cases  he  can  not  be  recjuired  to  answer  a  rule  to  show 
cause  in  a  summary  proceeding  for  disobedience  of  an  order  to 
turn  over  to  the  trustee  such  property.'^ 

The  courts  ha\'e  frequently  been  called  upon  in  the  exercise 
of  general  jurisdiction  to  determine  what  constitutes  con- 
tempt of  court  in  the  disobedience  or  resistance  of  an  injunc- 
tion order.  Generally,  to  do  the  thing  enjoined  is  contempt, 
and  it  has  been  held  to  be  a  violation  of  an  injunction  for 
the  person  enjoined  to  be  present  at  the  commission  of  the  act, 
aiding  and  abetting,  although  not  actually  taking  part  in  it,'" 
or  to  do  the  act  enjoined  as  agent  or  servant  of  another 
person."'  The  mere  fact  that  a  person  did  not  think  that 
his  act  amounted  to  a  violation  of  the  injunction,  is  no  de- 
fense,'^ nor  the  fact  that  he  acted  under  advice  of  counsel."" 
But  where  the  violation  of  an  injunction  order  is  not  wilful 
this  fact  may  be  considered  in  mitigation  of  the  punishment 
to  be  imposed.^" 


"''Louisville  Trust  Co.  v.  Com- 
ingor,   184  U.  S.   18,  46  L.  Ed.  413, 

7  Am.  B.  R.  421. 

""  Dunks  V.  Gray,  3  Fed.  Rep. 
868;   St.   John's   College  v.   Carter, 

8  Law  Jour.  Eq.  N.  S.  218;  So- 
ciete  V.  Western  Distilling  Co.,  42 
Fed.   Rep.  96. 

In  In  re  Wall,  13  Fed.  Rep.  818, 
the  court  said :  "I  am  too  well 
aware  of  his  influence  in  this  com- 
munity not  to  know  that  his  pres- 
ence would  be  ample  encourage- 
ment to  others  on  such  an  occasion. 
It  is  not  alone  by  words  that  one 
advises  and  encourages,  and  the 
fact  of  his  presence  and  action  is 
sufficient  not  only  to  find  an  en- 
couraging thereby,  but  raise  the 
pre5umf)tion  on  his  doing  the  same 
by  words." 


^  Dunks  V.  Gray,  3  Fed.  Rep. 
868,  41   Vt.  246. 

""  Atlantic,  etc.,  Co.  v.  Dittmar 
Co.,  9  Fed.  Rep.  316. 

'"  U.  S.  V.  Goldstein,  132  Fed. 
Rep.  789,  12  Am.  B.  R.  755;  In  re 
Krinsky  Bros.,  112  Fed.  Rep.  972, 
7  Am.  B.  R.  535 ;  Burr  v.  Kimbark, 
29  Fed.  Rep.  432 ;  United  States  v. 
Memphis,  etc..  R.  R.  Co.,  6  Fed. 
Rep.  238;  Goodyear  v.  Mullee,  No. 
5577  Fed.  Cas.,  5  Blatch.  429;  Ul- 
man  v.  Ritter,  72  Fed.  Rep.  1000; 
Societe  v.  Distilling  Co.,  42  Fed. 
Rep.  96. 

''^  Morss  v.  Sewing  Machine  Co., 
38  Fed.  Rep.  482;  Iowa  Barb  Wire 
Co.  V.  Southern  Co.,  30  Fed.  Rep. 
615. 


696 


LAW     AM)     l'lU)tEEDINc;s    IN     BANKRUPTCY. 


It  is  well  settled  that  a  slmwiiii;  made  1)\  a  rcspdndoiU  that 
lio  is  unable  to  ^\o  an  act  rc(|uired  nf  hiin  upon  an  ordrr  to 
show  cause  is  a  sullicient  answer.""  It  matters  not  for  the  pur- 
pose oi  such  a  proceeding-  that  the  inability  to  do  the  thing- 
requiretl  may  be  in  conse(|uence  of  his  own  fault  arising-  from 
a  mere  misconception  of  his  rights  or  committed  before  the 
court  took  jurisdiction  of  the  matter.  The  court  can  not  com- 
pel an  impossibility.  It  is  a  sufficient  answer  to  a  rule  to 
show  cause  why  he  should  not  be  punislied  for  contempt  for 
refusing  to  obey  an  order  to  turn  ()\er  property  to  the  bank- 
rupt's trustee,  to  show  that  the  property  is  not  in  his  posses- 
sion or  under  his  control.-'"  1lie  court  must  be  satisfied  be- 
yond a  reasonable  doubt  that  the  respondent  can  comply  with 
its  order  to  be  justified  in  adjudging  him  guilty  of  contempt. "''•'' 
The  uncorroborated  evidence  of  a  bankrupt  of  his  inability 
to  comply  with  the  order  is  far  from  controlling.''^ 

The  power  of  the  court  of  bankruptcy  to  punish  for  the  dis- 
obedience of  its  orders  extends  only  to  such  orders  as  actually 


''Boyd  V.  Glucklich  (C.  C.  A. 
8th  Cir.),  ii6  Fed.  Rep.  131,  8  Am. 
B.  R.  393;  In  re  Felson,  124  Fed. 
Rep.  288,  10  Am.  B.  R.  716;  Ex 
parte  Comingor  (C.  C.  A.  6th 
Cir.),  107  Fed.  Rep.  898,  5  Am.  B. 
R-  537;  Hendrj'x  v.  Fitzpatrick,,  19 
Fed.  Rep.  810,  814,  per  Lowell  and 
Nelson,  Judges;  In  re  Chiles,  22 
Wall.  157,  168,  22  L.  Ed.  819;  Kane 
V.  Haywood,  66  N.  C.  i ;  In  re 
Hausman  (C.  C.  A.  2d  Cir.),  121 
Fed.  Rep.  984,  10  Am.  B.  R.  64. 

"-'Boyd  V.  Glucklich  (C.  C.  A.  8th 
Cir.),  116  Fed.  Rep.  131,  8  Am.  B. 
R-  393;  Ex  parte  Comingor  (C.  C. 
A.  6th  Cir.),  107  Fed.  Rep.  898, 
5  Am.  B.  R.  537,  affirmed  184  U. 
S.  18,  46  L.  Ed.  413,  7  Am.  B.  R. 
421;  In  re  Cole  (C.  C.  A.  ist  Cir.), 
144  Fed.  Rep.  392,  16  Am.  B.  R. 
302;  In   re  Davison,   143  F"ed.  Rep. 


67^,,  16  Am.  B.  R.  22,7',  Samel  v. 
Dodd  (C.  C.  A.  5th  Cir.),  142  Fed. 
Rep.  68,  16  Am.  B.  R.  163. 

'^American  Trust  Co.  v.  Wallis 
(C.  C.  A.  3d  Cir.),  126  Fed.  Rep. 
464,  II  Am.  B.  R.  360;  In  re  Gold- 
farb  Bros.,  131  Fed.  Rep.  643,  12 
Am.  B.  R.  386;  In  re  Switzer,  140 
Fed.  Rep.  976,  15  Am.  B.  R.  468; 
In  re  Davison,  143  Fed.  Rep.  673, 
16  Am.  B.  R.  Tf^y;  Samel  v.  Dodd 
(C.  C.  A.  5th  Cir.),  142  Fed.  Rep. 
68,    16  Am.   B.   R.   163. 

'*  In  re  Henderson,  130  Fed.  Rep. 
385,  12  Am.  B.  R.  351 ;  Schweer  v. 
Brown  (C.  C.  A.  8th  Cir.),  130 
Fed.  Rep.  328,  12  Am.  B.  R.  178; 
In  re  Leinweber,  128  Fed.  Rep. 
641,  12  Am.  B.  R.  175;  In  re 
Shachter,  119  Fed.  Rep.  lOio,  9 
Am.    B.   R.  499, 


CONTEMPT. 


69; 


exist,^'  and  after  the  person  enjoined  has  had  notice.^"  It  is 
not  necessary  that  the  respondent  be  served  with  a  copy  of  the 
order  of  the  court,  if  knowledge  of  its  contents  came  to  him 
otherwise.^'  This  has  been  held  true  even  when  he  was  beyond 
the  territorial  jurisdiction  of  the  court  of  bankruptcy  at  that 
time.''*  An  order  actually  made  by  the  court  is  binding  until 
reversed  or  set  aside,  even  though  the  court  making  it  is  with- 
out jurisdiction. ^'^ 

In  the  ordinary  case  of  advising  clients  if  an  attorney  gives 
it  in  good  faith  and  in  the  honest  belief  that  his  advice  is  well 
founded  and  in  the  just  interest  of  his  client,  he  can  not  be 
held  for  contempt  for  error  in  judgment.'"'  Where  jiu!ici:d 
action  is  alleged  to  have  been  induced  by  the  advice  of  counsel 
complained  of,  on  the  ground  that  there  is  conspiracy  between 
the  state  court  and  the  attorneys  to  obstruct  the  administra- 
tion of  justice,  the  attorneys  can  not  be  punished  for  con- 
tempt.*** 


^  Ex  parte  Buskirk,  72  Fed.  Rep. 
14,  18  C.  C.  A.  410. 

"In  re  Cary,  10  Fed.  Rep.  622. 
See  notes  to  this  case  for  discus- 
sion of  contempt ;  In  re  Schwartz, 
14  Fed.  Rep.  787;  Ulman  v.  Ritter, 
72  Fed.  Rep.  1000 ;  Toledo,  etc.,  R. 
R.  Co.  V.  Penn.  Co.,  54  Fed.  Rep. 
746. 

^  In  re  Krinsky  Bros.,  112  Fed. 
Rep.  972,  7  Am.  B.  R.  535;  Blake 
V.  Nesbet,  144  Fed.-  Rep.  279,  16 
Am.  B.   R.  269. 

In  re  Lennon,  166  U.  S.  548,  554, 
41  L.  Ed.  mo,  the  supreme  court 
said: 

"The  facts  that  petitioner  was  not 
a  party  to  such  suit,  nor  served 
with  process  of  subpoena,  nor  had 
notice  of  the  application  made  by 
the  complainant  for  the  mandatory 
injunction,  nor  was  served  by  the 
oflFiccrs  of  the  court  with  such  in- 
junction,   arc    immaterial,    so    long 


as  it  was  made  to  appear  that  he 
had  notice  of  the  issuing  of  an  in- 
junction by  the  court.  To  render 
a  person  amenable  to  an  injunc- 
tion it  is  neither  necessary  that  he 
should  have  been  a  party  to  the 
suit  in  which  the  injunction  was 
issued,  nor  to  have  been  actually 
served  with  a  copy  of  it,  so  long 
as  he  appears  to  have  had  actual 
notice." 

'"  Blake  v.  Nesbet,  144  Fed.  Rep. 
279,   16  Am.   B.   R.  269. 

'"Worden  v.  Searls,  121  U.  S.  14, 
30  L.  Ed.  853;  /;;  re  Eaton,  51  Fed. 
Rep.  804:  Wagner  v.  U.  S.  (C.  C. 
A.  6th  Cir.),  104  Fed.  Rep.  133,  4 
Am.  B.  R.  596;  Blake  v.  Nesbet, 
144  Fed.  Rep.  279,  16  Am.  B.  R 
269. 

^"/n  re  Watts  and  Sachs,  190  U. 
S.  I,  47  L.  Ed.  933,  10  Am.  B.  R. 
113- 


()98 


1  AW      AND     I'ROCEEDINGS    IN     BANKRUPTCY. 


§239.     Nature  of  the  proceedings. 

rroceodiiiiis  lor  contempt  are  ol  a  twofold  nature,  crim- 
inal and  civil.  For  the  purpose  of  punishing  the  guilty  party 
for  his  disrespect  to  the  court  or  its  order  the  proceeding  is 
criminal.'  As  a  means  of  compelling  ohedience  to  some  law- 
ful order  ro(|uiring  the  party  to  perform  some  act  or  duty 
reciuired  o\  him,  and  which  he  refuses  to  ])erform,  the  pro- 
ceeding's may  be  civil  or  criminal."  Thus  if  the  respond- 
ent  had  in  his  possession  properly,  and  is  ordered  to  deliver 
it  to  the  court,  or  some  person  named  by  the  comt,  within  a 
fixed  time,  and  he  willfidly  refuses  to  obey  the  order,  it  be- 
ing within  his  power  to  do  so,  then  a  ci\il  process  of  con- 
tempt may  be  resorted  to  as  a  means  of  compelling  obedience 
to  the  order  of  the  court,  and  the  party  refusing  to  obey  may 
be  confined  and  imprisoned  until  he  performs  the  act  re- 
quired of  him  or  shows  that  it  is  not  in  his  power  to  do  it." 
He  may  also  be  proceeded  against  crinn'nally.  because  llie 
disrespect  being  willful,  it  is  an  offense  against  the  govern- 
ment. 


'  Bessette  v.  Conkey  Co.,  194  U. 
S.  324,  48  L.  Ed.  997 ;  /;/  re  Christ- 
enscn  Engineering  Co.,  194  U.  S. 
458,  48  L.  Ed.  1072;  New  Orleans 
V.  Steamship  Co.,  20  Wall.  393, 
22  L.  Ed.  354;  Ex  parte  Kear- 
ney, 7  Wheat.  38,  5  L.  Ed.  391 ;  In 
re  Manning,  44  Fed.  Rep.  275 ; 
United  States  v.  Berry,  24  Fed. 
Rep.  780;  In  re  Ellcrbe,  13  Fed. 
Rep.   530. 

^  Bessette  v.  Conkey  Co.,  194  U. 
S.  324,  48  L.  Ed.  997:  In  re  Christ- 
ensen  Engineering  Co.,  194  U.  S. 
458,  48  L.  Ed.  1072;  Worden  v. 
Searles,  121  U.  S.  26,  30  L. 
Ed.  853;  Hayes  v.  Fischer,  102 
U.  S.  122,  26  L.  Ed.  95;  In  re 
Graves,  29  Fed.  Rep.  60,  4  Black- 
stone's  Com.  285;  Wells,   Fargo  & 


Co.  V.  Oregon  Co.,  19  Fed.  Rep. 
20. 

In  Hendry X  v.  Fitzpatrick,  19 
Fed.  Rep.  8ro,  on  page  813,  Judge 
Lowell  observed:  "If  the  proceed- 
ing should  be  criminal  in  form  it 
would  make  no  difference.  A  crim- 
inal sentence  for  the  benefit  of  a 
private  person  is  to  be  treated  as 
civil  to  all  intents  and  purposes." 
See  also  observation  of  Mr.  Jus- 
tice Miller  in  In  re  Chiles,  22  Wall. 
168,  22  L.   Ed.  819. 

'Mueller  v.  Nugent,  184  V.  S. 
I,  46  L.  Ed.  405,  7  Am.  1>.  R.  224; 
In  re  Levy  &  Co.  (C.  C.  A.  2d 
Cir.),  142  Fed.  Rep.  442,  15  Am. 
B.  R.  166,  and  cases  cited  in  the 
opinion ;  In  re  Salkey,  No.  12254 
Fed.  Cas.,  6  Biss.  280. 


CONTEMPT.  699 

§  240.     Practice,  pleadings  and  procedure. 

Proceedings  in  contempt  should  not  be  instituted  before  the 
contempt  has  been  committed.  A  proceeding  for  contempt 
is  of  a  different  character  from  one  resulting  in  a  mere 
order,  as  for  the  payment  of  money  to  the  trustee  or  granting 
an  injunction.  An  order  should  not  direct  a  commitment  in 
case  of  failure  to  comply  with  it,  without  giving  the  defend- 
ant a  day  in  court  with  reference  to  that  part  of  the  order. ^ 

The  mode  of  proceeding  in  a  court  of  bankruptcy  to  de- 
termine whether  a  constructive  contempt  has  been  committed 
should  conform  to  the  established  practice  in  like  cases  in 
all  other  United  States  courts  as  near  as  may  be.  and  what  is 
legally  sufficient  to  purge  a  contempt  in  the  other  courts  of 
the  United  States  is  sufhcient  to  purge  the  like  contempt  in  a 
court  of  bankruptcy." 

It  is  proper  and  probably  better  practice  to  bring  the  ques- 
tion of  contempt  to  the  attention  of  the  court  by  a  petition 
or  motion  for  rule  to  show  cause.  The  practice  in  the  federal 
courts  in  contempt  proceedings  has  been  far  from  uniform  in 
this  respect. 

In  case  the  proceedings  are  instituted  to  punish  a  con- 
tempt committed  before  a  referee,  they  are  commenced  b}-  a 
certificate  of  the  referee.""^  The  judge  thereupon,  in  a  sum- 
mary manner,  hears  the  evidence  as  to  the  acts  complained 
of,  and  if  it  is  such  as  to  warrant  him  in  so  doing,  pun- 
ishes such  person  in  the  same  manner  and  to  the  same  ex- 
tent as  for  a  contempt  committed  before  the  court  of  bank- 
ruptcy, or  commits  such  person  upon  tlie  same  conditions  as 
if  the  doing  of  the  forbidden  act  had  occurred  with  refer- 
ence to  the  process  of.  or  in  the  presence  of,  the  court.^ 

'In  re  Cole   (C.  C.  A.  ist  Cir.).  'Boyd  v.  Glucklich  (C.  C.  A.  8th 

144   Fed.    Rep.   3Q2.    16  Am.   B.   R.  Cir.),  116  Fed.  Rep.  131,  8  Am.  B. 

302;     In     re     Davison,      143     Fed.  R.  393. 

Rep.  673,  16  Am.  B.  R.  iZ7;  In  re  '  B.   A.    1898,   Sec.  41&;   U.   S.   v. 

Herslikowitz,  136  I'^cd.  Rep.  950,  14  Goldstein,    132    Fed.    Rep.    789,    12 

Am.  B.  R.  86.  Am.    B.    R.    755.      See     U.     S.    v. 

Anonymous,  21  Fed.  Rep.  761. 


700 


LAW     AND     I'KOCKKDIXGS     IN     BANKRUPTCY. 


The  petition  m"  motion  may  be  entitknl  ;nul  liled  in  the 
'original  action.'  Where  the  proceeding  is  criminal,  and 
pnnishment  is  askeil  for.  it  may  he  institnted  in  the  nan.e  of 
the  I'nitcd  States.""*  'i'lie  ])ctition  shonld  stale  the  names  of 
the  persons  to  \k  attached  ;''  the  spccihc  acts  of  commission 
or  omission  which  constitnte  the  contempt;  '  when  and  where 
committed:'^  that  the  order,  if  any,  was  lawfnl,  and  the 
date  matle  and  h\-  whom;  the  allowance  or  grant  of  an  injnnc- 
tion.  if  anv,  when  and  by  whom,  and  that  it  had  been  issued 
on  the  terms  specified  and  w  ithin  the  linn'ts  imposed,  and  had 
been  dnly  served  in  the  mode  reqnired  by  it,  and  by  the 
proper  oflicer.  In  some  cases  it  is  necessary  to  charge  that 
the  acts  complained  of  were  done  "willfnlly  and  contemptu- 
ously," and  ''with  full  notice  and  knowledge."  " 

The  prayer  or  rec[uest  of  the  petition  or  motion  should  be 
for  an  order  or  rule  re(|niring  the  contemner  to  appear  in 
court  at  a  certain  time  and  j^lace,  and  show  cause  why  he 
should  not  be  attached  and  punished  for  contempt. 

The  facts  stated  in  the  petition  should  be  verified  by  an 
affidavit,  and  a  motion  should  be  supported  by  affidavits 
setting  forth  the  facts.  A  copy  of  the  petition  or  mol'on 
and  affidavits  should  generally  be  served  upon  the  contemnor 
personally, 


10 


*  See  Creditors  v.  Cozzens,  No. 
3378  Fed.  Cas.,  3  N.  B.  R.  281. 

°As  in  United  States  v.  Atchcson 
R.  S.  Co.,  16  Fed.  Rep.  853 ;  United 
States  V.  Murphy,  44  Fed.  Rep.  39. 

"  Creditors  v.  Cozzens,  No.  3378 
Fed.  Cas.,  3  N.  B.  R.  281;  Amer- 
ican Construction  Co.  v.  Rail  Road 
Co.,  52  Fed.   Rep.  937. 

'Toledo  C.  C.  R.  Co.  v.  Penn. 
Co.,  54  Fed.  Rep.  747.  See  also 
Jn  re  Swan,  150  U.  S.  637,  37  L. 
Ed.  1207;  In  re  Sawyer,  124  U.  S. 
207,  31  L.  Ed.  402. 

In  U.  S.  V.  Goldstein,  132  Fed. 
Rep.  789,  12  Am.  B.  R.  755,  for 
refusing  to   answer   "sundry   ques- 


tions" put  to  him  during  his  ex- 
amination before  the  referee,  was 
held  sufficient,  although  it  did  not 
set  out  the  questions. 

*  See  United  States  v.  Berry,  24 
Fed.  Rep.  780 ;  In  re  Litchfield,  13 
I'cd.  Rep.  868-9. 

"  See  statement  in  affidavits 
charging  In  re  Sawyer,  124  U.  S. 
207,  31  L.  Ed.  402;  Toledo,  etc., 
Ry.  Co.  V.  Penn.  Co.,  54  Fed.  Rep. 

751- 

"'  American  Construction  Co.  v. 
Rail  Road  Company,  52  Fed.  Rep. 
938;  United  States  v.  Murphy,  44 
Fed.  Rep.  40;  Gray  v.  Chicago, 
etc.,  R.  R  Co.,  No.  5713  Fed  Cas., 


CONTEMPT, 


701 


The  court  will  ordinarily  order  a  rule  to  show  cause  to 
issue  if  a  prima  facie  case  is  made.  It  is  not  necessary 
that  the  matter  alleged  as  the  foundation  for  the  charge 
appear  in  the  rule  to  show  cause,  because  the  rule  is  served 
merely  as  a  basis  for  process.  The  rule  to  show  cause 
should  be  personally  served  on  the  contemnor."  The  attach- 
ment to  take  the  body  of  the  contemnor  is  rarely  resorted  to, 
for  the  reason  that  if  he  appear  on  the  day  specified  it  is  not 
necessary,  and  if  he  does  not  appear  the  rule  may  be  made 
absolute,  and  if  convicted  he  may  be  arrested  under  a  war- 
rant or  a  mittimus.  But  when  there  is  danger  that  the  con- 
temnor will  flee  from  the  district,  the  attachment  has  been 
issued  immediately  upon  instituting  the  proceedings.^-  In 
one  case,  at  least,  a  rule  has  been  issued  requiring  him  "to 
appear  in  court  forthwith  to  show  cause."  ^^ 

To  the  rule  to  show  cause,  the  contemnor  may  make  re- 
turn or  answer  under  oath  before  the  day  set  for  hearing,  in 
which  he  may  deny  the  allegations  of  the  petition  or  admit 
them,    or  admit   them   and   justify  his   action.^'*  The   denials 


Woolw.  63.  But  see  Fanshawe  v. 
Iracy,  No.  4643  Fed.  Cas.,  4  Biss. 
490. 

In  Smith  v.  Belford  (C.  C.  A. 
6th  Cir.),  106  Fed.  Rep.  658,  5  Am. 

B.  R.  291,  the  want  of  notice  was 
held  error. 

"  ht  re  Hooks  Smelting  Co.,  146 
Fed.  Rep.  336,  15  Am.  B.  R.  834. 
"This   was    done    in    Thomas    v. 

C.  N.  O.  &  T.  P.  R.  R.  Co.,  In  re 
Phelan,  62  Fed.  Rep.  817,  and  the 
person  was  brought  directly  to 
court,  and  admitted  to  bail,  although 
this  does  not  appear  in  the  report 
'<f  the  case. 

But  consult  the  observation  of 
Judge  Drummond,  in  Fanshawe  v. 
Tracy,  No.  4643  Fed.  Cas.,  4  Biss. 
490. 

"This  was  done  in  Toledo,  etc., 
K.   Co.  V.   Penn.  Co.,  54  Fed.  Rep. 


751.  But  .see  Boyd  v.  Glucklich 
(C.  C.  A.  8th  Cir.),  116  Fed.  Rep. 
131,  8  Am.  B.  R.  393. 

"  This  was  done  In  re  Swan,  150 
U.  S.  639,  2,7  L-  Ed.  1207;  In  re 
Sawyer,  124  U.  S.  207,  31  L.  Ed. 
402 ;  In  re  Ayers,  123  U.  S.  456, 
31  L.  Ed.  216. 

In  Boyd  v.  Glucklich  (C.  C.  A. 
8th  Cir.),  116  Fed.  Rep.  131,  8  Am. 
B.  R.  393,  the  court  said:  "Dispatch 
in  judicial  proceedings  .is  com- 
mendable, but,  in  proceedings  in- 
volving the  liberty  of  a  citizen,  he 
has  a  right  not  only  to  be  informed 
of  the  precise  claim  against  him, 
but,  after  receiving  that  informa- 
tion, he  has  a  right  to  a  reason- 
able time  to  prepare  his  answer 
and  present  his  proofs,  and,  lastly, 
to  be  heard  by  counsel  on  the  law 
and   facts  of  the  case.     While  pro- 


"02 


LAW      AN'O     PROCEEDINGS    IN     BANKRUPTCY. 


ill  llic  return  or  answer  are  not  ennclusive.'"  At  common 
law  the  sworn  answer  was  not  to  be  eontrox'erted  as  to  mat- 
ters of  fact."'  Mr.  Justice  Curtis,  however,  adds  to  this  state- 
ment, "there  were  certain  precedents  t'or  the  intnxUiction  of 
other  kiiuls  of  proof."  ''  The  court  may  jjronounce  judgment 
ami  make  the  rule  absolute  if  im  answer  is  filed,  or  if  the 
answer  atlmits  facts  which,  in  the  opinion  of  the  court,  con- 
stitute contempt,  or  if  a  justification  is  deemed  insufficient. 
When  a  sufficient  return  or  answer  has  been  made,  the 
parties  appear  before  the  court  at  the  time  specified  for  the 
hearing.     Both  parties  may  present  testimony  by  witnesses 


ceedings  in  bankruptcy  may  be 
summary,  they  slioukl  not  be  too 
sunuuary;  in  other  words,  they 
should  not  be  so  summary  as  to 
deprive  the  bankrupt  of  those  fun- 
damental rights  and  privileges  that 
belong  to  every  citizen,  among 
which  are  the  right  to  be  advised 
of  the  demand  made  upon  him,  and 
the  right,  after  being  so  advised, 
to  have  a  reasonable  time'  to  pre- 
pare his  defense  and  produce  his 
witnesses.  The  Bankrupt  Act  does 
not  do  away  with  these  rights,  and 
no  citizen  forfeits  them  by  being 
adjudged  a  bankrupt."  See  also 
In  re  Shachter,  119  Fed.  Rep.  loio, 
9  Am.  B.  R.  499;  In  re  Hausman 
(C.  C.  A.  2d  Cir.),  121  Fed.  Rep. 
984,  10  Am.  B.  R.  64. 

"2  High  on  Injunctions,  1455; 
United  States  v.  Anonymous,  21 
Fed.  Rep.  767;  Schweer  v.  Brown 
(C.  C.  A.  8th  Cir.),  130  Fed.  Rep. 
328,  12  Am.  B.  R.  178;  In  re  De 
Gottardi,  114  Fed.  Rep.  328,  7  Am. 
B.  R.  72Z. 

In  Ripon  Knitting  Works,  loi 
Fed.  Rep.  810,  4  Am.  B.  R.  299, 
Judge  Ilanford  said :  "One  of  the 
principal   grounds   of   defense   upon 


which  tlic  respondent  relies  is  con- 
tained in  his  answer  denying  that 
he  has  any  money.  His  answer  is 
not  conclusive,  but  the  rule  in  such 
cases  requires  that  the  denial  be 
overcome  by  evidence  proving  be- 
yond a  rea.sonable  doubt  that  the 
bankrupt  actually  has  the  present 
possession  or  control  of  money,  or 
that  any  alleged  transfer  or  other 
disposition  of  it  is  a  mere  subter- 
fuge which  does  not  prevent  him 
from  producing  it."  See  also  U. 
S.  V.  Sweeney,  95  Fed.  Rep.  434; 
In  re  Purvine,  2  Am.  B.  R.  787, 
g6    Fed.    Rep.    192;    In    re    Mayer, 

3  ,\ni.  B.  R.  533,  98  Fed.  Rep. 
839;  In  re  Gerstel,  123  Fed. 
Rep.  166,  10  Am.  B.  R.  411;  In  re 
Shachter,  119  Fed.  Rep.  loio,  9  Am. 
B.    R.   449. 

'"/»  re  Pittman,  No.  I1184  Fed. 
Cas.,  I  Curtis,  186,  per  Mr.  Justice 
Curtis;  United  States  v.  Dodge, 
No.    14975    Fed.    Cas.,   2   Gall.   313; 

4  Blackstone's  Com.  286-7 ;  ^'^  ^'^ 
May,  I  Fed.  Rep.  743. 

"In  re  Pittman,  No.  11 184  Fed. 
Cas.,  I  Curtis,  186,  and  cases  col- 
lated. 


CONTEMPT. 


703 


examined  orally  ^-  or  by  affidavits/''  The  conteinnor  may  ap- 
pear in  person  or  by  counsel,  and  may  file  his  own  affidavit 
in  his  own  behalf,  or  with  his  consent  be  examined  upon 
written  interrogatories.-"  But  he  can  not  be  compelled  to 
testify  against  himself.  He  is  not  entitled  to  demand  a  trial 
by  jury.-^  After  the  evidence  has  been  adduced,  the  court  will 
hear  arguments  of  counsel  and  determine  the  facts  for  itself, 
or  it  may  refer  them  to  a  referee.  The  question  of  commit- 
ment can  not  be  left  to  the  discretion  of  the  referee." 

If  the  court  finds  the  proofs  do  not  support  the  charge  of 
contempt,  the  proper  judgment  is  to  dismiss  the  rule,  and  if 
the  contemnor  has  been  arrested  and  is  in  the  custody  of  the 
marshal  or  admitted  to  bail,  also  to  discharge  the  person. 
If  no  cause  is  shown  why  he  should  not  be  punished  for  con- 
tempt, the  court  should  order  the  rule  to  be  confirmed  and 
made  absolute,  and  adjudge  tlie  person  guilty  of  contempt  and 
fix  his  punishment.  It  is  good  practice  for  the  judgment  to 
recite  the  offense,  but  it  is  not  necessary,  if  it  describes  tlie 
offense  charged  by  reference  to  other  proceedings.-'' 

The  power  of  the  court  to  punish  contempts  of  their  au- 
thority is  limited  to  fine  or  imprisonment  or  fine  and  imprison- 
ment;-* but  there  is  no  linn't  to  the  extent  of  cither  fine  or 
imprisonment.  But  it  has  been  held  tliat  a  bankrui)t  can  not 
be  imprisoned  indefinitely,  wlien  it  is  not  certainly  known  that 


'"Savin,  petitioner,  131  U.  S.  267, 
279.  33  L-  Ed.  150;  Cuddy,  peti- 
tioner, 131  U.  S.  281,  s:i  L.  Ed.  154; 
Randall  v.  Brigham,  7  Wall.  540, 
19  L.  Ed.  285. 

'"  Mexican  Ore  Co.  v.  Mexican 
Co.,  47  Fed.  Rep.  353;  United 
States  V.  Anonymous,  21  Fed.  Rep. 
767;  United  States  v.  Atcheson, 
etc.,  R.  S.  Co.,  16  Fed.  Rep.  855; 
United  States  v.  Justices,  10  Fed. 
Rep.  461. 

°*  See  Savin,  petitioner,  131  U.  S. 
270.  3,3  I-  Ed.  150;  Cuddy,  peti- 
tioner, 131  U.  S.  281,  33  L.  Ed.  154. 


■'  Ripon  Knitting  Works  v. 
Schreiber,  loi  Fed.  Rep.  810,  4  Am. 
B.  R.  299. 

See  also  Tinsley  v.  Anderson,  171 
U.  S.  lor,  43  L.  Ed.  91 ;  Ex  parte 
'I'erry,  128  U.  S.  289,  32  L.  Ed  405 ; 
Eilcnbecker  v.  Plymouth  County, 
134  U.  S.  31,  3.3  L.  Ed.  801. 

"'Smith  V.  Belford  (C.  C.  A.  6th 
Cir.),  106  Fed.  Rep.  658,  5  Am.  B. 
R.  291. 

'"  Fischer  v.  Hayes,  6  Fed.  Rep. 
70;  Lovcland's  Forms  Fed.  Prac, 
-N'ns.  718-729. 

"'  B.  A.   1898,  Sec.  2,  clause  13. 


704  LAW     AND     I'UOCEEUINGS    IN     BAN  KKl' I' TCY. 

lie  has  property  which  ho  has  hcon  ordered  to  surrender.'''  A 
court  can  not  ihshar  an  attc>rney  for  contempt.'"''  It  can  not 
punish  contempt   committed   in  any  other  court. "^ 

W  hen  a  fmc  is  imposed  as  i)unishnient,  the  contenuior 
may  he  orilere^l  to  stand  committed  until  the  fine  and  cost 
he  paid.''"*  and  such  an  order  is  not  in  contlict  with  statutes 
prohihitiui^'  imprisonment  for  deht.'" 

When  the  judj^iuent  ^^\  the  com-t  he  im])risonment  or  line 
and  commitment  until  i)aid.  a  warrant  or  mittimus  is  issued. 
It  recites  that  the  contemnor  has  heen  convicted  of  a  con- 
tempt of  court,  and  should  specify  particularly  where  and 
how  long-  the  contenuior  is  to  he  imprisoned,  and  what  he  is 
to  do  to  entitle  him  to  discharge.  Thus  it  may  command 
the  marshal  to  take  the  body  of  the  contemnor  and  keep  him 
in  custod)-  until  he  shall  have  ])aid  into  court  the  amount  of 
the  tine,  together  with  the  fees  of  the  marshal  thereon,'*"  or 
it  may  specify  a  particular  place  and  term  of  imprisonment, 
and  command  the  marshal  to  take  the  body  of  the  person 
and  commit  the  same  to  such  place  of  confinement.'''^ 

The  rule  with  reference  to  the  power  of  the  court  cfMii- 
mitting  a  contemnor  to  release  him  by  a  subsequent  order 
seems  to  be,  that  in  case  of  a  criminal  contempt,  being  an 
offense  against  the  United  States,  and  the  commitment  but 
an  execution  of  the  judgment  of  conviction,  the  court  has  no 
power  to  discharge  or  remit  the  sentence."''"  But  it  falls 
within  the  pardoning  power  of  the  president  by  the  consti- 


^^ In  re  Taylor,  114  Fed.  Rep.  607,  Rep.  6^;  Ripon  Knitting  Works  v. 

7  Am.  B.   R.  410.  Schreiber,  loi  Fed.  Rep.  810,  4  Am. 

'"Ex    parte    Robinson,    19    Wall.  B.  R.  299. 

513.    22    L.    Ed.    205.  ^"Fischer  v.   Hayes,  7   Fed.   Rep. 

^  Ex  parte  Bradley,  7  Wall.  372,  98-      For    form    of    mittimus,    see 

19  L.  Ed.  214.  Loveland's  Forms  Fed.  Prac,  Nos. 

"*  See  In  re  Tyler,  149  U.  S.  180,  730,  7S'i- 

37  L.  Ed.  689.  ^'  Loveland's    Forms,   Fed.    Prac, 

"■"Bogart  V.   Supply  Co.,  27  Fed.  No.  731. 

Rep.  722;  Jeffries  v.  Laurie,  27  Fed.  ^"  In    re    Mullee,    No.    991 1    Fed. 

Rep.  198;  Fischer  v.  Hayes,  6  Fed.  Cas.,  7  Blatch.  23. 


COXTEMPT. 


705 


tution.'^'"'  Where  the  proceeding  is  of  a  civil  nature,  the 
court  has  power  to  release  the  person.^* 

Where  a  person  has  been  imprisoned  for  contempt,  relief 
is  usually  sought  by  habeas  corpus.^''  The  person  may  be 
discharged  if  the  order  of  commitment  was  utterly  void,^" 
otherwise  not.^'  The  inquiry  can  not  be  extended  under  a 
writ  of  habeas  eorpiis  so  as  to  review,  as  upon  writ  of  error, 
any  irregularity  of  the  proceedings  in  the  court  of  bankruptcy, 
or  to  determine,  as  upon  appeal,  the  real  merits  of  the  case.^^ 

An  order  to  pay  over  to  a  trustee  money  or  property  of  the 
estate  of  the  bankrupt  and  adjudging  the  party  disobeying 
such  an  order  to  be  in  contempt  may  be  reviewed  on  a  petition 
for  revision  as  to  matters  of  law  by  the  circuit  courts  of  ap- 
peals.^" It  has  been  held  tliat  contempt  proceedings  are  not 
a  part  of  the  original  case,  but  separate  and  distinct  therefrom, 
and  the  order  of  the  court,  a  judgment  in  a  criminal  case,  and 
therefore  reviewable  upon  a  writ  of  error  by  the  court  of 
appeals. *° 


^  Dixon's  Case,  3  Atty.  Gen.  0pp. 
622 ;  Rowan's  Case,  4  Atty.  Gen. 
0pp.  458;  Conger's  Case,  4  Atty. 
Gen.   0pp.  317. 

**  Hendryx  v.  Fitzpatrick,  19  Fed. 
Rep.  810;  In  re  Henderson,  13  Am. 
B.   R.  782. 

In  re  Taylor,  114  Fed.  Rep.  607, 
7  .'\m.  B.  R.  410,  the  court  dis- 
charged the  prisoner  on  the  ground 
that  it  was  useless  to  keep  him  im- 
pri.«oned  in  order  to  recover  money 
claimed  to  be  in  his  possession. 

"/«  re  Watts  and  Sachs,  190  U. 
S.  I,  47  L.  Ed.  933,  ID  Am.  B.  R. 
113;  In  re  Freche,  109  Fed.  Rep. 
620,  6  Am.  B.  R.  479;  In  re  Clai- 
l)orne.  109  Fed.  Rep.  74,  5  Am.  B. 
R.  812. 

"£j-  parte  Terry,  128  U.  S.  289, 
32  L.  Ed.  405  •,Ex  parte  Fisk, 
113   U.    S.    713,   28   L.    Ed.    1117. 

"/«  re  Tyler,  149  U.  S.  180,  :t,y 
L.  Ed.  689;  Savin,  petitioner,  131 
U.   S.  2()7,   j^T,  L.   Ed.    150;   Cuddy, 


petitioner,  131  U.  S.  280,  286,  ^Z  L. 
Ed.  154;  Ex  parte  Kearney,  7 
Wheat.  38,  S  L.  Ed.  391 ;  In  re 
Eaton,  51    Fed.   Rep.  804. 

^  Ex  parte  O'Xeal,  125  Fed.  Rep. 
967,  II  .Am.  B.  R.  196. 

^^Mueller  v.  Nugent,  184  U.  S.  i, 
46  L.  Ed.  405,  7  Am.  B.  R.  224; 
Boyd  V.  Glucklich,  116  Fed.  Rep. 
131,  8  Am.  B.  R.  393. 

*"  Bessette  v.  Conkey  Co.,  194  U. 
S.  324,  48  L.  Ed.  997;  Gould 
V.  Sessions  (C.  C.  A.  2d  Cir.), 
67  Fed.  Rep.  163 ;  Butler  v.  Fayer- 
weather  (C.  C.  A.  2d  Cir.),  91 
Fed.  Rep.  458;  Gary  Mfg.  Co.  v. 
Acme  Co.  (C.  C.  A.  2d  Cir.),  108 
Fed.  Rep.  873;  Westinghouse  Air 
Brake  Co.  v.  Christensen  Engineer- 
ing Co.  (C.  C.  A.  2d  Cir.),  123  Fed. 
Rep.  632,  s.  c.  194  U.  S.  458,  48  L. 
Ed.  T072;  Bullock  Electric  &  Mfg. 
Co.  V.  Westinghouse  Electric  & 
Mfg.  Co.  (C.  C.  A.  6th  Cir.),  129 
Fed.   Rep.    105,  63   C.   C.   A.  607. 


/0(t  LAW      AM)     I'KOl  KKDINGS     IN      BANKUUrTCY. 


CHAPTER  XXIII. 

CO-Ml'OSirU»NS    AM)    ARBITRATIONS. 

§  241.     The  general  nature  of  a  composition. 

The  ilioorv  of  a  composition  is  that  the  cash  value  of  the 
bankrupt's  estate  is  substantially  divided  among  the  creditors 
in  proportion  to  their  respective  debts. 

The  bankrupt  presents  a  list  of  the  names  of  his  creditors 
and  the  amount  due  each  of  them,  the  amount  of  his  assets 
and  tlie  rate  per  centum  he  is  willing  to  pay  on  these  debts 
as  a  compromise,  in  consideration  of  his  discharge  from  the 
balance  due  each  creditor.  His  creditors  consider  the  sub- 
ject, thus  presented,  after  the  debtor  has  been  examined  under 
oath.'  The  whole  matter  being  thus  before  them,  they  re- 
solve that  tlieir  interests  require  that  a  compromise  shall  be 
made,  and  that,  if  the  debtor  will  pay  them  a  certain  per- 
centage of  their  debts,  they  will  accept  it  in  satisfaction  and 
he  shall  be  discharged.  Tliey  deliberately  resolve,  upon  an 
understanding  of  all  the  facts,  that  this  is  all  that  his  prop- 
erty can  be  made  to  pay. 

Some  one  must  decide  the  question  of  the  amount  of  the 
dividend  and  of  the  discharge.  Some  one  must  say  that  the 
debt  of  an  opposing  creditor  shall  be  discharged  without  pay- 
ment in  full.  Congress  has  provided  that  the  debtor  and  a 
majority  of  his  creditors,  in  number  and  amount,  may  deter- 
mine these  questions  if  they  can  agree  upon  a  compromise.^ 
The  minority  of  the  creditors  must  submit  to  the  terms 
agreed  upon  by  the  majority.  The  terms  of  the  compromise 
are  subject  to  be  approved  or  disapproved  by  the  judge.  The 
rights  of  those  who  are  not  called  upon  or  who  dissent  may 

'  B.    A.    1898,    Sec.    12.     Compare      R.    S.    Sec.    5103. 


COMPOSITIONS  AND   ARBITRATIONS.  707 

be  fully  protected  by  objections  properly  taken  and  presented 
to  the  judge  at  the  time  of  the  application  for  an  order  con- 
firming the  composition.  The  property  is  distributed  under 
the  direction  of  the  court. 

This  is  a  much  shorter  and  less  expensive  method  of  set- 
tling the  bankrupt's  estate  than  if  the  whole  machinery  of 
the  court,  in  a  full  bankruptcy  proceeding,  is  called  into  use. 
Where  the  bankrupt  and  a  majority  of  his  creditors  fail  to 
agree  upon  terms  of  compromise,  or  where  the  court  refuses 
to  approve  the  terms  agreed  upon,  the  estate  is  administered 
in  bankruptcy  as  otherwise  provided  l)y  the  statute. 

§  242.     The  power  of  congress  to  provide  for  compositions. 

Provisions  for  facilitating  arrangements  between  bankrupts 
and  their  creditors  by  composition  were  first  introduced  in  the 
United  States  by  an  amendment  to  the  act  of  1867,  passed 
June  22.  1874.'  The  bankrupt  acts  of  1800,  1841,  and  the 
original  act  of  1867  contained  ;io  provisions  for  a  composi- 
tion by  a  bankrupt  with  his  creditors. 

As  soon  as  the  amendment  of  1874  was  passed,  it  was  at- 
tacked upon  the  ground  that  congress  had  exceeded  its  power 
and  was  not  authorized  b}-  the  constitution  to  provide  for  a 
composition  by  a  bankrupt  with  his  creditors  for  less  than 
the  full  amount  of  his  debts.  The  question  came  before  Mr. 
Justice  Hunt,  who  sustained  the  validity  of  the  provision  in 
the  amendment  of  1874.-  Upon  principle,  as  well  as  author- 
ity, the  present  provision  for  a  composition  can  not  be  suc- 
cessfully attacked  on  the  ground  of  being  in  contravention  of 
the  constitution  of  the  United  States.^ 

'i8  Stat,  at  L.  182,  Sec.  17.    The  '  !n    re   Reiman.    No.    11675    Fed. 

provision  of  this  amendment,  relat-  Cas.,   12  Blatch.  562;  In  re  Cham- 

ing   to    compositions,    is   set   out    in  horlin.   No.   2580  Fed.   Cas.,  9   Ben. 

parallel    columns   with   the   English  149. 

act  of  t868,  In  re  Scott,  No.   12519  'As  to  the  extent  of  the  power 

Fed.  Cas.,   15  N.  B.  R.  7.3.  of  congress  to  pass  bankrupt   laws 

generally,   consult   Chap.    II. 


708  LAW      AND     PROfKKDlNGS     IX     ISA  N  KRUPTCY. 

§  243.     Composition   provisions   should   not   be    construed 
broadly. 

It  has  Ikvii  saitl  '  that  "the  ci^iiposition  clause  of  the  law 
should  receive  a  strict  construction,  hecause  it  is  in  jjlain 
derogation  ot  common  right.  It  compels  the  dissenting  mi- 
nority of  creilitors  to  accept  just  as  much  upon  their  claims  as 
the  dehtor  and  the  ve(|uisite  majority  see  lit  to  resolve  that 
all  shall  accept.  It  takes  from  the  minority  the  coiumon 
riu'ht  of  making-  their  owns  terms  with  their  dehtor.  and  re- 
leases  the  ohligation  of  the  latter  to  them  against  their  will, 
and  upon  terms  imposed  hy  the  majority.  Certainly,  there- 
fore the  provisions  of  this  clause  should  not  be  extended  by 
construction  to  embrace  luore  than  the  words  clearly  and 
manifestly  import."  If  the  proceedings  are  not  had  in  accord- 
ance wnth  the  provisions  the  court  can  not  confirm  a  compo- 
sition.- 

§  244.    When  a  bankrupt  may  ofter  terms  of  composition. 

A  bankrupt  may  olTer  terms  of  composition  to  his  credit- 
ors after,  but  not  before,  he  has  been  examined  in  open  court 
or  at  a  meeting  of  his  creditors  and  filed  in  court  the  sched- 
ule of  his  property  and  list  of  his  creditors,  required  to  be 
filed  by  bankrupts.^ 

The  statute  does  not  limit  the  right  to  offer  terms  of  com- 
position to  any  particular  class  of  bankrupts.  Any  bank- 
rupt is  entitled  to  ofTer  terms  of  compromise  to  his  creditors. 
The  right  extends  to  corporations "  and  to  partnerships.^ 
Any  member  of  a  partnershii),  which  lias  Ijcen  adjudged 
bankrupt,  may  submit  a  proposition  of  composition  to  the 
creditors  of  the  firm  and  to  his  indiyidual  creditors.* 

Vh    re    Shields.    No.    12784    Fed.  'In    re    Weber.    No.    T7330    Fed. 

Cas..  4  Dill.  588;  Jn  re  Frear,   120  Cas.,  13  N.   P..  R.  529. 

Fed.   Rep.  978,   10  Am.   B.   R.    109;  -'Pool    v.    McDonald.    No.    11268 

In    re   Rider,   90   Fed.    Rep.   808,   3  Fed.  Cas.,   15  N.  B.  R.  560;  In  re 

Am.   B.   R.    178.  Spades,     No.     13 196    Fed.    Cas.,    6 

'In  re  Frear,   120  Fed.   Rep.  978,  Biss.  448. 

10  Am.   B.  R.   199.  '  Pool    v.    McDonald.    No.    11268 

'B.  A.   1898,   Sec.   12a.  Fed.  Cas.,   15  N.  B.  R.  560. 


COMPOSITIONS    AND    ARBITRATIONS.  709 

It  will  be  observed  that  there  is  a  limitation  in  respect  to 
the  time  at  which  such  an  offer  may  be  made.  A  bankrupt 
is  not  entitled  to  make  such  an  offer  before  he  has  been  ex- 
amined in  open  court  or  at  a  meeting  of  his  creditors,  and 
filed  in  court  a  schedule  of  his  property  and  a  list  of  his 
creditors.  Such  an  offer  may  be  made  at  any  time  after  he 
has  complied  with  these  conditions. 

A  further  limitation  exists  in  actual  practice.  No  compo- 
sition can  be  effected  until  claims  have  been  proved  by  cred- 
itors, with  v.hom  tlie  compromise  may  be  made."  Creditors 
seldom  prove  claims  before  the  first  meeting,  at  which  the 
bankrupt  is  regularly  examined  and  a  trustee  appointed. 
Hence,  in  practice,  a  composition  can  rarely  be  effected  until 
after  an  adjudication  and  appointment  and  qualification  of  a 
trustee. 

The  debtor  will  not  ordinarily  be  permitted  to  make  a 
second  application  for  confirmation  in  case  the  first  one  is 
denied.  Where  the  court  refused  to  permit  a  composition 
on  the  ground  that  the  oft'er  was  not  sufficiently  large,  the 
debtor  was  permitted  in  one  case  to  make  a  better  offer  and 
a  second  application  for  confirmation,  which  was  granted." 
He  was  not  permitted  to  make  the  second  application  in  that 
case  until  he  had  shown  good  reason  for  not  having  pre- 
viously made  a  better  offer.  Under  the  act  of  1867  it  was 
held  that  a  refusal  to  grant  a  discharge  was  not  an  estoppel 
to  proceedings  in  composition.'  It  may  be  doubted,  how- 
ever, if  such  is  the  rule  under  the  present  statute.  Section 
\2d  of  the  act  provides  that  "the  judge  shall  confirm  a  com- 
position if  satisfied  that  .  .  .  the  bankrupt  has  not  been 
guilty  of  any  of  the  acts  or  failed  to  perform  any  of  the 
duties  which  shall  be  a  bar  to  a  discharge."  It  would  there- 
fore seem  that  if  a  discharge  had  been  refused,  that  such  an 

'hi   re  Rider,  96  Fed.   Rep.  808.  '  fn   re   Whipple.   No.    17.S1.3   Fed. 

3  Am.   B.   R.    178;   In   re   Frcar,    10       Cas.,   11   N.  B.   R.   524 

Am.   B.  R.   199,   120  Fed.  Rep.  978;  ' /»     re    Odell.    No.     10427     Fo<l. 

In   re    Ililborn.    104   Fed.    Rep.   866.       Cas.,    9    Ben.    247;    In    re    Joseph, 

4  Am.  B.  R.  741.  24  Fed.  Rep.  137. 


710  LAW     AND     I'lUlCEEDINGS    IN     BANKRUPTCY. 

:ul judication  woiiKl  be  a  bar  to  a  suhscciucnt  application  for 
continnation  of  a  ciMuposilion. 

§  245.     Creditors'  meeting  to  consider  terms  of  composition. 

W'lioncvcr  a  bankni[)t  is  satisfied  that  a  sufficient  number 
of  creditors  will  accept  his  offer  of  terms  of  composition  he 
may  applv  to  the  comt  for  a  meeting-  of  the  creditors  to  con- 
sider the  proposition  for  composition.  The  application  is 
made  by  petition.^  The  petition  should  be  entitled  in  the 
court  and  cause,  and  state  the  /^cr  centum  which  the  bank- 
rupt offers  to  pay,  and  that  lie  believes  it  will  be  accepted  by 
a  majority  in  number  and  in  value  of  the  creditors  whose 
claims  are  allowed,  and  pray  that  a  meeting  of  the  creditors 
may  be  dub-  called  to  act  upon  such  pr()i)osal  for  a  composi- 
tion,    ddie  petition  should  be  signed  by  the  bankrupt. 

Idiis  petition  may  be  presented  to  the  judge  or  to  the 
referee.  Upon  such  a  petition  an  order  is  regularly  passed  di- 
rectine  a  meeting  of  the  creditors  to  be  called.  Thereupon 
the  referee  should  give  the  creditors  at  least  ten  days'  notice 
by  mail  of  the  time  and  place  of  holding  the  meeting."  At 
this  meeting  the  proposal  for  a  composition  is  voted  upon 
by  the  creditors.  All  unsecured  creditors  and  secured  cred- 
itors, to  the  extent  of  the  balance  of  their  debts  after  having 
deducted  the  amount  of  their  securities,  which  have  been 
proved  and  allowed,  are  entitled  to  vote. 

In  the  case  of  an  offer  of  compromise  by  a  partnership  or 
one  of  the  partners,  both  the  firm  and  individual  debtors 
may  vote.''  The  state  of  the  respective  debts  and  funds  may 
be  such  as  to  justify  this  course,  and  where  they  are  so,  it 
simplifies  the  proceeding  very  materially.  But  if  one  of  any 
class  of  the  creditors  preceives  that  the  other  class  is  about 
to  force  upon  him  an  unjust  composition  he  can  demand  a 

'  Official  Form  No.  6n.     See  Form  'Pool    v.    McDonald,    No.    11268 

No.    107,   post.  Fed.  Cas.,   15  N.  B.  R.  560;  In  re 

='B.    A.    1898,   Sec.    58«.     But   see  Spades.    No.     13196    Fed.     Cas.,    6 

In  re  Frear,   120  Fed.   Rep.  978.   10  Biss.   448. 
Am.    B.   R.    199. 


COMPOSITIONS    AND    ARBITRATIONS. 


711 


separate  vote  and  so  protect  himself  by  calling  to  his  assist- 
ance those  who  compose  the  class  to  which  he  belongs.* 

The  creditors  are  required  to  pass  the  resolution  for  a  com- 
position by  a  majority  vote  in  number  and  amount  of  the 
claims  allowed."  The  resolution  must  be  reduced  to  writing 
and  should  be  signed  by  the  creditors,  who  accept  the  terms 
offered,  together  with  the  amount  of  each  claim  proved  and 

allowed.*' 

If  not  a  sufficient  number  of  creditors  attend  this  meeting 
the  bankrupt  may  circulate  the  resolution  among  his  cred- 
itors, who  have  proved  claims,  and  thus  secure  a  majority  in 
number  of  all  the  creditors  whose  claims  have  been  allowed. 
which  number  represents  a  majority  in  the  amount  of  such 
claims.  The  statute  requires  the  acceptance  to  be  in  writing. 
It  is  not  necessarily  obtained  at  a  meeting  of  creditors." 
Creditors  having  once  accepted  a  composition  offered  will  not 


*In    re    Spades,    No.    13196    Fed. 
Cas.,  6  Biss.  448. 
'B.  A.  1898,  Sec.  56a. 
In  In  re  Rider,  96  Fed.  Rep.  808, 
3  Am.  B.  R.  178,  Judge  Coxe  said: 
"After   the  bankrupt   has   been   ex- 
amined and  filed  a  list  of  his  cred- 
itors he  'may  offer  terms  of  com- 
position   to    his    creditors.'      This 
plainly  implies  that  the  offer  should 
be  made  to  all  his  creditors,  whether 
they    have    proved    their    debts    or 
not.     It  is  not  essential  that  proofs 
shall    be    made    before,    or    at    the 
first  meeting.    They  may  be  made  at 
any   time   within    a   year....   After 
the  terms  are  thus  made  known  to 
all  the  creditors  they  have  a  reason- 
able  time   to    decide   whether   they 
will   accept   the   offer   or   not.     But 
in    order    to   qualify    themselves   to 
vote  upon  the  proposition  they  are 
required  to  prove  their  claims.    The 
reason    for   this   is   obvious;    it   ex- 
cludes from  the  voting  all  but  bona 
fide  creditors;   it  excludes  all  those 


who  are  too  indifferent  to  present 
their  claims  and  all  whose  claims 
are  unliquidated,  fictitious  or  ex- 
orbitant ;  it  gives  all  creditors  no- 
tice, no  matter  what  may  be  the 
nature  of  their  claims,  and  permits 
them  to  qualify,  if  they  desire  to 
do  so,  and  assent  to  the  compro- 
mise or-  oppose  it,  or  if  they  so 
elect,  they  may  simply  withhold 
their  assent." 

See  also  In  re  Frear,  120  Fed. 
Rep.  978.  10  Am.  B.  R.  199;  In  re 
Hilborn,  104  Fed.  Rep.  866,  4  Am. 
B.   R.  74T. 

"In  re  Frear,  10  Am.  B.  R.  199, 
120  Fed.  Rep.  978. 

'  Consult  In  re  Spillman,  No. 
13242  Fed.  Cas.,  13  N.  B.  R.  214; 
In  re  Scott,  No.  12519  Fed.  Cas., 
15   N.   B.   R.   73- 

As  to  adjourning  the  meeting 
when  the  best  interests  of  the  cred- 
itors require  it,  see  In  re  Cheney, 
No.  2637  Fed.  Cas.,  19  N.  B.  R.  16. 


7X2  T.AW      AM)     rRiH-F.F.niXGS    IN     BANKRUPTCY. 

be    perinittcil    to    witlulraw    ihcir   consent,    in    the   absence   of 
frand  or  misrepresentations/ 

g  246.     Application  for  confirmation. 

The  conrt  is  expressl)-  authorized  to  connrni  ov  reject  com- 
position between  debtors  and  their  crecHtors.'  The  bankrupt 
must  apply  to  the  judge  and  not  to  the  referee  for  the  order 
contirming  the  composition.* 

Before  such  an  application  can  be  made  the  bankrupt  is 
required  to  do  three  things. 

First.  He  must  file  an  acceptance  of  his  offer  of  compro- 
mise in  writing  by  majority  in  number  of  all  creditors 
whose  claims  have  been  allowed,  which  must  represent  a 
majority  in  amount  of  such  claims.^  The  manner  of  obtain- 
ing tlie  consent  of  his  creditors  is  considered  in  the  last  sec- 
tion and  need  not  be  repeated. 

Second.  He  must  deposit  the  consideration  to  be  paid  by 
the  bankrupt  to  his  creditors  in  such  a  place  as  may  be  desig- 
nated by  the  judge,  and  the  same  must  be  subject  to  the  order 
of  the  judge.^ 

Third.  He  must  also  deposit  the  money  necessary  to  pay 
all  debts  wdiich  have  priority,  and  the  costs  of  the  proceedings, 
in  such  place  as  may  be  designated  by  the  judge,  and  the 
same  must  be  subject  to  the  order  of  the  judge.^ 

"/«  re  Levy,   no  Fed.  Rep.  744,  said:    "The    conclusions    are:     (i) 

6  Am.  B.  R.  299.  A  bankrupt  in  a  composition  pro- 

^  B.    A.    1898,    Sec.    2,    clause    g;  ceeding  is  required  to  deposit,   for 

In  re  Hilborn,    104  Fed.  Rep.  866,  the    purpose    of    carrying    out    the 

4  Am.   B.   R.   741.  composition,      sufficient      to      cover 

^  B.    A.    1898,    Sec.    38,   clause   4;  costs,  priority  claims  and  expenses. 

Gen.  Ord.  12.  and,    in    addition,     the    percentage 

^  B.    A.    189S,    Sec.    12b;    In    re  named,  not  only  on  all  claims  filed 

Frear,  120  Fed.  Rep.  978,  10  Am.  B.  before    confirmation,    but    also    on 

R.    199,    120   Fed.   Rep.   978;    In    re  all  other  claims  listed  by  the  bank- 

Flynn,  134  Fed.  Rep.  145,  13  Am.  B.  rupt  in  his  schedule;    (2)   this  will 

R.  720;  In  re  Fisher  &  Co.,  135  Fed.  include,  of  course,  scheduled  claims 

Rep.  223,   14  Am.   B.  R.  366.  filed    after    the    composition    agree- 

In  re  Harvej',  144  Fed.  Rep.  90T,  ment   had   been   accepted   and   suffi- 

16  Am.   B.   R.   345,   Judge   Holland  cient  will   be  required  to  cover  the 


COMPOSITIONS    AND    ARBITRATIONS. 


713 


If  the  bankrupt  fails  to  do  any  of  these  things  before  apply- 
ing for  an  order  of  confirmation  his  application  should  be 
disregarded. 

The  consideration  should  be  substantially  equivalent  to  the 
cash  value  of  the  bankrupt's  estate,  that  is,  what  his  estate 
would  pay  in  bankruptcy.  Otherwise  the  object  of  a  com- 
position is  evaded.  The  theory  of  a  composition  is  that  the 
cash  value  of  the  bankrupt's  estate  is  substantially  divided 
among  the  creditors  in  proportion  to  their  respective  debts. 
It  is  established  by  all  experience  that  a  man  can  make  more 
out  of  his  own  assets  than  a  trustee  of  more  general  capacity 
than  he,  and  entirely  honest,  can  possibly  realize.  There 
may  be  a  margin  in  many  cases  which  the  debtor  may  save 
by  offering  less  than  he  might  offer,  and-  more  than  his  cred- 
itors could  obtain  by  process  of  law.* 

The  statute  does  not  declare  of  what  the  consideration 
must  consist.  Manifestly  it  should  be  of  such  a  nature  that 
it  can  be  readily  distributed  by  the  judge.  The  most  con- 
venient form  of  consideration  is  money.  But  an  honest 
debtor  has  no  money.  He  has  paid  in  all  his  money  as  well  as 
his  other  property  as  a  part  of  his  estate.  If  he  is  required 
to  deposit  a  money  consideration  in  all  cases,  few  composi- 
tions could  be  effected.  In  such  cases  he  is  usually  depend- 
ent upon  his  friends. 

A  practical  consideration  consists  in  promises  to  pay 
money  at  specified  dates,  secured  by  notes,  reorganization 
bonds,  or  other  negotiable  paper,''  or  possibly  stock  in  a  new 


same  percentage  upon  them;  (3) 
the  bankrupt  is  not  required  to  de- 
posit sufficient  to  secure  a  percen- 
tage on  secured  claims,  nor  for  any 
supposed  deficiency,  if  it  has  not 
yet   been    ascertained    and    filed." 

*  Ex  parte  Jewett,  No.  7302  Fed. 
Cas.,  2  Low.  393;  In  re  Whipple, 
No.  17513  Fed.  Cas..  11  N.  B.  R. 
524 ; .  In  re  Weber  Furniture  Co., 
No.  17330  Fed.  Cas.,  i  3N.  B.  R. 
529- 


°  Consult  In  re  Langdon.  No. 
8058  Fed  Cas.,  2  Low.  387;  In  re 
Reiman,  No.  T1673  Fed.  Cas.,  7 
Ben.  455,  affirmed  in  No.  11675 
Fed.  Cas.,  12  Blatch.  562;  In  re 
Lewis,  No.  8314  Fed.  Cas.,  14  N. 
B.  R.  144;  III  re  Hurst,  No.  6925 
Fed.  Cas.,  I  Flipp.  162;  In  re 
Wronkow,  No.  18105  Fed.  Cas.,  15 
Blatch.   38. 


714  LAW      AM)     I'UOCliliDlNGS     l.\     MAX  KKT  I'TCY. 

company."  Creditors  who  have  cotificleiice  in  ihcir  debtor 
ina\-  be  wilhiii;',  and  may  consider  it  for  their  own  I)esi  in- 
terests to  accej)!  a  paper  consideration  and  pcrmil  the  l)ank- 
rnpt  to  continue  his  business.  That  negotiable  i)aper  may 
be  used  is  impHed  by  Section  \4c  of  the  act,  whicli  provides 
that  "the  conlinnation  shall  disciiavi^e  the  bankrupt  from 
his  ilebts  other  liian  those  agreed  to  be  paid  by  the  confirma- 
tion of  the  composition."  It  is  significant  that  the  \\ord 
"consideration"  is  used,  and  in  the  next  clause  relating  to 
debts  ha\ing  priority  and  the  cost  of  the  proceedings  the 
word  "money"  is  used,  as  if  congress  intended  to  make  a 
distinction  in  the  character  of  the  two  deposits. 

It  will  be  observed  that  money  only  can  be  deposited  for 
the  purpose  of  paying  debts  which  have  priority  and  the  cost 
of  the  proceeding.'  A  sufficient  sum  to  pay  the  debts  which 
have  priority  and  the  costs  of  the  proceeding  must  be  depos- 
ited. This  is  one  of  the  conditions  precedent  to  obtaining  a 
confirmation  of  the  composition.^  The  rule  seems  to  have 
been  otherwise  under  the  act  of  1867." 

When  the  bankrupt  has  complied  witli  the  conditions  men- 
tioned above  he  may  apply  for  a  confirmation  of  the  com- 
position. The  application  is  made  by  petition  addressed  to 
the  judge.^"  It  should  state  that  the  bankrupt  has  been 
examined  in  open  court  or  at  a  meeting  of  his  creditors ; 
that  he  has  filed  in  court  a  schedule  of  his  property  and  list 
of  his  creditors;  that  he  has  offered  terms  of  composition  to 
his  creditors,  which  have  been  accepted  in  writing  by  a 
majority  in  number  of  all  creditors  whose  claims  have  been 
allowed,  wdiich  number  represents  a  majority  in  the  amount 
of  such  claims ;  and  that  the  consideration  to  be  paid  by  the 
bankrupt  to  his  creditors,    the    money    necessary    to    pay  all 

"In  re  Woodend,   133  Fed.   Rep.  'In     re     Chamberlin,     No.     2580 

593,    12   Am.    B.    R.    768,    this   was  Fed.   Cas.,  9   Ben.    149. 

denied  because  of  the  character  and  ^^  Gen.    Ord.    12;    Official    Form 

value    of   the    stock.  No.   61;    see   Form    No.    in,  post; 

'•  V,.    A.    1898,    Sec.    12/7.  B.  A.   1898,  Sec.  38,  clause  4. 

'  /«    re   Harris,  9   Am.   B.   R.   20, 
117  Fed.  Rep.  575. 


COMPOsrrioxs  axd  arbitrations.  715 

debts,  tlie  costs  of  tlie  proceedings,  and  tlic  amount  thereof, 
ha\e  been  deposited  subject  to  the  order  of  the  judge,  in  a 
certain  depository,  naming  it,  and  conclude  with  a  prayer 
that  the  court  confirm  the  said  composition.  The  petition 
is  signed  by  the  bankrupt  without  verification. 

The  judge  fixes  a  date  and  place,  with  reference  to  the 
convenience  of  the  parties  in  interest,  for  the  hearing  of 
such  application  for  the  confirmation  of  the  composition.  The 
creditors  are  entitled  to  have  at  least  ten  days'  notice  by  mail 
of  such  liearing.^^  This  notice  may  be  served  by  the  referee 
or  by  the  clerk  as  the  judge  may  direct.  The  notice  is  usually 
in  the  form  of  an  order  to  show  cause  why  the  composition 
should  not  be  confirmed. 

§  247.     Objections  to  a  confirmation. 

General  creditors  are  entitled  to  object  to  a  confirmation  of 
a  composition,  but  secured  creditors  are  not  entitled  to  object. 
They  have  no  interest  in  the  general  fund.  A  trustee  is  not 
authorized  to  interfere  in  such  proceeding  beyond  furnishing 
such  information  concerning  the  estate  under  his  chars^e  and 
the  administration  thereof  as  may  be  requested.  He  can  not 
object  to  a  confirmation.^  If  the  creditors  interested  in  com- 
position proceedings  fail  to  attend  to  their  interest  in  time  the 
courts  will  not  relieve  them  from  the  consequences  of  their 
neglect,  except  they  made  a  clear  case  for  equitable  interfer- 
ence in  their  behalf.^ 

When  a  creditor  desires  to  oppose  the  application  of  a 
bankrupt  for  the  confirmation  of  a  composition  he  must  en- 
ter Ids  appearance  in  opposition  thereto  on  the  day  when  the 
creditors  are  required  to  show  cause,  and  must  file  a  specifi- 
cation in  writing  of  the  grounds  of  his  opposition  within  ten 
days  thereafter,  unless  the  time  shall  be  enlarged  by  special 

"  B.  A.    1898,   Sec.  58a.  '  In  re  Wronkow,  No.  18105  Fed. 

'Ross  V.  Saunders  (C.  C.  A.  rst  Cas.,  15  Blatch.  38;  the  objecting 
Cir.),  105  Fed.  Rep.  915,  5  Am.  creditor  did  not  attend  the  meeting 
B.  R.  350.  called  to  consider  the  proposal   for 

composition. 


716  LAW    .\.\i>    i'uoLi:i:i)i.\(.;s   in    liANKRi'Pi'CY. 

order  oi  the  jiulj^'C."  The  form  of  the  specification  in  oppo- 
sition to  a  confirniaiion  is  substantialh-  the  same  as  in  ojjposi- 
tion  to  a  chs>.narge.' 

There  are  three  g-eneral  i^ronnds  f(^r  opposing  the  confirma- 
tion of  a  composition  by  a  hankrui)l  l)y  his  crcchtors.  They 
are :'' 

First.  'I'hat  the  composition  is  not  for  tlie  l)est  interests 
of  the  creditors. 

Second.  That  tlie  bankrnpt  lias  been  guilty  of  an  act  or 
failed  to  perform  some  of  the  duties  which  would  be  a  bar  to 
his  discharge  and 

Third.  That  the  composition  has  been  procured  by 
fraud. 

First:  Because  not  for  the  Interest  of  ttte  Cred- 
itors.— The  first  ground  of  opposition  to  a  confirmation  is 
that  it  is  not  for  the  interest  of  the  creditors."'  The  interest 
to  be  considered  is  that  of  all  the  general  creditors  and  not 
any  particular  creditor  or  class  of  creditors.  It  is  the  creditors 
who  have  proved  their  claims  at  the  time  the  matters  are  being 
considered. 

The  statute  evidently  imposes  upon  the  judge  the  duty  of 
examining  the  offer  and  acceptance  and  ascertaining  whether 
the. composition  is  for  the  best  interests  of  the  creditors.  The 
question  is,  not  whether  the  debtor  might  have  ofTered  more, 
but  whether  his  estate  would  pay  more  in  bankruptcy.^  In 
determing  this  question  the  court  should  consider  the  amount 
of  debts,  the  amount  and  character  of  the  assets,  tlie  nature 
of  the  business  that  is  to  be  carried  on,  and  many  other  cir- 

^Gen.  Ord.  32.  ''Ex  parte  Jewett,  No.  7303  Fed. 

'Sec.    280,    post;    Official    Form  Cas.,  2   Low.   393;   In  re  Whipple, 

No.    58;    see   Form   No.    157,  post;  No.    17513   Fed.   Cas.,  2  Low.  404; 

City    National    Bank    of    Dallas    v.  In    re    Weber    Furniture    Co.,    No. 

Doolittle    (C.   C.  A.   5th  Cir.),   107  17330  Fed.   Cas.,    13   N.   R.   R.   529, 

Fed.    Rep.   236,   5   Am.    B.   R.   736;  reversed  on  appeal.  No.   17331  Fed. 

Adler  v.  Jones  (C.  C.  A.  6th  Cir.),  Cas.,   13  N.  B.   R.  559;  In  re  Rei- 

109  Fed.  Rep.  967,  6  Am.  B.  R.  245.  man,   No.    11673  Fed.   Cas.,  7   Ben. 

°B.  A.  1898,  Sec.  \2d.  455,  on  appeal.  No.  11675  Fed.  Cas., 

"B.  A.  1898,  Sec.  \2d.  12  Blatch.  562. 


COMPOSITIONS    -VXD    ARBITRATIONS. 


717 


cumstances.  If  the  court  is  satisfied  upon  the  hearing  that  the 
composition  offered  would  pay  creditors  very  considerably  less 
than  they  might  reasonably  be  expected  to  realize  in  the  ad- 
ministration of  the  assets  in  due  course,  then  the  composition 
is  not  for  the  best  interest  of  creditors.  In  determining  this 
question  the  courts  will  doubtless  be  influenced  by  the  con- 
sideration that  a  man  can  ordinarily  do  better  with  his  own 
property,  and  realize  more  therefrom,  than  can  be  obtained  in 
course  of  judicial  proceedings  with  compulsory  sales  and 
expense  of  administration.**  In  England  the  determination  of 
the  creditors  is  final,  in  the  absence  of  fraud,  and  it  has  been 
said  that "  "it  will  be  found  that  the  practical  administra- 
tion of  our  law  must  be  very  similar."  The  fact  that  a 
majority  of  the  creditors  have  consented  to  the  terms  offered 
by  the  bankrupt,  is  prima  facie  evidence  that  it  is  for  the 
best  interest  of  all,  and  the  burden  of  proof  is  then  upon  the 
dissenting  creditors  to  show  cause  for  not  confirming  the 
composition.^" 

How  far  congress  intended  to  protect  creditors  against 
each  other,  and  how  far  the  court  is  to  inquire  into  motives, 
are  questions  of  no  little  difficulty.  The  law  which  enables 
a  majority  of  creditors  to  accept  a  composition  with  their 
debtor,  to  which  other  creditors  do  not  consent,  and  so  to 
bind  such  dissentients,  assumes  as  an  essential  condition  that 
it  shall  in  all  respects  be  just.      Some  creditors  may  agree 


'Adler  v.  Jones  (C.  C.  A.  6th 
Cir.),  109  Fed.  Rep.  967,  6  Am.  B. 
R.  245 ;  In  re  Arrington  Co.,  8  Am. 
B.  R.  64,   113  Fed.  Rep.  498. 

"  Ex  parte  Jewett,  No.  7303  Fed. 
Cas.,  2  Low.  393,  and  quoted  with 
approved  in  In  re  Weber,  No.  17331 
Fed.   Cas.,    13   N.    B.   R.    559. 

"Adler  v.  Jones  (C.  C.  A.  6th 
Cir.),  log  Fed.  Rep.  967,  6  Am.  B. 
R.  245;  In  re  Arrington  Co.,  113 
Fed.  Rep.  498,  8  Am.  B.  R.  64. 
86  out  of  89  creditors  accepted  the 
terms  of  composition,  and  only  one 


objected.  In  re  Weber  Furniture 
Co.,  No.  17330  Fed.  Cas.,  2  Low. 
404,  reversed  on  appeal  on  the 
ground  that  the  composition  was 
prima  facie  evidence  which  was  not 
rebutted  by  the  evidence ;  No. 
1 7331  Fed.  Cas.,  13  N.  B.  8.  559. 
As  to  the  weight  to  be  given  an 
acceptance  by  the  requisite  major- 
ity of  creditors  who  are  acquainted 
with  all  the  facts,  see  also  In  re 
Greenebaum,  No  5769  Fed.  Cas., 
I   Chi.  Law  Jour.  599. 


718  LAW     AAD    I'KOCEEDINGS    IN     BAXKRUl'TCY. 

to  the  composition  without  nuich  inquiry,  upon  the  ground 
that  hankruptcy  is  to  I)c  avoided  at  all  risks;  some  out  of 
kindness  to  the  bankrupt;  some  from  a  conviction  that  the 
otTer  is  for  their  own  interest  as  distinguished  from  general 
interest.  Mr.  ikicon,  chief  judge  in  hankruptcy,  speaking 
on  this  point,  said.  "  " Iknevolence,  generosity  and  forhear- 
ance  may  he  well  exercised — with  this  restriction,  however, 
that  the  practice  of  these  moral  virtues  is  not  made  at  the 
expense  of  other  people.  1\)  hold  the  contrary  would  be 
directly  opposed  to  the  commonest  principles  of  justice  and 
honesty." 

Whether  the  composition  is  for  the  hest  interests  of  the 
creditors  usually  turns  upon  the  (piestion  of  the  adequacy  or 
inadequacy  of  the  terms  offered."  Where  the  court  was  satis- 
fied that  the  net  assets  would  amount  to  eighteen  thousand 
dollars,  and  the  debtor  offered  to  divide  eleven  thousand  dol- 
lars, the  court  refused  to  conhrm  the  composition.''''  Where 
it  was  shown  that  a  debtor  could  pay  more  than  seven  shil- 
lings in  the  pound  and  offered  to  pay  one  shilling,  and  four 
creditors  out  of  five  had  agreed  to  the  arrangement,  the 
court  set  aside  the  deed  of  arrangement.^"* 

In  determining  the  question  whether  the  proposed  compo- 
sition is  for  the  best  interests  of  creditors  the  judge  is  vested 
with  the  exercise  of  discretion.  It  is  nevertheless  a  sound 
judicial  discretion. ''' 

Second:  Because  of  Grounds  which  would  Bar  a 
Discharge. — The  second  ground  for  opposing  a  confirma- 
tion is  that  the  bankrupt  has  been  guilty  of  an  act  or  failed 

"  Ex   parte    Williams.    lo    L.    R.  "  Ex   parte    Williams,    lo    L.    R. 

£q     6i.  Eq.  57.    Consult  also  Ex  parte  Covv- 

'^'Adler   v.   Jones    (C   C   A.  6th  en.  2  L.  R.  Chan.  App.  563;   Hart 

Cir.),  109  Fed.  Rep.  967,  6  Am.  B.  v.  Smith,  4  L.  R.  Q.  B.  61 ;  Ex  parte 

R,   245.  Greaves.  5  L.   R.   Chan.  App.  326; 

"/«  re  Whipple,  No.   1751.3  Fed.  Ex   parte   Duigman,    11    L.    R.    Eq. 

Cas.,    2    Low.    404.      See    also    Ex  604;  Ex  parte  Ecvy  &  Co.,  11  L.  R. 

parte   Jewett,    No.   7303    Fed.    Cas.,  Eq.  619. 

2    Low.    393;    In    re    Reiman,    No.  "Adler   v.   Jones    (C.   C.    A.   6th 

1 1673  Fed.  Cas.,  7  Ben.  455.  Cir.).  109  Fed.   Rep.  967,  6  Am.  B. 


R.  24 


:>■ 


COMPOSITIONS    AND    ARBITRATIONS.  719 

to  perform  some  of  the  duities  which  would  be  a  bar  to  his 
discharge."  A  bankrupt  is  not  entitled  to  a  discharge  when 
he  has  (1)  committed  an  offense  punishable  by  imprison- 
ment as  herein  provided;  or  (2)  with  fraudulent  intent  to 
conceal  his  true  financial  condition,  and,  in  contemplation  of 
bankruptcy,  destroyed,  concealed,  or  failed  to  keep  books  of 
account  or  records  from  which  his  true  condition  might  be 
ascertained.^'  These  grounds  are  discussed  in  connection  with 
an  application  for  a  discharge,  to  which  the  reader  is  re- 
ferred.^* 

By  the  amendment  of  Feb.  5,  1903,'^  the  grounds  for  refus- 
ing a  discharge  were  amended  to  prevent  a  discharge  when  the 
bankrupt  has,  first,  committed  an  offense  punishable  by  im- 
prisonment as  herein  provided;  or,  second,  with  intent  to 
conceal  his  financial  condition,  destroyed,  concealed,  or  failed 
to  keep  books  of  account  or  records  from  w-hich  such  condition 
might  be  ascertained;  or.  third,  obtained  ])r()perty  on  credit 
from  any  person  upon  a  materially  false  statement  in  writing 
made  to  such  person  for  the  purpose  of  obtaining  such  prop- 
erty on  credit;  or,  fourth,  at  any  time  subsequent  to  the  first 
day  of  the  four  months  immediately  preceding  the  filing  of 
the  petition  transferred,  removed,  destroyed,  or  concealed,  or 
permitted  to  be  removed,  destroyed,  or  concealed  any  of  his 
property  with  intent  to  hinder,  delay,  or  defraud  his  creditors ; 
or,  fifth,  in  voluntary  proceedings  been  granted  a  discharge  in 
bankruptcy  within  six  years;  or,  sixth,  in  the  course  of  tlie 
proceedings  in  bankruptcy  refused  to  obey  any  lawful  firder 
of  or  to  answer  any  material  question  appro\'ed  by  the  court. 
These  objections  can  be  made  to  confirming  a  composition 
only  in  cases  begun  since  the  amendment. 

The  statute  does  not  limit  the  time  for  making  a  composi- 
tion to  that  within  which  a  discharge  may  be  granted.      It 

'"B.    A.    1898.    Sec.    T2J;    In    re  i2to  Fed.  Cas.,  2  Woods,  173. 

Godwin,    10    Am.    I!.    R.    252,    122  ''  B.  A.    1898.  Sec.   14b. 

Fed.  Rep.  iii.    The  rule  under  the  "Sees.  281-283. 

act  of   1867  was  otherwise.     In   re  '"  B.  A.  1898.  Sec.  14b.  as  anicnd- 

Ilaskell,    No.    6192    Fed.    Cas..    11  cd  Feb.  5,  1903.  32  Stat,  at  L.  797- 
N.    B.    R.    164;    In   re   Becket,   No. 


720  LAW     AND     PROCEEDINGS    IN     HANKRUTTCV. 

would  tliercfore  seem  (hat  an  objection  to  the  confirmation 
upon  the  grouml  that  a  cHscharge  was  barred  l)y  hmitation 
of  time  would  not  be  sulhcient  to  prevent  the  continuation  of 
a  composition.  The  refusal  to  conlirm  a  composition  must 
be  founded  upon  acts  or  an  omission  to  perform  duties  which 
would  bar  a  discharge,  and  nt)t  merely  for  the  reason  that 
an  application  for  a  discharge  can  ni>t  be  made.  It  has  been 
refused  because  the  bankrujit  failed  to  keep  books.'^" 

Third:  Because  it  was  Obtained  by  Fraud. — ^It  is  an 
essential  condition  to  the  validity  of  a  composition  that  it 
shall  be  in  all  respects  just.  Any  taint  of  fraud,  whether  it 
consists  in  concealment,  misrepresentation,  inequality  or  injus- 
tice wholly  vitiates  the  composition  and  frees  the  persons  who 
w'ould  otherwise  be  bound  by  it. 

The  court  will  not  hesitate  to  refuse  to  confirm  a  compo- 
sition when  the  debtor  has  deceived  the  creditors  into  an 
agreement,  which  they  Avould  probably  not  have  made  had 
the  facts  been  honestly  and  fairly  before  them.  Thus  it  is 
a  good  ground  for  opposing  a  confirmation  that  a  creditor  is 
induced  to  sign  an  acceptance  by  reason  of  a  present  con- 
sideration or  an  expectation  of  advantage  offered  by  the 
bankrupt,"^  or  by  a  third  person,  without  the  actual  knowl- 
edge of  the  bankrupt,  when  the  relation  of  such  person  to 
the  bankrupt  is  such  as  to  arouse  suspicion,  as  an  employee 
or  a  relation."  But  the  mere  fact  that  a  brother  procures  an 
assignment  of  claims  openly  will  not  prev.ent  a  confirmation 
when  it  appears  after  throwing  out  his  claims  that  a  major- 
ity of  tlie  creditors  have  accepted  the  terms  offered."^  A 
bankrupt  may  induce  his  friends  to  pay  more  in  composition 
than  his  estate  would  pay  in  bankruptcy.  Such  a  composi- 
tion should  be  confirmed.-*     A  creditor  may  purchase  claims 


•JO 


In    re    Olman,     134    Fed.    Rep.  "Inn   re    Bennett,   No.    1312   Fed. 

681,    1.3  Am.    B.   R.   395.  Cas..  8  Ben.  561. 

■'In  re   Sawyer,   No.    12305   PVl.  '' /»   re  Walshe,    No.    171 18   Fed. 

Cas.,    2    Low.    475;    In    re    Jacobs,  Cas.,  2  Woods,  225. 

No.    7159   Fed.    Cas.,    18   N.    B.    R.  "*  In  re  Snelling,  No.   13140  Fed. 

48.  Cas.,   19  N.  B.  R.   120. 


COMPOSITIONS    AND    ARBITRATIONS. 


721 


for  the  purpose  of  using  them  in  opposing  a  composition.-' 

When  the  requisite  majority  of  the  creditors  agree  to  a 
composition  for  much  less  than  the  bankrupt  is  able  to  pay, 
fraud  may  be  presumed.  Either  the  assenting  creditors  know, 
or  they  do  not  know,  that  the  debtor  is  able  to  pay  a  com- 
position of  a  larger  amount  than  that  which  he  has  proposed. 
If  they  do  not  know  the  debtor's  means,  it  can  only  be  by 
reason  of  the  debtor's  suppression  of  facts  material  and  essen- 
tial to  the  exercise  by  them  of  their  free  will,  and  in  such  a 
case  they  would  be  entitled  to  repudiate  the  consent,  which 
was  obtained  from  them  by  such  suppression.  If  on  the  other 
hand  they  do  know  the  extent  of  the  debtor's  ability  to 
satisfy  the  debts  due  to  them  and  other  creditors,  and  agree 
to  release — and  join  in  compelling  unwilling  creditors  to  re- 
lease— the  debtor  upon  payment  of  a  composition  grossly 
disproportionate  to  the  debtor's  means,  they  willingly  and  in- 
tentionally make  themselves  parties  to  a  fraud  by  which  the 
dissentient  creditors  are  prejudiced.  In  such  cases  the  court 
should  refuse  to  confirm.-'^  Where  a  bankrupt's  assets  are 
so  trifling  that  practically  there  would  be  no  dividend,  a  com- 
position may  be  successfully  opposed  against  an  attempt  by 
friendly  creditors  to  force  a  composition  upon  opposing  cred- 
itors.'' 

It  is  undoubtedly  a  good  ground  for  not  confirming  a  com- 
position if  any  person  has  used  a  false  claim  in  composition 
personally  or  by  agent,  proxy,  or  attorney,  or  as  agent,  proxy, 


■•''//I  re  Jewett,  No.  7303  Fed. 
Cas.,  2  Low.  393,  the  court  re- 
fused to  confirm  a  composition  with 
leave  to  call  a  new  meeting.  Be- 
tween the  order  of  the  court  and 
the  time  of  calling  a  new  meeting 
an  opposing  creditor  purchased  a 
sufficient  number  of  claims  to  de- 
feat the  confirmation.  Judge  Low- 
ell said:  "I  think  some  illegal  mo- 
tive should  be  shown  beyond  the 
mere  desire  to  defeat  the  composi- 
tion upon  the  ground  that  it  is  not 


for  the  best  interests  of  the  cred- 
itors to  accept  it." 

■°  As  to  what  is  too  great  a  mar- 
gin, see  "because  it  is  not  for  the 
interest  of  creditors"  above,  in  this 
section. 

■"In  re  Russell.  10  Chan.  Ap.  255. 
263;  In  re  Hannahs,  No.  6033  Fed. 
Cas.,  8  Ben.  533,  the  court  re- 
fused to  confirm  a  composition  of 
fifty  cents  for  every  hundred  dollars 
where  the  bankrupt  had  been  re- 
fused a  discharge. 


722  LAW      AND     rKOfKKIUNGS     IX     15  A  N  K  Rl"  1' TCY. 

or  attornc)-."'"     Such  person  also  is  liable  lo  imprisonment  for 
a  periotl  not  to  cxceeil  two  years  for  the  oiiense."'* 

Where  fraud  exists  the  creditors  are  not  bound  to  raise  the 
question  at  the  time  of  confirmation,  i'^aud  \itatcs  the 
whole  conlirniation  and  constitutes  the  i^round  for  setting 
it  aside.  The  objections  foundetl  upon  fraud  may  be  raised 
either  at  the  time  of  confirmation  or  up(^n  an  api)lication  to 
set  aside  a  confirmation  previously  made.  Cases  upon  the 
tjuestion  of  whether  a  conhrmation  may  l)e  set  aside  or  not 
may  be  profitably  consulted  in  this  connection.'''  It  is  obxior.s 
that  fraud  sufficient  to  set  aside  a  composition  is  sufficient 
to  prevent  a  confirmation. 

§  248.     The  hearing  of  objections. 

When  objections  are  properly  taken  to  the  confirmation  of 
a  composition  there  should  be  a  hearing  before  the  judge. ^ 
The  creditors  are  entitled  to  a  ten  days'  notice  by  mail  of 
such  hearing."  At  this  hearing  evidence  mav  l)e  introduced 
before  the  judge,  as  he  may  direct,  either  orally  or  by  dep- 
ositions or  affidavits,  and  counsel  may  be  heard  in  support  of 
and  against  the  specification  of  the  grounds  of  opposition. 
The  judge  may  refer  the  matter  to  a  referee  with  directions  to 
report  the  facts,  l)ut  tlie  judge  must  make  the  order. 

The  object  of  this  hearing  is  to  satisfy  the  judge  that  the 
composition  is  for  the  best  interests  of  the  creditors ;  that 
the  bankrupt  has  not  been  guilty  of  any  of  the  acts  or  failed 
to  perform  any  of  the  duties  wdiich  would  be  a  bar  to  liis  dis- 
charge and  that  the  offer  and  its  acceptance  are  in  good 
faith,  and  have  not  been  made  or  procured  except  as  provided 
by  the  statute,  or  by  any  means,  promises,  or  acts  therein 
forbidden.^  If  satisfied  of  these  things  it  is  his  duty  to  con- 
firm the  composition.^  Otherwise  he  should  refuse  to  con- 
firm it. 

^  B.  A.  i8y8,  Sec.  29,  clause  3.  ^  B.   A.    1898,    Sec.    I2r,  and   Sec. 

^As  to  when  a  composition  may      38,  clause  4.     Gen.  Ord.  12,  par.  3. 
be  set  aside,  see  Sec.  252,  post.  '  B.  A.  1898,  Sec.  58a. 

'  B.  A.  1898,  Sec.  \2d. 


COMPOSITIONS   AND   ARBITRATIONS.  723 

§  249.    The  order  of  confirmation. 

The  statute  provides  that  the  judge  shall  confirm  a  com- 
position if  satisfied  that  (1)  it  is  for  the  best  interests  of  the 
creditors;  (2)  the  bankrupt  has  not  been  guilty  of  any  of  the 
acts  or  failed  to  perform  any  of  the  duties  which  would  be  a 
bar  to  his  discharge;  and  (3)  the  offer  and  its  acceptance  are 
in  good  faith,  and  have  not  been  made  or,  procured  except  as 
provided  by  the  statute,  or  by  any  means,  promises,  or  acts 
therein  forbidden. 

Where  the  proceedings  have  been  regular,  and  the  bankrupt 
has  complied  with  all  the  conditions  specified  in  the  statute, 
and  no  opposition  is  made  by  the  creditors,  a  prima  facie 
case  is  made  which  ordinarily  satisfies  the  court  that  the 
bankrupt  is  entitled  to  have  a  composition  confirmed.  The 
court  will  thereupon  regularly  pass  an  order  confirming  the 
composition/  This  order  usually  recites  the  several  condi- 
tions which  have  been  complied  with  by  the  bankrupt.  The 
order  concludes  "it  is  therefore  hereby  ordered  that  the  said 
composition  be  and  the  same  is  hereby  confirmed."  ^ 

In  case  there  is  opposition  to  the  confirmation,  and  it  ap- 
pears from  the  evidence  that  the  acceptance  of  the  offer  of 
terms  was  duly  made  by  the  requisite  number  of  creditors, 
and  the  court  is  satisfied  that  the  creditors  were  fully  and 
honestly  advised  of  the  true  condition  of  the  bankrupt's  af- 
fairs, so  that  they  acted  intelligently  and  understandingly  in 
full  view  of  the  facts,  it  will  ordinarily  confirm  the  composi- 
tion." On  the  other  hand,  if  the  court  is  satisfied  from  the 
evidence  that  the  composition  has  not  been  honestly  made  as 
Ijetween  the  debtor  and  the  creditors,  or  that  it  is  not  for  the 
best  interest  of  them  all,  or  that  it  appears  that  the  bankrupt 
has  committed  or  omitted  to  do  some  act  which  would  bar 

'Official  Form  No.  62;  see  Form  L.  J.  599;  hi  re  Walslie,  No.  17118 

No.  113,  f'ost:  hi  re  I'" rear,   10  .Am.  Fed.    Cas.,    2    Woods    225;    hi    re 

B.    R.    199,    120    Fed.    Rep.   978.  Weber    Furniture    Co..    No.    17331 

■In  re  Rciman,   No.   11675  Fed.  Fed.  Cas.,  13  N.  B.  R.  599;  hi  re 

Cas.,  12  Blatch.  562;  hi  re  rireen.-  Spades.    No.     13196    Fed.    Cas.,    6 

baum,    No.   57C9   Fed.   Cas.,    i    Chi.  Biss.  448. 


724 


LAW     AXn    TROCEEDINGS    IN     BANKRUPTCY. 


his  dischari;e.  or  if  the  proceedings  have  been  irregular,''  ihe 
court  shouKl  refuse  to  pass  an  order  of  contirniation.  W'hen- 
e\er  a  composition  is  not  confn-nied,  the  estate  is  adniinis- 
teretl  in  bankruptcy  as  otherwise  provided  by  the  statute.* 
\\  hether  the  order  shah  be  granted  or  refused,  rests  in  the 
sound  judicial  discretion  of  the  judge.  The  judge  may  pro- 
vide for  a  dispute  or  an  nnli(|uidated  claim  in  composition 
cases.'"* 

A  certified  copy  of  an  order  confirming  or  setting  aside  a 
composition,  or  granting  or  setting  aside  a  discharge,  not  re- 
voked, is  evidence  of  the  jurisdiction  of  the  court,  the  reg- 
ularity of  the  proceedings,  and  of  the  fact  that  the  order  was 
made.'' 

It  has  been  held  that  an  appeal  lies  in  favor  of  a  bankrupt 
from  an  order  refusing  a  confirmation  of  a  composition.^ 

§  250.    The  effect  of  a  confirmation  of  a  composition. 

The  confirmation  of  a  composition  has  tlie  effect : 
First,  to  revest  in  the  bankrupt  the  title  to  his  estate  and 
property  and  discharge  the  trustee;  ^  second,  to  discharge  the 
bankrupt  from  his  debts,  other  .than  those  agreed  to  be  paid 
by  the  terms  of  the  composition  and  those  not  affected  by  a 
discharge."  No  other  discharge  tlian  an  order  of  confirma- 
tion is  needed.'' 

The  confirmation  of  a  composition  has  the  effect  of  dis- 
charging the  bankrupt  from  claims  provable  in  bankruptcy. 


*  In  re  Asten,  No.  594  Fed.  Cas., 
8  Ben.  350;  see  also  In  re  Henry, 
No.  6370  Fed.  Cas.,  9  Ben.  449; 
In  re  Rodger,  No.  11992  Fed.  Cas., 
18  N.  B.  R.  381. 

*  B.  A.  1898,  Sec.  I2(?. 

''  Ex  f>arfe  Trafton,  No.  14133 
Fed.  Cas.,  2  Low.  505. 

"B.  A.  1898,  Sec.  21/.  See  also 
as  to  the  conclusiveness  of  an  or- 
order  of  confirmation.  Smith  v.  En- 
gle,  14  N.  B.  R.  481. 


'  U.  S.  V.  Hammond,  104  Fed. 
Rep.  862,  4  Am.  B.  R.  736.  But  see 
Ross  V.  Saunders,  105  Fed.  Rep. 
915,  5  Am.  B.  R.  350. 

'  B.  A.  1898,  Sec.  7of;  Legion  v. 
Allen,  56  Miss.  632. 

"B.  A.  1898,  Sec.  14c.  Consult 
Liebke  v.  Thomas,  it6  U.  S.  605, 
29  L.  Ed.  744- 

•'/n  re  Becket,  No.  1210  Fed. 
Cas.,  2  Woods,  173. 


COMPOSITIONS   AND   ARBITRATIONS.  725 

although  the  creditors  did  not  actually  prove  their  debts  or 
participate  in  the  composition  proceeding.*  It  releases  the 
bankrupt  from  such  debts  only  as  a  discharge.^  A  discharge  in 
bankruptcy  releases  a  bankrupt  from  all  of  his  provable  debts, 
except  such  as  are  due  as  a  tax  levied  by  the  United  States,  the 
state,  county,  district,  or  municipality  in  which  he  resides ; 
are  liabilities  for  obtaining  property  by  false  pretenses,  or 
false  representations,  or  for  wilful  and  malicious  injuries  to 
the  person  or  property  of  another,  or  for  alimony  due  or  to 
become  due,  or  for  maintenance  or  support  of  wife  or  child, 
or  for  seduction  of  an  unmarried  female,  or  criminal  con- 
versation ;  have  not  been  duly  scheduled  in  time  for  proof  and 
allowance,  with  the  name  of  the  creditor  if  known  to  the  bank- 
i*upt,  unless  such  creditor  had  notice  or  actual  knowledge  of 
the  proceedings  in  bankruptcy;  or  w^ere  created  by  his  fraud, 
embezzlement,  misappropriation,  or  defalcation  while  acting 
as  an  officer  or  in  any  fiduciary  capacity." 

The  confirmation  of  a  composition  -will  regularly  discharge 
a  debt  created  by  fraud. ^  It  will  not  discharge  a  debt  or  lia- 
bility incurred  in  and  by  a  bankrupt  acting  in  a  fiduciary  ca- 
pacity,^ nor  a  stockholder's  contingent  liability  not  scheduled,** 
nor  the  liability  of  a  person  who  is  a  co-defendant  with  or  guar- 
antor, or  in  any  manner  a  surety  for  a  bankrupt,^"  nor  the  debt 
of  a  creditor  whose  name  does  not  appear  in  the  statement 
of  the  debtor  or  otherwise  in  the  composition  proceedings 
and  w'hose  debt  is  not  mentioned,"  unless  such  person  had 

*  Glover    Grocery   Co.   v.    Dome,  the  la\/  of  1867;  Wilmot  v.  Mudge, 

116    Ga.    216,    8    Am.    B.    R.    702;  103  U.  S.  217,  26  L.  Ed.  536. 

McGehee  v.  Hentz,  No.  8794  Fed.  "Bayly  v.   University,    106  U.    S. 

Cas.,  19  N.  B.  R.   136.  II,  27  L.  Ed.  97. 

°  Wilmot    V.    Mudge,    103    U.    S.  "  Flower   v.    Grccnebaum,   2    Fed. 

217,  26  L.  Ed.  536;   Bayly  v.  Uni-  Rep.  897. 

versity,  106  U.  S.  11,  27  L.  Ed.  97.  '"  B.  A.   1898,  Sec.   16;   Moore  v. 

•B.  A.  1898,  Sec.  17,  as  amended  Stanwood,  98  III  605;  In  re  Biirch- 

by  the  act  of  Feb.  5,  1903,  32  Stat.  ell,  4  Fed.   Rep.  406. 

at   L.    797.  "  Broadway    Trust    Co.    v.    Man- 

'  Crawford    v.    Burke,    195    U.    S.  heim   (Sup.  Ct.  N.  Y.),  14  Am.  B. 

176,  49  L.   Ed.    147,   12   Am.   B.   R.  R.     122;     Harrison    v.    Gamble,    69 

55g.  Mich.    96;    Robinson    v.    Soulc,    56 

The    rule    was    otherwise    under  Miss.   549.     See  also  In  re   Black- 
more,  1 1  I't'd.  Rep.  412. 


.'o 


LAW     AND    PROCEEDINGS    IN     BANKRUPTCY. 


actual  know  Iodide  o\  the  proccodinLiS  in  Uanki-uplcy.  Such 
notice  to  a  creditor,  whose  chiinis  are  (.)niilte(l  from  tlie 
schedules,  should  be  given  before  application  for  confirmation 
is  hied.'-' 

Where  the  consideration  consists  of  negotiable  paper,  ruid 
the  l)ankru])t  does  not  fuh'iH  his  obligations  and  agreements 
in  connection  therewith,  the  creditor  may  recover  his  whole 
debt  from  the  bankrupt.'''  The  confirmation  of  a  composition 
does  not  release  the  bankrupt  from  debts  agreed  to  be  paid 
h\  the  terms  of  the  composition.  If  the  bankrupt  fails  to 
make  good  his  part  the  consideration  fails  and  the  whole 
debt  revives. 

The  order  confirming  a  composition  is  not  a  bar  to  a  suit 
to  collect  the  whole  debt,  wdien  the  composition  was  procure'd 
by  fraud.''*  llie  reason  for  this  rule  is  that  fraud  vitiates  the 
whole  composition  and  leaves  the  debtor  and  the  bankrupt 
in  the  same  position  that  they  were  before  the  composition 
was  attempted. 

The  composition  proceedings  will  not  operate  to  deprive  a 
secured  creditor  of  the  right,  after  exhausting  his  own  secu- 
rity, to  assert  against  the  bankrupt  a  claim  for  deficiency.^° 
Such  proceedings  will  not  afTect  a  vested  right  or  security.^" 
Secured  creditors  are  not  parties  to  the  composition. 

An  agreement  or  note  entered  into  secretly  for  the  purpose 
of  obtaining  a  composition  with  creditors  can  not  be  enforced 
against  the  bankrupt,  because  the  consideration  is  illegal." 

A  composition  may  be  pleaded  in  bar  of  actions  upon  debts 


"  Broadway  Trust  Co.  v.  Man- 
heim  (Sup.  Ct.  N.  Y.),  14  Am.  B. 
R.   122. 

"  In  re  Negley,  20  Fed.  Rep.  499 ; 
In  re  Hurst,  No.  6925  Fed.  Cas., 
I  Flip.  462;  Ransom  v.  Geer,  12 
Fed.  Rep.  607. 

"  Brownsville  Manufacturing  Co. 
V.  Lockwood,  II  Fed.  Rep.  705; 
Pukpe  V.  Churchill,  91  Mo.  81; 
Ex  parte  ?Talford,  19  L.  R.  Eq.  436. 


'°  Paret  v.  Ticknor,  No.  10711 
Fed.  Cas.,  4  Dill,  ill,  per  Mr. 
Justice  Miller ;  Cavanna  v.  Bassett, 
3  Fed.  Rep.  215. 

'"/m  re  Stowell,  24  Fed.  Rep.  468. 

"Carey  v.  Hess,  112  Ind.  398; 
Tirrell  v.  Freeman,  139  Mass.  297; 
Blasdel  v.  Fowle,  120  Mass.  447; 
Woodman  v.  Stowe,  11  Bradw. 
(111.  Ap.  Ct.)  613;  Tinker  v.  Hurst, 
70  Mich.   159. 


COMPOSITIONS    AXP    ARBITRATIONS.  727 

discharged.     In  order  to  be  available  as  defense  it  must  be 
pleaded. 


18 


§  251.    Proceedings  after  a  confirmation  of  a  composition. 

Upon  the  confirmation  of  a  composition  the  consideration  is 
distributed  as  the  judge  shall  direct,  and  the  case  dismissed.^ 

The  form  of  order  for  distribution  on  composition  is  pre- 
scribed by  the  supreme  court."     It  provides  that  the  deposit 
shall  be  distributed  by  the  clerk  of  the  court  as  follows:    1st, 
to  pay  the  several  claims  which  have  priority;  2d,   to  pay 
the  costs  of  proceedings ;  ^  3d,  to  pay,  according  to  the  terms 
of  the  composition,   the  several  claims  of  general  creditors 
which  have  been  allowed,  and  appear  upon  a  list  of  allowed 
claims,  on  the  files  in  the  case.    Only  those  creditors  who  prove 
their  claims  within  one  year  from  the  date  of  adjudication 
can  have  dividends  from  the  estate,  or  assert  a  right  to  share  in 
the  funds  paid  in  composition.     The  officers  of  the  court  can 
not  know  what  amount  should  be  paid  to  a  creditor,  or,  indeed, 
w^ho  are  creditors,  except  upon  proof  of  their  claims  in  the 
time  and  manner  provided  by  law.     The  bankrupt  is  entitled 
to  the  money  remaining  in  court  unclaimed  after  the  expiration 
of  the  year  in  which  proof  of  claims  could  be  made,  and  the 
creditor  cannot  be  heard  to  say  that  it  was  not  in  fault  in 
respect  to  the  failure  to  present  its  claim.     The  language  of 
the  statute  permits  no  exceptions  to  its  terms.*     A  claimant 
is  entitled  to  property  leased  to  bankrupt  and  which   is  not 
used  in  the  composition.^     The  services  of  a  trustee  are  dis- 

"  Broadway   Trust   Co.   v.   l\Ian-  6iog  Fed.  Cas.,  2  Low.  568. 

heim   (Sup.  Ct.  N.  Y.),  14  Am.  B.  "Official  Form  No.  63;  see  Form 

R.    122;   In   re   Tooker,    No.    14096  No.  114,  post. 

Fed.  Cas.,  8  Ben.  390.     See  Plead-  ^In  re   Harris,  g  Am.   B.  R.   20, 

ing   a    discharge,    Sec.   301,   post.  uy  Fed.  Rep.  575. 
'B.  A.  1898,  Sec.  12^.  'In  re  Brown,  123  Fed.  Rep.  336, 

As  to  set-offs  in  composition,  see  10  Am.  B.  R.  588;  In  re  Lane,  125 

In  re  Lissburger,  2  Fed.  Rep.  153;  Fed.  Rep.  772,  11  Am.  B.  R.  136. 

In  re  Purcell,  No.  11470  Fed.  Cas.,  ^  In   re    Winship    Co.    (C.    C.   A. 

18  N.  B.  R.  447;  Ex  parte  Howard  7tli  Cir.),  120  Fed.  Rep.  93,  9  Am. 

Nat.   Bank,   No.  6764  Fed.   Cas.,  2  B.  R.  638. 

Low.    487;    Ex   parte    Harris,    No. 


/  2S  TAW     AXD    PRcH-EEDiNGS    IN     BANKRUPTCY. 

penscil  with.  When  the  pi\)pcrty  has  thus  been  tlistributed, 
the  case  is  thsniissed  by  the  judge  aiul  the  proceedings  are  at 
an  end. 

I'pon  the  conlirnuition  of  a  composition  offeretl  by  a  bank- 
nipt  the  title  to  his  property  thereupon  revests  in  him."  The 
title  is  passed  by  operation  of  law,  and  no  deetl  is  neces- 
sary to  convey.  A  certified  copy  of  an  order  confirming  a 
composition  constitutes  evidence  of  the  revesting  of  the  title 
of  his  property  in  the  bankrupt,  and  if  recorded  imparts  the 
same  notice  that  a  deed  from  the  trustee  to  the  bankrupt 
if  recorded  would  impart.^ 

S  252.     Setting  aside  a  confirmation. 

The  courts  of  bankruptcy  are  expressly  given  pov^^er  to  set 
aside  a  composition  and  to  reinstate  the  case.^  The  applica- 
tion to  set  aside  a  confirmation  should  be  made  to  the  judge, 
and  not  to  the  referee." 

Xo  other  court  can  set  aside  a  composition  except  the 
court  of  bankruptcy  which  confirmed  the  composition.  An 
order  of  confirmation  of  a  composition  can  not  be  assailed 
collaterally  in  any  other  court.  The  statute  expressly  pro- 
vides that  "a  certified  copy  of  an  order  confirming  or  setting 
aside  a  composition,  not  revoked,  shall  be  evidence  of  the 
jurisdiction  of  the  court,  the  regularity  of  the  proceedings, 
and  of  the  fact  that  the  order  was  made."  ^ 

The  application  is  made  by  petition,  which  should  be  en- 
titled in  the  court  and  cause.  The  creditors  assenting  to  the 
confirmation  as  well  as  the  bankrupt* are  proper,  if  not  essen- 
tial, parties  defendant.*  It  should  set  forth  the  grounds 
upon  which  the  composition  is  asked  to  be  set  aside.     The 

"B.  A.  1898,  Sec.  7of.  "In  re  Wrisley  Co.  (C.  C.  A.  7\h 

'B.  A.  1898,  Sec.  21^?.  Cir.),    133    Fed.    Rep.   388,    13    Am. 

'  B.    A.    i8g8.    Sec.    2,  clause    9;       B.  R.  193;  see  also  Marshall  Field 

In   re    Rudnick,   93    Fed.  Rep.    787,       &    Co.    v.    Dry    Goods    Co.    (C.    C. 

2    Am.    B.    R.    114.  A.  8tli  Cir.),   120  Fed.  Rep.  815,  9 

=  B.    A.    1898,    Sec.    13.  Am.  B.  R.  693. 

="6.   A.    1898.    Sec.   21/. 


COMPOSITIONS    AND    ARBITRATIONS. 


'29 


only  ground  upon  which  a  composition  can  be  set  aside  and 
the  case  reinstated  is  when  it  is  made  to  appear  upoii^the  trial 
that  fraud  was  practiced  in  the  procuring  of  such  composition, 
and  that  the  knowledge  thereof  has  come  to  the  petitioners 
since  the  confirmation  of  such  composition/  The  petition 
should  conclude  with  a  prayer  tliat  the  composition  be  set 
aside  and  be  signed  by  a  "party  in  interest."  The  word 
"creditors"  was  used  in  the  former  act.**  The  word  "parties 
in  interest"'  is  a  broader  term,  but  in  practice  the  application 
usually  is  made  by  a  creditor.  But  a  creditor  who  has  assigned 
his  claim  is  not  then  a  party  in  interest.'  A  secured  creditor  can 
not  make  an  application  because  he  has  no  interest  in  the  com- 
position.* The  petition  must  be  verified.  An  affidavit  "on 
information  and  belief"  is  not  sufficient.^ 

The  petition  must  be  filed  in  the  clerk's  office  within  six 
months  after  the  composition  has  been  confirmed.^'*  A  trial 
is  had  upon  notice  to  all  creditors.^^  Evidence  mav  be  in- 
troduced and  counsel  heard  for  and  against  the  petition.  If 
the  allegations  in  the  petition  are  supported  by  sufficient 
evidence  the  court  will  order  the  composition  set  aside  and 
the  case  reinstated/^  and  if  not,  it  will  .order  the  petition 
dismissed. ^^  A  composition  will  not  be  set  aside  on  the  ground 
that  a  creditor  had  failed  to  get  notice  of  the  proceedings  be- 
cause his  address  w^as  misstated  in  the  bankrupt's  schedule  by 
mistake."     A  composition  may  be  set  aside  where  a  trustee 


°B.  A.  1898,  Sec.  13.  As  to  the 
sufficiency  of  a  petition  in  this  re- 
gard see  In  re  Roukous,  128  Feci. 
Rep.  645,    12  Am.   B.   R.   128. 

•R.    S.    Sec.    5103. 

'/«  re  Wrisley  Co.  (C.  C.  A. 
7th  Cir.),  133  Fed.  Rep.  388,  13  Am. 
B.   R.    193. 

'/n  re  Scott,  No.  12519  Fed. 
Cas.,    IS   N.   B.   R.   -jz- 

'In  re  Roukous,  128  Fed.  Rep. 
645,    12  Am.   B.   R.    128. 

"B.  A.   1898,   Sec.   13. 


"  In  re  Diggles,  No.  3905  Fed. 
Cas.,  8  Ben.  36;  Ex  parte  Hamhn, 
No.  5993  Fed.  Cas.,  2  Low.  571. 

"B.  A.  1898,  Sec.  2,  clause  9; 
Fairbanks  v.  Amoskeag  Bank,  38 
Fed.  Rep.  630;  Ex  parte  Williams, 
10   L.   R.   Eq.   57- 

"City  Bank  v.  Dooliule  (C.  C. 
A.  5th  Cir.),  107  Fed.  Rep.  236,  5 
Am.  B.  R.  y2,6;  In  re  Shaw,  9  Fed. 
Rep.  495;  Pool  V.  McDonald,  No. 
11268  Fed.  Cas.,  15  N.  B.  R.  sfx). 

'*  In  re  Rudnick,  93  Fed.  Rep, 
787,  2  Am.  B.  R.  114. 


730  LAW      AM)     I'KOCEEDINGS    IX     IJANKRUrTCV. 

joins  with  the  bankrupt  to  effect  a  compi^sition  to  the  iletri- 
nient  of  the  cre(Htors  by  false  representations  as  to  the  assets/'* 

Whenever  a  composition  has  been  set  aside  the  crethtors. 
at  their. lirsi  meeting-  thereafter,  must  appoint  mie  or  three 
trustees  of  such  estate."'  and  li\  the  amount  ol'  the  l)i>n(ls  as 
in  the  tirst  instance.  The  trustee,  upon  liis  ai)])ointnient  and 
qnaUfication.  is  vestetl  with  the  title  to  all  of  the  property  of 
the  bankrupt  as  of  the  date  of  the  final  decree  setting  aside 
the  composititMi.'' 

The  case  then  proceeds  as  if  no  composition  had  been  made. 
The  property  is  distributed  in  the  same  manner,  except  that 
in  the  event  of  the  comfirmation  of  a  composition  being  set 
aside,  the  property  acquired  by  the  bankrupt,  in  addition  to 
his  estate  at  the  time  the  composition  was  confirmed  or  the 
adjudication  was  made,  is  applied  to  the  payment  in  full  of 
the  claims  of  creditors  for  property  sold  to  him  on  credit, 
in  good  faith,  while  such  composition  or  discharge  was  in 
force,  and  the  residue,  if  any,  is  applied  to  the  payment  of 
the  debts  which  were  owing  at  tlie  time  of  the  adjudication.^* 

§  253.     Arbitration  and  compromise. 

The  trustee  may,  pursuant  to  the  direction  of  the  court, 
submit  to  arhitration  any  controversy  arising  in  the  settle- 
ment of  the  estate.^  or  he  may,  wdth  the  approval  of  the 
court,  compromise  any  controversy  arising  in  the  administra- 
tion of  the  estate  upon  such  terms  as  he  may  deem  for  the 
best  interests  of  the  estate.' 

Whenever  a  trustee  makes  application  to  the  court  for 
authority  to  submit  a  controversy  arising  in  the  settlement  of 
a  demand  against  a  bankrupt's  estate,  or  for  a  debt  due  to  it, 
to  the  determination  of  arbitrators,  or  for  authority  to  com- 
pound  and   settle   such   controversy   by   agreement   with   the 

"/h    re    Wrisley    Co.,    133  Fed.          '  B.  A.  1898.  Sec.  26a.     Compare 

Rep.  388,  13  Am.  B.  R.   193.  R.   S.   Sec.   5061. 

"B.  A.  1898,  Sec.  44-  'B.  A.  1898,  Sec.  27;  In  re  Hey- 

"  B.  A.  1898.  Sec.  yod.  man,    108    Fed.    Rep.    207,    5    Am. 

"  B.  A.  1898,  Sec.  64c.  B.  R.  808. 


COMPOSITIONS    AND    ARBITRATIONS.  731 

Other  party,  the  appHcation  must  dearly  and  distinctly  set 
forth  the  subject-matter  of  the  conrtoversy.  and  the  reason 
why  the  trustee  thinks  it  proper  and  most  for  the  interest  of 
the  estate  that  the  controversy  should  be  settled  by  arbitra- 
tion or  otherwise.^ 

Whenever  it  may  be  deemed  for  the  benefit  of  the  estate 
of  a  bankrupt  to  compound  and  settle  any  debts  or  other 
claims  due  or  belonging  to  the  estate  of  the  bankrupt,  the 
trustee,  or  the  bankrupt,  or  any  cretlitor  who  has  proved  his 
debt,  may  file  his  petition  therefor;  and  thereupon  the  court 
appoints  a  suitable  time  and  place  for  the  liearing  there- 
of, notice  of  which  is  given  as  the  court  shall  direct,  so 
that  all  creditors  and  other  persons  interested  may  ai)pear 
and  show  cause,  if  any  they  have,  why  an  order  should  not 
be  passed  by  the  court  upon  the  petition  autliorizing  such 
act  on  the^part  of  the  trustee.* 

Under  the  act  of  1867  it  was  held  that  such  applications 
must  be  made  to  the  judge."'  Under  the  present  act  the 
referee  is  authorized,  subject  always  to  a  re\'iew  by  the 
judge,  within  the  limits  of  his  district  as  established  from 
time  to  time,  to  perform  such  part  of  the  duties,  exce])t  as  to 
questions  arising  out  of  the  applications  of  bankrupts  for 
compositions  or  discharges  as  are  l)y  the  bankrupt  statute 
conferred  on  courts  of  bankruptcy,  and  as  shall  be  prescribed 
by  rules  or  orders  of  the  courts  of  bankruptcy  of  their  re- 
spective districts,  except  as  otherwise  provided  l)y  statute.*' 
It  seems,  therefore,  that  an  application  to  compromise  or  to 
submhit  to  arbitration  any  controversy  arising  in  the  admin- 
istration of  the  estate  may  be  made  to  the  referee  or  to  the 
judge. 

In  either  case  a  ten  days'  notice  should  be  given  by  mail 
to  the  creditors,  of  the  time  ruid  place  of  the  hearing  on  the 
petition."      Tlie   notice   is  u.sually   in   the    form    of  a   rule   to 

3  Gen.  Ord.  33.  °  B.  A.  i8gS,  Sec.  38,  claause  4. 

*Gen.  Orel.  28.  '  B.    A.     189S,    Sec.    S^a;    In    re 

''In    re    Graves,  No.    5709    I"'l'<1-       Hoolc,  ^  Fed.  Rep.  496. 
Cas.,  2  Ben.   100. 


732  l.AW     AM)     TKOCEEDINGS    IN     BANKRUPTCY. 

show  cause.  At  the  hearing-  the  court  may  lieav  testimony 
and  arguments  o\  comisel  in  support  of  and  against  the  peti- 
tion, anil  pass  an  order  granting  ov  refusing  to  grant  the 
prayer  of  the  petition.  It  nia\-  he  tlouhtod  if  the  court  can 
hy  a  general  order  authori/e  llie  trustee  to  compound  all 
donhtfnl  claims,  with  the  consent  of  a  committee  of  the 
creditors.'*  The  proceedings  should  be  in  accordance  with  the 
]iro\isions  of  the  statute  and  general  orders. 

When  leave  is  grantetl  to  submit  a  controversy  to  arbitra- 
tion, three  arbitrators  are  chosen  by  mutual  consent,  or  one 
by  the  trustee,  one  1)}"  tlie  other  ])arty  to  the  controversy, 
anil  the  third  by  the  two  so  chosen,  or  if  they  fail  to  agree 
in  five  days  after  their  appointment  the  court  appoint  the 
thirtl  arbitrator."  The  arbitrators,  upon  inquiry,  consider 
the  controversy,  and  should  report  their  finding  in  writing. 
The  written  hnding  of  the  arbitrators,  or  a  majority  of  them, 
as  to  the  issues  presented,  may  be  filed  in  court,  and  have 
hke  force  and  effect  as  the  verdict  of  a  jury.'°  It  is  subject 
to  be  set  aside  or  adjudged  upon  by  the  court  as  a  verdict 
would  be.*^ 

'See    /;;    re    Dibblee,    No.    3885  "  B.  A.    1898,   Sec.  26c. 

Fed.  Cas.,  3  Ben.  354.  "  In    re    McLam,    97    Fed.    Rep. 

'B.    A.     1898,     Sec.    26b:    III    re       922,  3  Am.  B.  R.  245. 
McLam.  97   Fed.    Rep.  922,  3  Am. 
B.    R.    245. 


HOW     TO    REDUCE    THE    ESTATE    TO     MONEY. 


733 


CHAPTER  XXIV. 

HOW    TO   REDUCE  THE   ESTATE   TO    MONEY. 

§  254.     The  general  power  of  a  trustee  to  collect  and  reduce 
estates  to  money. 

The  trustee  is  required  to  collect  and  reduce  to  money  the 
property  of  the  estate  for  which  he  is  trustee.^  The  courts 
of  bankruptcy  are  given  power  to  cause  the  estates  of  bank- 
rupts to  be  collected,  reduced  to  money  and  distributed  and  to 
determine  controversies  in  relation  thereto,  except  as  other- 
wise provided  by  the  statute." 

It  is  the  duty  of  the  bankrupt  to  deliver  to  the  trustee 
as  soon  as  he  is  appointed  and  qualified  all  of  his  property,  real 
and  personal,  to  be  distributed  among  his  creditors.  If  he 
fails  or  refuses  to  do  this  he  may  he  cited  to  answer  a  rule  to 
show  cause  and  the  court  may  order  him  to  turn  over  any  such 
property  in  his  possession  or  under  his  control  to  the  trustee 
and  enforce  the  order  1)y  commitment  if  he  fails  to  obey  it.^ 
The  same  procedure  may  be  had  to  obtain  property  in  the  pos- 
session of  an  agent  or  bailee  of  property  of  the  bankrupt,  who 
does  not  claim  title  to,  or  an  interest  in  the  property  in  ques- 
tion.^     An  assignee   for  the  benefit  of  creditors   is  such   an 


'  B.  A.  1898,  Sec.  47,  clause  2. 

'B.  A.  1898,  Sec.  2,  clause  7. 
G)mpare  R.  S.  Sections  5062  to 
5066,  Act  of  June  22d,  1874,  18 
Stat,  at  L.  178.  As  to  the  juris- 
diction of  a  court  of  bankruptcy 
in  this  respect,  see  Sec.  17  et  seq., 
ante. 

^  Schweer  v.  Brown  (C.  C.  A. 
8th  Cir.),  130  Fed.  Rep.  328.  12 
Am.  B.  R.  178;  In  re  Rosser  (C. 
C.  A.  8th  Cir.),  loi  Fed.  Rep.  562, 
4  Am.  B.  R.  153;  Ripon  Knitting 
Wks.  V.  Schric'licT.  ini  I-'cd.  Rej). 
810,    4    .\m.     B.     R.    299;     In    re 


Schlesinger  (C.  C.  A.  2d  Cir.),  102 
Fed.  Rep.  117,  4  Am.  B.  R.  361; 
In  re  Wilson,  116  Fed.  Rep.  419, 
8  Am.  B.  R.  612;  In  re  Greenberg, 
T06  Fed.  Rep.  496,  5  Am.  1'..  R. 
840;  In  re  Purvine  ( C.  C.  A.  5th 
Cir.),  96  Fed.  Rep.  192,  2  Am.  B.  R. 
787;  In  re  Gerstel,  123  Fed.  Rep. 
166,   10  .\m.   B.   R.  411. 

'  Mueller  v.  Nugent,  184  U.  S.  i, 
46  L.  Ed.  405,  7  .\m.  B.  R.  224; 
In  re  Feldser,  134  Fed.  Rep.  307, 
14  .\m.  B.  R.  216;  In  re  Moore,  104 
Fed.   Rep.  869,  5  Am.  B.  R.   151. 


734  LAW     AND    PROCEEDINGS     IX     BANKRUPTCY. 

aj;t.Mit.''  1  Ic  may  be  reijuircd  in  a  summary  i)n)ceeding-  to 
tleliver  to  the  trustee  any  property  oi  tlie  l)ankrupt  in  his 
pc>ssession  bv  reason  itf  the  assignment."  W  here  he  has  trans- 
terrecl  anv  [)art  of  such  property  to  another  person  who  claims 
title  to,  or  an  interest  in  it,  the  trustee  must  resort  to  plenary 
action  to  recover  it.' 

The  bankrupt  may  be  reciuired  by  order  of  the  court  to  sign 
papers  necessary  to  make  his  property  available  as  assets,  as 
to  execute  an  instrument  necessary  to  effectuate  a  sale  of 
a  seat  in  a  stock  exchange.'*  or  the  transfer  of  a  liquor  license," 
or  the  transfer  of  a  license  of  a  stall  in  market.'" 

Where  the  property  claimed  to  l)elong  to  the  estate  of  the 
bankrupt  is  in  the  possession  of  another  person  claiming 
title  to.  or  an  interest  in  it,  the  trustee  must  resort  to  a  plenary 
action  in  a  court,  either  state  or  federal.  Iia\ing  jurisdiction. 
This  is  necessary  to  recover  property  transferred  as  a  prefer- 
ence or  in  fraud  of  creditors,' '  or  to  recover  debts  due  the 
estate.'"  The  trustee  may,  with  the  approval  of  the  court, 
compromise  any  controversy  arising  in  the  administration  of 
the  estate  upon  such  terms  as  lie  may  deem  for  the  best  interest 
of  the  estate.''^ 

\\'here  a  great  advantage  will  result  to  the  estate  and  wdthin 
a  reasonable  time,  the  trustee  may  1)e  permitted  to  expend 
money  for  the  purpose  of  putting  the  estate  or  any  part  of 

"Bryan  v.  Bernheimer,  i8i  U.  S.  '"In    re    Emrich,    loi    Fed.    Rep. 

i88,   45   L.    Ed.  814,   5   hm.   B.   R.  231,  4  Am.   B.   R.  89. 

523.  "  See    Sees.    202   and   2030,   ant(^, 

"In  re  Stokes,  106  Fed.  Rep.  312,  where  the  nature  of  the  suit  and  the 

6  Am.   B.  R.  262;  In  re  Smith,  92  court  in  which  it  should  be  brought 
Fed.  Rep.   135,  2  Am.   B.  R.  9.  are    considered. 

'Louisville  Trust  Co.  v.   Comin-  '- fn  re  Waterloo  Organ  Co.,  118 

gor,    184  U.    S.    18,  46  L.   Ed.  413,  Fed.    Rep.   904,   9   Am.   B.    R.   427, 

7  Am.  B.  R.  421.  Judge  tiazel  held  that  a  mogtgagee 
*/«    re    Hurlbutt,    Hatch    &    Co.  in   possession   before   he   had    right 

(C.  C.  A.  2d   Cir.),   135   Fed.  Rjsp.  to  be  under  the   mortgage   did   not 

504,   13  Am.   B.   R.   50.  constitute    him    an    adverse    claim- 

*/«   re   Fisher,   98   Fed.   Rep.   89,  ant. 
3  Am.  B.  R.  406;  In  re  Becker,  98  "  B.   A.    1898,   Sec.  26,  Gen.  Ord. 

Fed.  Rep.  407,  3  Am.  B.  R.  412.  3i. 


now     TO     REDUCE     THE     ESTATE     TO     MOXEV.  /OD 

it  in  a  merchantable  form,"  as  by  cutting  timber,  harvesting 
crops,  and  the  hke ;  and  so  of  finishing  unfinished  goods.  The 
court  may  authorize  the  trustee  to  conduct  the  business  of  the 
bankrupt  for  hmitecl  periods,  if  necessary  for  the  best  interests 
of  the  estate.'' 

The  estate  of  the  bankrujit  must  be  rcchiced  to  money  in 
order  to  distribute  it  pro  rata  among  his  creditors.  The 
estate  may  come  to  the  trustee  loaded  with  Ijurdens.  There 
may  be  valid  mortgages  or  other  liens  on  it  and  there  may 
be  liens  and  mortgages  whose  validity  is  doubtful.  Whatever 
interest  the  bankrupt  has  in  such  ])roperty  must  be  determined 
and  reduced  to  money.  It  is  regularly  done  by  selling  the 
property. 

The  trustee  may,  "under  tlie  direction  of  the  court,'  sell 
anv  property  of  the  estate  in  his  possession  subject  to  "'  or 
free  from  liens,''  e\en  where  it  is  beyond  the  territorial  juris- 
diction of  the  court  ordering  the  sale.^*^  A  receiver  has  been 
permitted  to  sell  property  in  his  possession  under  an  order_ 
of  court,'"  but  he  can  not  sell  property  of  the  bankrupt  in  the 
possession  of  a  person  claiming  to  own  it.'"  \\dienever  it  is 
necessary  or  advisable  in  the  opinion  of  the  trustee  to  make 
a  sale,  he  should  apply  to  the  judge  or  referee,  usually  the 

"Foster  &  Ames,  No.  4965  Fed.  248;  In  re  Granite  City  Bank    (C. 

Cas.,  1  Low.  313.  C.  A.  8th  Cir.),  137  Fed.  Rep.  818, 

"Foster  v.  Ames,  No.  4965  Fed.  14    Am.    B.    R.    404;    In    re    Keet, 

Cas.,  I  Low.  313.  128   Fed.    Rep.  651,    11   Am.    B.    R. 

'°  B.  A.   1898,  Sec.  2,  clause  5,  as  117. 

amended   Feb.   S,    1903,  32   Stat,  at  " /»    re    Granite    City    Bank    (C. 

L.    797.  C.  A.  8th  Cir.).  137  Fed.  Rep.  818, 

'"Cramer   v.    Wilson,    195    U.    S.  14   Am.    B.    R.   404;    In   re   Wilka, 

408,   49   L.    Ed.   256;    In   re   Muhl-  131    Fed.  Rep.   1004,   12  Am.   B.  R. 

hauser    (C    C.    A.    6th    Cir.),    121  727. 

Fed.  Rep.  669,   10  Am.   B.   R.  236;  '''In  re  LeVay,  125  Fed.  Rep.  990, 

In    re    Gerry,    112    Fed.    Rep.    958,  ii    Am.   B.   R.    114;   In   re   Becker, 

7    Am.    B.    R.    459.  98  Fed.  Rep.  407,  3  Am.  B.  R.  412. 

"In   re  Union  Tru.st  Co.    (C.   C.  '"Beach    v.    Macon    Grocery    Co. 

A.   ist  Cir.),   122  Fed.  Rep.  937,  9  <'C.  C.  A.  5th  Cir.),  116  Fed.  Rep. 

Am.  B.  R.  767 ; /m  r<?  Shoe  &  Leath-  143.    8    Am.    B.    R.    751,    125    Fed. 

er    Reporter    fC.    C.    A.    ist    Cir.),  Rep.  513,   11   Am.  B.  R.   104. 
129   Fed.    Rep.   588,    12  Am.   B.    R. 


.  .S() 


LAW     AN'n     rROCKFOTNGS    IX     ISANKUrPTCV. 


referee."^  for  porniission  lu  sell  properly,  spocifyiiii;  [)aiticu- 
larly  what  property  is  to  be  sold.  But  where  the  trustee  uuule 
a  sale  without  authority  aud  the  sale  was  coufiruied  the  con- 
tinuation was  held  eijuivalent  to  a  prior  order."  The  supreme 
court  has  prescribed  forms  of  petitions  and  orders  for  the 
sale  bv  auction  of  real  estate, -''  for  the  redemption  of  prop- 
erty from  lien,'-''  for  the  sale  oi  property  subject  to  lien,"''  for  a 
private  sale  of  property,""  and  for  a  sale  of  perishable  prop- 
erty."' The  creditors  must  have  ten  days'  notice  of  the  pro- 
posed sale."** 

Where  the  property  is  sold  su1)ject  to  liens,  the  purchaser 
takes  only  the  bankrupt's  interest  in  the  property,  whatever 
that  may  be,  and  the  secured  creditor's  lien  on  the  property 
is  preserved.-"  Where  it  is  sold  free  of  liens,  the  secured  cred- 
itor can  assert  his  right  to  the  proceeds  before  the  referee 
after  the  sale,  when  and  where  his  claim  can  be  heard 
and  its  priority  awarded.'*'  The  purchaser  takes  a  clear 
title  to  the  property. 


§  255.     Unencumbered  property. 

Under  the  general   power  conferred  upon  the  court  and 
trustee,  such  parts  of  the  estate,  real  and  personal,  as  come 


"'/h  re  Fisher  &  Co.,  135  Fed. 
Rep.  223,  14  Am.  B.  R.  366;  In  re 
Rosenberg,  116  Fed.  Rep.  402,  8 
Am.  B.  R.  624;  Chauncey  v.  Dyke 
Bros.  (C.  C.  A.  8th  Cir.),  119 
Fed.  Rep.  i,  9  Am.  B.  R.  444;  Car- 
roll Co.  V.  Young  (C.  C.  A.  3d 
Cir.),  119  Fed.  Rep.  576,  578,  9  Am. 
B.  R.  643,  645;  In  re  Gerry,  112  Fed. 
Rep.  958,  7  Am.  B.  R.  459- 

"In  re  Harvey,  122  Fed.  Rep. 
745,    10  Am.   B.   R.   567. 

"^  Official  Form  No.  42;  see  Form 
No.  ^2,  post 

^  Official  Form  No.  43 ;  see  Form 
No.  7Z,  post. 

"Official  Form  No.  44;  see  Form 
No.  77,  post. 


-"  Official  Form  No.  45 ;  see  Form 
No.  83,  post. 

-'Official  Form  No.  46;  see  Form 
No.  84,  post. 

-'B.  A.  1898,  Sec.  58a.  But  see 
In  re  Hawkins,  125  Fed.  Rep.  633, 
II  Am.  B.  R.  49. 

-^  Cramer  v.  Wilson,  195  U.  S. 
408,  49  L.  Ed.  256;  In  re  Muhl- 
hauser  (C.  C.  A.  6th  Cir.),  121 
Fed.   Rep.   669,    10  Am.  B.   R.  236. 

="/m  re  Rochford  (C.  C.  A.  8th 
Cir.),  124  Fed.  Rep.  182,  10  Am. 
B.  R.  608;  In  re  Granite  City  Bank 
(C.  C.  A.  8th  Cir.),  137  Fed.  Rep. 
818,  14  Am.  B.  R.  404;  In  re  Union 
Trust  Co.  (C.  C.  A.  ist  Cir.), 
122  Fed.  Rep.  937,  9  Am.  B.  R. 
767. 


HOW    TO    REDUCE    THE    ESTATE    TO     MONEY.  7^1 

into  the  possession  of  the  trustee  unencumbered  by  mortgage 
or  lien,  may  be  sold  by  the  trustee  under  the  direction  of  the 
court.^  The  trustee  may  be  authorized  to  compromise  or  sell 
and  assign,  in  such  manner  as  the  judge  or  referee  may  order, 
any  outstanding  claims  or  other  property  in  his  hands  due  or 
belonging  to  the  estate,  which  can  not  be  collected  or  received 
by  him  without  unreasonable  or  inconvenient  delay  or  ex- 
pense.^ 

The  trustee  may  apply  to  the  referee  for  permission  to  sell 
such  property  by  auction  or  at  private  sale.^  In  the  case  of 
real  estate,  it  may  be  sold  in  lots  or  parcels  or  as  a  whole,  as 
the  referee  may  direct. 

The  application  for  leave  to  sell  property  is  made  by  peti- 
tion.* The  petition  should  be  entitled  in  the  court  and  cause 
and  allege  that  it  would  be  for  the  benefit  of  the  estate  that 
certain  property,  describing  it  and  its  estimated  value,  should 
be  sold  by  auction  or  at  private  sale,  as  may  be  desired.  In 
case  it  is  desired  to  have  it  sold  at  private  sale,  the  reasons 
or  advantages  to  be  obtained  by  selling  at  private  sale  should 
be  set  forth  in  the  petition.  The  property  to  be  sold,  either 
at  auction  or  at  private  sale,  should  be  specifically  described. 
The  petition  should  conclude  with  a  prayer  that  the  trustee 
may  be  authorized  to  make  the  sale  by  auction  or  at  private 
sale,  as  may  be.  The  petition  is  dated  and  signed  by  the 
trustee  without  verification. 

The  referee,  as  soon  as  the  petition  is  filed,  should  give  ten 
days'  notice  by  mail  to  the  creditors  of  the  bankrupt  of  the 
hearing  on  such  petition.^  At  the  time  and  place  mentioned 
in  the  notice  a  hearing  is  had,  at  which  evidence  may  be  in- 
troduced and  counsel  heard  in  favor  of  the  petition  and  in 


'  In   re   Goldsmith,   9   Am.    B.   R.  ''  As   to    private    sales,    see   In   re 

419.     118    Fed.     Rep.    763;    In    re  Kirtland,    No.    7851    Fed.    Cas.,    10 

Matthews,  109  Fed.  Rep.  603,  6  Am.  Blatch.  515;  In  re  Stevenson,  6  Fed. 

B.    R.   96.  Rep.   710. 

'B.  A.   1898,  Sec.  27;   Gen.  Ord.  'Official  Forms  Nos.  42  and  45; 

28.     Compare  R.  S.  Sees.  5061  and  see  Forms  Nos.  72  and  83,  post. 

5064.  "B.   A.    1898,   Sec.   58a. 


73S  LAW      AND     PROCEEDINGS    JX     l!A.\  KRUPTCY. 

oppositiiMi  thereto;  on  consiileraticni  whereof  the  referee  may 
pass  an  ortler  that  the  trustee  be  authori/'.ecl  to  sell  the  prop- 
ert)-  as  pra}XHl  in  the  petition,  or  may  rcfnse  to  g'rant  such 
leave  as  in  his  jnclgnient  is  most  advantageous  to  the  estate. 
If  leave  for  sale  is  given,  the  referee  should  re{|uire  the  trustee 
to  keep  an  accurate  account  of  each  article  or  lot  sold,  aiKi  the 
price  therefor  and  to  wIkmu  sold,  and  that  an  account  thereof 
shall  be  filed  at  once  w  ith  the  referee. 

§  256.    Encumbered  property. 

Where  property  of  the  bankrupt  is  in  the  possession  of  a 
mortgagee,  pledgee,  or  other  lienor,  the  trustee  can  not  sell 
it  without  the  consent  of  the  secured  creditor.  The  reason  is 
that  a  court  of  bankruptcy  has  no  power  to  bring  in  such  per- 
son as  a  party  to  the  bankruptcy  proceedings  or  an  independ- 
ent suit,  unless  the  property  is  in  ciisfodia  Icgis.^  The  court 
of  bankruptcy,  however,  may  sell  the  property  with  his  con- 
sent. It  is  sometimes  convenient  and  to  the  advantage  of  the 
secured  creditor  and  the  estate  to  have  such  property  admin- 
istered by  the  trustee.  The  secured  creditor  may  voluntarily 
ai)pear  in  the  bankruptcy  proceedings.  Proving  his  claim  as 
a  secured  creditor  makes  him  a  party  to  the  proceedings  in 
bankruptcy  and  subjects  him  to  the  order  of  the  court.  But 
unless  the  court  gets  jurisdiction  of  the  person  or  the  property, 
the  trustee  can  not  sell  it. 

\\'here  the  property  of  the  bankrupt  in  the  possession  of 
the  trustee  or  otherwise  in  custodia  legis  is  burdened  with 
mortgages,  liens,  and  encumbrances,  several  courses  are  open, 
namely :  First,  the  trustee  may  elect  not  to  take  such  prop- 
erty. Second,  he  may  redeem  the  property  by  discharging 
the  encumbrances.  Third,  he  may  sell  the  bankrupt's  interest 
without  affecting  the  rights  of  secured  creditors  in  the  prop- 
erty. Fourth,  he  may  sell  the  property  free  from  all  liens 
whatsoever.  These  courses  are  considered  more  at  length  in 
the  next  few  sections. 

'  First  Nat.  Rank  v:  Title  &  Trust       Co.,   iqR  U.   S.  280,  49  L.  Ed.   105:, 

14  \m.  B.  R.  102. 


now    TO     REDUCE    THE    ESTATE    TO     MOXEY.  739 

§  256a.  First :  Where  the  trustee  elects  not  to  take  encum- 
bered property. 
Where  property  comes  into  the  possession  of  the  trustee  so 
burdened  with  mortgages,  hens  and  encumbrances  that  the 
bankrupt's  equity  of  redemption  in  that  property  is  without 
vahie,  he  may  elect  not  to  take  it.'  A  court  of  bankruptcy  will 
not  ordinarily  order  a  sale  on  a  petition  by  the  trustee,  where 
the  encumbrances  equal  the  value  of  the  property.'  It  is,  how- 
ever, a  question  of  discretion.  The  court  may  order  the  prop-  . 
erty  turned  over  to  the  secured  creditor  or  direct  it  to  be  sold 
by  the  trustee.^ 

§  256b.  Second  :  Where  the  trustee  redeems  the  property 
by  discharging  encumberances. 
Whenever  it  may  be  deemed  for  the  benefit  of  the  estate 
of  a  bankrupt  to  redeem  and  discharge  any  mortgage  or  other 
pledge,  or  deposit  or  lien,  upon  any  property,  real  or  personal, 
or  to  relieve  said  property  from  any  conditional  contract,  and 
to  tender  performance  of  the  conditions  thereof,  or  to  com- 
pound and  settle  any  debts  or  other  claims  due  or  belonging 
to  the  estate  of  the  l)ankrupt,  the  trustee,  or  the  bankrupt,  or 
any  creditor  who  has  proved  his  deljt,  may  file  his  petition 
therefor;  and  thereupon  the  court  appoints  a  suitable  time  and 
place  for  the  hearing  thereof,  notice  of  which  must  be  given 

'See  Trustee  not  bound  to  take  in;    In    re    Union    Trust    Co.    (C. 

encumbered  interest,  Sec.  151,  ante,  C.  A.  ist  Cir.),   122  Fed.  Rep.  937, 

and  cases  cited  in  the  notes.  9    Am.    B.    R.    767. 

■Jn  re  Goldsmith,   118  Fed.   Rep.  In   re   Kcct,    128    Fed.    Rop.    651, 

763,  9  Am.  B.  R.  419;  In  re  Shaef-  n   Am.   B.   R.    117,  the  court   said: 

fer,    105    Fed.    Rep.   352,    5   Am.    B.  "h    is   not,    therefore,   a    matter   of 

R.  248;  In  re  Cogley,  107  Fed.  Rep.  power,     but     of     discretion;      and 

-ji.  5  Am.   B.   R.  731  ;   In  re  Gibbs,  while,  ordinarily,  the  latter  will  not 

109  Fed.  Rep.  627,  6  Am.  B.  R.  485;  be    exercised    in    favor    of    a    sale 

In  re  Styer,  98  Fed.  Rep.  290,  3  Am.  where  the   incumbrances  equal   the 

B.    R.    424.  value  of  the  property,  yet  there  are 

'  Fquitable   Loan   &   Security   Co.  considerations    in    the    present    in- 

V.  Moss  &  Co.   (C.  C.  .\.  5th  Cir.),  stance   which   seem   to   make   it   ad- 

125    I'"cd.    Rep.    609,    I  I    .Am.    B.    R.  visable." 


740  LAW    .\.\n   rR(UM:Ki>i\His    i.\    ha.n  kki'ptcv. 

as  the  court  shall  ilirccl.  so  that  all  crcdilois  aiul  olhcr  perscMis 
interested  ma\  appear  aiul  show  cause  if  any  they  have,  why 
an  orcler  should  not  he  jxissetl  hy  the  court  upon  the  petition, 
authorizing  such  act  on  the  part  of  the  trustee.' 

The  value  of  securities  held  by  secured  creditors  is  deter- 
mined by  converting-  the  same  into  money  according  to  the 
terms  of  the  agreement  pursuant  to  which  such  securities 
were  delivered  to  such  creditors,  or  by  such  creditors  and  the 
trustee,  by  agreement,  arbitration,  compromise,  or  litigation, 
as  the  court  may  direct." 

The  application  for  redemption  of  property  from  a  lien  is 
made  by  petition,  which  should  be  in  the  form  prescribed.'' 
The  petition  should  be  entitled  in  the  court  and  cause.  It 
should  represent  that  certain  portions  of  the  bankrupt's  estate, 
describing  the  property  and  its  estimated  value,  is  subject  to  a 
mortgage  or  other  lien,  setting  forth  or  describing  the  mort- 
gage or  lien;  and  contain  an  allegation  that  it  is  for  the 
benefit  of  the  estate  that  such  property  should  be  redeemed 
and  discharged  of  the  lien.  The  petition  concludes  with  a 
prayer  that  the  trustee  may  be  empowered  to  pay  out  of  the 
assets  of  the  estate  in  his  hands  the  amount  of  the  lien  in  order 
to  redeem  the  property.  The  petition  is  dated  and  signed  by 
the  trustee,  bankrupt,   or  creditor,*   without  verification. 

The  petition  is  regularly  presented  to  the  referee,  who  is 
required  to  give  ten  days'  notice  of  the  date  of  the  hearing  to 
the  creditors  of  the  bankrupt.'^  At  the  hearing,  evidence  may 
be  introduced  and  counsel  heard  in  favor  of  the  petition  and 
in  opposition  thereto.  In  consideration  wdiereof.  the  referee 
may  authorize  the  trustee  to  make  such  payment  and  redeem 
the  property.  If  it  appears  to  the  referee  that  it  is  not  for  the 
advantage  of  the  estate  to  redeem  such  property  he  may  de- 
cline to  grant  the  request  to  redeem  the  property. 


'  Gen.  Ord.  28.  *  Gen.   Ord.  28. 

'B.  A.  1898,  Sec.  S7h.  "  B.    A.    1898,    Sec.    580;    In    re 

'  Official  Form  No.  43 ;  see  Form  Matthews,  109  Fed.  Rep.  603,  6  Am. 

No.   73,   post:   Gen.   Ord.   28.  B.    R.    96.                             ♦ 


HOW    TO    REDUCE    THE    ESTATE    TO     MONEY.  741 

§  256c.  Third :  Where  the  trustee  sells  subject  to  liens. 

The  trustee  may  be  authorized  by  the  judge  or  referee  ^  to 
sell  :he  interest  of  the  bankrupt  in  any  encumbered  property 
in  his  possession  as  part  of  the  estate  without  affecting  the 
rights  of  the  secured  creditor  to  enforce  his  lien  against  the 
property.-  In  this  respect  the  trustee  acts  only  in  the  interests 
of  the  general  creditors.  It  is  no  part  of  his  duty  to  make 
such  an  application  unless  he  believes  the  sale  will  create  a 
larger  fund  for  distribution  among  the  unsecured  creditors. 
He  should  not  make  an  application  for  the  sale  of  property 
which  has  no  market  value,  or  one  that  is  clearly  less  tlian  the 
debt  secured  by  the  lien.^ 

An  application  for  the  sale  of  such  property,  subject  to  a 
lien,  is  made  by  petition,  which  should  be  in  the  prescribed 
form.'*  The  petition  should  be  entitled  in  the  court  and 
cause.  It  should  describe  the  estate,  or  property  to  be  sold, 
and  its  estimated  value.  It  should  set  forth  or  describe  the 
mortgage  or  otlier  lien  upon  the  property.  It  should  contain 
an  allegation  that  the  sale  would  be  for  the  benefit  of  the  es- 
tate  and  that  the  property  should  be  sold.  It  should  conclude 
with  a  prayer  that  he  may  be  authorized  to  make  the  sale  of 
such  property  subject  to  the  encumbrances  thereon.  The  peti- 
tion should  be  signed  by  the  trustee,  but  need  not  be  verified. 
The  petition  is  presented  to  the  referee.'* 

The  referee  sliould  give  ten  days'  notice  of  the  date  of  the 
licaring  of  the  petition  for  such  sale  by  mail  to  the  creditors 

'  In    re    Fisher    &    Co.,    135    Fed.  5  Am.  B.  R.   731 ;   In  re  Goldsmih, 

Rep.  223,   14  Am.  B.  R.  366  In  re  118    Fed.    Rep.    763,    9   Am.    B.    R. 

Gerry,  112  Fed.  Rep.  958,  7  Am.  B.  419;   /n  re  Shaeffcr,   105  Fed.   Rep. 

R.  459.  352,  5  Am.  B.  R.  24S;  /;;  re  Gibbs, 

'In  re  Gerry,  112  Fed.  Rep.  958,  109    Fed.    Rep.    627,    6    Am.    B.    R. 

7  .^.m.  B.  R.  459 ;  Cramer  v.  Wilson,  485 ;    In    re    Stycr,    98    Fed.    Rep. 

195  U.  S.  408,  49  L.  Ed.  256;  In  re  290,  3  Am.  B.  R.  424. 

Muhlhauser    (C.    C.    A.    6th    Cir.),  ''Official  Form  No.  44,  sec  Form 

121    Fed.   Rep.   669,    to   Am.   B.   R.  No.  77,  post;  In  re  Fisher  &  Co., 

236.  135   Fed.   Rep.   223,    14  Am.   B.   R. 


In  re  Cogley,  107  Fed.  Rep.  7Z,      2^. 


742 


LAW     AND    PROCEEDINGS    IN     BANKRUPTCY.. 


of  tlie  bankrupt.'^  A  hearing  is  had  at  the  time  and  place 
named  in  the  notice,  at  which  arguments  may  be  heard  in 
fa\or  and  in  o[)jH)sition  to  the  petition  and  evidence  intro- 
ducetl.  Upon  consitleration  (~»f  whicli  the  referee  may  order 
the  property  sold  at  auction  or  at  pri\-ate  sale,  and  require  the 
trustee  to  keep  an  accurate  account  of  the  property  sold,  the 
price  given  therefor,  to  whom  sold,  and  file  the  account  thereof 
at  once  with  the  referee.  If  it  appears  to  the  referee  that 
nothing  is  to  l,)e  gained  by  the  sale  he  may  refuse  to  grant  the 
prayer  of  the  petition. 


§  256d.  Fourth :  The  trustee  may  sell  property  free  of  all 
liens. 

The  trustee  may  also  apply  for  leave  to  sell  encumbered 
property  free  from  all  encumbrances.^  He  may  sell  it  free 
of  a  wife's  inchoate  right  of  dower  with  lier  consent." 

The  application  for  such  a  sale  is  made  by  a  petition  sub- 
stantially like  that  prescribed  in  form  No.  44  for  a  sale  sub- 


=  B.  A.   1898,  Sec.  58a. 

^  In  re  Granite  City  Bank  (C. 
C.  A.  8th  Cir.),  137  Fed.  Rep.  818, 
14  Am.  B.  R.  404;  In  re  Union 
Trust  Co.  (C.  C.  A.  1st  Cir.),  122 
Fed.  Rep.  937.  9  Am.  B.  R.  967 ; 
In  re  McMahon  (C.  C.  A.  6th 
Cir.),  147  Fed.  Rep.  685;  In  re 
Matthews,  109  Fed.  Rep.  603,  6  Am. 
B.  R.  96;  In  re  Goldsmith,  118 
Fed._  Rep.  763,  9  Am.  B.  R.  419 ; 
In  re  Rosenberg,  116  Fed.  Rep. 
402,  8  -Am.  H.  R.  624;  Chauncey 
V.  Dyke  Bros.  (C.  C.  A.  8th  Cir.), 
119  Fed.  Rep.  i,  g  Am.  B.  R.  444; 
Carroll  Co.  v.  Young  (C.  C.  A. 
3d  Cir.),  119  Fed.  Rep.  576,  9  Am. 
B.  R.  643 ;  In  re  Sanborn,  96  Fed. 
Rep.  551,  3  Am.  B.  R.  54;  In  re 
Waterloo  Organ  Co.,  118  Fed.  Rep. 
904,  9  Am.  B.  R.  427;  In  re  Keet, 
128  Fed.  Rep.  651,  11  Am.  B.  R. 
117. 


''In  Savage  v.  Savage  (C.  C.  A. 
4th  Cir.),  141  Fed.  Rep.  346,  15 
Am.  B.  R.  599,  the  court  said : 
"It  is  nearly  always  desirable,  in 
making  sale  of  a  bankrupt's  real 
estate,  if  the  wife  will  consent,  to 
sell  free  from  her  inchoate  right 
of  dower,  and  to  compensate  her 
by  a  fair  allowance  out  of  the 
proceeds  for  her  release  of  that 
right.  It  is  common  practice  to 
do  so  when  it  is  possible,  and  we 
think  the  practice  is  to  be  approved, 
as  it  gives  the  purchaser  an  unin- 
cumbered title,  and  ordinarily  re- 
sults in  advantage  to  creditors  by 
obtaining  a  better  price  for  a  clear 
title  than  can  be  obtained  for  prop- 
erty the  title  to  which  is  clouded 
by  such  a  possible  incumbrance." 
See  also  In  re  Keet,  12S  Fed.  Rep. 
651,   II  Am.  B.  R.   117. 


HOW    TO    REDUCE    THE    ESTATE    TO     MONEY. 


743 


ject  to  encumbrances,  except  that  the  prayer  should  be  that  he 
may  be  authorized  to  sell  such  property  free  from  all  encum- 
brances. The  application  is  regularly  made  to  the  referee  for 
leave  to  sell  free  of  liens. ^  A  ten  days'  notice  should  be  given 
the  general  creditors.*  The  rights  of  the  secured  creditors 
being  affected  by  the  sale,  they  must  likewise  have  notice  to 
appear  and  protect  their  interests.^  The  notice  prescribed  by 
Sec.  58a  of  the  bankrupt  act  is  sufficient  to  bring  in  secured 
creditors.®  This  notice  may  be  served  personally  on  the  cred- 
itor and  proof  of  such  service  made  by  affidavit.  The  record 
must  show  affirmatively  that  every  creditor  whose  lien  will 
be  discharged  by  the  sale  has  received  notice  of  the  application 
to  sell.'  A  general  statement  by  the  referee  that  such  notice 
"was  eiven  to  each  and  everv  creditor  and  lien  creditor"  is 
not  sufficient." 

The  trustee  may  be  directed  to  sell  such  property  at  public 
auction  or  at  private  sale.  When  the  sale  is  made,  the  lien  is 
transferred  to  the  fund  in  court.^    The  bankruptcy  court  hav- 


^  In  re  Fisher  &  Co.,  135  Fed. 
Rep.  223,  14  Am.  B.  R.  366;  In  re 
.Matthews,  109  Fed.  Rep.  603,  6  Am. 

B.  R.  96;  In  re  Goldsmith,  118 
l-'cd.  Rep.  763,  9  Am.  B.  R.  419; 
In  re  Rosenberg,  116  Fed.  Rep.  402, 
8  Am.  B.  R.  624. 

'  B.  A.  1898,  Sec.  580. 

'"  In  re  Platteville  Foundry  &  Ma- 
chine Co.,  147  Fed.  Rep.  828;  In  re 
Sanborn,  96  Fed.  Rep.  551,  3  Am. 
I>.  R.  54;  In  re  Goldsmith,  118  Fed. 
Rep.  763,  9  Am.  B.  R.  419;  Ray 
V.  Norseworthy,  23  Wall.  128,  23 
L.  Ed.  116;  Houston  v.  City  Bank, 
6  How.  486,  12  L.'Ed.  526;  Fowler 
V.  Hart,  13  How.  373,  14  L.  Ed. 
i8r3. 

''In    re    Granite    State   Bank    (C. 

C.  A.  8th  Cir.),  137  Fed.  Rep.  818, 
14  Am.  B.  R.  404;  In  re  Wilka,  131 
Fed.  Rep.  1004,  12  Am.  B.  R.  727. 


'  In  re  Saxton  Furnace  Co.,  136 
Fed.  Rep.  697,   14  Am.  B.  R.  483. 

*  In  re  Worland.  92  Fed.  Rep. 
893,  I  Am.  B.  R.  450;  In  re  Pittel- 
kow,  92  Fed.  Rep.  901,  i  Am.  B. 
R.  472 ;  Southern  L.  &  T.  Co.  v. 
Benbow,  96  Fed.  Rep.  514,  3  Am.  B. 
R.  9;  In  re  Granite  City  Bank  (C. 
C.  A.  8th  Cir.),  137  Fed.  Rep.  818, 
14  Am.  B.  R.  404;  Carroll  &  Bros. 
Co.  V.  Young  (C.  C.  A.  3d  Cir.), 
119    Fed.    Rep.    576,   9    Am.    B.    R. 

643- 

In  First  National  Bank  v.  Trust 
Co.,  198  U.  S.  291,  49  L.  Ed.  1051. 
14  Am.  B.  R.  102,  the  supreme 
court  said :  "The  sale  in  the  circum- 
.stances  did  not  change  the  situation. 
The  proceeds  stood  in  place  of 
the  property  and  the  order  return- 
ing the  proceeds  was  equivalent  to 
an    order    returning    the    property. 


744 


LAW     AND    FROCEEDINGS    IN     BANKRUPTCY. 


ing-  soUl  the  proport}'  free  from  liens  and  the  Hens  having 
attachetl  to  tlie  funds  in  the  court's  custody,  the  bankruptcy 
court  will  decide  the  rights  of  the  different  lien  claimants," 
and  may  call  the  claimants  in  by  either  notice  or  rule  to  show 
cause/"  After  deducting  the  expenses  of  the  sale,^^  the  mort- 
gages and  other  liens  must  be  paid  out  of  the  fund  obtained 
from  the  sale  before  it  is  applied  to  the  payment  of  other 
debts,  even  the  debts  which  are  given  priority  by  the  statute.*" 
It  is  not  necessary  for  the  lien  claimant  to  prove  his  claims 
before  he  can  subject  tlie  property  or  its  proceeds  to  his  debt." 
nor  is  it  necessary  for  him  in  any  way  to  object  to  the  sale, 
if  his  proportional  share  of  the  proceeds  can  be  determined.** 
\\'here  the  entire  property  is  sold  without  any  objection  from 


This  was  proper  to  do,  whether  the 
court  had  held  that  it  lacked  juris- 
diction, or  ruled  in  favor  of  pe- 
titioners   on    the   merits." 

°  Whitney  v.  Wenman,  198  U.  S. 
539,  49  L.  Ed.  1 157,  14  Am.  B.  R. 
45;  In  re  Waterloo  Organ  Co.,  118 
Fed.  Rep.  904,  9  Am.  B.  R.  427; 
Chauncey  v.  Dyke  Bros.  (C.  C.  A. 
8th  Cir.),  119  Fed.  Rep.  i,  9  Am. 
B.  R.  444;  In  re  Byrne,  97  Fed. 
Rep.  762,  3  Am.  B.  R.  268. 

In  re  Rochford  (C  C.  A.  8th 
Cir.),  124  Fed.  Rep.  182,  10  Am.  B. 
R.  608,  the  court  said :  "The  only 
question  here  presented  is  whether 
or  not  the  referee  and  the  court  had 
jurisdiction  to  determine  the  valid- 
ity of  the  claim  of  the  mortgagee  to 
the  property  or  its  proceeds.  The  sale 
was  valid.  The  court  lawfully  ac- 
quired and  rightfully  Jicld  the  cus- 
tody of  the  property.  The  conver- 
sion of  it  into  money  by  the  sale 
was  a  rightful  proceeding  in  bank- 
ruptcy. The  issue  of  the  notice 
to  the  mortgagee  to  present  his  claim 
to  the  court  and  the  adjudication 
of  it  were  far  within  the  jurisdic- 


tion of  the  referee  and  of  the  court 
below." 

"/n  re  Rochford  (C.  C.  A.  8th 
Cir.),  124  Fed.  Rep.  182,  10  Am. 
B.  R.  608. 

"McNair  v.  Mclntyre  (C.  C.  A. 
4th  Cir.),  113  Fed.  Rep.  113,  7  Am. 
B.  R.  638;  affirming  In  re  Sandcr- 
lin,  109  Fed.  Rep.  857,  6  Am.  B.  R. 
384;  In  re  Utt  (C.  C.  A.  7th  Cir.), 
105  Fed.  Rep.  754,  5  Am.  B.  R. 
383. 

'"/w  re  Prince  and  Walter,  131 
Fed.  Rep.  546,  12  Am.  B.  R.  675; 
In  re  Frick,  i  Am.  B.  R.  719; 
In  re  McConnell,  No.  8712  Fed. 
Cas.,  9  N.  B.  R.  387;  but  see  In  re 
Tebo,  loi  Fed.  Rep.  419,  4  Am. 
B.  R.  235 ;  see  also  post,  Sec.  267, 
last  paragraph. 

"/«  re  Goldsmith,  118  Fed.  Rep. 
763,  9  Am.  B.  R..419;  In  re  Oconee 
Milling  Co.  (C.  C.  A.  sth  Cir.),  109 
Fed.  Rep.  866,  6  Am.  B.  R.  475. 

"Carroll  Co.  v.  Young  (C.  C.  A. 
3d  Cir.),  119  Fed.  Rep.  576,  9  Am. 
B.  R.  643.  See  also  Keyser  v. 
Wessel  (C.  C.  A.  3d  Cir.),  128 
Fed.  Rep.  281,  12  Am.  B  R.   126. 


HOW    TO    REDUCE    THE    ESTATE    TO     MONEY, 


745 


a  creditor  who  has  a  Hen  on  a  portion  of  it,  he  can  not  enforce 
his  Hen  against  the  proceeds ;  he  should  make  his  claim  before 
the  sale  and  have  the  goods  on  which  lie  has  a  lien  sold  sepa- 
rately.^^ The  purchaser  should  be  protected  from  being  forced 
to  pay  taxes  which  though  not  yet  levied  have  become  a  lien 
at  the  time  of  the  sale/*^  AMiere  the  lien  claimant  is  the  pur- 
chaser, if  the  amount  and  validity  of  his  lien  is  unquestioned, 
he  should  be  allowed  to  deduct  it  from  the  purchase  price;  if 
the  lien  is  doubtful  he  should  pay  the  difference  between  the 
amount  of  the  lien  as  claimed  and  the  purchase  and  give  the 
trustee  an  undertaking  to  pay  the  balance  if  it  is  decided 
against  him/' 

Where  a  secured  creditor  has  received  money  on  his  claim 
by  order  of  the  referee,  he  is  entitled  to  retain  it  until  the  order 
is  vacated  by  a  direct  proceeding  for  that  purpose.^^ 

§  257.    When  a  secured  creditor  may  apply  to  have  proper- 
ty, on  which  he  has  a  lien,  sold. 

The  trustee  may  not  see  fit  to  institute  proceedings  for  the 
sale  of  encumbered  property.  Whenever  he  does  not,  the 
secured  creditor  must  do  so,  if  it  is  to  be  sold  in  the  court  of 
bankruptcy. 

Since  all  the  property  of  the  bankrupt  passes  to  the  trustee, 
as  has  been  pointed  out  elsewhere,^  subject  to  equities,  property 
on  which  there  is  a  mortgage  or  other  lien  passes  to  the 
trustee,  and  is  therefore  in  the  custody  of  the  court  of  bank- 
ruptcy.^    This  rule  is  subject    to    an    exception  in  case  the 


"/«  re  Klapholz,  113  Fed.  Rep. 
1002,  7  Am.  B.  R.  703 ;  In  re  Gerry, 
112  Fed.  Rep.  958,  7  Am.  B.  R. 
459;  Keyser  v.  VVessel  (C.  C.  A. 
3d  Cir.),  128  Fed.  Rep.  281,  12  Am. 
B.  R.   126. 

"/m  re  Keller,  109  Fed.  Rep.  131, 
6  Am.   B.   R.   351. 

"/n  re  Waterloo  Organ  Co.,  118 
Fed.  Rep.  904,  9  Am.  B.  R.  427. 

"  In     re     Wilkesbarre     Furniture 


Mfg.  Co.,  130  Fed.  Rep.  796,  12 
Am.    B.    R.   472. 

'  See  Title  to  bankrupt's  proper- 
ty,   Sec.    149,    ante. 

'In  re  Kellogg  (C.  C.  A.  2d 
Cir.),  121  Fed.  Rep.  z^^,  10  Am.  B. 
R.  7;  In  re  Rochford  (C.  C.  A. 
8th  Cir.),  124  Fed.  Rep.  182,  10 
Am.  B.  R.  608;  Chauncey  v.  Dyke 
Bro.s.  (C.  C.  A.  8th  Cir.).  119  Fed. 
Rep.    I,   9   Am.    B.    R.   444;    In   re 


"40 


LAW     AND    PROCEEDINGS    IN     BANKRUPTCY. 


trustee  elects  not  to  take  encumbered  property.  In  case  the 
trustee  elects  not  to  take  the  encumbered  property,  it  releases 
the  jurisdiction  of  the  bankruptcy  court  over  such  property, 
and  the  secured  creditor  may  proceed  to  enforce  his  lien  in  a 
state  court. 

An  attempt  to  enforce  a  lien  in  any  other  court  is  lial)le 
to  be  enjoined.''  A  sale  so  made  may  be  set  aside."*  The 
court  of  bankruptcy  may  permit  or  authorize  a  secured  cred- 
itor to  enforce  his  security  in  a  state  court.''  In  such  case 
the  trustee  must  be  a  party  to  the  proceeding."  Such  a  pro- 
ceeding in  a  state  court,  without  authority,  is  not  absolutely 
void.'  The  court  of  bankruptcy  will  not  interfere  with  such 
proceedings  unless  an  advantage  may  result  to  the  bankrupt 
estate.**  It  may  ratify  the  state  proceedings  upon  applica- 
tion where  the  secured  creditor  shows  that  the  estate  and  the 


Kellogg.  6  Am.  B.  R.  389;  Carter 
V.  Ilobbs  92  Fed.  Rep.  594,  i  Am.  B. 
R.  215;  In  re  Worland,  92  Fed. 
Rep.  893,  I  Am.  B.  R.  450;  In  re 
Pittelkow,  92  Fed.  Rep.  901,  i  Am. 
B.  R.  472;  In  re  Booth,  96  Fed. 
Rep.  943,  2  Am.  B.  R.  770. 

Un  re  Utt  (C.  C.  A.  7th  Cir.), 
105  Fed.  Rep.  754,  45  C.  C.  A.  32,  5 
Am.  B.  R.  383;  In  re  Matthews, 
109  Fed.  Rep.  603  6  Am.  B. 
R.  96;  In  re  Pittelkow,  92  Fed. 
Rep.  901,  I  Am.  B.  R.  472; 
In  re  Globe  Cycle  Works  (Ref.), 
2  Am.  B.  R.  447;  Markson  v. 
Heaney,  No.  9098  Fed.  Cas.,  i  Dill. 
497;  McLean  v.  Lafayette  Bank, 
No.  8885  Fed.  Cas.,  3  McLean,  185 ; 
In  re  Kerosene  Oil  Co.,  No.  7725 
Fed.  Cas.,  3  Ben.  35 ;  In  re  Wynne, 
No.  181 17  Fed.  Cas.,  Chase,  227. 

See  Clifton  v.  Foster,   103  Mass. 

233. 

'In  re  Davis,  No.  3618  Fed.  Cas., 
2  N.  B.  R.  391 ;  Davis  v.  Anderson, 
No.  3623  Fed.  Cas.,  6  N.  B.  R. 
143- 


°/m  re  Porter,  109  Fed.  Rep.  iii, 
6  Am.  B.  R.  259;  Equitable  Loan 
&  Security  Co.  v.  Moss  &  Co.,  125 
Fed.  Rep.  609,  11  Am.  B.  R.  in; 
In  re  Cook,  No.  3151  Fed.  Cas.,  3 
Biss.  116;  In  re  McGilton,  No.  8798 
Fed.    Cas.,   3   Biss.    144. 

"Cole  v.  Duncan,  58  111.  176; 
Truitt  V.  Truitt,  38  Ind.  16;  Wins- 
low  v.  Clark,  47  N.  Y.  261 ;  Barron 
V.  Newberry,  No.  1056  Fed.  Cas., 
I    Biss.    149. 

'Whitridge  v.  Taylor,  66  N.  C. 
273;  Truitt  V.  Truitt,  38  Ind.  16; 
Pierce  v.  Wilco.x,  40  Ind.  70;  Cole 
V.  Duncan,  58  111.  176;  Mays  v. 
Fritton,  20  Wall.  414,  22  L.  Ed. 
389;  Scott  V.  Kelly,  22  Wall.  57. 
22  L.  Ed.  729;  Boese  v.  King,  108 
U.  S.  379,  27  L.  Ed.  760. 

V»  re  Utt  (C.  C.  A.  7th  Cir.), 
105  Fed.  Rep.  754,  5  Am.  B.  R. 
383;  In  re  HoUoway,  93  Fed.  Rep. 
638,  I  Am.  B.  R.  659;  In  re  Brink- 
man,  No.  1883  Fed.  Cas.,  6  N. 
B.  R.  541;  In  re  Bowie,  No.  1728 
Fed.   Cas.,    i    N.   B.   R.   628;   In   re 


HOW    TO    REDUCE    THE    ESTATE    TO     MONEY. 


74: 


other  creditors  will  not  be  injured  thereby."  The  secured 
creditor  may  surrender  his  security  or  rely  upon  his  security 
without  proving  his  claim/*'  or  if  the  entire  debt  is  not  se- 
cured, he  may  rely  upon  his  security  and  prove  for  the  bal- 


ance 


11 


Whenever  a  secured  creditor  desires  to  enforce  his  mort- 
gage or  other  lien  in  a  court  of  bankruptcy,  he  may  file  an 
intervening  petition  asking  that  the  trustee  administer  the 
property  in  the  bankruptcy  proceedings.  This  petition  should 
be  filed  by  leave  of  court.  It  is  not  necessary  for  him  to  first 
prove  his  claim.''  If  he  does  not  prove  his  claim,  he  is  not 
entitled  to  a  dividend  on  any  part  of  the  debt  not  covered  by 
the  security.  He  can  not  demand  as  a  matter  of  right  that  the 
court  of  bankruptcy  enforce  his  security.  It  is  purely  a 
matter  of  judicial  discretion.  If  it  appears  that  the  encum- 
brance is  equal  to  the  value  of  the  property,  the  court  will 
not,  ordinarily,  undertake  to  enforce  the  security.'^  It  is. 
however,  sometimes  convenient  in  the  settlement  of  an  estate  to 
have  such  property  sold  by  the  trustee.  In  case  it  appears, 
for  any  reason,  to  be  for  the  best  interests  of  the  general  cred- 
itors, the  court  may  order  property  encumbered  to  its  full 
value  to  be  sold  by  the  trustee.'^ 

A  secured  creditor  may  obtain  a  sale  of  property  securing 


Iron  Mountain  Co.,  Xo.  7065  Fed. 
Cas.,  9  Blatch.  320 ;  Tichenor  v. 
Allen,  13  Grat.   (Va.)    15. 

"Phelps  V.  Sellick,  No.  11079 
Fed.  Cas.,  6  N.  B.  R.  390. 

'"In  re  Goldsmith,  118  Fed.  Rep. 
763,  9  Am.  B.  R.  419. 

"  See  Rights  of  secured  credit- 
ors, Sec.  202,  ante;  B.  A.  1898,  Sec. 
566  and  Sec.  57/2;  Wicks  v.  Perk- 
ins, Xo.  17615  Fed.  Cas.,  i  Woods, 
383;  Brown  v.  Gibbons,  7,7  la.  654; 
McKay  v.  Funk,  27  la.  661;  Bent- 
ley  V.  Wells,  61   111.  59. 

"In  re  Goldsmith,  118  Fed.  Rep. 
763,  9  Am.  B.  R.  419. 


''"In  re  Goldsmith,  118  Fed.  Rep. 
763,  9  Am.  B.  R.  419;  /„  re  Shaef- 
fer,  105  Fed.  Rep.  352,  5  Am.  B. 
R.  248;  In  re  Cogley,  107  Fed.  Rep. 
73,  5  Am.  B.  R.  731;  In  re  Gibbs, 
109  Fed.  Rep.  627,  6  Am.  B.  R. 
485;  In  re  Styer,  98  Fed.  Rep.  290, 
3  Am.  B.  R.  424. 

''In  re  Kcet,  128  Fed.  Rep.  651, 
II  Am.  B.  R.  117;  In  re  Utt  (C. 
C.  A.  7th  Cir.),  105  Fed.  Rep.  734, 
5  Am.  B.  R.  383;  In  re  Union 
Trust  Co.,  122  Fed.  Rep.  937,  9 
Am.  B.  R.  767. 


748  I. AW     AXP     I'ROCEEDINGS    IN     BANKRUPTCY. 

his  debt  in  a  court  oi  banl<niplc}-  by  first  proving  his  claim  in 
the  manner  prescribed.''  In  such  case  he  is  entitled  to  a 
dividenil  on  such  sum  as  may  be  owing  over  and  above  the 
value  of  his  security."'  Eiilior  his  security  or  his  debt  may  be 
disputed.  The  contest  is  made  upon  the  proof  of  the  debt  in 
the  same  manner  as  contests  upon  the  proof  of  unsecured 
debts.'"  If  his  claim  is  allowed,  the  property  will  regularly  be 
sold  upon  application.  The  object  of  selling  such  property 
is  to  ascertain  the  value  of  the  security. 

It  is  not  always  necessary  to  resort  to  a  sale  for  this  pur- 
pose. The  value  of  a  security  held  by  a  secured  creditor 
may  be  determined  by  converting  the  same  into  money  ac- 
cording to  the  terms  of  the  agreement  pursuant  to  which 
such  security  was  delivered  to  such  creditor,  by  such  cred- 
itor, and  the  trustee,  by  agreement,  arbitration  or  compro- 
mise, as  well  as  by  litigation. ^^  \\'hichever  method  is  re- 
sorted to  for  this  purpose  is  subject  to  the  direction  of  the 
court."  The  selling  of  such  property  is  a  matter  of  judicial 
discretion.  The  court  will  take  a  course  which,  in  its  judg- 
ment, having  due  reference  to  the  rights  of  the  secured  cred- 
itors, will  be  most  beneficial  to  all  the  parties  interested.  A 
secured  creditor  can  not  demand,  as  a  matter  of  right,  that 
the  trustee  shall,  upon  his  offer,  convey  the  property,  upon 
which  he  has  a  lien,  to  hini  on  condition  of  his  agreeing  not 
to  present  a  claim  for  any  part  of  the  debt  against  the  estate.'" 

Where  a  secured  creditor  seeks  and  enjoys  the  aid  of  the 
bankruptcy  court  in  enforcing  and  releasing  his  liens,  he 
should  pay  the  costs  incurred  in  obtaining  this  aid.^"     The 


"  Official  Forms  No.  32  and  No.  105    Fed.    Fep.    734,    5    Am.    B.    R. 

36;  see  Forms  Nos.  55  and  59,  post.  383;  In  re  Alison  Rubber  Co.,   137 

'°B.  A.   1898,  Sec.   57^.  Fed.    Rep.   643,    14   Am.    B.   R.   78; 

"  See    Re-examination    of   claims,  In  re   Cogley,    107   Fed.   Rep.   y^,   5 

Sec.   140,  ante.  Am.   B.   R.   731  ;    McNair   v.    Mcln- 

"B.  A.  1898,  Sec.  S7h.  tyre   (C.  C.  A.  4th  Cir.),   113  Fed. 

"/w  re  Ellerhorst,  No.  4380  Fed.  Rep.    113,   7  Am.   B.   R.  638;   In  re 

Cas.,  2  Saw.  219.  Goldsmith,    118    Fed.    Rep.    763.    9 

="/;;    re   Utt    (C.   C.   A.   7th   Cir.),  Am.    B.   R.   419- 


HOW    TO    REDUCE    THE    ESTATE    TO     MONEY.  749 

referee  and  trustee  are  entitled  to  commissions  on  all  moneys 
dispersed  to  a  secured  creditor  by  the  trustee."^ 

§  258.    Disputed  property. 

It  would  seem  that,  under  the  general  power  conferred  upon 
the  court  of  bankruptcy  with  reference  to  collecting,  reducing 
to  money  and  distributing  the  estates  of  bankrupts,  and  deter- 
mining controversies  in  relation  thereto,^  that  the  court  may 
order  property,  which  is  in  dispute,  sold.  The  title  to  a  part 
of  the  real  or  personal  property  which  comes  into  possession 
of  the  trustee  or  which  is  claimed  by  him  may  be  in  dispute. 
It  may  be  for  the  advantage  of  all  concerned  that  such  prop- 
erty be  sold,  and  the  fund  deposited  in  court  until  tlie  court 
of  bankruptcy  siiall  determine  to  whom  it  belongs. 

Where  the  property  is  in  the  possession  of  the  trustee,  or  the 
claimant  is  a  party  to  the  bankrupcty  proceedings,  he  may  sell 
it  under  the  direction  of  tlie  court  without  the  consent  of  the 
claimant,  but  where  the  property  is  in  the  possession  of  the 
claimant  he  must  procure  his  consent  or  resort  to  a  suit  in 
a  court  of  competent  jurisdiction  to  recover  it.' 

In  case  the  property  is  in  his  possession  the  trustee  should 
petition  the  judge  or  referee  for  leave  to  make  such  sale. 
Ten  days'  notice  should  be  given  to  the  creditors.^  Notice 
should  also  be  given  to  the  claimant  to  appear  and  assert  his 
right  in  the  property.  In  practice,  sales  of  this  character  can 
usually  be  arranged  by  agreement. 

§  259.    Sale  of  perishable  property. 

Upon  petition  by  a  bankrupt,  creditor,  receiver  or  trustee, 
setting  forth  that  a  part  or  the  whole  of  the  bankrupt's  estate 

^'B.    A.    1898,    Sees.    40    and    48  -In  re  Rosenberg.   116  Fed.  Rep. 

as  amended  by  the  act  of  February  402,  8  Am.  B.  R.  624;  In  re  First 

5.   1903,  32  Stat,  at  L.   797;   In  re  Nat.  Bank  v.  Title  &  Trust  Co.,  198 

Sanford    Furniture    Mfg.    Co.,    126  U.   S.  280,  49  L.   Fd.   1051,   14  \m. 

Fed.   Rep.  888,    11   Am.  B.   R.  414;  ?,.  R.   102;  In  re  INTcMahon   (C.  C. 

In  re  Iowa  Falls  Mfg.  Co.,  140  Fed.  A.  6th  Cir.),  147  Fed.  Rep.  685. 

Rep.  527,   IS  Am.  B.  R.  .384.  •'' B.  A.  1898,  Sec.  58a. 

'  B.  A.  1898,  Sec.  2.  clause  7. 


750  LAW    AND    PROCEEDINGS    IN     BA'NKRUPTCY. 

is  perishable,  the  nature  ami  location  of  such  perishable  estate, 
and  that  there  will  be  loss  if  the  same  is  not  sold  immediately, 
the  court,  if  satistknl  of  the  facts  stated,  and  that  the  sale  is 
requircil  in  the  interest  of  the  estate,  may  order  the  same  to  be 
sold,  with  CM-  without  notice  to  the  creditors,  and  the  proceeds 
to  be  deposited  in  court.^  The  petition  and  order  should  be 
in  the  prescribed  form." 

§  260.    The  sale. 

All  sales  must  be  by  public  auction  unless  otherwise  ordered 
by  the  court/  Upon  application  to  the  court,  and  for  good 
cause  shown,  the  trustee  may  be  authorized  to  sell  any  specified 
portion  of  the  bankrupt's  estate  at  private  sale,  in  which  case 
he  must  keep  an  accurate  account  of  each  article  sold,  and  the 
price  received  therefor,  and  to  whom  sold,  which  account  he 
must  file  at  once  with  the  referee." 

There  is  no  ])rovision  of  the  bankrupt  act  or  general  oiders 
requiring  a  sale  to  be  advertised  in  a  newspaper.  Congress 
has  provided  by  special  act  the  manner  in  which  property 
shall  be  sold  under  an  order,  judgment  or  decree  of  any 
United  States  court.''     It  provides   for  a  public  sale  at  the 

'  Gen.   Ord.   18,  par.  3.     See  also  interest  in  land  sold  under  any  order 

In   re   Becker,  98  Fed.   Rep.  407,  3  or    decree    of    any    United    States 

Am.    B.    R.   412;    In   re    Edes,    135  court   .shall   be    sold   at   public   sale 

Fed.  Rep.  595,   14  Am.  B.  R.  382;  at  the   Court-house  of  the  county, 

In  re  Le  Vay,   125  Fed.  Rep.  990,  parish,  or  city  in  which  the  prop- 

II  Am.  B.  R.  114;  /;;  re  Joyce,  128  crtj',    or    the   greater    part    thereof, 

Fed.  Rep.  985,  11  Am.  B.  R.  716.  is    located,    or    upon    the    premises, 

^Official  Form  No.  46;  see  Form  as  the  court  rendering  such  order 

No.  84,  post.  or   decree   of   sale   may   direct.  -^ 

'  Gen.  Ord.  18.  "Sec   2.  That    all    personal    prop- 

*  Gen.  Ord.  18,  par.  2;  Official  erty  sold  under  any  order  or  de- 
Form  No.  45,  see  Form  No.  83,  cree  of  any  court  of  the  United 
post;  In  re  Hawkins,  125  Fed.  Rep.  States  shall  be  sold  as  provided 
633,  II  Am.  B.  R.  49;  In  re  Gutter-  in  the  first  section  of  this  act,  un- 
son,  136  Fed.  Rep.  698,  14  i\m.  B.  less  in  the  opinion  of  the  court 
R.  495;  In  re  Edes,  135  Fed.  Rep.  rendering  such  order  or  decree,  it 
595,  14  Am.  B.  R.  382.  would   be  best   to    sell    it    in    some 

^The   act   of   March    3,    1893,   27  other   manner. 

Stat,  at  L.  751,  provides:  "Sec.    3.  That    hereafter    no    sale 

"Sec.  I.  That  all  real  estate  or  any  of    real    estate    under    any    order, 


HOW    TO    REDUCE    THE    ESTATE    TO     MONEY. 


751 


courthouse  or  upon  the  premises  and  for  pubhcation  of  notice 
of  the  sale  of  real  estate  in  a  county  newspaper  once  a  week 
for  at  least  four  weeks -prior  to  the  sale.*  It  has  been  held 
that  the  act  of  1893  does  not  apply  to  sales  in  bankruptcy 
proceedings.®  The  act  of  1893  by  express  terms  applies  to 
all  United  States  courts,  which  clearly  includes  courts  of  bank- 
ruptcy. It  is  not  expressly  repealed  or  modified  in  any  respect 
by  the  bankrupt  act.  The  omission  in  that  act  to  regulate  in 
any  way  the  manner  of  making  a  sale  in  bankruptcy  pro- 
ceedings shows  that  Congress,  having  by  special  act  made 
all  necessary  provisions  for  such  sale,  did  not  see  fit  to  further 
legislate  on  the  subject.  The  act  of  1893  has  been  held  to 
be  directory  and  not  mandatory  and  that  if  it  is  not  followed 
and  no  objection  is  made  to  the  irregularity  until  after  confir- 
mation, the  sale  is  valid  and  the  purchaser's  title  good.'' 
\\'hether  it  is  binding  on  courts  of  bankruptcy  or  not,  it  is 
safe  and  proper  for  a  court  of  bankruptcy  to  conform  to  this 
statute  by  ordering  a  sale  in  bankruptcy.  By  Section  2  of 
the  act  of  1893,  the  judge  may  order  personal  property  sold 
in  some  other  manner  when  it  seems  best  to  him  to  do  so. 
The  advertisement  relates  onlv  to  real  estate. 


judgment,  or  decree  of  any  United 
States  court  shall  be  had  without 
previous  publication  of  notices  of 
such  proposed  sale  being  ordered, 
and  had  once  a  week,  for  at  least 
four  weeks,  prior  to  such  sale  in 
at  least  one  newspaper  printed,  reg- 
ularly issued  and  having  a  general 
circulation  in  the  county  and  state 
where  the  real  estate  proposed  to 
be  sold  is  situated,  if  such  there 
be.  If  said  property  shall  be  situ- 
ated in  more  than  one  county  or 
state,  such  notice  shall  be  pub- 
lished in  such  of  the  counties  where 
said  property  is  situated,  as  the 
court  may  direct.  Said  notice  shall, 
among    other    things,    describe    tlie 


nia\',  in  its  discretion,  direct  the 
publication  of  the  notice  of  sale 
herein  provided  for  to  be  made  in 
such  other  papers  as  may  seem 
proper." 

*  Twenty-seven  days  is  not  suffi- 
cient. Wilson  V.  Northwestern 
Mutual  Life  Insurance  Co.  (C.  C. 
A.  8th    Cir.),   65   Fed.   Rep.   38. 

°  In  re  Edes,  135  Fed.  Rep.  595, 
14  Am.  B.  R.  382. 

*  National  Nickel  Co.  v.  Nevada 
Nickel  Syndicate  (C.  C.  A.  9th 
Cir.),  112  Fed.  Rep.  44,  50  C.  C. 
A.  113,  in  court  below,  106  Fed. 
Rep.  no,  103  Fed.  Rep.  390;  Black 
v.  Black,  77  Fed.  Rep.  785;  God- 
chaux    V.    Alorris     (C.    C.    A.    5th 


real   estate  to  be   sold.     The  court      Cir).   i2r    Fed.   Rep.  482. 


752  LAW     AND    PROCEEDINGS    IN    BANKRUPTCY. 

Before  the  date  of  sale  of  real  or  personal  property  belong- 
ing to  the  bankrupt's  estate  it  must  be  appraised  by  three 
disinterested  appraisers.'  The  appraisers  are  appointed  by 
and  report  to  the  judge  or  referee,'*  usually  the  referee. 
Where  the  trustee  is  acting  under  an  order  of  sale,  he  should 
proceed  in  accordance  with  the  provision  of  the  order.  Any- 
thing which  he  may  do  in  conflict  with  or  in  violation  of  such 
order  is  null  and  void.  Under  an  order  to  sell  for  the  highest 
price  he  can  obtain,  he  must  accept  the  highest  bid,  although 
he  has  previously  agreed  to  sell  to  another  person  for  a  certain 
price,  and  to  wait  for  an  answer  for  a  certain  time,  which 
period  has  not  expired  at  the  time  of  receiving  the  better  bid." 
A  sale  is  regularly  made  by  the  trustee,  but  the  court  may 
appoint  commissioners  to  make  it."  The  court  may  appoint 
an  official  auctioneer." 

As  a  general  rule,  any  person  may  bid  and  purchase  at  a 
public  or  private  sale  by  a  trustee.  The  bankrupt  may  pur- 
chase at  such  a  sale.''  The  trustee,"  or  an  attorney  or  agent 
of  the  trustee,"  or  a  referee,'^  can  not  purchase  at  such  a  sale ; 
but  if  the  trustee,  having  purchased,  makes  improvements  he 
is  entitled  to  be  reimbursed  their  value.'*' 

Holders  of  the  bonds  of  a  bankrupt  corporation,  secured 
by  a  mortgage,  which  gives  them  the  right  to  use  such  bonds 
in  the  purchase  of  the  property  if  sold  at  judicial  sale,  should 
not  be  deprived  of  such  right  by  an  order  authorizing  the 
trustee  to  sell  the  property  free  from  liens,  so  long  as  their 

'B.  A.  1898,  Sec.  70&.  "/n  re  Benjamin,   136  Fed.  Rep. 

"B.  A.  1898,  Sec.  70b;  In  re  Co-  I75,   i4  Am.  B.  R.  481. 

lumbia  Iron  Works,  142  Fed.  Rep.  "Arnold    v.    Leonard,    20    Miss. 

234,  14  Am.  B.  R.  526.  258. 

'/n    re    Ryan,    No.    12182    Fed.  "In   re    Hawley,    117    Fed.    Rep. 

Cas.,  s.  c.  6  N.  B.  R.  235;  Sturgiss  364,   9   Am.    B.    R.   61. 

V.  Corbin   (C.  C.  A.  4th  Cir),   141  '*  Citizens  Bank  v.  Ober,  No.  2731 

Fed.   Rep.   i   ,15  Am.   B.   R.  543-  Fed.  Cas.,  s.  c.    i   Woods,  80. 

'°  Sturgiss   V.    Corbin    (C.    C    A.  ''  B.  A.  1898,  Sec.  39^^- 

4th  Cir.),  141  Fed.  Rep.  I,  15  Am.  ''In   re   Hawley,    117   Fed.    Rep. 

B.   R.   543-  364.  9  Am.  B.  R.  61. 


HOW    TO    REDUCE    THE    ESTATE    TO    MONEY. 


/d6 


title  to  the  bonds  is  imimpeached.''  The  trustee  need  not 
adjourn  a  sale  for  the  purpose  of  giving  a  bidder  time  to 
search  the  title.''  Where  a  sale  is  fairly  made,  and  the  bids 
are  understood  by  the  bystanders  and  the  auctioneer,  it  will  be 
a  valid  sale,  although  the  trustee  is  present,  but.  in  conse- 
quence of  his  negligence  and  inattention,  fails  to  understand 
the  terms  thereof.  Such  a  purchaser  can  compel  a  transfer 
of  property  to  him  by  the  trustee.^''  The  purchaser  is  also 
bound  by  the  terms  of  the  sale.-" 

It  is  not  absolutely  necessary  that  a  sale  be  confirmed  by 
the  court,  but  all  real  and  personal  property  must,  when  prac- 
ticable, be  sold  subject  to  the  approval  of  the  court.''  It  can 
not  be  sold  otherwise  than  subject  to  the  approval  of  the  court 
for  less  than  seventy-five  per  centum  of  its  appraised  value." 

Where  the  sale  has  been  confirmed  by  the  court  the  title  to 
the  property  is  conveyed  to  the  purchaser  by  the  trustee.'' 
Where  the  property  is  sold  free  of  liens  the  purchaser  is 
entitled  to  a  deed  to  the  property  released  and  discharged  of 
all  incumbrances  whatsoever,  including  taxes.'*  Where  it 
is  sold  subject  to  liens  only  the  title  to  the  bankrupt's  interest 
is  transferred,  the  title  of  third  persons  claiming  adversely  is 


"In  re  Saxton  Furnace  Co.,  136 
Fed.  Rep.  697,  14  Am.  B.  R.  483. 

"Hills  V.  Alden,  No.  6507  Fed. 
Cas.,  s.  c.  2  Hask.  299. 

"Ives  V.  Tregent,  29  Mich.  390; 
Russell  V.  Phelps,  42  Mich.  388; 
Voorheis  v.  Frisbie,  25  Mich.  476, 
and  note  i  (annotated  ed.).  See 
also  as  to  right  of  purchase  at 
sale,  Sturgiss  v.  Corbin  (C.  C.  A. 
4th  Cir.),  141  Fed.  Rep.  i,  15  Am. 
B.  R.  543- 

"Owens  V.  Bruce  (C.  C.  A.  4th 
Cir.),  109  Fed.  Rep.  72,  6  Am.  B. 
R.  322. 

"B.  A.  1898,  Sec.  70b:  In  re 
Shea   (C.  C.  A.   ist  Cir.),  126  Fed. 


Rep.  153.  II  Am.  R.  R.  207,  the 
court  said:  "We  do  not  undertake 
to  say  that  Sec.  70b  requires  al- 
ways a  formal  approval.  If  a  sale 
is  made  and  silently  acquisced  in 
for  a  considerable  time,  or  if  the 
proceeds  thereof  are  credited  in  the 
trustee's  account,  and  the  account 
is  passed,  either  may  be  held  to 
meet  the  requirements  of  the  stat- 
ute." 

''B.  A.  1898,  Sec.  70&. 

""  B.  A.  1898,  Sec.  7or. 

'*In  re  Keller,  109  Fed.  Rep. 
131,  6  Am.  B.  R.  3Si;  In  re  Prince 
V.  Walter.  131  Fed.  Rep.  546,  12 
Am.  B.  R.  675. 


754 


LAW     AN'D     PROCEEDINGS    IX     UAXKRUPTCY. 


in  no  wav  affccteil.  '  I  ho  conveyance  of  real  estate  is  made 
bv  iloeil.  which  shonUl  recite  the  bankruptcy  proceedings,  the 
appointment  and  qnablication  of  the  trustee  and  the  proceed- 
ings relating  to  tbe  sale  and  the  conlirmation  by  the  court 
and  is  executed  by  the  trustee  as  other  deeds  in  tlie  state 
where  tbe  property  is  situated.'" 

A  court  of  bankruptcy  lias  no  power  to  restrain  the  trustee 
from  making  a  deed  to  tbe  purcbaser  or  to  ccMnpel  a  specific 
]-)erformance  of  an  alleged  contract  between  tbe  petitioner 
anil  tbe  purcbaser  relating  to  a  division  of  tbe  land  sold."' 
A  controversy  between  tbird  persons  is  not  a  part  of  tbe 
bankruptcy  proceeding. 

§  261.     Setting  aside  a  sale. 

Tbe  contest,  witb  reference  to  tbe  validity  of  tbe  sale,  is  usu- 
ally made  at  the  time  of  tbe  application  to  tbe  court  to  confirm 
the  sale.  Tbe  court  will  not  refuse  to  confirm  a  sale  or  set  it 
aside  after  it  has  been  confirmed  merely  because  a  higher  bid 
is  offered. ^  or  because  tbe  price  is  inadequate ;-  there  miist  be 
circumstances  impeaching  the  validity  of  the  sale  or  such  gross 
inadequacy  as  to  shock  the  conscience.^ 

The  court  of  bankruptcy  has  power,  in  its  discretion,  to  set 
aside  a  sale  even  where  such  sale  has  been  consummated  by 
tbe  delivery  of  a  deed.*  In  case  money  has  been  deposited 
or  paid,  it  should  be  ordered  to  be  refunded  by  the  trustee. 


-=/)!  ;r  Muhlhauser  (C.  C.  A. 
6th  Cir.),  121  Fed.  Rep.  669,  10 
Am.  B.  R.  236;  Cramer  v.  Wilson, 
195  U.  S.  409,  49  L.  Ed.  256. 

•°  For  form  of  deed  to  real  estate, 
see  No.  165,  (^ost. 

"  Henrie  v.  Henderson  (C.  C.  A. 
4th  Cir.),  145  Fed. "Rep.  316,  16  Am. 
B.  R.  617. 

'7)1  re  Ethier,  118  Fed.  Rep.  107, 
9  Am.  B.  R.  160;  In  re  Belden,  120 
Fed.  Rep.  524,  9  Am.  B.  R.  679; 
Sturgiss   V.    Corbin    (C.   C.   A.  4th 


Cir.).   141   Fed.   Rep.   i,   15  Am.   B. 

R.  543. 

'  In  re  Thompson,  2  Am.  B.  R. 
216. 

'■In  re  Ethier,  118  Fed.  Rep.  107, 
9  Am.  B.  R.  160;  Magann  v.  Segal 
(C.  C.  A.  6th  Cir.),  92  Fed.  Rep. 
252,  34  C.  C.  A.  323. 

*In  re  Mott,  No.  9878  Red.  Cas. 
In  re  Stevenson,  6  Fed.  Rep.  710; 
In  re  Hyde,  6  Fed.  Rep.   587;   Ex 
parte    Bryan,    No.    2061    Fed.    Cas., 
2  Hughes,  273. 


HOW    TO    REDUCE    THE    ESTATE    TO    MONEV. 


/  :>D 


Thus  a  sale  may  be  set  aside  on  the  ground  of  fraud  or  col- 
lusion,^ or  because  the  sale  is  illegal,  as  in  not  selling  to  the 
highest  bidder,*"  or  selling  property  unlawfully  in  the  posses- 
sion of  the  trustee,'  or  made  under  an  illegal  or  irregular 
order,**  or  any  misconduct  on  the  part  of  the  trustee,"  and  this 
may  be  done  although  the  purchaser  is  entirely  innocent  and 
although  the  sale  was  not  made  subject  to  the  order  of  the 
court.'"  In  deciding  whether  or  not  a  sale  shall  be  set  aside 
the  court  will  give  much  weight  to  objection  on  the  part  of  the 
creditors/' 

Under  the  present  statute  if  a  sale  is  made  for  less  than 
seventy-five  per  centum  of  the  appraised  value  it  would  seem 
to  be  sufficient  ground  for  setting  aside  the  sale,  irrespective 
of  whether  any  fraud  or  collusion  was  shown,  provided  it 
was  made  otherwise  than  subject  to  the  approval  of  the  court/- 
The  mere  nondelivery  of  a  deed  by  the  trustee  is  not  sufficient 
cause  for  setting  aside  a  sale,  otherwise  regular,  and  ordering 
a  resale.'^ 

A  sale  made  by  an  assignee  for  the  benefit  of  creditors  may 
be  set  aside  and  suit  brought  by  trustee  to  recover  property 
fraudulently  conveyed  which  was  used  in  purchasing  at 
assignee's  sale.'* 


'-In  re  Ethier,  ii8  Fed.  Rep.  107, 
9  Am.  B.  R.  160;  In  re  Conanv,  No. 
3085  Fed.  Cas.,  cited  In  re  King, 
3  Fed.  Rep.  842;  In  re  Hyde,  6 
Fed.  Rep.  592;  Clark  v.  Clark,  17 
How  315,  15  L.  Ed.  77;  in  re 
Stevenson,  6  Fed.  Rep.  710. 

But  see  Hills  v.  Alden,  No.  6507 
Fed.  Cas.,  2  Hasck.  299,  as  to  what 
is  not  evidence  of  fraud. 

'/m  re  Ryan,  No.  12182  Fed. 
Cas.  6  N.  B.  R.  235. 

'Davis  V.  R.  R.  Co.,  No.  3648 
Fed.  Cas.,  i  Woods,  661. 

^  Ex  parte  Bryan,  No.  2061  Fed. 
Cas.,  2  Hughes,  273;  In  re  Mott, 
No.  8978  Fed.  Cas. 

*  In  re  Shea,  122  Fed.  Rep.  742, 
ID  Am.  B.  R.  481 ;  petition  for  re- 


view dismissed  (C.  C.  A.  ist  Cir.), 
126  Fed.  Rep.  153,  11  Am.  B.  R. 
207;  In  re  Belden,  120  Fed.  Rep. 
524,  9  Am.   B.   R.  679. 

'"/«  re  Shea,  122  Fed.  Rep.  742, 
10  Am.  B.  R.  481.  Petition  for 
review  dismissed  (C.  C.  A.  ist 
Cir.),  126  Fed.  Rep.  153,  11  Am.  B. 
R.  207. 

"  In  re  Belden,  120  Fed.  Rep.  524, 
9  Am.  B.  R.  679. 

'"  B.  A.  1898,  Sec.  70b. 

"In  re  King,  3  Fed.  Rep.  839. 
See  also  Owens  v.  Bruce  (C.  C.  A. 
4th  Cir.),  109  Fed.  Rep.  72,  6  Am. 
B.  R.  322. 

"/m  re  Finlay  Bros.,  104  Fed 
Rep..  67s,  4  Am.  B.  R.  745. 


"56 


LAW     AM)     I'ROCEEDINGS     I X     BANKRUPTCY. 


§  262.     Costs  of  sale. 

The  oxpcnsos  of  ;i  sale  arc  (M-dinarily  Icqitimalc  costs  of  ad- 
ministration, aiul  should  ho  paid  lirsl,  mit  of  the  proceeds  of 
tlie  property  sold.'  Such  costs  are  left  hy  statute  in  the  dis- 
cretion ol  the  court,"  and  t|uestions  arising-  in  relation  to  them 
must  he  disposeil  oi  upon  equilahle   j)rinciples. 

Where  a  mortgage  is  api)arcntly  fraudulent,  and  creditors 
have  endeavored  to  have  it  declared  void,  such  creditors  are 
entitletl  to  he  rcimhnrsed  the  amount  of  their  reasonable  costs, 
expenses  and  disbursements  in  the  j)roceedings  in  bankruptcy, 
including  the  sale  of  the  mortgaged  property,  from  the  pro- 
ceeds of  such  sale."  Where  a  secured  creditor  seeks  and  en- 
joys the  aid  of  the  bankruptcy  court  in  enforcing  and  releasing 
his  lien,  he  should  pay  the  costs  incurred  in  obtaining  this 
aid.'*  But  with  regard  to  the  costs  of  general  administration, 
in  which  he  has  no  concern,  and  in  which  he  can  have  no  in- 
terest until  his  lien  is  either  satisfied  or  released,  it  would 
be  inequitable  to  reqnire  liim  to  bear  the  burden  of  them.'^ 


'  /«  re  Sanderlin.  109  Fed.  Rep. 
857,  6  Am.  B.  R.  384,  affirmed  in 
IMcNair  v.  Mclntyre  (C.  C.  A.  4th 
Cir.),  113  Fed.  Rep.  113,  7  Am.  B. 
R.  638. 

=  B.  A.   1898.  Sec.  2,  clause   18. 

^  In  re  Dumont,  4127  Fed.  Cas., 
4  N.  B.  R.   17. 

*In  re  Utt  (C.  C.  A.  7th  Cir), 
105  Fed.  Rep.  754,  5  Am  B.  R.  383; 
In  re  Alison  Lumber  Co.,  137  Fed. 
Rep.  643,  14  Am.  B.  R.  78;  In  re 
Coglej',    107    Fed.    Rep.    73,   5   Am. 

B.  R.  731 ;  McNair  v.  Mclntyre  fC. 

C.  A.  4th  Cir.),  113  Fed.  Rep.  113, 
7  Am.  B.  R.  638;  In  re  Goldsmith, 
118  Fed  Rep.  763,  g  Am.  B.  R. 
419. 

^  In  re  Hambright,  No.  5973  Fed. 
Cas.,  2  N.  B.  R.  498;  In  re  Daven- 
port,  No.  3587  Fed.   Cas.,  3   N.  B. 


R.  77;  In  re  York,  No.  18138  Fed. 
Cas.,  3  N.  B.  R.  661. 

In  re  Alison  Lumber  Co.,  137 
Fed.  Rep.  643,  648,  14  Am.  B.  R. 
78,  84  After  referring  to  costs  in- 
curred in  the  state  court,  Judge 
Speer  said :  "The  expenses  and 
costs  of  the  bankruptcy  court  stand 
upon  a  superior  footing,  and,  if 
there  is  not  sufficient  money  arising 
from  the  .sale  of  unpledged  prop- 
erty to  pay  them,  it  seems  that 
the  secured  creditors  should  con- 
tribute ratably  to  that  purpose. 
They  have  appeared  in  the  bank- 
ruptcy court,  selected  it  as  their 
forum,  availed  themselves  of  the 
services  of  its  officers,  and  utilized 
its  process  to  collect  their  claims. 
We  have  no  doubt  of  their  duty  to 
contribute  to  pay  all  such  costs 
and  expenses." 


HOW    TO    REDUCE    THE    ESTATE    TO    MONEY.  757 

Creditors  who  have  failed  to  obtain  a  review  of  an  order 
directing  a  private  sale  of  the  bankrupt's  property  may  be  re- 
quired  to   pay   the    incidental   expenses   attending   the    sale," 

§  263.     Of  preferences  and  debts. 

The  trustee  may  receive,  as  a  part  of  the  bankrupt's  estate, 
property  which  has  been  transferred  by  the  bankrupt  prior  to 
the  filing  of  the  petition  in  fraud  of  the  act.  The  transferee 
may  decline  to  reconvey  it.  He  may  also  receive  as  a  part 
of  the  estate  debts  and  accounts  due  the  bankrupt  which  the 
debtors  refuse  to  pay. 

The  trustee  may,  with  the  approval  of  the  court,  compro- 
mise any  controversy  arising  in  the  administration  of  the 
estate  upon  such  terms  as  he  may  deem  for  the  best  interests 
of  the  estate/  or  he  may  submit  the  claim  to  arbitration.^ 
A\'henever  it  may  be  deemed  for  the  benefit  of  the  estate  of  a 
bankrupt  to  compound  and  settle  any  debts  or  other  claims  due 
or  belonging  to  the  estate  of  the  bankrupt,  the  trustee,  or  the 
bankrupt,  or  any  creditor  who  has  proven  his  debt,  may  file 
his  petition  therefor ;  and  thereupon  the  court  appoints  a  suit- 
able time  and  place  for  the  hearing  thereof,  notice  of  which 
shall  be  given  as  the  court  shall  direct,  so  that  all  creditors 
and  other  persons  interested  may  appear  and  show  cause,  if 
any  they  have,  why  an  order  should  not  be  passed  by  the  court 
upon  the  petition  authorizing  such  act  on  the  part  of  the  trus- 
tee.^ The  creditors  are  entitled  to  ten  days'  notice  by  mail  of 
the  proposed  compromise  of  any  controversy.* 

It  may,  however,  be  necessary  for  the  trustee  to  resort  to  a 
suit  to  recover  the  preferred  property  or  to  compel  the  pay- 

•/n  re  Johnston,   No.   7424   Fed.  Franklin  Sav.  Fund  Soc,  No.  5058 

Cas.,  25  Pitts.  Leg.  J.  141.  Fed.   Cas.,  31    Leg.   Int.    173 

'B   .A.    1898,   Sec.   27.     Compare  '  B.  A.   1898,  Sec.  26;   Gen.  Onl 

R.    S.    Sec.    5061      Consult    In    re  Zi- 

Dihblee.  No.  3885  Fed.  Cas.,  3  Ben.  'Gen.    Ords.    28    and    Z},;    In    re 

354;   In   re   Graves,   No.   5709   Fed.  Hoole,  3  Fed.  Rep.  496. 

Cas.,    2    Ben.     100;    In    re    Hoole,  *  B.  \.   1898,   Sec.  58a. 
3    Fed.    Rep.    496;    Estate    of    the 


758  LAW     AND     I'ROCF.HDINGS     IN     HAN  KKUl'TCY. 

inent  of  such  ilebts.     The  authority  of  the  trustee  to  bring  and 
prosecute  such  suits  can  not  be  questioned.'* 

The  trustee  was  compelled  at  first  to  prosecute  such  suits 
in  a  state  court,  except  upon  consent  of  the  defendant."  Since 
the  amendment  of  February  5.  U)03,  he  may  prosecute  sucli 
suits  either  in  the  courts  of  bankruptcy  or  a  state  court.'' 

'B.    A.    1898,    Sec.   6or,   Sec.   670  '  B.  A.  1898.  Sees.  23,  (  60,  67  and 

and    Sec.    70c   and    Sec.    47.   clause  70,    as    amended    Feb.    5,    1903,    3-' 

_'.     As  to  the  nature  of  such  suits,  Stat,    at    L.    797;    Pond    v.    N.    Y. 

see  Sec.  203a.  ante.  Exchange  Bank,  124  Fed.  Rep.  992, 

"  For    a    discussion    of    this    sub-  10  Am.   B.   R.   343-     See   Sec.   203, 

jcct,  see  Sec.  20.  ante. 


THE    DISTRIBUTION     OF    THE    ESTATE.  759 


CHAPTER   XXV. 

THE  DISTRIBUTION   OF  THE  ESTATE. 

§  264.    The  general  plan  of  distribution. 

The  trustee  collects  and  reduces  to  money  the  property  of 
the  estate,  for  which  he  is  trustee,  under  the  direction  of  the 
court,  and  is  required  to  account  for  and  pay  over  to  such 
estate  all  interest  received  by  him  upon  the  property  of  the 
estate.^  The  money  so  collected  is  deposited  in  one  of  the 
designated  depositories.  This  constitutes  the  fund  to  be  dis- 
tributed. It  should  l)e  deposited  in  the  name  of  the  court  or 
judge  -  or  to  the  credit  of  the  trustee,  naming  the  estate,'''  and 
should  not  be  withdrawn  on  check  signed  by  the  referee  only, 
but  only  when  such  check  is  countersigned  by  the  judge  or 
some  one  designated  by  him.* 

The  trustee  is  required  to  report  to  the  court,  the  judge  or 
referee,  in  writing,  the  condition  of  the  estate  and  the  amounts 
of  money  on  hand,  and  such  other  details  as  may  be  required 
by  the  court,  within  the  first  month  after  his  appointment  and 
every  two  months  thereafter,  unless  otherwise  ordered  by  tiie 
court.'  All  accounts  of  the  trustee  are  referred,  as  of  course. 
to  the  referee  for  orders,  unless  otherwise  specially  ordered  by 
the  court.*' 

The  referee  keeps  a  record  of  the  claims  which  ha\'e  been 
proved  and  allowed,  and  declares  all  dividends  and  prepares 
and  delivers  to  the  trustee  dividend  sheets  showing  the  divi- 
dends declared  and  to  whom  payable."     The  dividends  are  of 

'  B.    A.    1898,  Sec.    47,  clauses    I     See  also  In  re  Rude,  loi  Fed.  Rep. 
and   2.  80s,  4  Am.  B.  R.  319. 

■In   re  Cobb,  T12  Fed.  Rep.  655,        '  B.  k.   1898,   Sec.  47,  clause  10. 

7    .-Xni.    B.     R.  202.  "Gen.   Ord.    17. 

"In  re  Carr.  117   Fed.  Rep.   572,        'B    \.    1898,    Sec.    39,    clause    i; 
9  .\ni.   B.   R.  38.  Official  Form  No.  40;  see  F'orm  No. 

' ///   re   Colib,  112   I'fd.  Rep.  655.    9^,  post. 

7    .\m.    15.    1^  202;    Gen.    Ord.    29. 


7bO  LAW     AXn     PRC^CEEDINGS    IN     BANKRUPTCY. 

an  equal  /^cr  ccntiiiiij  and  are  declared  and  paid  on  all  allowed 
claims  except  such  as  have  priority  or  are  secured.**  The  first 
dividentl  should  be  declared  within  thirty  days  after  the  ad- 
judication, if  the  money  of  the  estate  in  excess  of  the  amount 
necessary  to  pay  the  debts  which  have  priority,  and  such 
claims  as  have  not  been  but  jjrobably  will  be  allowed,  equals 
five  f^cr  ccntiDii  or  more  of  such  allowed  claims." 

The  trustee  receives  the  list  of  claims  and  dividends  pre- 
pared by  the  referee,  and  forthwith  serves  a  notice  '"  upon  the 
creditors  whose  names  are  included  in  this  list,  of  the  time 
and  place  where  payment  of  the  dividends  will  be  made.  The 
creditors  are  entitled  to  have  at  least  ten  days'  notice,  by  mail 
to  their  respective  addresses,  unless  they  waive  notice  in  writ- 
ing, of  the  declaration  and  time  of  payment  of  the  dividends.^^ 
The  creditors  may,  either  personally  or  by  some  person  author- 
ized in  writing,^-  obtain  such  dividends  from  the  trustee  at  the 
time  and  place  mentioned  in  the  notice.  Where  payments  are 
made  to  attorneys  it  should  clearly  appear  on  whose  account 
the  payment  is  made."  A  claimed  indebtedness  from  one 
creditor  of  a  bankrupt  to  another,  growing  out  of  transactions 
not  connected  with  the  bankruptcy  proceedings,  can  not  be 
litigated  in  such  proceedings  or  adjusted  in  the  distribution  of 
dividends.^* 

Subsequent  dividends  are  declared  and  paid  upon  like  terms 
and  in  the  same  manner  as  the  first  dividend. ^^  When  the 
estate  is  ready  to  be  closed,  a  final  meeting  of  the  creditors  is 
called  by  the  referee,  of  which  at  least  a  ten  days'  notice  must 
be  given  to  each  creditor.^"  At  this  meeting  the  trustee  is 
required  to  lay  before  the  creditors  detailed  statements  of  the 

*B.  A.  1898,  Sec.  65a.  "In  re  Carr,   116  Fed.  Rep.  556, 

'  B.  A.  1898,  Sec.  65&.  8  Am.  B.  R.  635. 

'"  Official  Form  No.  41 ;  see  Form  "  In    re   Girard   Glazed   Kid   Co., 

No.  99,  post.  136  Fed.    Rep.   511,    14   Am.   B.   R. 

"B.  A.   1898,   Sec.   58a.  485- 

'-See  Creditor's  letter  to  trustee  '' B.  A.  1898,  Sec.  6sb. 

in  Official  Form  No.  41;  see  Form  '"  B.  A  1898,  Sec.  58a. 
No.  99.  post. 


THE    DISTRIBUTION     OF    THE    ESTATE.  761 

administration  of  the  estate/'  He  is  also  required  to  make 
a  final  report  and  file  final  accounts  with  the  referee  or  the 
judge  at  least  fifteen  days  before  the  day  fixed  for  the  final 
meeting.  This  report  and  account  must  be  rendered  under 
oath/^  and  must  be  clear  and  show  the  disposition  made  of 
all  money/^  The  referee  audits  the  account,  and,  if  regular 
and  proper,  passes  an  order  allowing  the  account  and  discharg- 
ing the  trustee/®  This  is  the  general  plan  of  distributing 
the  bankrupt's  estate,  provided  by  the  bankrupt  law.  It  is 
necessary  to  consider  several  of  these  steps  more  in  detail, 
which  will  be  done  in  the  several  sections  of  this  chapter. 

It  may  be  observed  that  there  is  considerable  difference  be- 
tween the  method  of  distribution  under  this  act  and  that  pur- 
sued under,  the  act  of  1867.  Hie  principal  point  of  difference 
is  that  the  referee  declares  the  dividends  under  the  present 
statute  instead  of  the  creditors,  as  was  done  under  the  former 
act.^*' 

§  265.    Who  are  entitled  to  share  in  the  estate. 

All  creditors  whose  debts  are  duly  proved  and  allowed  are 
entitled  to  share  in  the  bankrupt's  property  and  estate.  This 
includes  creditors  who  have  a  priority  or  are  secured  as  well  as 
general  creditors.  Secured  creditors  are  entitled  to  be  paid  to 
the  extent  of  their  security.  Creditors  having  a  priority  are 
entitled  to  be  paid  in  full.  The  general  creditors  share  pro 
rata.  There  is  no  provision  in  the  statute  for  paying  dividends 
to  creditors  who  have  not  proved  their  claims.'  but  a  creditor 
who  received  an  innocent  preference  and  refused  to  surrender 
it  has  been  held  entitled  to  the  surplus  of  the  bankrupt's  estate. 
not  exceeding  the  balance  due  on  his  debt,  after  the  other  cred- 
itors have  been  paid  in  full.^ 

"B.  A.  1898,  Sec.  47,  clause  7.  ""  R.  S.  Sees.  5092  and  5093. 

"  See  Official  Forms  Nos.  49  and  '  See  In  re  Hoyt,  No.  6806  Fed. 

50;  see  Forms  Nos.  93  and  94.  f^ost.  Cas.,  3  N.  B.  R.  55. 

"Official  Form  No.  51;  see  Form  "In    re    Morton,    118    Fed.    Rep. 

No.  95,  l>ost.  908,  9  Am.  B.  R.  508. 


762  I-A\V     AN1>     I'KOCKKDlXCiS     1 N      1!  AX  KRUl'TlY. 

The  persons  entitled  to  share  in  a  particular  diviclend  are 
such  only  as  have  proxcd  their  debts  prior  to  its  being  de- 
clared by  the  referee.     A  creditor  is  not  entitled  to  have  his 
debt  brought  in  for  a  dividend  if  not  pro\ed  until  after  the 
tn-der  declaring  the  dividend  is  made."'     This  construction  of 
the  act  is  the  only  one  that  can  give  bearing  and  consistency 
to  the  proceedings.     If  additional  debts  may  be  brought  into 
the  computation  after  the  referee  has  prepared  his  list  of  claims 
and  dividends  it  would  be  subject  to  incessant  lluctuations  and 
renewals ;  and  what  would  render  it  still  more  inconvenient  and 
unequal  in  practice  would  be  that  even  after  the  trustee  had 
paid  dividends  under  the  rate  to  a  part  of  the  creditors,  others 
might  come  in  and  arrest  payments  in  progress  to  tlie  residue. 
and.  by  presenting  from  day  to  day  a  new  basis  of  distribu- 
tion, dwindle  downi  the  per  centum  first  established,  and  place 
those  creditors  to  wdiom  it  was  declared  on  a  scale  constantly 
descending  in  proportions.     This  would  be  in  direct  conflict 
with  the  evident  intent  of  the  statute.^ 

Where  there  are  several  funds,  as  in  the  case  of  a  partner- 
ship, the  firm  creditors  are  entitled  to  be  paid  out  of  the  firm 
property  and  the  individual  creditors  out  of  the   individual 
estates  of  the  partners.''     Should  any  surplus  remain  of  the 
property  of  any  partner  after  paying  his  individual  debts,  such 
surplus  is  added  to  the  partnership  assets  and  is  applied  to 
the  payment  of  the  partnership  debts.^     Should  any  surplus 
of  the  partnership  property  remain  after  paying  the  partnership 
debts,  such  surplus  is  added  to  the  assets  of  the  individual 
partners  in  the  proportion  of  their  respective  interests  in  the 
partnership.**     The  distribution  of  a  partnership  estate   and 
the  individual  estates  of  the  partners  is  more  fully  discussed 
in  another  place,  to  which  the  reader  is  referred.'' 

'B.    A.    1898,    Sec.    65f;    In    re      /«  rr  Stein,  94  Fed.  Rep.  124,  i  Am. 
Stein,  94  Fed.  Rep.   124,  i  Am.  B.       B.   R.  662. 
R.  662;  In  re  Miller,  No.  9556  Fed.  '  B.  A.  1898,  Sec.  sf- 

Cas.,  I  N.  Y.  Leg.  Obs.  180.  '  B.  A.  1898.  Sec.  sf. 

*  B.   A.    1898,    Sees   65    a   and   c;  '  See   Administration   of  partner- 

ship estates,  Sec.  99,  ante. 


THE    DISTRIBUTION    OF    THE    ESTATE.  763 

The  claims  of  persons  contingently  liable  for  the  bankrupt 
may  be  proved  in  the  name  of  the  creditor,  when  known,  by  the 
party  contingently  liable.  When  the  name  of  the  creditor  is 
unknown  such  claim  may  be  proved  in  the  name  of  the  party 
contingently  liable,  but  no  dividend  is  paid  upon  such  claim, 
except  upon  satisfactory  proof  that  it  will  diminish  pro  tanto 
the  original  debt.- 

§  266.     How  and  when  dividends  are  declared. 

Creditors  are  entitled  to  have  at  least  ten  days'  notice  by 
mail  to  their  respective  addresses  as  they  appear  in  the  list 
of  creditors  of  the  bankrupt,  or  as  afterwards  filed  with  the 
papers  in  the  case  by  the  creditors,  unless  they  waive  notice  in 
writing  of  the  declaration  and  time  of  payment  of  dividends.^ 
The  referee  declares  dividends  and  prepares  and  delivers  to 
the  trustee  dividend  sheets,  showing  the  dividends  declared 
and  to  whom  payable."  From  this  provision  it  appears  that 
the  referee  fixes  and  determines  the  rate  of  the  dividend  as 
well  as  makes  the  computation  and  calculations  as  to  the 
amounts.  The  data  for  such  calculations  is  in  his  possession ; 
namely,  the  names  of  the  creditors  and  the  amount  of  each 
debt  proved  and  allowed.  Tlie  trustee  is  required  to  report 
to  him,  in  writing,  the  condition  of  the  estate  and  the  amount 
of  money  on  hand,  and  such  other  details  as  may  be  required 
l)y  the  court.^  The  first  report  must  be  made  within  a  month 
after  his  appointment.^  Other  reports  are  required  from  him 
every  two  months  thereafter,  unless  otherwise  ordered  by  the 
judge  or  referee.^  With  this  data  the  referee  is  prepared  to 
declare  the  rate  and  compute  the  amount  of  each  creditor's 
dividend. 

Having  determined  upon  tlie  rate  per  coititm,  the  referee 
prepares  a  list  of  debts,  proved  and  allowed,  stating  the  rate 
of  dividend  and  the  name  of  each  creditor,  alphabetically  ar- 

*Gcn.    Orel.    21,    par.    4.      B.    A.  'B.  A.  1898,  Sec.  39,     clause     i; 

1898,    .Sec   6sc;    In    re    Dillon,    100  Form    No.   40. 

\'c<\.  Rep.  627,  4  Am.  B.  R.  63.  '  B.   A.    1898,  Sec.  47,  clause    10; 

'B.  A.   1898,  Sec.  58a.  Gen.    Ord.    17. 


7o4 


LAW      AM)     PROCEEDINGS    IN     BANKRUPTCY. 


rangetl,  together  with  the  sum  proveil  and  allowed  and  the 
amount  of  the  tli\  ulend  Ic  he  paid  thereon.'  Where  only 
one  creditor  has  proved  his  elaiin  he  is  entitled  to  be  paid  in 
full  if  there  he  enough  for  that  purpose;  if  there  be  not 
enoueh  he  takes  the  whole.''  This  list  of  claims  and  divi- 
ilends  should  he  incUuled  by  tlie  referee  in  his  record,  and  a 
copy  delixered  1)\  him  to  the  trustee.  This  is  the  authority 
for  the  trustee  to  make  payments  of  dividends  as  set  forth  in 
such  list. 

Where  a  claim  has  been  honestly  and  fairly  disputed  and 
the  claimant  linally  prevails,  interest  upon  the  dividends  should 
i>ot  be  allowed  irom  the  time  that  like  dividends  were  declared 
upon  undisputed  claims."  Interest  may  be  allowed  on  all 
claims  from  the  date  of  filing  the  petition  if  the  bankrupt's 
estate  is  sufficient  to  pay  the  same  to  all' 

The  risfhts  of  creditors,  wdio  have  received  dividends,  or  in 
whose  favor  final  dividends  have  been  declared,  are  not  afifected 
bv  the  proof  and  allow^ance  of  claims  subsequent  to  the  date  of 
such  pavment  or  declarations  of  dividends ;  but  the  creditors 
proving  and  securing  the  allowance  of  such  claims  are  paid 


*  Official  Form  No.  40 ;  see  Form 
No.  98,  {>ost. 

''In  re  Haynes.  No.  6269  Fed. 
Cas..  2  N.  B.  R.  227 ;  In  re  James, 
No.  7175  Fed.  Cas.,  2  N.  B.  R. 
227. 

"  In  Hersey,  ct  al.  v.  Fosdick,  20 
Fed.  Rep.  44,  Judge  Lowell,  in  con- 
sidering this  question,  said :  "I 
can  see  no  reason  why,  because  a 
creditor  finally  prevails  in  a  claim 
honestly  and  fairly  disputed  by  the 
assignees,  he  should  have  more  than 
his  dividend.  Not,  surely,  as  dam- 
ages for  withholding  something  due 
him,  for  there  is  nothing  due  him 
in  bankruptcy  until  his  debt,  both 
as  to  its  legality  and  its  amount,  has 
been  ascertained.  Not  as  a  matter 
of  contract,  for  there  is  no  con- 
tractural  relation  between  the  par- 
ties.    1  am  confident  that  the  prac- 


tice has  always  been  against  it,  and 
that  it  is  both  just  and  expedient 
that  the  general  creditors  should  be 
at  liberty  to  investigate  doubtful 
claims,  without  the  liability  to  such 
a  penalty  as  would  be  imposed  upon 
them  by  granting  the  petition.  I  do 
not  say  that  if  funds  have  been  set 
aside  to  meet  a  large  claim  of  this 
kind,  and  have  earned  interest,  the 
court  has  not  power  to  order  the 
precise  amount  of  interest  so  earned 
on  a  sum  which  proves  to  be  the 
creditor's  money,  to  be  paid  to 
him." 

But  see  In  re  Kitzinger,  No.  7862 
Fed.  Cas.,  19  N.  B.  R.  238,  and 
No.  7863  Fed.  Cas.,  19  N.  B.  R. 
307. 

' /;;  re  1  lagan.  No.  5898  Fed. 
Cas.,  6  Ben.  407;  In  re  Town,  No. 
141 12  Fed.   Cas.,  8  N.   B.   R.  40. 


THE    DISTRIBUTION    OF    THE    ESTATE.  765 

dividends  equal  in  amount  to  those  already  received  by  the 
other  creditors  if  the  estate  equals  so  much  before  such  other 
creditors  are  paid  any  further  dividends.'  It  is  not  necessary 
before  declaring  a  final  dividend  to  wait  a  year, — the  time 
within  which  Sec.  S7n  of  the  bankrupt  act  requires  all  claims 
to  be  proved."  Where  an  order  is  entered,  by  the  consent 
of  all  known  creditors,  for  a  distribution  different  from  that 
provided  by  the  bankrupt  act  it  is  subject  to  the  rights  of  any 
unknown  creditors  who  appear  within  the  time  allowed  by  the 

act.^° 

Where  a  person  has  recovered  a  judgment,  which  is  pending 
review  in  an  appellate  court,  the  court  of  bankruptcy  will  see 
to  it  that  no  dividends  are  paid  until  the  case  is  disposed  of 
by  the  appellate  court.  It  will  then  be  ordered  to  be  paid  or 
expunged,  or  ordered  suspended,  as  shall  be  indicated  by  the 
judgment  of  the  appellate  court.^^  The  proceedings  in  bank- 
ruptcy may  go  on  in  the  usual  way  to  their  final  orderly  ter- 
mination. If  the  judgment  creditor  shall  not,  in  the  mean- 
time, have  succeeded  in  getting  his  debt  in  a  condition  to  re- 
ceive dividends  upon  it,  he  will  not  be  able  to  participate  in  the 
distribution  of  the  estate  as  a  judgment  creditor. 

The  first  dividend  is  required  to  be  declared  wnthin  thirty 
days  after  the  adjudication,  if  the  money  of  the  estate  in  ex- 
cess of  the  amount  necessary  to  pay  the  debts  which  have  pri- 
ority and  such  claims  as  have  not  been,  but  probably  will  be, 
allowed  equals  five  per  centum  or  more  of  such  allowed 
claims.^^  Dividends  subsequent  to  the  first  are  declared  upon 
like  terms  as  the  first  and  as  often  as  the  amount  equals  ten 
per  centum  or  more  and  upon  closing  the  estate.  Dividends 
may  be  declared  oftener  and  in  smaller  proportions  if  the 
judge  shall  so  order. ^'' 


« ■ 


B.    A.     1898,    Sec.    65r;    In    re  'In   re   Stein,  94   Fed.   Rep.    124, 

Hovey,    5    Fed.    Rep.   356,   affirmed,  i  Am.  B.  R.  66j. 

8  Fed.  Rep.  314.     As  to  when  do-  '"/«  re  Lockwood,  104  Fed.  Rop. 

mestic    creditors    are    preferred    in  794,  4  Am.   B.  R.  731. 

paying   dividends   to    foreign   cred-  "  In  re  Sheehan,  No.  12737  Fed. 

itors,  see  B.  A.  1898.  Sl-c.  b^d.  Cas.,   8    N.    B.    R.   345. 

'-■p..   A.    1898.   Sec.  656. 


766  LAW     AND     rROCEEDINGS    IN     BANKRUPTCY. 

§  267.     Debts  which  have  priority. 

In  the  ilistribulion  of  an  estate  a  secnred  creditor,  as  a 
mortgagee  or  lion  holder,  is  entitled  to  be  paid  in  full,  or  to 
the  extent  of  the  amount  realized,  from  the  funds  derived  from 
a  sale  of  the  property,  which  is  subject  to  the  specific  lien  or 
security,  less  expenses  of  foreclosing  the  lien,'  including  com- 
missions of  referee  and  trustee.'  The  trustee  is  required  to 
pay  the  taxes  of  the  bankrupt.^ 

Certain  other  debts  have  a  priority  by  virtue  of  express  pro- 
visions of  the  statute  and  should  be  paid  in  full  before  paying 
any  debts  of  general  creditors.  Such  debts  are,  and  the  order 
of  payment  is  as  follows :  •*  First.  Costs  of  preserving  the 
estate  subsequent  to  filing  the  petition.  Second.  Filing  fees 
pa  ill  by  creditors  in  involuntary  cases,  and  the  reasonable  ex- 
pense of  creditors  in  recovering  property  transferred  or  con- 
cealed by  the  bankrupt.  Third.  Cost  of  administration. 
Fourth.  \\'ages  due  workmen,  etc.  Fifth.  Debts  entitled  to 
priority  under  the  law-s  of  the  states  or  of  the  United  States. 
These  priorities  are  considered  hereafter  at  length.^ 

In  the  event  of  the  confirmation  of  a  composition  being  set 
.  aside,  or  a  discharge  revoked,  the  property  acquired  by  the 
bankrupt  in  addition  to  his  estate  at  the  time  the  composition 
was  confirmed  or  the  adjudication  was  made,  is  applied  to 
the  payment  in  full  of  the  claims  of  creditors  for  property  sold 
to  him  on  credit,  in  good  faith,  while  such  composition  or 
discharge  was  in  force,  and  the  residue,  if  any,  is  applied  to 
the  payment  of  the  debts  which  w^ere  owing  at  the  time  of  the 
adjudication." 

'/»  re  Utt    (C.  C.  A.  7th  Cir.),  Sanford    Furniture    Mfg.    Co.,    126 

105    Fed.    Rep.    754,    5    Am.    B.    R.  Fed.  Rep.  888,   11   Am.   B.  R.  414; 

383;    McNair   v.    Mclntyre    (C.    C.  /w  re  Iowa  Falls  Mfg.  Co..  140  Fed. 

A.  4th    Cir.),    113    Fed.    Rep.    113,  Rep.  527,   i5  Am.  B.  R.  384. 
7  Am.  B.  R.  638;  In  re  Alison  Lum-  '  See  Sec.  267a,  post. 

ber  Co.,  137  Fed.  Rep.  643,  14  Am.  *  B.  .A..  1898,  Sec.  64,  as  amended 

B.  R.  78.  Feb.  5,   1903,  32  Stat,  at  L.  797. 
=  B   A.    1898,   Sees.  40  and  48  as  '  Sees.  2670  to  267/. 

amended    by    the    act    of    February  "  B.  A.  1898,  Sec.  64c. 

5,   1903,  32  Stat,   at  L.  797;   ^«   re 


THE    DISTRIBUTION     OF    THE    ESTATE.  767 

When  the  referee  has  determined  what  debts  are  entitled 
to  priority  he  should  pass  an  order  setting  forth  the  names  of 
the  creditors  and  the  amount  of  debts  entitled  to  priority  due 
each,  and  direct  the  trustee  to  pay  such  debts  in  fulL 

Where  a  secured  creditor  and  a  creditor  having  a  priority 
are  entitled  to  payment  out  of  the  same  fund,  and  the  fund  is 
insufficient  to  pay  both  in  full,  the  question  will  arise  as  to 
which  class  of  creditors  has  preference  over  the  other,  the  se- 
cured or  those  having  priority  ?  The  statute  creates  prefer- 
ences in  the  distribution  of  the  bankrupt's  assets,  as  has  been 
stated,  and  prescribes  the  order  of  payment.  This  provision 
does  not  refer  to  any  part  of  the  estate  derived  from  the  sale 
of  property  on  which  creditors  may  liave  a  specific  lien.  It 
will  be  observed  that  this  priority  is  only  allowed  out  of  the 
estate  of  the  bankrupt.  The  fund  derived  from  the  sale  of 
property,  which  is  subject  to  specific  liens,  becomes  a  part  of 
the  bankrupt's  estate  to  such  extent  only  as  the  fund  exceeds 
the  amount  of  the  debt  secured  by  the  lien  or  mortgage." 
The  priority  referred  to  in  Sec.  64  relates  to  claims  other- 
wise unsecured  and  gives  them  priority  over  other  unse- 
cured claims,  but  does  not  affect  a  debt  or  claim  secured  by 
mortgage  or  other  lien  which  tlie  act  expressly  provides  shall 
not  be  affected  by  bankruptcy  proceedings  in  Sec.  67.  The 
claim  of  the  lien  creditor  must  therefore  be  paid  in  full  before 
creditors  are  entitled  to  a  priority  under  Sec.  64.^ 

§  267a.    Taxes. 

The  court  is  required  by  the  bankrupt  act  ^  "to  order  the  trus- 
tee to  pay  all  taxes  legally  due  and  owing  by  the  bankrupt  to 

'That   the  trustee   takes   the    es-  licr  Cornice  Roofing  Co.,   133  Fed. 

tate  in  the  same  phght  and  condi-  Rep.  958,   13  .'\m.  B.  R.  585;  In  re 

tion  that  the  bankrupt  held  it  and  McConncll,    No.   8712    Fed.    Cas.,   9 

subject  to  all  equities  impressed  up-  N.  B.  R.  387;  see  ahso  In  re  San- 

on    it   by    the   bankrupt,    see    York  derlin,    109    Fed.    Rep.    857,    859,   6 

Mfg.  Co.  V.  Cassell,  201   U.  S.  344.  Am.   B.   R.  384.  387;   Liddon   Bros. 

50  L.   Ed.  782.    15  Am.   B.   R.  633,  v.  .Smith    (C.  C.  A.  5th   Cir.),,  13.S 

and  cases  cited.  Fed.  Rep.  43,  14  Am.  B.  R.  204 ;  but 

*/«  rf  Prince  &  Walter,  131  Fed.  see  /«  re  Tebo,  loi  Fed.  Rep.  419, 

Rep.  546,  12  Am.  B.  R.  675;  /;;  re  4  Am.  B.  R.  235. 
Frick,  I  y\m.  li.  R.  719;  /)/  re  Bour- 


768 


LAW     AND     I'ROCT.EOINGS    IX     RAX  KR'JPTCV. 


the   L'nited   States,   state,  county,   district   or  municipality   in 
ailvance  of  the  payment  of  dividends  to  creditors."  ' 

The  test  is  given  in  the  statute.  Arc  the  taxes  "legally  due 
and  owing"  hy  the  hankrupt?  if  tliey  are.  the  trustee  should 
pay  them  in  advance  of  the  i)aymcnt  of  dividends  to  creditors." 
\\  hether  a  tax  is  "legally  due  and  owing"  depends  upon  the 
local  law.  'The  general  rule  is  that  a  tax  is  legally  due  and 
owing  from  the  day  of  assessment,  although  not  payable  until 
a  later  date."'  It  has  been  licld  that  a  tax  assessed  against  a 
bankrupt  prior  to  adjudication  was  legally  due  and  owing 
within  the  meaning  of  Section  64,  although  not  payable  until 
after  adjudication.* 

Money  collected  by  a  bankrupt  tax  collector  for  a  county  is 
not  a  tax  "due  and  owing"  so  as  to  be  entitled  to  priority  of 
payment.'' 

Whether  a  claim  is  for  a  tax  within  the  meaning  of  Section 
(Aa  is  a  question  to  be  decided  by  the  court  of  bankruptcy  and 
not  by  the  state  courts.*'     Section  64a  declares  that  in  case  of 


'  B.  A.  1898,  Sec.  64a. 

'Waco  V.  Bryan  (C.  C.  A.  5th 
Cir.).  127  Fed.  Rep.  79.  11  Am.  B. 
R.  481;  Chattanooga  v.  Hill   (C.  C. 

A.  6th  Cir.).  139  Fed  Rep.  600, 
15  Am.  B.  R.  195;  In  re  Tilden, 
91  Fed.  Rep.  500,  i  Am.  B.  R.  300. 

"In  re  Flynn.  134  Fed.  Rep.  145. 
13  Am.  B.  R.  720;  In  re  Keller,  109 
Fed.  Rep.  131.  6  Am.  B.  R.  351; 
New  Jersey  v.  Anderson,  203  U. 
S.  483,    17  Am.   B.   R.  63. 

As  to  the  date  of  a  foreign  cor- 
poration tax  in  Ohio  see  Emmer- 
man  v.  Speciahy  Co.,  13  Am.  B. 
R.  40,  note. 

*  In  re  Flynn.  134  Fed.  Rep.  145, 
13  Am.  B.  R.  720;  New  Jersey  v. 
Anderson,   203   U.   S.   483,    i/    Am. 

B.  R.  63. 

=  /rt  re  Waller.  142  Fed.  Rep.  883, 
r;  .^m.  B.  R.  753- 
"  In  Now  Jersey  v.  Anderson,  203 


U.  S.  483,  17  Am.  B.  R.  63,  the 
supreme  court  said :  "While  we  take 
this  view  of  the  decisions  of  the  Su- 
preme court  of  New  Jersey  and 
reach  the  conclusion  that  the  claim 
in  question  is  for  a  tax  within  the 
meaning  of  the  law  as  construed  by 
that  court,  the  bankruptcy  act  is  a 
federal  statute,  the  ultimate  inter- 
pretation of  which  is  in  the  Federal 
courts.  It  is  doubtless  true,  as  was 
said  in  the  opinion  of  the  learned 
judge  speaking  for  the  Circuit  Court 
of  Appeals,  in  this  case,  that  if  the 
highest  court  of  the  state  should 
decide  that  a  given  statute  imposed 
no  tax  within  the  meaning  of  the 
law  as  interpreted  by  it.  a  Federal 
court,  in  passing  upon  the  bank- 
ruptcy act,  would  not  compel  the 
state  to  accept  a  preference  from 
the  bankrupt's  estate  upon  a  differ- 
ent view  of  the  law.     Conceding  the 


tHE    DISTRIBUTION    OF    THE    ESTATE.  769 

disputes  as  to  the  amount  or  legality  of  any  such  taxes,  they  are 
to  be  heard  and  determined  by  the  court.  The  state  court  may 
construe  a  statute  and  define  its  meaning-,  but  whether  its  con- 
struction creates  a  tax  within  the  meaning  of  the  bankruptcy 
act,  giving  a  preference  to  taxes,  is  a  federal  question  to  be  de- 
cided by  the  courts  of  the  United  States.^  It  has  been  held  that 
a  franchise  fee  imposed  upon  corporations  by  the  state  under 
whose  laws  they  are  incorporated,  is  a  tax  entitled  to  priority.^ 
An  assessment  for  local  improvements  has  been  held  to  be  a 
tax  entitled  to  priority."  \\niere  a  partner  is  liable  for  partner- 
ship debts,  such  taxes  have  been  given  priority  as  against  the 
partner's  estate  in  bankruptcy,  when  there  were  no  partnership 
assets.***  In  the  following  instances  priority  has  been  refused 
on  the  ground  that  the  claim  was  not  a  tax,  namely:  a  liquor 
license,^''  a  debt  due  the  state  on  a  judgment, ^^  or  a  claim  for 
taxes,  which  the  bankrupt  agreed  to  pay  on  property  which  he 
leased,  because  his  liability  was  entirely  contractural.^^ 

Taxes  are  put  at  the  head  of  everything  payable  out  of  the 
general  fund  in  the  hands  of  the  trustee.  The  taxes  due  by  the 
bankrupt  should  be  paid  in  full  before  paying  debts  entitled  to 
priority  under  Section  64b,^^  as  well  as  in  advance  of  all  debts 
of  general  creditors. 

doctrine  that  the  meaning  of  a  stat-  C.  A.  7th  Cir.),  I37  Fed.  Rep.  858, 

ute  is  a  state  question,  except  where  14  Am.   B.   R.  604;   In   re   Danville 

rights,   the   subject  of  adjudication  Rolling  Mill  Co.,  121  Fed.  Rep.  432, 

by    the    Federal    courts,    have    ac-  10  Am.  B.  R.  327. 

crued  before  its  construction  by  the  ^  In  re  Stalker,  123  Fed.  Rep.  961, 

state  court,  or  the  question  of  con-  10  Am.  B.  R.  710. 

tract   within   the   protection   of   the  °*/;j    re    Green,    116    Fed.    Rep. 

Federal     constitution     is     involved,  118,  8  Am.  B.  R.  553. 

still    a    state    court,    while    entitled  '" /;t    re    Ott,    95    Fed.    Rep.    274, 

to  great  consideration,  can  not  con-  2   Am.   B.   R.  637. 

clusively    decide   that   to   be   a   tax  "  In    re   Alderson,   98   Fed.    Rep. 

within    the    meaning   of   a    Federal  588,  3  Am.  B.  R.  544. 

law,  providing  for  the  payment  of  "/n    re    Broom,    123    Fed.    Rep. 

taxes,   which   is  not   so   in   fact."  G39,  10  Am.  B.  R.  427. 

'  \ew  Jersey  v.  Anderson,  203  U.  "In  re  Prince  &  Walter,  131  Fed. 

S.  483,  17  Am.  B.  R.  63.  Rep.  546,   12  Am.   B.  R.  675,  after 

'  New  Jer.sey  v.  Anderson,  203  U.  considering  the  terms  of  Sees.  64  a 

S.  483,  17  Am.  B.  R.  63;  reversing  and  /;.  Judge  Archibald  said:  "Tax- 

In  re  Cosmopolitan  Power  Co.   (C.  cs,  as  a  class,  are  thus  put  at  the 


770  LAW     AND     I'KOCEEDINGS    IN     BANKRUPTCY. 

There  is  some  coiitlict  in  the  opinions  ;is  to  whether  the  trus- 
tee or  scoured  erechtors  should  pay  tlie  taxes  i)n  encunihered 
property.  The  belter  rule  is  that  the  trustee  must  pay  all  taxes 
owing-  hy  the  bankrupt  on  all  ol"  his  property  at  the  date  of 
bankruptcy.  irrespecti\e  of  its  condition  with  reference  to  en- 
euiubrances."  The  reason  is  that  a  tax  is  a  personal  debt 
against  the  taxpayer,  which  is  given  priority  by  the  express 
terms  of  the  bankrupt  act.  There  is  some  authority  for  limit- 
ing the  taxes  payable  by  the  trustee  to  such  as  constitute  a 
lien  upon  the  bankrupt's  estate  in  the  hands  of  the  trustee  and 
remit  the  sovereign  to  the  enforcement  of  any  lien  which  it  may 
have  against  the  property  which  the  trustee  relinquished  to 
secured  creditors.^^  Giving  the  words  of  the  statute  their  plain 
meaning,  it  is  clear  that  the  trustee  should  pay  all  taxes  owing 
by  the  bankrupt  at  the  date  of  bankruptcy,  whether  the  prop- 
erty taxed  is  administered  by  the  trustee  or  not,"  as  where 
the  property  on  which  the  taxes  are  owing  is  exempt  by  law 
and  does  not  pass  to  the  trustee/^  or  where  mortgaged  prop- 
erty never  comes  into  the  possession  of  the  trustee/*  or  where 
mortgaged  property  is  relinquished  to  the  mortgagee  because 
the  mortgaged  debt  exceeds  the  value  of  the  property/**  or 
wiiere  mortgaged  property  is  sold  by  the  trustee  free  of  liens."*^ 

head  of  everything — even  above  the  79,  11  Am  B.  R.  481 ;  In  re  Tilden, 

expenses    of   preserving   the    estate  91  Fed.  Rep.  500,  i  Am.  B.  R.  300; 

or  the  cost  of  administering  it."  In   re   Prince   &   Walter,    131    Fed. 

"Chattanooga  v.   Hill    (C.   C.  A.  Rep.  546,   12  Am.   B.   R.  675. 

6th  Cir.),  139  Fed.  Rep.  600,  15  Am.  "In  re  Tilden,  91  Fed.  Rep.  500, 

B.  R.   195;  Waco  v.  Bryan   (C.  C.  i  Am.  B.  R.  300. 

A.  5th   Cir.),   127  Fed.  Rep.  79,  11  '"Waco  v.   Bryan    (C.   C.  A.  Sth 

Am.    B.    R.  481;   In   re   Tilden,   91  Cir.),  127  Fed.  Rep.  79,  11  Am.  B. 

Fed.   Rep.   500,    i    Am.    B.    R.   300;  R.  481. 

In   re    Prince   &   Walter,    131    Fed.  "Chattanooga  v.  Hill    (C.  C.  A. 

Rep.    546,    12    Am.    B.    R.    675.  6th  Cir.),  139  Fed.  Rep.  600,  15  Am. 

"/n    re    Stalker,    123    Fed.    Rep.  B.   R.   195 

961,  10  Am.  B.  R.  710;  In  re  Brink-  The  mortgagee  is  free  to  agree  to 

er,  128  Fed.  Rep.  634,  12  Am.  B.  R.  pay    taxes    on    condition    that    the 

122;    In    re   Veitch,    loi    Fed.    Rep.  property  is  surrendered  to  him,  as 

251,   4   Am.    B.    R.    112.  was  done  in  Equitable  Loan  Co.  v. 

"Chattanooga  v.   Hill    (C.  C.  A.  Moss  (C.  C.  A.  5th  Cir.),  125  Fed. 

6th    Cir.),    139   Fed.    Rep.    600,    15  Rep.  609,  11  Am.  B.  R.  iii. 

Am.    B.    R.    195;    Waco    v.    Bryan  '"In  re  Prince  &  Walter,  131  Fed. 

(C.  C.  A.  5th  Cir.),  127  Fed.  Rep.  Rep.  546,  12  Am.  B.  R.  675;  In  re 


THE    DISTRIBUTION     OF    THE    ESTATE. 


771 


Whether  a  purchaser  at  a  sale  may  be  required  to  pay  taxes 
depends  upon  the  contract  of  sale.  If  he  buys  subject  to  liens, 
he  must  pay  the  taxes.-^  If  he  buys  free  of  all  liens,  the  trustee 
must  pay  the  taxes."  To  prevent  any  controversy  on  this  point 
the  order  of  sale  made  by  the  referee  should  specify  particu- 
larly what  taxes  to  be  paid  by  the  purchaser.  Where  a  pur- 
chaser or  other  person  pays  taxes,  he  is  not  entitled  to  priority 
by  invoking  the  doctrine  of  equitable  subrogation  to  any  right 
of  the  sovereign  in  this  respect."^ 

Funds  of  the  bankrupt  which  have  come  into  the  hands  of 
the  trustee  are  subject  to  taxation  in  the  district  where  they 
would  be  taxable  if  bankruptcy  had  not  intervened.-*  If  prop- 
erty in  the  hands  of  an  assignee,  trustee,  executor  or  adminis- 
trator is  not  taxable  under  the  local  law,  it  is  not  taxable  in  the 
hands  of  a  trustee  in  bankruptcy.  Where  property  in  the  pos- 
session of  the  bankrupt  is  taxed  by  the  local  authorities,  the 
trustee  should  pay  these  taxes  in  the  same  manner  as  the  taxes 
due  at  the  time  of  bankruptcy  are  paid. 

A  claim  for  taxes  may  be  proved  like  any  other  claim,  but 
it  is  not  necessary  to  file  a  proof  of  claim.-^  Taxes  are  regu- 
larly paid  by  order  of  the  referee.  When  the  trustee  files  the 
receipts  of  the  proper  public  officers  for  such  payment,  he  is 
credited  with  the  amount  thereof,  and  in  case  any  question 


Keller,  109  Fed.  Rep.  131,  6  Am. 
B.  R.  351. 

But  see  In  re  Veitch,  loi  Fed. 
Rep.  251,  4  Am.  B.  R.  112,  and  In 
re  Brinker,  128  Fed.  Rep.  634,  12 
Am.  B.  R.  122. 

"  In  re  Hollenfeltz,  94  Fed.  Rep. 
629,  2  Am.  B.  R.  499;  In  re  Gerry, 
112  Fed.  Rep.  958,  7  Am.  B.  R. 
459;  In  re  Brinker,  128  Fed.  Rep. 
634,  12  Am.  B.  R.  122;  In  re  Fisher 
&  Co.,  148  Fed.  Rep.  907. 

""/»  re  Prince  &  Walter,  131  Fed. 
Rep.  546,  12  Am.  B.  R.  675;  In  re 
Keller,  109  Fed.  Rep.  131,  6  Am. 
B.  R.  351- 

^In  re  Ikinkcr,  128  Fed.  Rep. 
634,  12  Am.  B.  R.  122;  Cooper  Gro- 


cery  Co.   V.    Bryan    (C.    C.    A.    5th 
Cir.),  127  Fed.  Rep.  815,  11  Am.  B. 

R-  734. 

"  Swarts  V.  Hammer,  194  U.  S. 
441,  48  L.  Ed.  1060,  II  Am.  B.  R. 
708,  affirming  120  Fed.  Rep.  256, 
9  Am.  B.  R.  691;  In  re  Sims,  118 
Fed.  Rep.  356,  9  Am.  B.  R.  162; 
In  re  Conhaim,  100  Fed.  Rep.  268, 
4  Am.  B.  R.  58;  In  re  Keller,  109 
Fed.  Rep.  131,  6  Am.  B.  R.  351 ; 
In  re  Fisher  &  Co.,  148  Fed.  Rep. 
907. 

-•'  In  re  Harvey,  122  Fed.  Rep. 
745,  10  Am.  B.  R.  567;  In  re  Prince 
&  Walter,  131  Fed.  Rep.  546,  12 
Am.   B.   R.  675. 


"Jll  LAW    AXn    rROCFF.mXCS   TX    BAXKRUPTCV 


arises  as  to  the  anunitit  or  legality  ^^\  any  siu-Ji  tax,  the  mat- 
ter may  he  heard  aiul  determined  hy  the  eourt.''"' 

§  267b.  First :  Costs  of  preserving  the  estate. 

Of  the  debts  enlitleil  to  payment  in  fnll  next  after  the  taxes 
and  before  paying  any  debts  of  general  creditors,  the  first  class 
in  order  of  payment  is  "the  actual  and  necessary  cost  of  pre- 
serving the  estate  subsequent  to  filing  the  petition."  ^ 

This  is  really  a  cost  of  administration,  which  may  be  includ- 
eil  in  the  third  class  of  debts  enumerated  in  Section  CAh,  but 
Congress  saw  fit  to  provide  for  the  payment  of  the  cost  of  pre- 
serving the  estate  in  advance  of  other  costs  of  administration. 
It  includes  rent,  charges  for  storage,  insurance  and  the  com- 
pensation of  a  receiver,  marshal,  watchman  or  keeper  in  car- 
ing for  and  preserving  the  property.  In  fact,  it  includes  every 
necessary  expense  incident  to  the  preservation  of  the  estate 
of  the  bankrupt  from  the  time  the  petition  is  filed."  It  does 
not  include  all  expenses  and  disbursements  of  receivers  and 
other  officers  pending  adjudication  and  the  appointment  of 
trustees,  but  only  such  expenses  of  officers  or  parties  as  are 
incurred  in  preserving  the  estate.  The  court  is  not  bound  to 
allow  the  full  sum  actually  expended,  but  only  so  much  as  it 
shall  find  to  have  been  reasonable  and  necessary  for  the  pur- 
pose.^ 

The  actual  and  necessary  expenses  incurred  for  preserving 
the  property  should  be  reported  in  detail,  under  oath,  and  ex- 
amined and  approved  or  disapproved  by  the  court.*  Section 
62  provides  the  manner  of  proving  and  allowing  such  claims 
and  for  the  payment  of  such  expenses.  Section  646  provides 
the  order  in  which  they  shall  be  paid. 

This  provision  relates  only  to  the  preservation  of  the  prop- 

-'  B.  A.  1898,  Sec.  64a.       .  Rep.   643.   648,    14   Am.    B.    R.    78 ; 

'  B.  A.  1898,  Sec.  64^,  clause  i.  In  re  LiUle  River  Lumber  Co.,  loi 

""In  re  Allen,  96  Fed.   Rep.   512,  Fed.  Rep.  558,  3  Am.  B.  R.  682. 
3  Am.   B.   R.   38;   In   re   Scott,   99  ^  In   re   Allen,  96  Fed.   Rep.   512, 

Fed.   Rep.  404,   3   Am.   B.   R.  625;  3   Am.  B.  R.  38. 
In  re  Alison  Lumber  Co.,  T37  Fed.  *  B.  A.   1898,   Sec.  62. 


THE    DISTRIBUTION     OF    THE    ESTATE. 


773 


erty  after  the  petition  is  filed.  The  courts,  however,  will  allow 
a  receiver  or  assignee  or  his  attorney  pay  for  services  rendered 
in  preserving  the  estate  prior  to  the  tiling  of  the  petition  in  so 
far  as  such  services  are  beneficial  to  the  estate.^ 

§  167c,  Second :  Filing  fees   and    expenses    of   recovering 
property. 

Of  the  debts  entitled  to  payment  in  full  next  after  the  taxes, 

and  before  paying  any  debts  of  general  creditors,  the  second 

class  in  order  of  payment  is  the  tiling  fees  paid  by  creditors 

in    involuntary   cases, ^    and.    since   the   amendment   of    1903, 

where  property  of  the  bankrupt,  transferred  or  concealed  by 

him,  either  before  or  after  the  filing  of  the  petition,  shall  have 

been  recovered  for  the  Ijenefit  of  the  estate  of  the  bankrupt  by 

the  efforts  and  at  the  expense  of  one  or  more  creditors,  the 

reasonable  expenses  of  such  recovery."     Such  expenses  were 

allowed  by  the  court  under  its  general  equity  powders  before 

the  amendment.^ 

§  i67d.  Third :  Costs  of  administration. 

Of  the  debts  entitled  to  payment  in  full  next  after  the  taxes 
and  before  paying  any  debts  of  general  creditors,  the  third 
class  in  order  of  payment  is  the  cost  of  administration.^ 

Cost  of  administration  includes  the  fees  and  mileage  payable 
to  witnesses  as  provided  by  the  laws  of  the  United  States.* 
It  must  appear  that  the  witness  fees  have  been  actually  paid 


'  Randolph  v.  Scruggs,  igo  U.  S. 
533,  47  L.  Ed.  1 165,  10  Am.  B.  R. 
I ;  In  re  Chase  (C.  C.  A.  ist  Cir.), 
124  Fed.  Rep.  753,  10  Am.  B.  R. 
677;  Summers  v.  Abbott  (C.  C.  A. 
8th  Cir.),  122  Fed.  Rep.  36,  10  Am. 

B.  R.   254;    fn   re   Zier  &   Co.    (C. 

C.  A.  7th  Cir.),  142  Fed.  Rep.  102, 
15   Am.    B.    R.   646. 

'  B.  A.  1898,  Sec  64b.  clause  2. 
In  re  Silverman,  97  Fed.  Rep.  325, 
3  Am.  B.  R.  227. 


See  also  B.  A.  189S,  Sec.  se; 
Gen.   Ord.   34;    Sec.   88,   ante. 

^32  Stat,  at  L.  797. 

'  In  re  Lesser,  100  Fed.  Rep. 
4,13.  3  Am.  B.  R.  815,  affirmed  by 
C.  C.  A.  2d  Cir.,  in  5  Am.  B. 
R.  320;  In  re  Allen,  96  Fed.  Rep. 
512,  3  Am.  B.  R.  38. 

'  B.  A.  1898.  Sec.  64b.  clause  3. 

'B.  A.  1898,  Sec.  64/),  clau.se  3, 
R.  S.  Sees.  848,  849;  HofFschlaepcr 
Co.  V.  Young  Nap,  12  Am.  B.  R. 
526. 


774  LAW     AM)    I'ROCEEDINCS    I\    HAXKIUTTCY. 

before  they  are  entitled  to  priority. '*  Mileai^e  can  only  be 
allowed  npon  sbowini;-  tbe  residence  or  place  of  bnsiness,  or 
the  distance  necessarily  traveled  by  tbe  witness.' 

Costs  of  administration  also  inchule  one  reasonable  attor- 
ney's fee  t'or  professional  scr\iccs  actnrdly  rendered,  irrespec- 
tive of  tbe  nnniber  of  attorneys  employed,  to  tbe  petitioning 
creditors  in  involnntary  cases,  to  tbe  bankrni)t  in  in\'(^luntary 
cases  wbile  performins;-  tbe  dnties  by  tbe  statnte  ])rescril)ed 
and  to  tbe  bankrnpt  in  volnntary  cases,  as  tbe  conrt  may 
allow. ^  it  will  be  observed  tbat  attorney's  fees  are  allowed  as 
costs  of  administration  in  tbree  classes  of  cases.  Tbe  priority 
is  allowed  for  professional  services  only,**  and  only  a  reason- 
able fee  for  services  actually  rendered,^  the  amount  of  which  is 
to  be  determined  by  the  court.^  The  subject  of  attorney's  fees 
is  considered  elsewhere." 

The  actual  and  necessar)'-  expenses  incurred  by  officers  in 
the  administration  of  an  estate  are  entitled  to  priority  under 
this  clause.'"  Such  expenses  include  rent,  premiums  for  insur- 
ance, money  paid  for  care  and  storage  of  the  property,  for 
marshal's  fees,  for  advertising  and  giving  notice  to  creditors, 
for  premiums  to  bonding  company  for  trustee's  bond,  to  a 
stenographer  employed  under  Section  38a,  clause  5,  for  trav- 
eling and  incidental  expenses  of  a  referee  or  trustee  and  those 
of  any  clerk  or  other  officer  attending  him  in  the  performance 

^  Hoffschlaeger  Co.  V.  Young  Nap,  Mfg.  Co.,  ti8  Fed.  Rep.  892,  10 
12  Am.  B.  R.  526.  Am.  B.  R.  552. 

*  In  re  Todd,   109  Fed.  Rep.  265,  "See    Sec.   41a,  ante. 

6  Am.  B.  R.  88.  '"In    re    Daniels,    130    Fed.    Rep. 

°  B.  A.  1898,  Sec.  64^,  clause  3.  597,  12  Am.  B.  R.  446 ;  In  re  Tel)o, 

"  In  re  Connell  &  Sons,  120  Fed.  loi  Fed.  Rep.  419,  4  Am.  B.  R.  235 ; 

Rep.  846,  9  Am.   B.  R.  474.  In   re   Carolina   Cooperage   Co.,   96 

' /m  re  Rosenthal,   120  Fed.   Rep.  Fed.   Rep.  950,   3   Am.   B.   R.    154; 

848,  9  Am.  B.  R.  626;  In  re  Carr,  In  re  Mammoth  Pine  Lumber  Co., 

117   Fed.    Rep.    572,   9   Am.    B.    R.  116    I'^d.    Rep.    731,    8   Am.    B.    R. 

58.  651 ;  In  re  Allen,  96  Fed.  Rep.  512, 

*  In  re  Curtis  (C.  C.  A.  7th  3  Am.  B.  R.  38;  In  re  Scott,  99 
Cir.),  100  Fed.  Rep.  784,  4  Am.  Fed.  Rep.  404,  3  Am.  B.  R.  625; 
B.  R.  17;  Smith  v.  Cooper  (C.  C.  In  re  Pierce,  iii  Fed.  Rep.  516, 
A.  5th  Cir.),  120  Fed.  Rep.  730,  ti  6  Am.  B.  R.  747;  In  re  Prince  & 
Am.    B.    R.    755;    In    re    Goldville  Walter,  131  Fed.  Rep.  546,  12  Am. 


THE    DISTRIBUTION     OF    THE    ESTATE. 


775 


of  his  duties,  and  any  other  necessary  expense  actually  nicurred 
by  the  referee,  trustee,  receiver  or  marshal  incident  to  the  man- 
agement or  settlement  of  the  estate.  The  expenses  of  a  sale 
including  advertisement,  appraisement,  auctioneer's  fees,  etc., 
are  entitled  to  priority  as  costs  of  administration.  Such  ex- 
penses are  usually  paid  out  of  the  proceeds  of  the  sale,  which 
belongs  to  the  general  creditors.  \\'here  a  court  of  bankruptcy 
sells  mortgaged  property,  it  is  only  fair  that  the  secured  cred- 
itor bear  his  proportion  of  these  expenses.^^  Money  advanced 
for  expenses  by  the  bankrupt  or  other  person  is  entitled  to 
priority  as  costs  of  administration.^'-  A  deficiency  resulting 
from  continuing  the  business  of  the  bankrupt  has  been  allowed 
priority  over  general  creditors,^''  but  not  as  against  claims  of 
secured  creditors.^*  Costs  awarded  against  a  trustee  in  a  state 
court  have  been  ordered  paid  in  full,  but  not  a  judgment  for 
damages  for  detention  of  property.^^ 

The  expenses  of  administration  must  be  reported  in  detail, 
under  oath,  and  examined  and  approved  by  the  court.^*'  The 
accounts  should  be  itemized,  with  proper  vouchers  when  vouch- 
ers can  be  procured,  and  the  affidavit  should  state  that  the 
amounts  charged  were  necessary,  just  and  reasonable."  The 
expenses  of  a  trustee  are  usually  made  in  his  regular  reports 
to  the  court  and  are  allowed  upon  confirmation  of  such  reports. 
If  an  officer  fails  to  itemize  and  verifv  his  account,  the  court 


B.  R.  67s ;  In  re  Lengert  Wagon 
Co.,  no  Fed.  Rep.  927,  6  Am.  B. 
R-  535;  /«  ''<?  Pattee,  143  Fed.  Rep. 
J94,  16  Am.  B.  R.  450;  In  re  Castle- 
berry,  143  Fed.  Rep.  1021,  16  Am. 
B.  R.  431- 

"/n  re  Utt  (C  C.  A.  7th  Cir.), 
105  Fed.  Rep.  754,  5  Am.  B.  R. 
383;  In  re  Alison  Lumber  Co.,  137 
Fed.  Rep.  643,  14  Am.  B.  R,  78; 
In  re  Cogley,  107  Fed.  Rep.'  jt,,  S 
.■\m.  B.  R.  731 ;  McNair  v.  Mcln- 
tyre  (C.  C.  A.  4th  Cir.),  113  Fed. 
Rep.  113,  7  Am.  B.  R.  638;  In  re 
Goldsmith,  118  Fed.  Rep.  763,  9  Am. 
15.   K.  419. 


"  Gen.  Ord.  10 ;  In  re  Hatcher, 
145  Fed.  Rep.  658,  16  Am.  B.  R. 
722. 

"In  re  Prince  &  Walter,  131  Fed. 
Rep.  546,  12  Am.  B.  R.  675. 

"/w  re  Bourlier  Cornice  &  Roof- 
ing Co.,  133  Fed.  Rep.  958,  13  Am. 
B.  R.  585;  In  re  Prince  &  Walter, 
131   Fed.   Rep.   546,   12  Am.   B.   R. 

675. 

"'In  re  Neely,  108  Fed.  Rep.  371, 
5  Am.  B.  R.  836. 

'"B.  A.  1898,  Sec.  62;  Gen.  Ords. 
19  and  26. 

"  Gen.  Ords.  19  and  20. 


77('>  LAW  AND  rR(X'vi:nix(;s  in  uax-kkittcv. 

will  not  allow  it.'''  It  is  not  necessary  to  ojve  crcditiM-s  notice 
before  allowini;'  items  dI"  expense  as  a  cost  of  administration.'" 
The  court  is  not  hound  to  allow  the  full  sum  actually  expended, 
but  onlv  so  much  as  it  shall  lind  lo  have  been  reasonable  and 
necessary  for  ihe  purpose. ■"  Section  ()2  provides  the  manner 
of  provino-  and  allowim;-  expenses  of  officers  in  administering 
an  estate  autl  iox  the  payment  ^A  such  accounts.  Section  646 
gi\es  such  accounts  priority  of  payment. 

§  267e.  Fourth  :  Labor  claims. 

Of  the  debts  entitled  to  payment  next  after  the  taxes  and 
before  paying  any  debts  of  general  creditors  the  fourth  class  in 
order  of  payment  is  wages  due  to  workmen,  clerks,  traveling  or 
city  salesmen  or  servants  which  have  been  earned  within  three 
months  before  the  date  of  the  commencement  of  proceedings, 
not  to  exceed  three  hundred  dollars  to  each  claimant.^ 

The  claim  of  a  salesman  employed  in  a  shop  is  entitled  to 
priority."  The  claim  of  an  apprentice  for  labor  done  after  his 
apprenticeship  under  an  agreement  for  a  specific  compensation 
is  entitled  to  priority  as  the  claim  of  a  workman.''  The  fact  that 
a  laborer  is  paid  by  the  piece  does  not  do  away  with  his  right  to 
priority.*  A  claim  of  one  temporarily  employed  in  adjusting 
the  books  and  accounts  of  the  bankrupt  is  entitled  to  priority 
as  a  clerk.^  So  long  as  a  hona  fide  contract  for  hiring  exists 
and  the  servant  does  all  that  the  master  requires  of  him, 
the  wages  are  earned  so  vacation  pay  is  "wages  earned"  and 

"7«    re    Daniels,    130    Fed.    Rep.  included  by  the  amendment  of  June 

597,  12  Am.  B.  R.  446;  hi  re  Caro-  15,  1906,  34  Stat,  at  L. 

lina   Cooperage    Co.,   96   Fed.    Rep.  "/m  re  Flick,   105  Fed.  Rep.  503, 

950,  3  Am.  B.  R.  154;  In  re  Hoyt,  5  Am.  B.  R.  465. 

119    Fed.    Rep.    987,   9   Am.    B.    R.  ^ /»    re   Steiner,    No.    I33S4    Fed. 

574.  Cas.,   I    Pa.  L.  J.  368. 

"In  re  Stotts,  93  Fed.  Rep.  438,  Un    re    Gurewitz    (C.    C.    A.    2d 

I  Am.  B.  R.  641.  Cir.),  121  Fed.  Rep.  982,  10  Am.  B. 

^  In  re  Allen,  96  Fed.   Rep.  512,  R.  350. 

3  Am.  B.  R.  38.  °/i.r    parte    Rockett,    No.     11977 

^  B.  A.  1898,  Sec.  64^,  clause  4.  Fed.  Cas.,  2  Low.  522. 

Traveling  and  city  salesmen  were 


THE    DISTRIBUTION     OF    THE    ESTATE.  /// 

"clue"  although  payment  is  deferred.''  A  father  is  entitled 
to  priority  for  the  services  rendered  by  his  minor  son  as  a 
workman.'  But  where  the  claim  arises  under  an  entire  con- 
tract for  labor,  including  the  services  of  a  team,  it  can  not  be 
apportioned,  and  is  not  entitled  to  priority.^ 

An  assignee  of  wages  due  for  labor  is  entitled  to  priority 
of  payment,  whether  the  assignment  was  made  before  or 
after  the  commencement  of  bankruptcy  proceedings."*  The 
Supreme  Court  has  said.'"  "The  priority  is  attached  to  the 
debt  and  not  to  the  person  of  the  creditor;  to  the  claim 
and  not  to  the  claimant."  A  person  who  loans  money  to 
pay  wages  is  not  subrogated  to  the  rights  of  the  laborers  or 
entitled  to  priority."  The  reason  is  that  where  a  claim  for 
wages  is  paid,  it  is  extinguished  and  no  priority  can  attach 
to  it.  Where  the  claim  is  sold  or  assigned  it  still  exists  and 
is  entitled  to  priority.  It  is  a  general  rule  in  equity  that  one 
who  furnished  money  to  pay  preferential  claims  is  not  enti- 
tled to  priority  over  other  creditors.  Subrogation  exists  by 
virtue  of  contract  with  the  claimant  and  not  by  any  agree- 
ment with  the  debtor.  A  person  who  loans  money  to  pay 
labor  claims  is  a  general  creditor. 

The    claims    of'  a    traveling    salesman,'-    an    agent    sell- 
ing on  commission,''  the  president  '^  or  general  manager  '^ 

'  In    re    Gladding    Co.,    120    Fed.  "  Shropshire,   Woodliff   &   Co.  v. 

Rep.   709,  9  .Am.   B.  R.  700.  Bush,  204  U.  S.   186. 

'/n  re   Harthorn,   No.  6162  Fed.  "Theobald  v.   Hammond    (C.  C. 

Cas.,  4  N.  B.  R.  103.  A.   6th    Cir.),    133    Fed.    Rep.    525; 

'In    re    Blackman,    6    Chi.    Leg.  In  re  North  Carolina  Car  Co.,  127 

News.  18.  Fed.  Rep.   178,   n   Am.  B.  R.  488; 

'In   re   Campbell,    102  Fed.   Rep.  In  re  St.  Louis  Ice   Mfg.  &   Stor- 

686,  4  Am.   B.  R.   535.  age  Co.,  147  Fed.  Rep.  752. 

"Shropshire,    Woodliff   &    Co.    v.  '= /«  re  Greenewald,  99  Fed.  Rep. 

Bush,  204  U.   S.    186  ;  In  re  Har-  705,  3  Am.  B.  R.  696;  In  re  Scan- 

mon,  128  Fed.  Rep.  170,  11  Am.  B.  Ian,  97  Fed.  Rep.  26,  3  Am.  B.  R. 

R.    64;    In   re   Campbell,    102    Fed.  202. 

Rep.  686,  4  Am.  B.  R.  535;  ^»  re  "In  re  Mayer,  loi  Fed.  Rep.  227, 

Brown,  No.  1974  Fed.  Cas.,  4  Ben.  4  Am.  B.  R.  119. 

1^2.                                        •  "  ^»   re  Carolina   Cooperage   Co., 

But  see  In  re  Westlund.  99  Fed.  96  Fed.  Rep.  950,  3  .Am.  R.  R.  I54- 

Rep.  399,  3  Am.   B.   R.  646.  "In     re     Grubbs-Wiley    Grocery 

Co.,  96  Fed.  Rep.  183,  2  Am.  B.  R. 


/  / 


8 


LAW    AND    rUDCEKDlNGS    IN    UAXKRl'PTCY. 


of  a  corporation  nrc  not  entitled  to  ]M-iority.  .\n  em- 
ployee is  not  entitled  to  prio.ritN'  in  ])a\nient  i»l'  wa^es  for  an 
nnexpired  term  r.f  cniploN  nient,  wlieic  he  was  \\i\)ni;- fully 
ilisehari^'ed.'"  The  priority  lor  wages  extends  to  wages  earned 
within  three  months  immediately  preeeding  the  hling"  of  ihe 
petition,  ami  not  the  three  months  last  emi)loyed.''  A  person 
ha\ing"  a  labor  claim  entitled  to  priority  does  not  lose  his 
priority  b}-  haxing  obtained  a  jndgnient  on  it  within  four 
months  prior  to  the  liling  of  the  petition. ^^ 

\\  here  a  state  statute  gives  priority  to  w'ages  earned  more 
than  three  months  prior  to  insolvency  proceedings,  such  claims 
are  not  entitled  to  priority  under  Section  64b,  clause  5,  of  the 
bankrupt  act.  as  Section  64b,  clause  4.  is  held  to  exclude  claims 
for  wages  from  Section  64b,  clause  5.^°  Where,  however,  the 
state  law  gives  not  a  priority,  but  a  lien  on  the  bankrupt's 
property  and  this  lien  becomes  fixed  before  the  petition  in 
bankruptcy  is  filed,  it  will  be  respected.-"  If  the  labor  claimant 
fails  to  comply  the  state  statute  so  as  to  create  a  lien,  his  claim 
is  not  entitled  to  priority.-^ 

§  267f.     Debts  entitled  to  priority  under  the  laws  of  the  states 
or  United  States. 

Of  the  debts  entitled  to  payment  next  after  the  taxes  and  be- 
fore paying  any  debts  of  general  creditors  the  fifth  class  in 
order  of  payment  is  debts  owing  to  any  person  who  by  the 
laws  of  the  states  or  the  United  States  is  entitled  to  priority.^ 


'"/n   re    Pevear,    No.    11053    Fed. 
Cas.,  17  N.  B.  R.  461. 
Fed.  Rep.  96,  i  Am.  B.  R.  234. 

''  In  re  Rouse,  Hazard  &  Co.,  91 
Fed.  Rep.  96,  i   Am.  B.  R.  234. 

"/«  re  Anson,  loi.  Fed  Rep.  698, 
4  Am.   B.   R.  231. 

"In  re  Rouse,  Hazard  &  Co.  (C. 
C.  A.  7th  Cir.),  91  Fed.  Rep.  96,  i 
Am.  B.  R.  234;  In  re  Shaw,  109 
Fed.  Rep.  782,  6  Am.  B.  R.  501 ; 
In  re  Slomka    (C.  C.  A.  2d  Cir.), 


122    Fed.    Rep.    630,    9    Am.    B.    R. 

635- 

""/;;  re  Lawler,  no  Fed.  Rep.  135, 
6  Am.  B.  R.  184;  In  re  Laird  (C 
C.  A.  6th  Cir.),  109  Fed.  Rep.  550, 
6  Am.  B.  R.  I ;  see  also  In  re  City 
Trust  Co.  (C.  C.  A.  6th  Cir.),  121 
Fed.  Rep.  706,  10  Am.  B.  R.  231. 

"' /»  re  Burton  Bros.  Mfg.  Co., 
134  Fed."  Rep.  157,  14  Am.  B.  R. 
218. 

'  B.  A.  1898,  Sec.  64^,  clause  5. 


THE    DISTRIBUTION     OF    THE     ESTATE. 


79 


This  clause  does  not  adopt  the  state  laws  with  reference  to  the 
priority  of  labor  claims." 

Where  a  claimant  has  a  lien  he  is  preferred  not  because  Sec. 
64b,  clause  5,  of  the  bankrupt  act,  gives  him  priority,  but  be- 
cause the  bankrupt  act  recognizes  all  valid  liens,''  which  it 
does  not  specifically  dissolve.  Thus  where  a  state  law  gives  a 
lien  for  one  year's  rent,  on  the  goods  on  the  premises,  the 
landlord  is  entitled  to  the  proceeds  of  the  sale  of  such  goods  up 
to  that  amount.'  Where  no  lien  is  created  in  favor  the  land- 
lord his  claim  for  rent  is  not  entitled  to  priority.^  A  mere 
judgment  is  not  entitled  to  jiriority  though  due  to  the  state ;  ^ 
and  when  a  judgment  becomes  a  lien  depends  upon  the  laws 
of  the  state  in  which  it  is  asserted.'  This  clause  of  the  bank- 
rupt act  does  not  make  all  liens  under  the  state  laws  equal,  but 
leaves  them  the  priorities  which  the  state  law  gives  them.'*  So 
where  the  state  statutes  give  a  lien  to  both  landlord  and  a  wage- 
earner  their  priority  will  be  determined  by  the  state  law.** 
Where  the  state  law  gives  no  priority  over  other  creditors  for 
money  due  the  county  by  a  delinquent  tax  collector  it  is 
not  entitled  to  priority  in  bankruptcy.^*'  A  state  law  exempting 
wages  or  salary  will  be  enforced  in  bankruptcy.^^  AMiere  a 
landlord  distrains  for  rent  after  adjudication  he  will  not  be  en- 


'  In  re  Rouse,  Hazard  &  Co.  (C. 
C.  A.  7th  Cir.),  91  Fed.  Rep.  96, 
I  Am.  B.  R.  234;  In  re  Shaw,  109 
Fed  Rep.  782,  6  Am.  B.  R.  501 ;  In 
re  Slomka  (C.  C.  A.  2d  Cir.),  122 
Fed.  Rep.  630,  9  Am.  B.  R.  635. 
Where,  however,  the  labor  claimant 
has  acquired  a  lien  it  may  be  valid 
against  the  trustee  in  bankruptcy ; 
In  re  Lawler,  no  Fed  Rep.  135,  6 
Am.  B.  R.  184;  In  re  Laird  (C.  C. 
A.  6th  Cir.),  109  Fed.  Rep.  550,  6 
Am.  B.  R.  I ;  see  also  In  re  City 
Trust  Co.  (C.  C.  A.  6th  Cir.),  121 
Fed.   Rep.  706,    10  Am.   B.  R.  231. 

"B.  A.  1898,  Sec.  67^. 

'hi  re  Mitchell,  116  Fed.  Rep. 
87.  S  Am.   I'..  R.  324. 


°/n  re  Whealton  Restaurant  Co., 
143  Fed.  Rep.  921,  16  Am.  B.  R. 
294. 

'In  re  Falls  City  Shirt  ]\Ifg. 
Co.,  98  Fed.  Rep.  592,  3  Am.  B.  R. 

437. 

'  Pence  v.  Cochran,  6  Fed.  Rep. 
269;  In  re  Lowe,  19  Fed.  Rep.  589. 

^  Falls  City  Shirt  Mfg.  Co.,  98 
Fed.  Rep.   592,  3   Am.   B.   R.  437. 

'''In  re  Byrne,  97  Fed.  Rep.  762, 
3   Am.    B.    R.   268. 

'"  //;  re  Waller,  142  Fed.  Rep.  883. 
15  \m.  B.  R.  753. 

" /»  re  Ilolden,  127  Fed.  Rep. 
980,    \2   Am.    B.    R.   96. 


780 


1  AW    AXD    PROCKF.DTXr.S   TX    RAXKRUPTCY. 


titled  to  the  amount  distrained  for  as  the  property  is  in  ciisfocUa 
/I'i^/V.  hut  win  he  iL;i\en  the  jiriority  which  the  state  hiw  gives  to 
a  hmdlord  in  ease  o\  execution.'-  W  here,  as  in  Pennsylvania, 
the  \endor  has  no  hen  on  real  estate  lor  the  purchase  price, 
hut  a  hare  Ici^al  title,  it  the  trustee  of  the  vendee  severs  part  of 
the  structures  and  sells  them,  the  proceeds  go  to  tiie  general 
crctlitors/^ 

The  insolvency  laws  of  the  states  are  considered  as  remain- 
ing in  force  since  the  passage  of  the  hankruptcy  act,  so  where 
these  laws  give  priority  to  certain  debts  when  the  estate  is  ad- 
ministered in  insolvency,  the  same  priorities  will  ordinarily  be 
allowed  when  the  estate  is  administered  in  bankruptcy.^*  If 
the  state  statute  gives  not  a  priority,  but  a  lien,  and  the  lien 
is  dissolved  by  the  bankruptcy  proceedings,  the  leinor  is  en- 
titled to  no  priority.^^  Where  the  priority  given  l)y  the  state 
law  was  to  claims  for  compensation  and  for  expenses  incurred 
by  an  assignee  in  insolvency,  a  doubtful  question  arose  when 
the  assignment  was  set  aside  by  the  bringing  of  bankruptcy 
proceedings  within  four  months.  It  was  held  that  such  a 
general  assignment  was  in  fraud  of  the  bankrupt  act  and  there- 
fore such  debts  were  not  only  entitled  to  priority,  but  were 
not  even  provable  claims."     This  doctrine  was  repudiated  by 


^- In  re  Duble,  117  Fed.  Rep.  794, 
9  Am.  B.  R.  121. 

"/n  re  Clark,  118  Fed.  Rep.  358, 
9  Am.  B.  R.  252.  See  also  In  re. 
Hamilton,  102  Fed.  Rep.  683,  4  Am. 
B.  R.  543. 

''In  re  Worcester  Co.  (C.  C.  A. 
1st  Cir.),  102  Fed.  Rep.  808,  4  Am. 
B.  R.  496;  In  re  Crow,  116  Fed. 
Rep.  no,  7  Am.  B.  R.  545;  In  re 
Daniels,  no  Fed.  Rep.  745,  6  Am. 
B.  R.  699;  In  fc  Lewis,  99  Fed. 
Rep.  935..  4  Am.  B.  R.  51. 

In  re  Beaver  Coal  Co,  107  Fed. 
Rep.  98,  5  Am.  B.  R.  787,  seems 
contra. 

Where  the  priority  is  given  in  the 


settlement  of  a  partnership  no  pri- 
ority will  be  given  in  administration 
of  the  estate  of  one  of  the  partners 
in  bankruptcy.  In  re  Daniels,  no 
Fed.   Rep.   745,  6  Am.   B.  R.  699. 

''"In  re  Allen.  96  Fed.  Rep.  512, 
3  Am.  B.  R.  38;  In  re  Young,  96 
Fed.  Rep.  606,  2  Am.  B.  R.  673. 

^°  Steaj-ns  v.  Flick,  103  Fed.  Rep. 
919,  4  Am.  B.  R.  723;  In  re  Peter 
Paul  Book  Co.,  104  Fed.  Rep.  786, 
5  Am.  B.  R.  105 ;  Wilbur  v.  Watson, 
in  Fed.  Rep.  493,  7  Am.  B.  R.  54; 
In  re  Tatum,  112  Fed.  Rep.  50,  7 
Am.  B.  R.  52;  contra  In  re  Scholtz, 
106  Fed.  Rep.  834,  5  Am.  B.  R. 
782. 


THE    DISTRIBUTION    OF    THE    ESTATE.  781 

the  supreme  court  in  Randolph  v.  Scruggs,^'  and  it  is  now  set- 
tled that  an  assigneee  or  his  attorney  are  entitled  to  compensa- 
tion for  services  rendered  either  before  or  after  the  filing  of  the 
petition,  if  the  services  rendered  were  beneficial  to  the  estate, 
and  this  claim  is  entitled  to  priority/® 

Costs  and  sheriff  fees  incurred  in  an  attachment  proceeding 
within  four  months  of  bankruptcy,  which  is  avoided  by  Section 
67/,  are  not  entitled  to  priority  of  payment,  unless  there  is  a 
provision  in  the  state  statute  creating  a  lien  in  favor  of  such 
charges/'*  Where  a  lien  exists  under  the  state  statute  in  favor 
of  a  sheriff  or  party  for  costs  in  such  a  proceeding  it  will  be 
recognized  in  a  court  of  bankruptcy  -°  as  where  a  lien  w^as 
created  by  attachment  proceedings  more  than  four  months  prior 
to  bankruptcy.'^ 

The  United  States  are  entitled  to  priority,  although  they  do 
not  prove  their  debt,  irrespective  of  the  form  of  indebtedness." 
Where  a  person  purchases  an  article  duty  free,  and  is  com- 
pelled to  pay  the  duty  in  order  to  get  possession  of  the  prop- 
erty, he  is  entitled  to  be  subrogated  to  the  right  of  the  United 
States  to  priority,  although  he  proves  his  debt  is  unsecured."^ 
Where  a  revenue  officer  has  paid  a  dishonored  check,  received 

"190  U.   S.  533,  47  L.  Ed.   1 165,  4  Am.   B.    R.   51;    In   re   Goldberg 

10  Am.  B.  R.  I.  &  Bros.,  144  Fed.  Rep.  566,  16  Am. 

''  Randolph  v.  Scruggs,  190  U.  S.  B.  R.  521. 

533,  47  L.  Ed.  1 165,   10  Am.  B.  R.  "' /«  re  Beaver  Coal  Co.    (C.  C. 

i;  In  re  Chase  (C.  C.  A.  ist  Cir.),  A.  9th  Cir.),   113  Fed.  Rep.  889,  7 

124   Fed.   Rep.   753,    13   Am.   B.    R.  Am.  B.  R.  542,  affirming  6  Am.  B. 

677;  Summers  v.  Abbott  (C.  C.  A.  R.  404,   no  Fed.  Rep.  630. 

8th  Cir.),  122  Fed.  Rep.  36,  10  Am.  "  R.  S.  Sec.  3466;  In  re  Stoever, 

B.  R.  254;   In  re  Pattee,   143  Fed.  127   Fed.    Rep.   394,    11   Am.    P>.    R. 

Rep.   994,    16  Am.   B.    R.   450.  345;    Lewis    v.    United    States,    92 

"/«  re  Beaver  Coal  Co.,  107  Fed.  U.    S.   618,   23   L.    Ed.   513;    U.    S. 

Rep.  98,   5   Am.   B.   R.   787;   In  re  v.  Herron,  20  Wall.  251,  22  L.  Ed. 

Copper    King,    143    I'\'d.    Rep.    649,  275;  In  re  Vetterlein,  20  Fed.  Rep. 

16  Am.    B.   R.    148;   In   re   Young,  109;   Harrison  v.  Sterry,  5  Cranch, 

96  Fed.  Rep.  606,  2  Am.  B.  R.  670;  289,  3   L.   Ed.    104. 

In   re   Allen,   96   Fed.    Rep.    512,   3  See  also  U.  S.  v.  Murphy,  15  Fed. 

Am.   B.   R.  38;   /;;   re  Daniels,   no  Rep.  589,  and  collation  of  cases  in 

Fed.    Rep.   745,   6   Am.    P.     R.   699;  note  at  the  end  of  tlie  opinion. 

In  re  Jennings,  8  Am.   1'..   R.  358-  ''^«  >'C  Kirkland,   No.   7844  Fed. 

"/m  re  Lewis,  99  Fed.  Rep.  935,  Cas.,   14  N.  B.  R.   157. 


/^J  LAW    AND   PROCEEDINGS   IX    BANKRUPTCY. 

by  him  from  a  i;o\crnnicnt  (lcl)tor.  he  is  entitled  t(^  he  sub- 
rogated to  the  rights  oi  the  United  Stales  against  sueli  debtor"* 
Where  the  I'nited  States  liave  obtained  a  judgment  against 
persons  eomi)osing  a  l>ankru[)t  firm,  thougli  for  a  debt  on 
which  one  i)i  the  partners  was  hable  as  principal  and  the  other 
as  surety,  they  are  entitled  to  priority  over  rdl  i)artnership 
creditors.-^  A  judginent  for  an  internal  revenue  penalty  re- 
covered after  the  adjudication  in  bankruptcy  is  entitled  to 
priority  of  payment.""  Debts  owing  to  the  United  States,  a 
state,  a  county,  a  district,  or  a  municipality  as  a  penalty  or  for- 
feiture are  allowed  only  for  the  amount  of  the  pecuniary  loss 
sustained  by  the  act,  transaction,  or  proceeding  out  of  wdiich 
the  penalty  or  forfeiture  arose,  with  reasonable  and  actual  costs 
occasioned  thereby  and  such  interest  as  may  have  accrued 
thereon  according  to  law."'  Hence  the  priority  of  the  United 
States  is  limited  in  respect  to  what  may  be  allowed. 

§  268.     Dividends  are  not  subject  to  attachment. 

A  dividend  in  the  hands  of  the  trustee  can  not  be  reached 
by  attachment  or  on  any  process  from  a  state  court. ^  The 
same  rule  holds  in  cases  of  money  payable  under  a  composi- 
tion with  creditors."  The  reason  for  this  rule  is  that  while 
the  funds  are  in  the  hands  of  the  trustee  they  are  a  part  of 
the  estate  of  the  bankrupt  in  the  custody  of  the  court.  Such 
money  is  not  the  property  of  the  debtor,  but  is  property  only 
wdiich  becomes  his,  wdien  he  actually  gets  it.  He  can  not 
maintain  any  suit  against  the  trustee  for  it,  nor  obtain  it  by 
any  legal  process  other  than  an  application  to  the  court  of 
bankruptcy  having  control  of  the  funds,  as  a  party  to  the  pro- 

■'/«  re  McBride,   No.  8662   Fed.  In  re  Cunningham,   No.  3478   Fed. 

Cas.,   19  N.  B.  R.  452.  ^  Cas.,  19  N.  B.  R.  276;  In  re  Kohl- 

-'/w   re   Strassburger,    No.    13526  saat,  No.  7918  Fed.  Cas.,  18  N.  B. 

Fed.  Cas.,  4  Woods,  557.  R.  57o;  In  re  Bridgman,  No.   1867 

-°/m    re    Rosey,    No.    T2066    Fed.  Fed.   Cas.,  2  N.   B.   R.  252;   Colby 

Cas.,  6  Ben.  507.  v.   Coates,  6   Cush.    (Mass.)    558. 

='B.  A.  1898,  Sec.  57/.  'In  re   Kohlsaat,   No.   7918   Fed. 

'In  re  Chisholm,  4  Fed.  Rep.  526;  Cas.,    18    N.    B.    R.    570. 
Gilbert  v.  Quinby,  i  Fed.  Rep.  Ili; 


THE    DISTRIBUTION     OF    THE    ESTATE. 


783 


ceedings  in  that  court.  The  situation  is  very  similar  to  that  of 
money  in  the  hands  of  a  pubhc  officer  due  to  a  private  person, 
and  the  famihar  cases  relating-  to  the  exemption  of  such  funds 
from  attachment,  to  prevent  them  from  passing  to  the  person 
who  claims  them,  may  be  profitably  consulted.^ 

§  269.     The  manner  of  paying  dividends. 

A  dividend  sheet,  showing  the  dividends  declared  and  pay- 
able, is  delivered  by  the  referee  to  the  trustee.'  The  trustee 
should  forthwith  give  notice  to  the  creditors  when  and  where 
a  check  or  warrant  for  the  dividend  may  be  obtained.'  The 
trustee  is  required  to  pay  dividends  within  ten  days  after  they 
are  declared  by  the  referee.^  If  the  creditor  can  not  person- 
ally attend,  the  warrant  may  be  delivered  to  a  person  author- 
ized in  writing  to  receive  it*  At  the  time  and  place  named 
in  the  notice  the  creditor  should  present  himself,  or  a  duly 
authorized  agent,  to  receive  and  receipt  for  the  dividend  war- 
rant. 

Each  dividend  is  paid  by  a  check  or  warrant  drawn  upon 
the  designated  depository  in  which  the  fund  is  deposited." 
The  warrant  or  check  must  be  signed  by  the  clerk  of  the 
court  or  by  the  trustee,  and  countersigned  .by  the  judge  of 
the  court,  or  by  a  referee  designated  for  that  purpose,  or  by 
the  clerk  or  his  assistant  under  an  order  made  by  the  judge, 
stating  the  date,  the  time,  and  the  account  for  which  it  is 
drawn.*'     The  warrant  is  usually  drawn  by  the  trustee  and 


^Buchanan  v.  Alexander,  4  How. 
20,  II  L.  Ed.  857;  McLaughlin  v. 
Swann,  18  How.  217,  15  L.  Ed.  357; 
Providence  &  Stonington  Steam.ship 
Co.  V.  Ins.  Co.,  II  Fed.  Rep.  284; 
Clarke  v.  Shaw,  28  Fed.  Rep.  356; 
Van  Brocklin  v.  Tennessee,  117  U. 
S.  151,  29  L.  Ed.  845;  Foley  v. 
Shriver,  81  Va.  568;  Roeller  v. 
Ames,  33  Minn.  132;  Gassett  v. 
Grout,    4    Met.    (Mass.)    486. 

'B.  A.  1898,  Sec.  39,  clause  i; 
Form  No.  40. 


'Official  Form  No.  41,  see  Form 
No.  99,  post. 

^  B.  A.   1898,  Sec.  47,  clause  9. 

*  Official  Form  No.  41,  see  Form 
No.  99,  post. 

°B.  A.    1898,  Sec.  47,  clause  4- 

"Gen.  Ord.  29;  In  re  Cobb,  112 
Fed.  Rep.  655,  7  Am.  B.  R.  202; 
see  also  In  re  Rude,  loi  Fed.  Rep. 
805,  4  Am.  B.  R.  319;  In  re  Clark, 
No.  2810  Fed.  Cas.,  9  N.  B.  R.  67. 


784  LAW    AXn    I'ROCEEUINGS    IN    BANKRUPTCY. 

couiitersit^ncd  In-  tlic  referee.  \\"liere  the  checks  are  given  to 
attorneys  they  should  (hstinctly  show  in  payment  of  which 
claim  thev  are  i^ivon.'  An  entry  of  the  substance  of  such 
check  or  warrant,  with  tlie  dale  thereof,  the  sum  (h^awn  for, 
and  the  account  iov  which  it  is  ch^awn,  must  be  forthwith 
made  in  a  bo(M<  kept  for  that  purpose  by  the  trustee  or  his 
clerk;  and  all  checks  and  drafts  should  be  entered  in  the 
order  of  time  in  which  they  are  drawn,  and  numbered  in  the 
case  of  each  estate.*  The  creditor  receiving  the  check  is  re- 
tjuired  by  the  trustee  to  sign  a  voucher  to  be  used  in  making 
up  his  accounts. 

§  270.     Unclaimed  dividends. 

There  was  a  conflict  of  opinion  under  the  former  act  as  to 
what  disposition  should  be  made  of  the  balance  that  remained 
after  the  payment  of  all  the  creditors,  who  had  proved  their 
debts  in  case  there  were  names  of  creditors  on  the  schedule 
who  had  not  proved  their  debts.  Some  judges  held  that  it 
should  be  distributed  among  the  creditors  holding  unproved 
claims/  Other  judges  held  that  it  should  be  paid  to  the 
bankrupt." 

This  question  can  not  be  mooted  under  the  present  act, 
which  expressly  provides  that  dividends  which  remain  un- 
claimed for  six  months  after  the  final  dividend  has  been 
declared  shall  be  paid  by  the  trustee  into  court.  Dividends 
remaining  unclaimed  for  one  year  shall,  under  the  direction 
of  the  court,  be  distributed  to  the  creditors  whose  claims  have 
been  allowed  but  not  paid  in  full,  and  after  such  claims  have 
been  paid  in  full  the  balance  shall  be  paid  to  the  bankrupt. 
Provided,  that  in  case  unclaimed  dividends  belong  to  minors, 

''In   re  Carr,   it6  Fed.  Rep.  556,  In    re    Blight's   Estate,    No.    1540 

8   Am.    B.    R.   635.  Fed.    Cas.,    i     Pa.    Law    J.    225,    it 

*  Gen.  Ord.  29.  was  held  that  unclaimed   dividends 

'  In    re    Haynes,    No.    6269    Fed.  would  not  be  awarded  to  a  bank- 

Cas.,  2  N.  B.  R.  227;  In  re  Jame.s,  rupt's   administrator   when  opposed 

No.  7175  Fed.  Cas.,  2  N.  B.  R.  227.  by  creditors  whose  claims  were  not 

"  In  re  Hoyt,  No.  6806  Fed.  Cas.,  paid   in  full. 
3  N.  B.  R.  55-,.  Steevens  x.  Earles, 
^5  Mich.  40. 


THE    DISTRIBUTION     OF    THE    ESTATE.  785 

such  minors  may  liave  one  year  after  arriving  at  majority  to 
claim  such  dividends.'" 

§  271.     The  settlement  of  the  estate. 

When  the  trustee  has  realized  all  the  property  of  the  bank- 
rupt, or  so  much  thereof  as  can  be  realized,  or  where  no  tan- 
gible assets  have  come  into  his  hands  and  he  has  no  informa- 
tion  of  any  property  belonging  to  the  bankrupt,  and  the  estate 
has  been  distributed  or  is  in  shape  for  a  final  dividend,  the 
estate  is  ripe  for  settlement.  The  final  dividend  may  be  de- 
clared before  the  time  limited  for  proving  claims  has  expired.^ 
The  trustee  thereupon  makes  a  final  report  and  files  his  final 
accounts  under  oath  with  the  referee."  This  should  be  done 
at  least  fifteen  days  before  the  day  fixed  for  the  final  meeting 
of  the  creditors.^ 

The  referee  should  thereupon  give  at  least  ten  days'  notice 
by  mail  to  the  creditors,  at  their  respective  addresses  as  they 
appear  in  the  list  of  creditors  of  the  bankrupt,  or  as  after- 
wards filed  with  the  papers  in  the  case,  unless  they  waive 
notice  in  writing,  of  the  filing  of  the  final  accounts  of  the 
trustee  and  the  time  when  and  the  place  where  they  will  be 
examined  and  passed  upon.*  Whenever  the  affairs  of  the 
estate  are  ready  to  be  closed  a  final  meeting  of  creditors  must 
be  ordered.^  But  if  no  trustee  is  appointed,  the  court  may 
order  that  no  meeting  of  the  creditors  other  than  the  first 
meeting  shall  be  called.^ 

Upon  the  day  fixed  for  the  final  meeting  the  creditors  as- 
semble pursuant  to  notice.  The  trustee  is  required  to  lay 
before  this  meeting  of  the  creditors  detailed  statements  of  the 
administration  of  the  estate.  These  statements  and  accounts 
are  examined  at  this  time,  and  such  other  business  as  may  be 

^  B.  A.   1898,  Sec.  66.  makes  his  return   in  Official   Form 

^  In  re   Stein,  94  Fed.   Rep.   124,  No.  48;   see  Form  No.  92,  post. 

I  Am.  B.  R.  662.  "B.  A.   1898,  Sec.  47,  clause  8. 

'Official   Forms   Nos.  49  and  50,  *  B.    A.    1898,    Sec.    58a;    In    re 

see    Forms    Nos.    93    and   94,    posl.  Savage,  12  Fed.  Rep.  719. 

If  there  are  no  assets  the  trustee  "B.   A.    1898,   Sec.  55/. 

'Gen.   Ord.    15. 


^86 


LAW    AND    I'ROCEEDINGS   IN    BANKRUPTCY. 


necessary  to  the  final  settlement  of  the  affairs  of  the  bankrupt 
may  be  transacted.  ^Fhe  creditors  may,  by  vote  at  tlie  iinal 
meeting,  dispense  with  the  reading-  and  exhibition  of  the  trus- 
tee's acounts  and  \x)uchers,  w  here  they  have  been  on  file  for  a 
reasonable  time.' 

If  the  final  accounts  arc  satisfactt)ry  and  proper  the  referee 
passes  and  order  allowing  the  same  and  discharging  the  trustee 
from  his  trust.^  If  objections  are  made  to  the  accounts  the 
referee  should  hear  them  and  determine  the  merits  as  soon  as 
he  conveniently  can  do  so.  No  objection  should  be  allowed 
after  a  distribution  has  been  confirmed."'  The  meeting  may 
bo  adjourned  with  leave  to  the  trustee  to  correct  his  errors  or 


onnssions 


10 


§  271a.     Reopening  a  case. 

The  statute  expressly  authorizes  the  court  to  reopen  estates 
whenever  it  appears  that  they  were  closed  before  being  fully 
administered.^  This  may  be  done  upon  a  showing  made  c.v 
parte.-  Whether  a  proper  case  is  made  for  reopening  an  estate 
rests  in  the  sound  discretion  of  the  court.''  After  an  order  re- 
opening an  estate  is  made  the  creditors  should  elect  a  new  trus- 
tee at  their  first  meeting.*  The  new  trustee,  upon  his  qualifi- 
cation, is  vested  by  operation  of  law  witli  the  title  of  the 
bankrupt  as  of  the  date  he  was  adjudged  bankrupt  the 
same  as  the  original  trustee.^  He  has  the  same  power 
to  recover  property  which  has  been  concealed  or  transferred 


"  In  re  Merchants  Ins.  Co.,  No. 
9442  Fed.  Cas.,  6  Biss.  252. 

'Official  Form  No.  51,  see  Form 
No.  95,  post. 

'In  re  Heebner,  132  Fed.  Rep. 
1003,  13  Am.  B.  R.  256. 

'"/n  re  Savage,  12  Fed.  Rep.  719. 

'B.  A.  1898,  Sec.  2,  clause  8; 
In  re  Barton's  Estate,  144  Fed. 
Rep.  540,  16  Am.  B.  R.  569;  In  re 
Ryburn,  145  Fed.  Rep.  662,  16  Am. 
B.   R.   514- 


"  //;  re  Ryburn,  145  Fed  Rep.  662, 
16   Am.    B.    R.    514. 

■Vn  re  O'Connell  (C.  C.  A.  ist 
Cir.),  137  Fed.  Rep.  838,  14  Am.  B. 
R.  2T,j;  In  re  Newton  (C.  C.  A. 
8th  Cir.),  T07  Fed.  Rep.  429,  6 
Am.  B.  R.  52. 

■*  B.  A.  1898,  Sec.  44;  In  re  New- 
ton (C.  C.  A.  8th  Cir.),  107  Fed. 
Rep.  429,  6  Am.  B.  R.  52 ;  Fowler 
V.  Jenks,  90  Minn.  74,  11  Am.  B, 
R.  225. 

*B.  A.    1898,   Sec.   700. 


THE    DISTRIBUTION     OF    THE    ESTATE.  787 

as  the  original  trustee.  After  a  case  has  been  reopened  the 
administration  of  the  newly  acquired  assets  is  made  in  the  same 
way  as  if  there  had  been  no  closing  of  the  estate. 

§  272.     The  record  of  the  referee  to  be  transmitted  to  the 
court. 

\\'hen  the  debts  have  been  proved  and  allowed,  the  assets 
collected  and  distributed,  the  trustee's  accounts  audited  and 
the  trustee  discharged,  the  case  is  concluded  before  the  referee. 
He  should  then  certify  to  a  record  of  the  proceedings  before 
him,  together  with  such  papers  as  are  on  file  before  him,  and 
transmit  them  to  the  clerk  of  the  court.'  They  are  preserved 
by  the  clerk  as  a  part  of  the  records  of  the  court. 

Certified  copies  of  such  proceedings  or  of  such  papers,  when 
issued  by  the  clerk  or  referee,  are  to  be  admitted  as  evidence 
with  like  force  and  effect  as  certified  copies  of  the  records  of 
district  courts  of  the  United  States  are  now  and  may  hereafter 
be  admitted  as  evidence."  The  referee  can  furnish  certified 
copies  only  when  the  papers  are  in  his  possession,  and  not 
after  his  record  has  been  filed  with  the  clerk. 

'B.  A.   1898,  Sec.  42c;   Cook  Tn-       C.  A.  4th  Cir.),  147  Fed.  Rep.  475- 
let  Coal  Field  Co.  v.   Caldwell    (C.  '  B.  A.  1898,  Sec.  2id. 


/88  LAW    AXn    l'ROCEElMNi;S    IN    BANKRUPTCY. 


ciiArri'.R  XXVI. 


DISC'll  Al^CE. 


§  273.     Application  for  a  discharge. 

Anv  iK-rson  wlio  has  l)cen  adjudged  a  bankrupt  may  file  an 
application  for  a  discharge  in  llic  court  of  bankruptcy  in 
Avhich  ihc  proceedings  arc  i)en(hng.^  This  includes  involun- 
tary as  well  as  voluntary  bankrupts.  I1ic  insanity  of  a  bank- 
rupt does  not  afifect  his  riglit  to  apply  for  a  discharge." 

The  ajiplication  for  a  discharge  should  be  by  a  petition  in 
the  prescribed  form."'  It  should  be  entitled  in  the  court  and 
cause  and  addressed  to  the  judge.  It  must  state  concisely,  in 
accordance  with  the  provisions  of  the  bankrupt  act  and  the 
orders  of  the  court,  the  proceedings  in  the  case  and  the  acts 
of  the  bankrupt.''  Thus  it  should  state  the  name  of  the  bank- 
rupt, his  residence  and  the  date  on  which  he  was  adjudged  a 
bankrupt ;  that  he  has  duly  surrendered  all  his  property  and 
rights  of  property  and  has  fully  complied  with  all  the  require- 
ments of  said  acts  and  of  the  orders  of  the  court  touching  his 
said  bankruptcy.  It  should  conclude  with  a  prayer  that  he 
may  be  decreed  by  the  court  to  have  a  full  discharge  from  all 
debts  provable  against  his  estate  under  said  bankrupt  acts, 
except  such  debts  as  are  excepted  by  law  from  such  discharge. 
A  person  neeed  not  pray  for  a  discharge  from  his  firm  debts 
in  precise  words,  if  he  asks  for  a  discharge  from  his  provable 
debts:  that  \-irtually  prays  for  a  discharge  from  his  partnership 
debts.^  The  petition  should  be  dated  and  signed  by  the 
bankrupt.      No  verification   is  required. 

As  soon  as  the  petition  is  properly  filed  the  court  passes  an 

'B    A.    1898,    Sec.    14.      Compare  'Official  Form  No.  57;  see  Form 

R.   S.   Sec.   5108  to  Sec.   5120.  No.  153,  post. 

'/n  re  Miller,  133  Fed.  Rep.  1017,  "Gen.    Ord.   31. 

13  Am.  B.  R.  345.  ^  ^n   re    Pierson,    No.    11 153   Fed. 

Cas.,   10   N.  B.   R.    107. 


DISCHARGE.  789 

order  of  notice.'^  This  order  should  fix  the  date  that  a  hear- 
ing may  be  had  upon  the  petition,  and  provide  that  notice  be 
pubhshed  in  a  certain  designated  newspaper  '  to  all  known 
creditors  and  all  other  persons  in  interest  to  appear  at  the 
said  time  and  place  to  show  cause,  if  any  they  have,  why  the 
prayer  of  the  petitioner  should  not  be  granted.  The  order 
should  also  provide  that  the  clerk  send  by  mail  to  all  known 
creditors  copies  of  the  petition  and  the  order.  All  creditors, 
wheher  they  have  proved  their  claims  or  not,  are  entitled 
to  have  at  least  ten  days'  notice  by  mail  to  their  respective 
addresses  as  they  appear  in  the  list  of  the  creditors,  or  as 
afterwards  filed  with  the  papers  in  the  case  by  the  creditors, 
unless  they  waive  notice  in  writing  of  the  hearing  upon  the 
application  for  discharge  of  the  bankrupt.*^  If  the  creditors 
were  not  notified  by  mail  it  must  appear  that  their  addresses 
could  not  be  obtained  after  due  search,  or  the  discharge  will 
not  be  granted.''  This  order  should  be  tested  by  the  clerk  and 
issued  by  him  under  the  seal  of  the  court.  The  clerk  there- 
upon mails  to  each  creditor  and  other  party  in  interest  a  copy 
of  the  petition  and  the  order  and  certifies  that  he  has  done  so. 
This  certificate  of  the  clerk  is  sufficient  evidence  that  the  notices 
were  duly  mailed.^*' 

A  copy  of  the  petition  and  order  are  also  published  in  the 
newspaper,  as  directed  by  the  order,  and  an  affidavit  to  that 
effect,  stating  the  days  upon  which  they  are  so  published,  must 
be  made  and  filed  in  the  court.  A  copy  of  the  printed  adver- 
tisement is  usually  attached  to  the  affidavit.  The  affidavit 
is  regularly  made  by  the  publisher  or  som.e  person  officially 
connected  with  the  newspaper.  Any  person  cognizant  of  the 
fact  may  make  it. 

A  bankrupt  partner  has  been  permitted  to  amend  his  petition 


"Official  Form  No.  57;  see  Form          "  Fn  re  Dvorak,  107  Fed.  Rep.  76, 

No.  153,  post.  6  Am.  B.   R.  66. 

'B.    A.    i8g8,    Sec.    28.  '»/«  rr  Townsend,  No.  14116  Fed. 

'B.   A.    1898,    Sec.   58a.  Cas.,   2   Ben.   62. 


7'\^ 


LAW    A\l>    rK(H'i:i'.l)INi;S    J.\     llANKUrPTCV 


for  dischariic  lo  release  lirni  debts  as  well  as  his  individual 
debts  long-  after  bis  discbaii;e  was  i;-ranlcd.'^ 

^  274.     When  and  where  the  petition  is  filed. 

Anv  person  may,  after  tbe  expiration  of  one  niontli  and 
within  the  next  twelve  months  subsequent  to  beino-  adjudg-ed 
a  bankrupt,  lile  an  application  for  a  ilisehari^e  in  the  eourt 
of  bankruptcy  in  which  the  proceedings  are  pending;  if  it 
shall  be  -made  to  appear  to  the  juilge  that  the  bankrupt  was 
unavoidably  prevented  from  hling  it  within  such  time,  it  may 
be  tiled  within  but  not  after  the  expiration  of  the  next  six 
months.'-  A  petition  I'llcd  more  than  twelve  months  and  less 
than  eighteen  months  after  the  adjudication  will  not  be  heard 
unless  Leave  to  file  it  has  been  granted  by  the  court  after  hear- 
ing the  reasons  for  delav.'''  and  this  leave  will  not  be  granted  by 
a  iiiiiic  pro  iiiiic  entry  more  than  eighteen  months  after  the 
adjudication.'*  If  the  court  permits  a  petition  to  be  filed  after 
a  year  upon  an  insufficient  showing  the  remedy  is  a  motion  to 
vacate.'^  The  petition  should  be  filed  in  the  clerk's  office  and 
not  with  the  referee,'"  or  with  the  judge." 

It  will  be  observed  that  the  time  wdthin  which  an  applica- 
tion may  be  made  is  not  dependent  at  all  upon  the  progress 
made  in  the  administration  of  the  estate.     Assets  may  or  may 


"/n  re  Kaufman,  136  Fed.  Rep. 
262,   14  Am.  B.  R.  393. 

But  see  In  re  Hawk  (C.  C.  A. 
8di  Cir.),  114  Fed.  Rep.  916,  8  Am. 
B.  R.  71,  denying  application  to  set 
aside  a  discliarge  to  allow  an 
amendment  to  insert  a  creditor  in 
schedules. 

"B  .A.  1898,  Sec.  14a;  In  re 
Fahy,  116  Fed.  Rep.  239,  8  Am.  B. 

R.   354. 
"In    re    Knauer,    133    Fed.    Rep. 

805,  13  Am.  B.  R.  503;  In  re 
Lewin,  135  Fed.  Rep.  252,  14  Am. 
B.  R.  358;  In  re  Ander.son,  134 
I'cd.  Rep.  319.   14  Am.  B.  R.  221. 


''In  re  Wolff,  100  Fed.  Rep.  430, 
4   Am.    B.    R.    74. 

'°/n  re  Haynes,  122  Fed.  Rep. 
560,    10   Am.    B.    R.    13. 

'"Watson  V.  McDuff  (C.  C.  A. 
5th  Cir.),  loi  Fed.  Rep.  241,  4 
Am.   B.  R.   no. 

"In  re  Sykes,  106  Fed.  Rep.  669. 
6  Am.  B.  R.  264. 

Under  District  Court  rule  11  in 
bankruptcy  in  the  Southern  District 
of  New  York,  which  makes  ths 
office  of  the  referee  the  office  of  the 
court,  the  fding  of  a  petition  for 
discharge  with  the  referee  is  suffi- 
cient. In  re  Pincus,  147  Fed.  Rep. 
621. 


DISCHARGE. 


■91 


not  have  come  into  the  hands  of  the  trustee.  The  estate  may 
have  been  fuhy  or  partly  distributed.  It  is  immaterial  whether 
any  dividend  has  been  declared  or  not. 

In  computing  tlie  time  within  which  a  petition  in  bank- 
ruptcy must  be  filed  the  number  of  days  are  computed  by 
excluding  the  first  and  including  the  last,  unless  the  last  fall 
on  a  Sunday  or  holiday,  in  which  event  the  day  last  included 
shall  be  the  next  day  thereafter  which  is  not  a  Sunday  or  a 
legal  holiday. ^^  The  word  "holiday"  includes  Christmas,  tl:e 
fourth  of  Jul}-,  the  twenty-second  of  February,  and  any  day 
appointed  by  the  president  of  the  United  States  or  the  con- 
gress of  the  United  States  as  a  holiday  or  as  a  day  of  public 
fasting  or  thanksgiving.^'' 

A  bankrupt  is  not  entitled  to  file  a  second  application  for  a 
discharge  in  the  same  proceeding  when  his  first  petition  is 
denied  after  an  investigation  of  its  merits  ; "°  but  the  fact  that  a 
bankrupt  has  been  refused  a  discharge  does  not  prevent  his 
obtaining  one  on  again  going  through  bankruptcy.-^  Since  the 
amendment  of  Feb.  5,  1903,  he  can  not  obtain  a  discharge, 
when  he  has  been   granted  one   in  a   voluntary  proceeding 

*    1    *  *  22 

within  SIX  years. 


§  275.     Who  may  oppose  a  discharge. 

An  application  for  a  discharge  may  be  oposed  by  any  of 
the  "parties  in  interest."  ^  To  entitle  a  party  to  oppose  a 
discharge  he  must  have  a  pecuniary  interest  in  the  matter, 
and  that  interest  must  be  satisfactorily  shown. - 


"B.  A.  1898,  Sec.  31. 

"  B.  A.  i8g8.  Sec.   i,  clause   14. 

"/n  re  Brockway,  23  Fed.  Rep. 
583,  reviewing  12  Fed.  Rep.  69;  In 
re  Feigenbaum  (C.  C.  A.  2d  Cir.), 
121  Fed.  Rep.  69,  9  Am.  B.  R.  595; 
In  re  Royal,  113  Fed.  Rep.  140,  7 
Am.  B.  R.  636. 

"In  re  Claff,  11 1  Fed.  Rep.  506, 
7  Am.  B.  R.  128;  In  re  Merrman, 
1.34  I-'cd.  Rep.  566,  4  Am.  B.  R. 
139.     The  di.scharge  was  denied  on 


another  ground  later  (C.  C.  A.  2d 
Cir.),  136  l"ed.  Rep.  767,  13  Am. 
B.  R.  778. 

^  See  Sec  28or,  post. 

'B.  A.   1898,   Sec.   14/^ 

"In  re  Servis,  140  Fed.  Rep.  222, 
IS  Am.  B.  R.  271 ;  In  re  Chandler 
(C.  C.  A.  7th  Cir.),  138  Fed.  Rep. 
6^7,  14  Am.  B.  R.  512;  In  re 
Shcpard,  No.  12753  Fed.  Cas.,  i  N. 
B.  R.  439;  In  re  Smith,  No.  12977 
Fed.    Cas.,    8    Blatch.    461;    In    re 


;^L' 


LAW   AN'i>  i>Ri)Ci:Knixr,>;  in   nANKRUpxCV. 


A  person  has  bcoti  held  to  have  an  interest  sulheient  to  entitle 
him  to  oppose  a  discharge,  where  his  claim  was  contingent  and 
unlinuidaled  so  as  not  to  he  capable  oi'  being  proved  as  a  debt,"' 
or  where  he  held  an  e([nitable  claim  oidy  against  the  estate/ 
or  where  his  claim  was  being  contested,"  although  his  claim 
lias  not  bixMi  i)ro\  etl "  or  is  no  longer  provable,^  or  where  he  is 
plaintitt  in  a  suit  against  the  bankrupt  for  contribution  on  a 
joint  debt  which  he  has  paid.^  The  reason  that  sucb  persons 
are  jiarties  in  interest  is  that  if  a  discharge  is  granted,  the  bank- 
rupt may  plead  it  in  bar  of  their  claims  if  asserted  later.  A  cred- 
itor whose  only  del)t  is  one  not  released  by  discharge,"  or 
whose  debt  is  barred  b}'  the  statute  of  limitations,^"  or  who  has 
been  paid  in  fuU/^  has  no  such  interest  and  therefore  can  not 
oppose  the  discharge. 

A  trustee  has  been  permitted  to  file  objections  to  the  granting 
of  a  tlischarge  to  the  bankrupt  whose  estate  he  is  administer- 
The  executor  or  administrator  of  a  deceased  creditor 


ing- 


of  the  bankrupt  may  oppose  his  discharge. 

It  has  been  held  that  where  a  partnership  which  had  proved 

a  claim  against  a  bankrupt  estate  was  dissolved  pending  the 
proceedings,  without  any  disposition  of  the  claim  being  made  as 
between  the  partners,  no  one  could  thereafter  maintain  objec- 
tions to  the  bankrupt's  discharge  without  showing  affirmatively 
that  all  assented  to  the  action." 

A  creditor  may  be  barred  from  objecting  to  a  discharge  by 


♦Boutelle,  No.  1705  Fed.  Cas.,  2  N. 
B.  R.  129;  In  re  Alurdock,  No.  9939 
Fed.  Cas.,  i  Low.  362;  Book's  Case, 
No.  1637  Fed.  Cas.,  3  McLean,  317. 

^  Ex  parte  Traphagen,  No.  14140 
Fed.  Cas.,  i  N.  Y.  Leg.  Obs.  98. 

*In  re  Tebbetts,  No.  13817  Fed. 
Cas.,   5   Law.    Rep.    259. 

"/rt  re  Belden,  No.  1238  Fed. 
Cas.,  4  Ben.   225. 

°/h  re  Frice,  96  Fed.  Rep.  611, 
2  Am.   B.   R.  674. 

'  In  re  Bimberg,  121  Fed.  Rep. 
942,  9  Am.    B.   R.  601. 


^  In    re    Conroy,    134    Fed.    Rep. 
764,  14  Am.  B.  R.  249. 
"  In  re  Servis,  140  Fed.  Rep.  222, 

15  Am.  B.  R.  271.  See  also  In  re 
Maples,  105  Fed.  Rep.  919,  5  Am. 
B.  R.  426. 

'"/m  re  Burk,  No.  2156  Fed.  Cas., 
Deady,  425. 
"/m  re  Harr,  143  Fed.  Rep.  421, 

16  Am.  B.  R.  213. 

'^/n  re  Levey,  133  Fed.  Rep.  572, 
13    Am.    B.    R.    312. 

"In  re  Hendrick,  143  Fed.  Rep. 
647,  16  Am.  B.  R.  218. 


DISCHARGE.  793 

laches/*  or  he  may  be  estopped  by  his  own  consent  to  an  act 
from  alleging  it  against  his  debtor  on  the  question  of  his  dis- 
charge. The  question  of  estoppel  arose  more  frequently  under 
the  act  of  1867,  where  fraudulent  preferences  barred  a  dis- 
chaige,  that  it  can  under  the  present. act.  The  question  was 
frequently  considered  by  the  court  under   the   former  act.^^ 

§  276     How  to  oppose  a  discharge. 

Although  a  petition  for  a  discharge  is  filed  and  the  opposi- 
tion to  it  is  made  in  the  bankruptcy  proceedings,  the  specifica- 
tion of  grounds  in  opposition  to  the  discharge  is  in  the  nature 
of  a  new  suit.  It  calls  for  pleas,  proofs  and  a  hearing  or  trial. ^ 
If,  however,  the  bankrupt  does  not  plead  to  the  specifications 
the  bankrupt  will  not  be  denied  a  discharge  without  proof  by 
the  opposing  creditor." 

A  creditor  or  other  party  in  interest,  who  desires  to  oppose 
a  discharge  is  required  to  enter  his  appearance  in  opposition 
thereto  on  the  day  wlien  the  creditors  are  required  to  show 
cause,  and  to  file  a  specification  in  writing  of  the  grounds 
of  his  opposition  within  ten  days  tliereafter,  unless  the  time 
shall  be  enlarged  by  special  order  of  the  judge.^  This  should 
be  filed  with  tlie  clerk  and  not  with  the  referee  or  sent  to  the 
judge.* 

"  Kentucky  National  Bank  v.  Car-  of  a  new  suit.  It  requires  proofs 
ley  (C.  C.  A.  3d  Cir.),  121  Fed.  of  the  grounds  set  out  in  the  spec- 
Rep.  822,   10  Am.   B.   R.  375.  ifications   in   opposition  to   the   dis- 

"/n   re    Sawyer,    No    12394   Fed.  charge." 

Cas.,  2  Hask.  2i?)l\   ^"  ^<^  Schuyler,  ^  In  re  Crist,   116  I*"cd.  Rep.   1007, 

No.    12494   Fed.    Cas.,   2    Ben.   200 ;  9   Am.   B.   R.    i  ;   /;;    re  Logan,    102 

In  re  Kraft,  3  Fed.  Rep.  892;  John-  Fed.   Rep.   876,  4  Am.   B.    R.   525; 

son  V.  Rogers,   No.  7408  Fed.  Cas.,  /;:     re     Hcndrick,     138     Fed.     Rep. 

15    N.    B.    R.    i;    Judson    v.    The  473,   14  Am.   V,.  R.  795. 

Courier  Co.,- 8  Fed.  Rep.  422.  ^Gen.   Ord.  32.     In   re  Ginsburg, 

'  B.    A.     1898,    Sec.    14.      In    re  130   Fed.    Rep.   627,    12   Am.    B.   R. 

Hendrick,    138    Fed.    Rep.    473,    14  459;    In    re    Grant,    135    Fed.    Rep. 

Am.  B.  R.  795.  889.  14  Am.  I'..  R.  398. 

In  In  re  Prager  &  Son,  134  Fed.  *  Watson    v.    McDuff    (C.    C.    A. 

Rep.    1006,    13   Am.   B.    R.   527,  the  5tii  Cir.),  loi  Fed.  Rep.  241,  4  Am. 

court  says:  "The  opposition  to  the  B.   R.  410;   In   re   Sykes,    106  Fed. 

discharge   is   always   in   the    nature  Rep.  669,  6  Am.  1>.  I\.  2(^j^. 


794  LAW    AM)    I'UOCEEDINGS    1\    ISANKKll'UV. 

An  appearance  is  not  regularly  entered  until  after  a  peti- 
tion for  discharge  is  filed."'  hut  il  has  been  held  that  an  ap* 
pearance  may  be  enteretl  to  t)i)pi)se  a  discharge  at  any  time 
before  the  expiration  of  the  time  limited  by  general  order  32.'^ 
The  former  is  the  better  practice.  Manifestly  a  i)erson  should 
not  put  in  a  defense  until  it  is  called  tOr,  and  it  is  not  called 
for  until  a  petition  is  liletl.  Before  that  time  it  is  not  known 
whether  the  bankrupt  will  apply  for  a  discharge  or  not. 

A  creditor  inteiuling  to  oppose  an  application  for  discharge 
may  enter  his  appearance  in  person  in  his  own  behalf  or  by 
attorney,  who  must  be  an  attorney  or  counselor  authorized 
to  practice  in  the  circuit  or  district  court.^  The  name  of  the 
attorney  or  counselor,  with  his  place  of  business,  must  be 
entered  upon  the  docket,  with  the  date  of  the  entry.^  An 
appearance  not  duly  authorized  will  be  disregarded.®  Unless 
an  appearance  is  duly  entered,  the  creditor  has  no  standing 
in  court  as  to  the  petition  for  discharge,  and  therefore  can  not 
be  heard  in  opposition  to  it.**  It  has  been  held  that  creditors 
may  enter  their  appearance  upon  an  adjourned  day  of  the 
hearing  on  the  order  to  show^  cause ;  ^°  and  also  that  the  court 
may,  in  its  discretion,  enlarge  the  time  for  entering  appear- 
ance and  filing  specifications  in  opposition  to  a  discharge  as 
well  after  as  before  the  expiration  of  the  time  allowed  by  the 
rule.^^     Speaking  of  this  question.  Judge  Lowell  said:     "I 

'In    re    McVej^    No.    8932    Fed.  land,   No.   13640  Fed.   Cas.,  Deady, 

Cas.,  2   N.   B.   R.   257;  In  re   Sea-  573;  In  re   Smith,  No.    12985  I'^ed. 

bur3%    No.    12573   Fed.   Cas.,   10   N.  Cas.,   5   N.   B.   R.  20;   Creditors  v. 

B.   R.  90.  Williams,  No.  3379  Fed.  Cas.,  4  N. 


6 


In  re  Baum,  No.  11 16  Fed.  Cas.,  B.  R.  579;  In  re  Buxbaum,  No.  2259 

I  Ben.  274.  Fed.  Cas.,  2  Hughes,  339. 

'Gen.  Ord.  4;  Creditors  v.  Will-  ^^ In  re  Seabury,  No.   12573  Fed. 

iams,    No.    3379    Fed.    Cas.,    4    N.  Cas.,   10  N.  B.  R.  90;  In  re  Tall- 

B.  R.  579;  In  re  McVey,  No.  8932  mann.  No.  13740  Fed.  Cas.,  2  Ben. 

Fed.  Cas.,  2  N.  B.  R.  257.  404. 

'In    re    Eidom,    No.    4314    Fed.  But    see    In    re    Houghton,    No. 

Cas.,    3    N.    B.    R.    106 ;    Creditors  6730  Fed.  Cas.,  2  Low.  328. 

V.   Williams,  8279  Fed.   Cas.,  4   N.  "  In  re  Levin,  No.  8291  Fed.  Cas., 

B.    R.    579.  7  Biss.   231 ;   In  re   I<"illey,  2  Cent. 

^  In    re    AlcVey,    No.    8932    Fed.  L.  J.  419.     In  this  last  case  it  ap- 

Cas.,  2  N.  B.  R.  257;  In  re  Suther-  peared  that  the  creditor  had  not  re- 


DISCHARGE.  .      795 

have  decided  in  one  case  that  the  discretion  of  the  court  to  en- 
large the  time  extends  to  the  time  for  appearance,  as  well  as  to 
that  for  filing  the  specification,  and  may  be  exercised  after  the 
time  has  expired,  as  well  as  before ;  but  I  do  not  think  it  can 
be  laid  down  as  a  matter  of  law  that  the  day  when  creditors 
are  required  to  show  cause  means  any  day  to  which  the  pro- 
ceedings may  have  been  adjourned  for  other  purposes.  But 
I  do  think  the  that  rule  intends  that  the  court  shall  have 
power  to  enlarge  the  time  whenever  there  is  good  cause  shown 
for  it.  The  distinction  is  between  an  absolute  right  imposing 
a  corresponding  duty  upon  the  court,  and  a  discretionary 
power  to  be  exercised  only  upon  cause  shown."  ^" 

Upon  the  entry  of  appearance  of  a  creditor  or  a  party  in 
interest  to  oppose  a  discharge  all  proceedings  upon  the  peti- 
tion are  suspended  until  the  specification  of  grounds  in  oppo- 
sition to  the  discharge  is  filed.^^  \\'here  no  entry  of  appear- 
ance is  made  within  the  time  specified,  or  where  it  is  not  duly 
authorized,  it  should  be  disregarded  and  the  cause  should  pro- 
ceed as  if  no  opposition  had  been  made. 

\\'here  there  is  no  entry  of  appearance  by  an  opposing  party 
the  petition  of  a  bankrupt  to  be  discharged  may  be  continued 
from  time  to  time  to  suit  the  convenience  of  the  bankrupt.^* 
\\'hen  an  appearance  has  been  entered  by  any  creditor  against 
the  discharge  the  proceedings  upon  the  petition  are  no  longer 
under  the  exclusive  control  of  the  bankrupt,  but  the  oppos- 
ing creditor  can  not  move  to  dismiss  the  petition  or  that  its 
prayer  be  denied  because  the  bankrupt  is,  or  supposed  to  be, 
dilatory  in  bringing  the  matter  on  for  liearing.  The  proper 
course  for  the  creditor  is  to  move  the  court  to  set  down  the 
matter  for  hearing  upon  the  petition  and  his  objections  there- 

ceived  notice  of  the  application  for  See  also  In  re  Ginsburg,  130  Fed. 

discliarge.  Rep.  627^  12  Am.  B.  R.  459;  In  re 

But    see    Creditors    v.    Williams,  Grant,   135   Fed.   Rep.  889,   14  Am. 

No.    3379    Fed.    Gas.,    4    N.    B.    R.  B.    R.   398. 

579;    In    re    Houghton,    No.    6730  "/h    re   Frizcllc,    No.    5132    Fed. 

Fed.  Gas.,  2  Low.  328.  Gas.,  5  N.  B.  R.  119. 

"In  re  Houghton,  No.  6730  Fed. 
Gas.,   2  Low.   328. 


796 


LAW    AXn    PROCKEniXC^S   IN    BAX'KUrPTCY. 


to,  if  any  be  filotl."    A  hearing  on  a  petition  for  discharge  may- 
be continued   for  the  pm-pose  of  examining  the  bankrupt." 

§  277.     The  specification  of  grounds  in  opposition  to  a  dis- 
charge. 

\\'here  an  opposing  crechtor  or  other  party  in  interest  has 
enteretl  his  appearance  in  (opposition  to  a  discharge  upon  the 
dav  when  creditors  are  required  to  show  cause,  he  must  lile 
a  specification  in  writing  of  the  grounds  of  his  opposition 
within  ten  days  thereafter,  unless  the  time  shall  be  enlarged 
by  special  order  of  the  judge. ^  If  the  specification  is  not 
filed  within  the  prescribed  time  it  can  not  be  considered. - 
Where  a  creditor  has  duly  entered  his  appearance,  and 
through  inadvertence  fails  to  file  a  specification  within  the 
prescribed  time,  he  may,  on  showing  proper  cause,  be  allowed 
to  file  it  iiiiiic  pro  tunc.^  Where  the  specification  is  not 
filed  within  the  time,  and  the  time  for  filing  it  is  not  extended, 
the  cause  progresses  as  though  there  were  no  opposition.* 

The  specification  must  be  in  writing.^  It  must  state  the 
name  of  the. opposing  creditor."  It  should  show  that  the  per- 
son objecting  is  a  party  in  interest.  The  statement  that  he 
is  a  creditor  whose  debt  will  be  released  by  a  discharge  is  suf- 
ficient. The  mere  statement  that  he  is  trustee  of  the  estate  is 
not  sufficient.'' 

The  specificaion  should  then  state  the  grounds  of  opposition 


"7w  re  Sutherland,  No.  13640 
Fed.  Cas.,  Deady,  573. 

''/»  re  Seckendorf,  No.  12600 
Fed.  Cas.,  2  Ben.  462 ;  In  re  Thomp- 
son, No.  13935  Fed.  Cas.,  2  Ben. 
166;  In  re  Jacobs,  No.  7160  Fed. 
Cas.,  5  Saw.  458. 

'Gen.  Ord.  32. 

"In  re  .Mbrecht,  104  Fed.  Rep. 
974,  5  Am.  B.  R.  223;  In  re 
Clothier,  108  Fed.  Rep.  199,  6  Am. 
B.  R.  203;  In  re  McVey,  No.  8932 
Fed.    Cas.,   2    N.    B.   R.   257. 

^In  re  Grefe,  No.  5794  Fed.  Cas., 
2  N.  B.  R.  329. 


*In  re  McVey,  No.  8932  Fed. 
Cas.,  2  N.  B.  R.  257;  Creditors 
V.  Williams,  No.  3379  Fed.  Cas.,  4 
N.   B.   R.   579. 

'Gen.  Ord.  32. 

°  Official  Form  No.  58 ;  see  Form 
No.  157,  post;  In  re  Shoemaker, 
No.  12799  Fed.  Cas.,  4  Biss.  245,  it 
was  held  that  "A.  and  B.,  attorneys 
for  opposing  crditors,"  was  not  suf- 
ficient. In  re  Glass,  119  Fed.  Rep. 
509,  9  Am.  B.  R.  391. 

'  In  re  Levey,  133  Fed.  Rep.  572, 
13   Am.    B.   R.   312. 


DISCHARGE.  797 

specifically.  The  object  of  the  specification  of  grounds  of  op- 
position to  a  petition  for  discharge  is  to  give  the  bankrupt 
reasonable  notice  of  what  is  expected  to  be  proved  against  him 
and  to  advise  the  court  of  the  issue  to  be  tried.  The  allega- 
tions must  be  averments  of  fact  and  not  conclusions  of  law.® 
Where  the  ground  of  objection  is  the  commission  of  an 
offense  or  crime  under  the  act,  it  is  insufficient  to  charge  the 
offense  in  the  words  of  the  statute,  but  the  specification  must 
state  facts  showing  the  commission  of  the  offense  or  crime 
with  substantially  the  same  particularity  and  exactness  re- 
quired in  a  criminal  information  or  an  indictment.^  The  acts 
set  out  must  be  charged  to  have  been  "knowingly  and  fraudu- 
lently" done.^"  Where  the  ground  of  objection  is  the  conceal- 
ment of  property  the  specification  must  describe  the  property, 
name  the  person  holding  the  title,  state  the  time  of  transfer 
and  other  facts  necessary  to  identify  the  transaction.^^  AMiere 
the  ground  of  objection  is  the  making  of  a  false  oath,  the 
account  or  the  testimony  alleged  to  be  false  must  be  specifically 
pointed  out  together  with  the  facts  relied  upon  to  prove  its 
falsity.^-  \Miere  the  ground  of  objection  is  that  the  bankrupt 
failed  to  keep  books  of  account,  etc..  a  charge  in  the  language 

*/n  re  Hirsch,  96  Fed.  Rep.  468,  Blalock,   118  Fed.  Rep.  679,  9  Am. 

2  Am.  B.  R.  715;  In  re  Steed,  107  B.   R.   266;   In  re   Mudd,   105   Fed. 

Fed.  Rep.  682,  6  Am.  B.  R.  -/y.  In  Rep.  348,  5  Am.  B.  R.  242;  In  re 

re    Servis,    140    Fed.    Rep.    222,    15  Pierce,  103  Fed.  Rep.  64,  4  Am.  B. 

Am.    B.    R.    271;    In    re    Chandler  R.  554;  In  re  Adams,  104  Fed.  Rep. 

(C.  C.  A.  7th  Cir.),  138  Fed.  Rep.  7^,  4  Am.   B.   R.   696. 
637,  14  Am.  B.  R.  512;  In  re  Good-  " /»    re    Parish,    122    Fed.    Rep. 

ale,  109  Fed.  Rep.  783,  6  Am.  B.  R.  553,  10  Am.  B.  R.  548;  In  re  Gins- 

493;    In    re    Peck,    120    Fed.    Rep.  burg,  130  Fed.  Rep.  627.  12  Am.  B. 

972,  9  Am.  B.  R.  747 ;  In  re  Parish,  R.  459 ;  In  re  Mudd,  105  Fed.  Rep. 

122   Fed.   Rep.   553,    10  Am.    B.    R.  348,  5  Am.  B.  R.  242;  In  re  Mil- 

548.  graum  &  Ost,  129  Fed.  Rep.  827,  12 

'In  re  Hirsch,  96  Fed.  Rep.  468,  Am.  B.  R.  306;  In  re  Gift,  130  Fed. 
2  Am.  B.  R.  715;  In  re  Kaiser,  99  Rep.  230,   12  .Am.   B.  R.  244. 
Fed.   Rep.  689,   3   Am.    B.   R.   767;  "In   re  Giiishurg,   130  Fed.   Rep. 
In  re  Mudd,   105  Fed.   Rep.  348,  5  C27,  12  Am.  B.  R.  459;  In  re  Good- 
Am.  B.  R.  242.  ale,    109   Fed.   Rep.  783,  6  Am.   B. 

'"In   re   Patterson,   121   Fed.   Rep.  R.  493- 
921,    10    Am.    B.    R.    371;    In    re 


■OS 


LAW    AND   PROCEEDINGS   IN    BANKRUPTCY. 


of  the  act  is  all  lliat  is  required."  When  it  is  alleg-ed  that  the 
bankrupt  has  obtaineil  property  on  credit  honi  any  i)crson  npon 
a  materially  false  statement  in  writing  nuule  to  such  i)erson  for 
the  purpose  of  obtaining  such  property  on  credit,  not  only  must 
the  false  representation  be  set  out,  hut  the  name  of  the  person 
so  alleged  to  have  been  defrauded  must  be  given/'* 

The  specification  must  be  signed  l)y  the  party  in  interest 
who  is  opposing  the  discharge.^''  It  must  be  verified  by  affi- 
davit of  the  party  in  interest/"  or  his  agent  or  attorney  who  has 
knowledge  of  the  facts  stated  in  the  petition/'  An  affidavit 
on  information  and  belief  has  been  held  sufficient/^  But  it 
is  better  to  have  the  affidavit  positive  in  its  terms/''  A  defect 
in  verifying  a  petition  may  be  cured  by  amendment  ^"  or  if  no 
exception  is  taken  it  will  be  considered  waived/^ 

Where  the  allegations  are  so  general  as  really  not  to  advise 
the  bankrupt  what  facts  he  must  be  prepared  to  meet  and 
resist,  the  specification  is  bad,  and  may  be  disregarded  "  or 


"/;i  re  Ginsburg,  130  Fed.  Rep. 
627,  12  Am.  B.  R.  459;  In  re  Pat- 
terson, 121  Fed.  Rep.  921,  10  Am.  B. 
R.  371 ;  In  re  Levey,  133  Fed. 
Rep.  572,  576,  13  Am.  B.  R.  312; 
Godshalk  v.  Sterling  (C.  C.  A.  3d 
Cir.),  129  Fed.  Rep.  580,  12  Am.  B. 
R.  302. 

"Godshalk  v.  Sterling  (C.  C.  A. 
3d  Cir.),  129  Fed.  Rep.  580,  12  Am. 
B.  R.  302. 

"Official  Form  No.  58;  see  Form 
No.  157,  post.  In  re  Glass,  119 
Fed.    Rep.    509,   520,   9   Am.    B.    R. 

391,  405- 

'"/«  re  Brown  (C.  C.  A.  5th 
Cir.),  112  Fed.  Rep.  49,  7  Am.  B. 
R.  252;  In  re  Glass,  119  Fed.  Rep. 
509,  9  Am.  B.  R.  391 ;  In  re 
Baerncopf,  117  Fed.  Rep.  975,  9 
Am.  B.  R.  133;  In  re  Meurer,  144 
I'ed.  Rep.  445,  15  Am.  B.  R.  823; 
In  re  Gift,  130  Fed.  Rep.  230,  12 
Am.  B.   R.  244. 


But  see  In  re  Jamieson,  120  Fed. 
Rep.  697,  9  Am.   B.   R.  681. 

"  In  re  Peck,  120  Fed.  Rep.  972, 
9  Am.  B.  R.  747;  In  re  Milgraum  & 
Ost,  129  Fed.  Rep.  827,  12  Am.  B. 
R.  306. 

But  see  In  re  Glass,  119  Fed. 
Rep.  520,  9  Am.   B.   R.  391. 

^'  /;;  re  Milgraum  &  Ost,  129  Fed. 
Rep.  827,   12  Am.   B.   R.  306. 

'"/n  re  Glass,  119  Fed.  Rep.  520, 
9  Am.  B.  R.  391 ;  In  re  Peck,  120 
Fed.  Rep.  972,  9  Am.  B.  R.  747; 
in  re  Brown  (C.  C.  A.  5th  Cir), 
112  Fed.  Rep.  49,  7  Am.  B.  R.  252. 

""  In  re  Meurer,  144  Fed.  Rep. 
445,  IS  Am.  B.  R.  823. 

"/w  re  Robinson,  123  Fed.  Rep. 
844,  TO  Am.  B.  R.  477;  Godshalk  v. 
Sterling  (C.  C.  A.  3d  Cir.),  129 
Fed.  Rep.  580,  12  Am.  B.  R.  302. 

"In  re  Hendrick,   138  Fed.   Rep 
473,  14  Am.  B.  R.  795 ;  In  re  Rath- 
bone,   No.   11580  Fed.  Cas.,  2  Ben. 


DISCHARGE. 


799 


stricken  out.-^  All  objections  to  specifications  for  formal  de- 
fects must  be  raised  before  the  issue  is  tried  or  the  defect  is 
waived."'*  If  the  specifications  are  defective  either  in  form  or 
in  substance  they  may  be  amended  by  leave  of  the  court.-* 
A\'hether  or  not  this  leave  shall  be  granted  is  within  the  discre- 
tion of  the  court  and  the  question  of  whether  or  not  this  dis- 
cretion was  abused  is  one  on  which  the  circuit  court  of  appeals 
can  exerise  its  power  of  revision  under  Section  24&.-"  Before 
the  hearing  the  court  should  be  very  liberal  in  granting  leave 
to  amend  specifications,-'  but  after  issue  joined  and  the  case  is 
areued  amendment  will  not  be  allowed.-^  In  one  case  amend- 
ment  was  allowed  after  the  evidence  was  in  where  it  would  not 
present  any  new  issue.-"'  In  amending  specifications  the  ob- 
jectors will  not  be  permitted  to  change  the  substantial  nature 
of  their  objections  after  the  time  allowed  for  filing  objections 


30 


138;  In  re  Hansen,  Xo.  6039  Fed. 
Cas.,  2  N.  B.  R.  2\i;  In  re  Dreyer, 
No.  4082  Fed.  Cas.,  2  N.  B.  R. 
212;  In  re  Son,  No.  13174  Fed. 
Cas.,  2  Ben.  153;  In  re  Tyrrel,  No. 
14314  Fed.  Cas.,  2  N.  B.  R.  200. 

^In  re  Waggoner,  No.  17037 
Fed.  Cas.,  i  Ben.  532. 

"/n  re  Baldwin,  119  Fed.  Rep. 
796.  9  Am.  B.  R.  591 ;  In  re  Baern- 
copf,  117  Fed.  Rep.  975.  9  Am.  B. 
R.  133;  In  re  Robinson,  123  Fed. 
Rep.  844,  10  Am.  B.  R.  477;  ^«  ''^ 
Scott,  126  Fed.  Rep.  981,  11  Am. 
B.  R.  327.  In  the  northern  district 
of  New  York  this  should  be  done 
by  motion.    In  re  Baldwin,  sut^ra. 

'^In  re  Peck,  120  Fed.  Rep.  972, 
9  .-Xm.  B.  R.  747;  In  re  Parish,, 
122  Fed.  Rep.  553,  10  Am.  B.  R. 
548. 

=°/h  r^Carley  (C.  C.  A.  3d  Cir.), 
117  Fed.  Rep.  130,  8  Am.  B.  R.  720; 
In  re  Brown  (C.  C.  A.  5th  Cir.), 
112  Fed.  Rep.  49.  12  .'\m.  B.  R. 
252. 

■" /n  re  Glass,   119  Fed.  Rep.  509, 


9  Am.  B.  R.  391;  In  re  Carley  (C. 
C.  A.  3d  Cir.),  117  Fed.  Rep.  130, 
8  Am.  B.  R.  720;  In  re  Morgan, 
loi  Fed.  Rep.  982,  4  Am.  B.  R.  402; 
In  re  Kaiser,  99  Fed.  Rep.  689,  3 
Am.  B.  R.  767 ;  In  re  Price,  96  Fed. 
Rep.  611,  2  Am.  B.  R.  674;  In  re 
Hirsch,  96  Fed.  Rep.  468,  471,  2 
Am.  B.  R.  715,  718;  In  re  Hi.xon, 
93  Fed.  Rep.  440,  i  Am.  B.  R.  610; 
In  re  Holman,  92  Fed.  Rep.  512,  i 
Am.  B.  R.  600. 

Amendment  was  not  allowed  in 
In  re  Mudd,  105  Fed.  Rep.  348,  5 
Am.  B.  R.  242;  In  re  Peck,  120 
Fed.  Rep.  972.  9  .'\m.  B.  R.  747. 

"^/n  re  Smith,  16  Fed.  Rep.  465, 
467;  In  re  Graves,  24  Fed.  Rep.  550. 

■''In  re  Pierce,  103  Fed.  Rep.  64, 
4  .un.  B.  R.  554. 

^In  re  Gift,  130  I'cd.  Rep.  230, 
12  Am.  B.  R.  244;  In  re  Ilendrick, 
138  Fed.  Rep.  473.  M  Am.  B.  R. 
795;  In  re  Peck,  120  Fed.  Rep. 
972,  9  Am.  B.  R.  747;  In  re  Mer- 
cur  (C.  C.  A.  3d  Cir.),  122  Fed. 
Rep.  384,  10  .Xm.  B.  R.  505,  affirm- 


800 


LAW    AND    PROCEEDINGS    IN    ISAXKRrPTCV. 


The  specification  as  amended  shcMild  only  anionnt   to  an  en- 
huiienient  of  the  original. 

As  the  proceethni^s  in  hankrni)tcN'  are  strictly  statntory,  a 
discharj^e  can  he  refnseil  only  npon  a  j^ronnd  si)ecilically  set 
forth  in  the  sialnie,  except  the  want  of  jnrisdiction  of  the 
court  to  entertain  the  proceedings.  The  statutory  ^rounds 
which  may  be  set  up  in  the  specification  in  opposition  to  a 
petition  for  discharge  are  considered  in  the  next  few  sections. 


§  278.     Grounds    for   opposing   a   bankrupt's    discharge. 

In  order  to  prevent  a  bankrupt's  discharge  his  case  must 
fall  within  one  of  the  exceptions  named  in  the  statute.^  Un- 
der the  act  of  1867  the  cases  in  which  no  discharge  could 
be  granted  were  collated  in  ten  separate  paragraphs.^  The 
bill,  which  afterwards  became  the  present  bankrupt  act,  con- 
tained nine  distinct  classes  of  cases  in  which  no  discharge 
could  be  granted.^     These  grounds  remained  in  the  bill  until 


inj?    Ti6   Fed.    Rep.   655,   8   Am.    B. 
R.  273. 

'B.  A.  1898,  Sec.  14^';  In  re 
Blalock,  118  Fed.  Rep.  679,  9  Am. 
B.  R.  266;  In  re  McCarty,  III  Fed. 
Rep.  151,  7  Am.  B.  R.  40;  In  re 
Howden,  in  Fed.  Rep.  723,  7  Am. 
B.  R.  191 ;  In  re  Marshall  Paper 
Co.  (C.  C.  A.  I  St  Cir.),  102  Fed. 
Rep.  872,  4  Am.  B.  R.  468;  In  re 
Peacock,  loi  Fed.  Rep.  560,  4  Am. 
B.  R.  136;  In  re  Parish,  122  Fed. 
Rep.  553,  10  Am.  B.  R.  548. 

In  re  Schenck,  116  Fed.  Rep.  554, 
8  Am.  B.  R.  727;  In  re  Walther,  95 
Fed.  Rep.  941,  2  Am.  B.  R.  702; 
and  In  re  Fleishman,  120  Fed.  Rep. 
960,  9  Am.  B.  R.  557,  seem  to  deny 
a  discharge  where  the  statute  does 
not  authorize  it. 

'R.   S.   Sec.   51 10. 

"The  bill  provided  that  the  bank- 
rupt should  be  discharged  "unless 
he  has  (i)  been  convicted  of  having 


committed  an  offense  punishable  by 
imprisonment  as  herein  provided; 
(2)  given  a  preference  as  herein  de- 
fined, and  within  six  months  prior 
to  the  filing  of  the  petition  against 
him,  which  has  not  been  surren- 
dered to  the  trustee;  (3)  obtained 
property  upon  credit  which  has  not 
been  paid  for  or  stored  at  the  time 
the  petition  is  filed  against  him  up- 
on a  materially  false  statement  in 
writing  made  by  him  to  any  person 
for  the  purpose  of  obtaining  credit 
or  of  being  communicated  to  the 
trade  or  to  the  person  from  whom 
he  obtained  such  property  on  cred- 
it;  (4)  made  a  transfer  of  any  of 
his  property  which  any  creditor 
who  has  proved  his  claim  in  the 
proceedings  might,  at  the  time  of 
the  filing  of  the  petition,  have  im- 
peached as  fraudulent  if  he  had  then 
been  a  judgment  creditor,  unless 
such  property  shall  have  been   sur- 


DISCHARGE.  801 

its  final  revision  by  the  conference  committee.  The  bill  was 
materially  changed  by  the  conference  committee  in  this  re- 
spect.*   Many  of  the  grounds  were  stricken  out. 

Before  the  amendment  of  February  5,  1903.  there  were 
two  general  grounds  only  for  contesting  the  discharge  of  a 
bankrupt  in  the  present  statute.  They  were  that  the  bank- 
rupt has  (1)  committed  an  offense  punishable  by  imprison- 
ment as  herein  provided;  or  (2)  with  fraudulent  intent  to 
conceal  his  true  financial  condition,  and  in  contemplation  of 
bankruptcy,  destroyed,  concealed  or  failed  to  keep  books  of 
account  or  records  from  which  his  true  condition  might  be 
ascertained.^ 

The  statute  as  it  existed  prior  to  February  5,  1903,  applies  to 
all  cases  in  which  the  proceedings  were  begun  before  that 
time.     By  that  amendment  the  second  ground  was  changed  to 
read  "with  intent  to  conceal  his  financial  condition,  destroyed 
concealed,  or  failed  to    keep    books    of    account    or    records 
from   which   such   condition   might  be  ascertained,"   and  the 
following  grounds  were  added  :  "^ — obtained  property  on  credit 
from  any  person  upon  a  materially  false  statement  in  writing 
made  to  such  person  for  the  purpose  of  obtaining  such  prop- 
rendered  to  the  trustee;  or  (5)  with       crctcd  or  conveyed  any  of  his  prop- 
fraudulent  intent  and  in  contemphi-       erty  to  avoid  its  being  administered 
tion    of    bankruptcy,    destroyed    or       in  bankruptcy,  or  any  document  re- 
negected  to  keep  books  of  account       lating  to  his  property  in  contempla- 
or    records    from    which    his    true      tion  of  bankruptcy;  or    (8)    trans- 
condition  might  be  ascertained ;   or       ferred  any  property  otherwise  than 
(6)  made  a  substantially  false  valu-       in  the  ordinary  course  of  his  busi- 
ation,  as  a  bankrupt,  of  any  of  the      ness,  in  contemplation  of  bankrupt- 
property  of  his  estate  in  his  sched-       cy;  or    (9)    in  case  of  any  person 
ule    of    property,    or    intentionally       having,  to  his  knowledge,  after  he 
omitted  therefrom  any  of  the  prop-       has  become    a   bankrupt,   proved   a 
erty  of  his  estate,  or  from  the  list       false  claim  against  his  estate,  failed 
of  his  creditors  any  person  to  whom       to    disclose    that    fact,    within    one 
he     is    indebted    in     a     substantial       month  after  coming  to  a  knowledge 
amount,    or    included    therein    any       lliereof,  to  his  trustee." 
person  to  whom  he  is  not  indebted,  '31  Cong.  Rec.  7205. 

or   included   therein   a   creditor   for  °  B.  A.   1898,  Sec.   14/;.     See  Sees, 

an  amount  substantially  more  than       279  and  280.  f^nst. 
the    true    indebtedness,    of    (7)    se-  "32  Stat,  at  L.  797. 


802  LAW    AXn    n^OCKKIMXnS    rx    TtANKRUPTrV. 

erty  on  cTodit  ;  '  o\\  at  any  liir.c  sul)sc(|iK'nt  In  ihc  first  day  of 
the  lour  niuiilhs  imnicdialcly  prcceiliui;-  the  lilini;-  of  the 
petition  transferred,  removed,  destroyed,  or  eonce;ded,  or  per- 
niittetl  to  be  removed,  ilestroyed,  or  eoneealed  any  of  his  prop- 
erty with  intent  to  hinder,  dehiy.  or  defraud  his  creditors;® 
or.  in  vohmtary  proceedings  been  granted  a  (h'scharge  in 
bankruptcy  within  six  years; "  or  in  the  course  of  the  proceed- 
ings in  bankruptcy  refused  to  obey  any  lawful  order  of  or 
to  answer  any  material  question  approved  bv  the  court.^° 

Another  ground  for  contesting  a  discharge,  recognized  by 
the  courts,  is  that  the  court  has  never  acquired  jurisdiction 
of  the  proceedings,  although  it  may  have  made  many  orders 
therein.  Thus  a  court  will  not  accjuire  jurisdiction  where 
at  the  time  of  filing  the  petition  the  bankrupt  had  not  resided 
or  had  a  domicile  or  a  place  of  business  within  the  district 
for  the  length  of  time  prescribed  by  the  statute,  or  where 
any  jurisdictional  requirement  is  wanting.  This  objection 
can  not  be  raised  upon  an  application  for  a  discharge  \A'hen 
the  record  on  its  face  shows  jurisdiction."  The  truth  of  juris- 
dictional averments  in  the  petition  must  be  contested  at  the 
time  of  the  adjudication  or  jurisdiction  will  be  conclusively 
presumed  and  a  discharge  granted. ^^ 

§  279.     First  ground  for  opposing  a  discharge,  that  the  bank- 
rupt is  guilty  of  an  offense. 

The  court  will  refuse  the  application  for  a  discharge  when 
the  bankrupt  has  committed  an  offense  under  the  statute 
punishable  by  imprisonment." 

Offenses  under  the  act  are:  When  a  person  has  know- 
ingly and  fraudulently,  first,  concealed,  while  a  bankrupt, 
from  his  trustee  any  of  the  property  belonging  to  his  estate 

'  See  Sec.  280a,  post;  In  re  Ives,  "  See  Sec.  280b,  post. 

No.  7115  Fed.  Cas.,  5  Dill.  146;  In  "See  Sec.  280c,  post. 

re   Goodale,    109   Fed.    Rep.   783,   6  "  See  Sec.  28od,  post. 

Am.  B.  R.  493;  III  re  Clisdell,   loi  "  See  cases  cited  in  note  7  aliove. 

Fed.    Rep.    246,   4   Am.    B.    R.    95;  "  B.  A.  1898,  Sec.  14^. 
In  re  Mason,  99  Fed.   Rep.  256,  3 
Am.   B.    R.   599. 


DISCHARGE.  803 

in  bankruptcy;  or,  second,  made  a  false  oath  or  account  in, 
or  in  relation  to,  any  proceeding  in  bankruptcy;  or,  third, 
presented  under  oath  any  false  claim  for  proof  against  the 
estate  of  a  bankrupt,  or  used  any  such  claim  in  composition, 
personally  or  by  agent,  proxy,  or  attorney,  or  as  agent,  proxy, 
or  attorney ;  or,  fourth,  received  any  material  amount  of  prop- 
erty from  a  bankrupt  after  the  filing  of  the  petition,  with 
intent  to  defeat  the  act;  or,  fifth,  extorted  or  attempted  to 
extort  any  money  or  property  from  any  person  as  a  consid- 
eration for  acting  or  forbearing  to  act  in  bankruptcy  proceed- 
ings.^ What  acts  are  necessary  to  constitute  each  of  these 
offenses  is  considered  elsewhere  and  need  not  be  repeated 
here." 

It  is  not  necessary  that  a  bankrupt  shall  have  been  con- 
victed of  the  offense  as  a  foundation  for  refusing  the  dis- 
charge. If  he  has  been  guilty  of  an  offense  he  can  not  be  dis- 
charged, although  from  difficulties  in  proof,  placed  in  the  way 
by  statute,  he  can  not  be  convicted  of  the  offense  in  a  criminal 
prosecution.' 

The  burden  of  proof  is  on  the  objecting  creditor  to  establish 
by  clear  and  convincing  evidence  that  the  bankrupt  has  com- 
mitted the  offense  under  the  act  in  order  to  defeat  his  dis- 
charge,* The  proceeding  for  a  discharge  is  not  a  criminal 
proceeding.^  \\'hile  the  objecting  party  has  the  burden  of  the 
proof,  he  is  not  required  to  prove  the  commission  of  the 
offense  alleged  beyond  a  reasonable  doubt,  a  fair  preponder- 

'  B.  A.   1898,   Sec.  2gh.     See  also  885,  14  Am.  B.  R.  290 ;  In  re  Gay- 
Offenses,  Chap.  XXI,  ante.  lord    (C.  C.   A.  2d  Cir.),   112  Fed. 

'  Sees.  230  to  234,  ante.  Rep.   668,   7   Am.    B.    R.    i ;    In   re 

''In    re    Gaylord    (C.    C.    A.    2d  Dauchy,  122  Fed.  Rep.  688,  10  Am. 

Cir.),  112  Fed.  Rep.  668,  7  Am.  B.  B.  R.  527^  In  re  Howden,  11 1  Fed. 

R.  I ;  In  re  Dow's  Estate,  -105  Fed.  Rep.  723,  7  Am.  B.  R.   191 ;  In  re 

Rep.  889,  5  Am.  B.  R.  400;  In  re  Jacobs,   144  Fed.  Rep.  868,   16  Am. 

Goodale,  109  Fed.  Rep.  783,  6  Am.  B.    R.  482. 

B.   R.   493;   In   re  Leslie,   119   Fed.  "/»    re    Gaylord    (C.    C.    A.    2d 

Rep.  406,  9  Am.  B.  R.  561;  contra.  Cir.),    112    Fed.    Rep.    668,    7    y\ni. 

In  re  Marx,   102  Fed.   Rep.  676,  4  B.   R.    i ;   In  re   Dauchy,    122   Fed. 

Am.  B.  R.  521.  Rep.  688,   10  Am.  B.  R.  527. 

*  In    re    Keefcr,    135    I'ed.    Rep. 


804 


LAW    AXD   PROCKEDINGS   IN    T.  A  N  K  UK  I'lcY 


ancc  pf  c\  iiloncc  is  sufficient.'"'  Testimony  of  the  l);nil<rni)t 
upon  his  examination  may  he  used  npon  an  apphcation  to 
tlefeat  a  (Hschariie.' 


jJ280.     Second  ground  of  opposing  discharge,  that  bankrupt 
destroyed,  concealed  or  failed  to  keep  books. 

A  bankrupt  should  not  be  granted  a  discharg-c  in  proceed- 
ings begun  since  February  5,  1903,  when  he  has,  wilh  intent 
to  conceal  his  linancial  condition,  destroyed,  concealed,  or 
failed  to  keep  books  of  account  or  records  from  which  such 
condition  might  be  ascertained.^ 

Tn  order  to  prevent  a  discharge  under  this  provision  two 
things  must  concur.  First,  the  bankrupt  must  have  destroyed, 
concealed,  or  failed  to  have  kept  books  of  account  or  records 
from  which  his  financial  condition  might  be  ascertained. 
Second,  he  must  have  done  this  with  intent  to  conceal  his 
financial  condition. 

The  original  bankrupt  act  contained  the  word  "fraudulent" 
before  intent  and  also  a  third  element,  namely :  that  he  must 
have  destroyed  or  concealed  or  failed  to  keep  books  of  account 
in  contemplation  of  bankruptcy."  The  words  "in  contem- 
plation of  bankruptcy"  did  not  mean  "in  contemplation  of 
insolvency" — or  a   simple   inability   to   pay   as   debts   should 


'In  re  Gaylord  (C.  "C  A.  2d 
Cir.),  112  Fed.  Rep.  668,  7  Am. 
B.  R.  I ;  In  re  Leslie,  iig  Fed.  Rep. 
406,  9  Am.  B.  R.  561  ;  In  re  Dauchy, 
122  Fed.  Rep.  688,  10  Am.  B.  R. 
527;  In  re  Hamilton,  133  Fed.  Rep. 
823,  13  Am.  B.  R.  22)2)'>  ^n  re  How- 
den,  III  Fed.  Rep.  ^2^,  7  Am.  B. 
R.  191. 

''In  re  Gaylord  (C.  C.  A.  2d 
Cir.),  112  Fed.  Rep.  668,  7  Am. 
B.  R.  i;  In  re  Wilcox  (C.  C.  A. 
2d  Cir.),  109  Fed.  Rep.  628,  6  Am. 
B.  R.  362;  In  re  Wiesen  Bros.,  135 
Fed.  Rep.  442,   14  Am.  B.  R.  347; 


131    Fed.   Rep.  824,    12  Am.   B.   R. 

653. 

^  B.  A.  1898,  Sec.  14&,  clause  2, 
as  amended  February  5,  1903,  32 
Stat,   at  L.  797. 

'^  B.  A.  1898,  Sec.  14&.  Van  Ingen 
V.  Schophofen  (C.  C.  A.  8th  Cir.), 
129  Fed.  Rep.  352,  12  Am.  B.  R. 
24;  In  re  Idzall,  96  Fed.  Rep.  314, 
2  Am.  B.  R.  741 ;  In  re  Carmichael, 
96  Fed.  Rep.  594,  2  Am.  B.  R. 
815;  In  re  Blalock,  118  Fed.  Rep. 
679,  9  Am.  B.  R.  266;  In  re  Spear, 
103  Fed.  Rep.  779,  4  Am.  B.  R. 
617;    In    re    Brice,    102    Fed.    Rep. 


In  re  Alphin  &  Lake   Cotton   Co.,       114,  4  Am.  B.  R.  355. 


DISCHARGE. 


805 


become  due  and  payable — but  meant  that  the  debtor  must 
contemplate  the  commission  of  what  was  declared  by  the 
act  to  be  an  act  of  bankruptcy,  or  must  have  contemplated 
an  application  by  himself  to  be  declared  a  bankrupt.^ 

It  is  not  necessary  to  allege  or  prove,  in  proceedings  begun 
since  the  amendment  of  February  5,  1903,  that  the  intent  was 
fraudulent  or  that  the  destruction,  concealment  or  failure  to 
keep  books  was  in  contemplation  of  bankruptcy  in  order  to 
defeat  a  discharge/  It  is  necessary  to  allege  and  prove  these 
things  when  the  bankruptcy  proceeding  was  begun  before  that 
time/ 

First,  Failure  to  Keep  Books,  etc. — It  is  essential  to 
prevent  a  discharge  that  the  bankrupt  has  destroyed,  concealed 
or  failed  to  have  kept  books  of  account  or  records  from  which 
his  financial  condition  nu'ght  be  ascertained.*' 

The  absence  of  books  of  account  and  records  must  be  due 
to  the  acts  of  the  bankrupt.  He  will  not  be  required  to  abide 
the  consequences  of  the  acts  of  other  persons,  if  innocent 
himself.  The  mere  fact  that  such  books  do  not  come  into  the 
possession  of  the  trustee  is  not  sufficient  to  prevent  a  dis- 
charge,' unless  the  bankrupt  is  chargeable  for  their  disap- 
pearance.^ A  failure  to  keep  books  by  a  husband  who  man- 
ages the  business  for  his  wife  will  not  prevent  a  discharge 


'  Buckingham  v.  McLean,  13 
How.  168,  14  L.  Ed.  91 ;  In  re 
Marx,  102  Fed.  Rep.  676,  4  Am. 
B.  R.  521;  III  re  Kenyon,  112  Fed. 
Rep.  658,  7  Am.  B.  R.  527;  Van 
Ingen  v.  Schophofen  (C.  C  A.  8th 
Cir.),  129  Fed.  Rep.  352,  12  Am. 
B.   R.   24. 

*  In  re  Alvord,  135  Fed.  Rep. 
236,  14  Am.  B.  R.  264. 

'Van  Ingen  v.  Schophofen  (C.  C. 
A.  8th  Cir.),  129  Fed.  Rep.  352, 
12  Am.  B.  R.  24;  In  re  Mackenzie, 
132  Fed.  Rep.  114,  12  Am.  B.  R. 
605;   In   re   Studebaker    (C.    C.    \. 


2d  Cir.),  127  Fed.  Rep.  951,  11  Am. 
B.  R.  384;  In  re  Feldstein  (C.  C. 
A.  2d  Cir.),  115  Fed.  Rep.  259.  8 
Am.  B.  R.  160. 

•^  B.  A.  1898,  Sec.  i^h,  as  amended 
Feb.   5,   1903,  32  Stat,  at  L.   797. 

'■In  re  Fades  (C  C.  A.  7th  Cir.), 
143  Fed.  Rep.  293,  16  Am.  B.  R.  30. 

*Ablowich  V.  Stnrsberg  (C.  C. 
A.  2d  Cir.),  IDS  Fed.  Rep.  75i,  5 
Am.  B.  R.  403,  affirming  3  Am.  B. 
R.  586;  In  re  Mendelsohn,  102  Fed. 
Rep.  119,  4  Am.  B.  R.  103;  In  re 
Morgan,  iot  Fed.  Rep.  982,  4  Am. 
15.    R.  402. 


800  LAW    AM)    rKOCLKUlNGS   IN    KAN  KKl  T  ICV. 

boiiii;'  graiiloil  the  wit'o.  if  she  is  innocent.''  A  failure  io  keep 
books  by  a  partner,  it'  it  i)re\ents  the  diseharj^e  of  an  inno- 
cent partner  at  aU,  it  is  st>  only  when  the  transactions  not 
recordeil  hail  reference  to  partnership  transactions  so  as  to  fall 
within  the  scope  ot"  the  [)artners  authority.'"  The  destruction 
of  partnership  books  is  grouiKl  for  the  refusal  of  a  discharge 
to  a  bankrupt  partner  indix  idually^^ 

-V  discharge  should  be  denied  a  bruikrupt,  who  has  kept 
proper  books  of  account  in  his  business  to  show  his  financial 
condition  at  the  time  of  the  bankruptcy,  and  prevents  their 
use  in  the  settlement  of  his  estate  by  destroying  ^-  or  conceal- 
ing "  them.  To  conceal  includes  to  secrete,  falsify  and  muti- 
late.^* The  mere  fact  that  a  bankrupt  fails  to  preserve  books 
of  account  kept  in  his  business,  from  which  he  had  retired 
many  3xars  before  bankruptcy,  is  not  sufificient  to  defeat  his 
discharge.^^ 

A  discharge  should  be  denied  a  bankrupt,  who  has  kept 
books  of  account  or  records  in  his  business.  This  may  result 
from  a  failure  to  keep  proper  books  or  from  the  manner  in 
which  the  books  are  kept.  The  object  of  keeping  the  books  is 
to  furnish  and  preserve  evidence  of  the  real  condition  of  the 
bankrupt's  affairs,  so  that  all  of  the  bankrupt's  proper  assets 

'In  re  Meyers,  105  Fed.  Rep.  353,  "/m  re  McBachron,  116  Fed.  Rep. 

5  Am.  B.   R.  4;  In  re  Hyman,  97      783,  8  Am.  B.  R.  732;  In  re  Mendel- 
Fed.  Rep.  195,  3  Am.  B.  R.  169.  sohn,  102  Fed.  Rep.  119,  4  Am.  B. 

'"  In  re  Schultz,  109  Fed.  Rep.  264,       R.   103 ;  In  re  Jewett,  3  Fed.  Rep. 

6  Am.  B.  R.  91.    Consult  also  In  re       503;    In   re    Carrier,   47    Fed.   Rep. 
Hardie  &  Co.,    143  Fed.   Rep.   607,      438. 

609,  16  Am.  B.  R.  313.  "B.   A.    1898,    Sec.    l,   clause   22. 

"  In  re  Conley,  120  Fed.  Rep.  42,  See  also  In  re  Mendelsohn,  102  Fed. 

9  Am.  B.  R.  496.  Rep.  119,  4  Am.  B.  R.  103,  and  In 

'"Ablowich   V.    Stursberg    (C.    C.  re  Pierson,  No.  11 153  Fed.  Cas.,  10 

A.  2d    Cir.),    105    Fed.    Rep.    751,  N.  B.  R.  107.    In  re  Bemis,  104  Fed. 
5  Am.  B.  R.  403,  affirming  3  Am.  Rep.  672,  5  Am.  B.  R.  36;  Bauman 

B.  R.  586;  In  re   McBachron,    116  v.    Feist    (C.    C.   A.   8th   Cir.),    107 
Fed.  Rep.  783.  8  Am.  B.  R.  732.  Fed.  Rep.  83,  5  Am.  B.  R.  703. 

But  see  In  re  Studebaker  (C.  C.  ^'/m  re   Prager  &  Son,   134  Fed 

A.  2d  Cir.),  127  Fed.  Rep.  951,  ll  Rep.  1006,  13  Am.  B.  R.  527;  In  re 
Am.  B.  R.  384.  Stark,  96  Fed.   Rep.  88,  2  Am    B. 

R.  785. 


DISCHARGE. 


807 


and  liabilities  may  be  ascertained  and  his  property  distributed 
among  his  bona  fide  creditors.  A  bankrupt  is  required  to  have 
kept  such  books  as  are  necessary  to  ascertain  his  financial  con- 
dition. What  books  are  necessary  for  this  purpose  depends 
upon  the  character  of  the  business  and  the  circumstances  in 
each  particular  case.^*^  If  the  business  of  the  bankrupt  is  such 
that  ordinarily  books  would  not  be  kept,  he  need  not  have  kept 
them.'' 

There  may  be  a  failure  to  keep  books,  if  the  books  are  so 
irregularly  kept  that  it  is  impossible  to  determine  the  bank- 
rupt's financial  condition  from  them.'*  Congress  has  not  at- 
tempted to  prescribe  any  particular  system  or  principle  of 
bookkeeping.  The  form  and  manner  in  which  the  books  are  kept 
is  unimportant,  so  long  as  the  financial  condition  of  the  bank- 
rupt may  be  ascertained  from  them.'**  If  a  competent  person 
upon  an  examination  of  the  books  and  records  kept  by  the 
bankrupt  is  able  to  reach  a  substantially  correct  conclusion 
as  to  the  state  of  his  affairs,  it  is  all  that  is  required.  If  he 
can  not  do  this  there  has  not  been  the  keeping  of  ''books  of 
account  or  record,"  wh*ich  the  bankrupt  act  calls  for. 


"  In  re  Bemus,  104  Fed.  Rep.  672, 

5  Am.  B.  R.  36;  In  re  Cashman, 
103  Fed.  Rep.  67,  4  Am.  B.  R.  326; 
In  re  Grossman,  iii  Fed.  Rep.  507, 

6  Am.  B.  R.  510;  In  re  Kenyon, 
112  Fed.  Rep.  658,  7  Am.  B.  R. 
527;  In  re  Greenberg,  114  Fed. 
Rep.  77Z,  8  Am.  B.  R.  94;  In  re 
Feldstein  (C.  C.  A.  2d  Cir.),  115 
Fed.  Rep.  259,  8  Am.  B.  R.   160. 

See  also  In  re  Bellis,  No.  1275 
Fed.  Cas.,  4  Ben.  53;  In  re  Gay, 
No.  5279  Fed.  Cas.,  2  N.  B.  R.  358; 
In  re  Smith,  16  Fed.  Rep.  468; 
In  re  White,  No.  17532  Fed.  Cas., 
2  N.  B.  R.  590;  In  re  Brockway, 
12  Fed.  Rep.  69;  In  re  1  lammnnd. 
No.  5999  Fed.  Cas..  i  Low.  381 ; 
In   re  Vcniia,   5   I'ed.   Rep.   72^. 

"  In  re  Corn.  106  Fed.  Rep.  143, 
5   .Am.   B.   R.  478;   /;;   re   Pragor  & 


Son,  134  Fed.  Rep.  1006,  13  Am. 
B.  R.  527;  In  re  Keefer,  135  Fed. 
Rep.  88s,  14  Am.  B.  R.  290;  Sellers 
V.  Bell  (C.  C.  A.  5th  Cir.),  94  Fed. 
Rep.  801,  2  .Am.  B.  R.  529. 

'"In  re  Feldstein  (C.  C.  A.  2d 
Cir.),  115  Fed  .Rep.  259,  8  Am. 
B.  R.  160;  In  re  Alvord,  135  Fed. 
Rep.  236,  14  Am.  B.  R.  264;  In  re 
Greenberg,  IT4  Fed.  Rep.  772,,  8 
Am.  B.  R.  94;  In  re  Ca.shman,  103 
Fed.  Rep.  67,  4  .Am.  B.  R.  326;  In  re 
Morgan,  loi  Fed.  Rep.  982.  4  .Am. 
B.  R.  402;  In  re  .Allcndorf,  129  Fed 
Rep.  981,  12  Am.  P..  R.  320;  In  re 
Hamilton,  133  Fed.  Rep.  823,  13 
.Am.  B.  R.  333. 

'"/;;  re  Hamilton,  133  Fed.  Rep. 
823,  13  Am.  B.  R.  333;  In  re  Izdall, 
96  Fed.  Rep.  314.  2  Am.  B.  R. 
74'. 


SOS 


LAW    AND   PROCEEDINGS   IN    UAX  KRT^PTCY. 


Second,  Intent. — In  order  to  defeat  a  discharoc  there  must 
be  an  intent  on  the  part  of  the  bankrupt  to  conceal  his  financial 
condition,  where  he  has  destroyed,  cuucealed  or  faiknl  to  keep 
books."^  In  bankruptcy  proceedings  begun  prior  to  the  aniend- 
nient  of  1903,  the  intent  must  be  fraudulent.'^  By  omitting 
the  word  "fraudulent"  the  amendment  of  1903  has  enlarged 
the  rights  of  the  cretlitors.  It  is  not  necessary  now  to  allege 
or  prove  fraud.  An  intent  to  conceal  his  hnancial  condition 
is  all  that  the  creditors  opposing  the  discharge  of  a  bankrupt 
are  required  to  establish."  Where  the  bankrupt  acts  honestly 
without  intent  to  cover  up  his  financial  condition,  he  is  entitled 
to  a  discharge,  although  he  may  have  destroyed  or  neglected 
to  keep  books  through  inadvertence,  ignorance  or  mistake. 
Under  the  act  of  1867  a  simple  failure  of  merchants  and 
tradesmen  to  keep  books  of  account,  irrespective  of  intent,  was 
all  that  was  necessary  to  defeat  a  discharge.^^ 

The  intent  of  the  bankrupt  can  not  ordinarily  be  proved 
bv  direct  evidence.  The  bankrupt  is  presumed  to  intend  the 
direct  natural  consequences  of  his  acts.  If  the  result  is  to  pro- 
duce inexplicable  confusion  of  the  bankrupt's  financial  affairs, 
the  bankrupt  must  be  held  to  have  intended  to  conceal  his 
financial  condition.'* 

The  burden  of  proof  is  upon  the  opposing  creditors  to 
establish  by  clear  and  convincing  evidence  that  the  bankrupt 
has  destroyed,  concealed  or  failed  to  keep  books  of  record  or 


^  B.  A.  1898,  Sec.  14^,  as  amended 
February  5,  1903,  32  Stat,  at  L.  797. 
In  re  Allendorf,  129  Fed.  Rep.  981, 
12  Am.  B.  R.  320;  Godshalk  v. 
Sterling  (C.  C.  A.  2d  Cir.),  129 
Fed.  Rep.  580,  12  Am.  B.  R.  302; 
In  re  Keefer,  135  Fed.  Rep.  885, 
14  Am.  B.  R.  290;  In  re  Hamilton, 
133  Fed.  Rep.  823,   13  Am.  B.   R. 

333- 

"B.  A.  1898,  Sec.  14&.  /»  re 
Studebaker  (C.  C.  A.  2d  Cir.),  127 
Fed.  Rep.  951,  11  Am.  B.  R.  384; 
Van  Ingcn  v.  Schophofcn  (C.  C.  A. 


8th  Cir.),  129  Fed.  Rep.  352,  12 
Am.  B.  R.  24;  In  re  Feldstein  (C. 
C.  A.  2d  Cir.),  IIS  Fed.  Rep.  259, 
8  Am.  B.  R.  160;  In  re  Izdall,  96 
Fed.  Rep.  314,  2  Am.  B.  R.  741. 

"In  re  Alvord,  135  Fed.  Rep. 
236,  14  Am.  B.  R.  264;  God.shalk 
V.  Sterling  (C.  C.  A.  3d  Cir.),  129 
Fed.   Rep.   580,   12  Am.   B.   R.  302. 

"^R.  S.  Sec.  5 1 10,  clause  7;  In  re 
Hunt,  26  Fed.  Rep.  739. 

^*  In  re  Alvord,  135  Fed.  Rep. 
236,    14   Am.    B.    R.   264. 


DISCHARGE.  809 

account  with  tlie  intent  to  conceal  his  financial  condition.^^ 
It  has  been  held  that  evidence  of  a  failure  to  keep  any  books 
whatever  will  not  support  an  allegation  complaining  of  the 
manner  in  which  the  books  were  kept  so  as  to  prevent  a  dis- 
charge.""^ In  such  a  case  the  court  on  application  will  ordina- 
rily allow  the  pleadings  to  be  amended  to  conform  to  the  evi- 
dence. 

§  280a.  Third  ground  of  opposing  discharge,  that  the  bank- 
rupt has  obtained  property  on  credit  upon  a  false 
statement  in  writing. 

A  bankrupt  will  not  be  granted  a  discharge  in  proceedings 
begun  since  February  5,  1903,  when  he  has  obtained  prop- 
erty on  credit  from  any  person,  upon  a  materially  false  state- 
ment in  writing  made  to  such  person  for  the  purpose  of 
obtaining  such  property  on  credit.^ 

This  bar  to  a  discharge  was  added  by  the  amendment  of 
Februry  5,  1903.  Nothing  like  it  is  contained  in  any  prior 
bankruptcy  laws  of  this  country.  It  applies  only  to  proceed- 
ings begun  since  the  date  of  the  amendment. 

To  prevent  a  discharge  under  this  provision,  two  things 
must  be  established  by  the  objecting  creditor:  first,  the 
bankrupt  must  have  obtained  property  on  credit,  and,  second, 
he  must  have  made  to  the  person  from  whom  he  obtained  it 
a  materially  false  statement  in  writing  for  the  purpose  of  ob- 
taining it  on  credit. 

The  statement  referred  to  in  this  provision  uuist  be  made 
by  the  bankrupt  or  his  agent  with  his  authority  -  to  the  cred- 
itor giving  him  credit.  It  need  not  be  made  to  the  creditor 
opposing  the  discharge.'^    It  has  been  held  sufficient  to  bar  liis 

"/«  re  Hamilton,   133  Fed.  Rep.  '  B.  A.  i8g8,  Sec.  14?^,  as  amcndcMl 

823,  13  Am.  B.  R.  333; /»  rf  Kccfcr,  P^eb.    5,    1903,   ^2    Stat,   at   L.    797; 

135   Fed.   Rep.  885,    14  Am.    B.    R.  In  re  Scott,   126  Fed.  Rep.  981.   11 

290;   In   re   Chamberlain,    125    Fed.  Am.  B.  R.  327. 

Rep.  629,   II    Am.   B.   R.  95;  In  re  ''In   re   Goodhile,    130   Fed.    Rep. 

Fades  (C.  C.  A.  7tli  Cir.),  143  Fed.  782.   12  Am.  B.  R.  380. 

Rep.  292,  16  Am.  B.  R.  30.  ' /h  re  ITarr,   143  Fed.  Rep.  421, 

'"/«    re    Halsell,    132    Fed.    Rep.  16  Am.  B.  R.  213. 
562.  13  Am.  V,.  R.  106. 


810 


LAW    AND   PROCEEDINGS   IN    BANKRUPTCY. 


discharge  if  the  false  statement  w  as  made  to  a  creditor  whose 
debt  was  paid  in  t'nll  before  bankruptcy.*  A  false  statement 
made  by  one  partner  ni)on  which  crccht  was  extended  to  tlie 
firm  has  been  hold  snrticient  to  defeat  the  discharge  of  another 
partner.^  A  false  statement  made  by  a  bankrupt  may  bar  his 
right  to  a  discharge  although  the  credit  was  t)btained  by  a 
corporation  of  which  the  bankrupt  owned  the  majority  of  the 
stock."" 

An  oral  statement  is  not  sufficient.  It  must  be  in  writing, 
but  there  is  nothing  in  tile  act  which  requires  it  to  be  signed 
by  the  debtor.  The  statement  must  be  materially  false  in  fact. 
It  is  not  necessary  that  it  should  be  intentionally  false.^  If  the 
statement  is  made  for  the  purpose  of  obtaining  property  on 
credit,  is  false  and  w'as  relied  upon  by  the  creditor  upon  the 
faith  of  which  he  made  the  sale  on  credit,  it  is  sufficient  to 
defeat  a  discharge.^  If  the  creditor  does  not  give  credit  on 
the  faith  of  the  statement.®  or  if  the  debtor  did  not  make  the 
statement  for  the  purpose  of  obtaining  the  property  on  credit,^" 
it  will  not  bar  a  discharge,  no  matter  how  false  the  statement 
may  be. 

There  is  no  time  limit  fixed  by  the  statute  within  which  the 
statement  must  be  made."  It  may  be  made  more  than  four 
months  prior  to  filing  the  petition  and  defeat  a  dischaige.^^ 

This  ground  may  be  pleaded  by  the  creditor  selling  the 
goods  or  any  other  person  entitled  to  oppose  the  discharge.^^ 
In  pleading  this  objection  the  specification  should  set  out  the 


*  In  re  Harr,  143  Fed.  Rep.  421, 
16  Am.  B.  R.  213. 

°/m  re  Hardie  &  Co.,  143  Fed. 
Rep.  607,  16  Am.  B.  R.  313. 

^  In  re  Dresser  &  Co.,  144  Fed. 
Rep.  318,  13  Am.  B.  R.  616. 

Vn  re   Petersen,   10  Am.   B.   R. 

355- 
^  In  re   Goodhile,    130   Fed.   Rep. 

782,  12  Am.  B.  R.  380. 

°/m  re  Kaplan,  141  Fed.  Rep. 
463,  15  Am.  B.  R.  534;  In  re  Allen- 


dorf,  129  Fed.  Rep.  981,  12  Am.  B. 
R.  320. 

"•/m  re  Allendorf,  129  Fed.  Rep. 
981,  12  Am.  B.  R.  320. 

"/«  re  Scott,  126 -Fed.  Rep.  981. 
II  Am.  B.  R.  327;  In  re  Peterson, 

10  Am.  B.  R.  355 ;  In  re  Dresser  & 
Co.,  144  Fed.  Rep.  318,  13  Am.  B. 
R.  616. 

,  "/w  re  Scott,  126  Fed.  Rep.  981, 

11  Am.  B.  R.  327. 

"In  re  Harr,  143  Fed.  Rep.  421, 
16  Am.  B.   R.  213. 


DISCHARGE. 


811 


false  representations  and  gi\c  t!ie  names  of  persons  alleged  to 
have  been  defrauded/*  The  burden  of  proof,  as  in  other 
objections  to  a  discharge,  is  upon  the  objecting  creditors. ^^ 

§  280b.     Fourth  ground  of  opposing  discharge,  that  the  bank- 
rupt has  made  a  fraudulent  transfer. 

A  bankrupt  will  not  be  granted  a  discharge  in  proceedings 
begun  since  February  5,  1503,  when  he  has,  at  any  time 
subsequent  to  the  first  day  of  the  four  months  immediately 
preceding  the  filing  of  the  petition,  transferred,  removed, 
destroyed  or  concealed,  or  permitted  to  be  removed,  destroyed 
or  concealed,  any  of  his  property  with  intent  to  hinder,  delay 
or  defraud  his  creditors.^ 

This  bar  to  a  discharge  was  added  by  the  amendment  of 
February  5,  1903,  and  applies  only  to  proceedings  instituted 
since  that  date. 

This  is  substantially  the  phraseology  used  in  the  first  act 
of  bankruptcy.  If  the  objecting  creditor  can  show  the  com- 
mission of  an  act  by  the  bankrupt  after  the  first  day  of  i.'ie 
four  months'  period,  which  would  be  an  act  ot  bankruptcy 
under  Sec.  Za,  clause  1,  if  committed  prior  to  the  filing  of 
the  petition,  the  bankrupt  is  not  entitled  to  a  discliarge.-  This 
provision  makes  conveyances  which  by  the  common  law  and 
the  statute  of  Elizabeth  were  held  void,  because  fraudulent, 
a  ground  for  refusing  a  discharge  to  a  bankrupt.  A  mere 
constructive  fraud  is  not  sufficient  to  defeat  a  discharge.  The 
test  is  the  presence  or  absence  of  real   fraud.'"'     An  assign- 


"Godshalk  v.  Sterling  (C.  C.  A. 
3d  Cir.),  129  Fed.  Rep.  580,  12  Am. 
B.  R.  302;  In  re  Levey,  133  Fed. 
Rep.  572,  13  Am.  B.  R.  312. 

"In  re  Hamilton,  133  Fed.  Rep. 
823,   13  Am.   B.   R.  SS3. 

'  B.  A.  1898,  See.  J4b,  as  amended 
Feb.  5.  1903,  32  Stat,  at  L  797. 
In  re  Miller,  135  Fed.  Rep.  591,  14 
Am.  I>.  R.  329;  In  re  Schenck,  116 
Fed.    Rep.   554.   8   .Am.   B.    R.    727; 


In  re  Young,  140  Fed.  Rep.  728, 
15  Am.  B.  R.  477;  /;;  re  Jacobs  & 
Verstandig,   147  Fed.   Rep.   797. 

'As  to  what  constitutes  such  act 
of  bankruptcy,  see  Sec.  51,  ante. 

^  In  re  Brumbaugh,  128  Fed.  Rep. 
*97i,  12  Am.  B.  R.  204;  In  re  Miller, 
135  F"ed.  Rep.  59T,  14  Am.  B.  R. 
329;  In  re  Gift,  130  Fed.  Rep. 
230,  12  Am.  P>.  R.  244;  /;;  re 
Brown,   [40  hVd.  Rci).   T^t^tT,,   15  .Am. 


812 


LAW   AND  PROCEEDINGS   IN    BANKRUPTCY. 


mcnt  lor  the  benetit  of  cretlitors  is  not  in  itself  fraudulent,'  and 
will  not  bar  a  discharge.  A  preference  is  not  made  a  bar  to 
a  discharge."' 

The  property  transferred  or  concealeil  must  belong  to  the 
bankrupt  to  fall  within  this  provision.''  The  words  "with 
intent  to  hinder,  delay  and  defraud  creditors"  mean  for  the 
purpose  of  defrauding  the  entire  body  of  creditors  and  not 
the  conversion  of  the  property  of  one  creditor.  The  fact  that 
a  stock  broker  transfers  stock  pledged  with  him  will  not  bar 
his  discharge.^  Where  the  fraudulent  transaction  took  place 
more  than  four  months  prior  to  filing  the  petition  in  bank- 
ruptcy, it  will  not  prevent  a  discharge.® 

Where  a  discharge  is  objected  to  on  this  ground  the  speci- 
fication should  describe  the  property  claimed  to  be  fraudu- 
lently transferred  or  concealed,  giving  the  name  of  the  person 
holding  the  title,  the  time  of  the  transfer  and  any  other  fact 
necessary  to  identify  the  transaction.®  The  allegation  may  be 
amended  for  the  purpose  of  amplifying  the  original  averment 
where  the  substance  is  not  changed  by  the  amendment. ^° 
The  burden  of  establishing  this  ground  of  opposition  by  clear 
and  convincing  proof  is  on  the  objecting  creditor. 


§  280c.     Fifth  ground  of  opposing  discharge,  that  the  bank- 
rupt was  granted  a  discharge  within  six  years. 

A  bankrupt  will  not  be  granted  a  discharge  in  proceedings 
begun  since  February  5,   1903,  when,  in  voluntary  proceed- 


B.    R.   350;   In   re   Dauchy    (C.    C. 

A.  2d  Cir.),  122  Fed.  Rep.  691, 
II  Am.  B.  R.  527;  In  re  Le 
Claire,   124  Fed.   Rep.  655,   10  Am. 

B.  R.  723-  See  also  Lansing  Boil- 
er &  Engine  Works  v.  Ryerson  (C. 

C.  A.  6th  Cir.),  128  Fed.  Rep.  701, 
II  Am.  B.  R.  558. 

*  Randolph  v.  Scruggs,  190  U.  S. 
533.  47  L.  Ed  1 165,  10  Am.  B.  R.  i. 

^  In  re  Maher,  144  Fed.  Rep.  505, 
16    Am.    B.    R.    340. 

°  In  re  Berry  &  Co.,  146  Fed.  Rep. 


623,  15  Am.  B.  R.  360;  Vchon  v. 
Ullman  (C.  C.  A.  7th  Cir.),  147 
Fed.  Rep.  694. 

'  In  re  Berry  &  Co.,  146  Fed.  Rep. 
623,  IS  Am.  B.  R.  360. 

^  In  re  Brumbaugh,  128  Fed.  Rep. 
971,  12  Am.  B.  R.  204. 

Vn  re  Parish,  122  Fed.  Rep.  553, 
10  Am.  B.  R.  548;  In  re  Gift,  130 
Fed.  Rep.  230,   12  Am.  B.  R.  244. 

'"/».  re  Gift,  130  Fed.  Rep.  230, 
12   Am.   B.   R.   244. 


DISCHARGE. 


813 


ings  he  has  been  granted  a  discharge  in  bankruptcy  within 

six  years.^ 

This  bar  to  a  discharge  was  added  by  the  amendment  of 
February  5,  1903,  and  appHes  only  to  proceedings  instituted 
since  that  date.  It  is  not  retroactive  as  appHed  to  cases  where 
the  first  proceedings  were  had  prior  to  the  amendment.  It 
merely  adds  a  new  condition  of  discharge  in  cases  instituted 
after  the  amendment." 

The  bar  is  limited  to  discharges  actually  granted  in  volun- 
tary proceedings.^  A  discharge  granted  in  a  partnership 
proceeding  instituted  by  himself  is  one  granted  in  voluntary 
proceedings.*  When  a  discharge  has  been  granted  in  a  vol- 
untary proceeding,  it  operates  as  a  bar  to  a  discharge  being 
granted  within  the  prescribed  period  in  a  subsequent  proceed- 
ing, either  voluntary  or  involuntary."^  It  is  no  bar  to  a  dis- 
charge that  a  discharge  was  applied  for  and  was  not  granted 
in  a  former  voluntary  proceeding,  or  that  a  discharge  was 
either  granted  or  denied  in  a  former  involuntary  proceeding. 
A  voluntary  proceeding  in  bankruptcy  for  the  sole  purpose 
of  obtaining  a  discharge  which  a  prior  involuntary  proceed- 
ing has  conclusively  determined. that  the  bankrupt  is  not  law- 
fully entitled  to  presents  no  ground  for  relief  and  should  be 
dismissed.*'  If  new  debts  have  been  created  since  the  first  pro- 
ceeding a  different  case  is  presented.  The  bankrupt  may  l^e 
entitled  to  a  discharge  releasing  him  from  these  debts.  A  dis- 
charge in  a  second  proceeding  will  not  have  the  effect  of 


'  B.  A.  1898,  Sec.  14b  as  amended 
Feb.  5,   1903,  32  Stat,  at  L.  797. 

'In  re  Carleton,  131  Fed.  Rep. 
146,  12  Am.  B.  R.  475;  In  re  Sea- 
holm  (C  C.  A.  1st  Cir.),  136  Fed. 
Rep.    144,   14  Am.   B.   R.  292. 

"In  re  Seaholm  (C.  C  A.  ist 
Cir.),  136  Fed.  Rep.  144,  I4  Am. 
B.  R.  292;  In  re  Neely,  I34  Fed. 
Rep.  667,   12  Am.  B.  R.  407. 

*  In  re  Carleton,  131  Fed.  Rep. 
146,    12  Am.   B.   R.  475. 


^In  re  Neely,  134  Fed.  Rep.  667, 
12  Am.  B.  R.  407;  In  re  Carleton, 
131    Fed.   Rep.    146,   12  Am.   B.   R. 

475- 

"Kuntz  V.  Young  (C.  C.  A.  8th 
Cir.),  131  Fed.  Rep.  719,  12  Am.  B. 
R.  505;  In  re  Fiegenbaum  (C.  C. 
A.  2d  Cir.),  121  Fed.  Rep.  69, 
9  Am.  B.  R.  595 ;  In  re  Kuffler,  144 
Fed.  Rep.  445.  16  Am.  B.  R.  305; 
In  re  Wcintral),  133  Fed.  Rep. 
1000,   13  Am.   B.  R.  71 T. 


814  LAW    AXD   rROCF.EDTXGS   IN    BANKRUPTCY. 

releasing-  debts  from  which  the  hankni])t  has  failed  to  apply 
for.  or  has  been  denied  a  (Hscharge  in  a  former  proceeding.^ 
Tliis  will  not  prevent  granting  a  discharge  for  what  it  is 
worth."' 

The  six  years'  limit  rnns  from  the  date  of  the  discharge  in 
volnntary  proceedings  to  the  date  of  judicial  action  upon  an 
application  for  the  next  discharge  either  in  voluntary  or  in- 
voluntary proceedings." 

§  280d.  Sixth  ground  of  opposing  discharge,  that  bankrupt 
has  refused  to  obey  an  order  of  court  or  to  answer  a 
question. 

A  bankrupt  will  not  be  granted  a  discharge  in  proceedings 
beo-un  since  Februarv  5,  1903.  when,  in  the  course  of  the 
proceedings  in  bankruptcy,  he  has  refused  to  obey  any  lawful 
order  of  or  to  ansv/er  any  material  question  approved  by  the 
court.^ 

To  prevent  a  discharge  it  must  appear  that  the  order  was 
lawful  and  made  in  the  course  of  bankruptcy  proceedings. 
If  the  bankrupt  is  guilty  (not  necessarily  convicted)  of  con- 
tempt in  refusing  to  obey  an  order  of  court  made  in  bank- 
ruptcy proceedings,  he  is  not  entitled  to  a  discharge.  It  is 
not  necessary  that  a  bankrupt  actually  declare  that  he  will 
not  obey  the  order.  A  delay  or  failure  to  perform  on  his 
part  for  a  reasonable  time,  after  an  order  is  made,  is  a  suffi- 
cient refusal  to  prevent  a  discharge. 

To  prevent  a  discharge  for  refusing  to  answer  a  question 
it  should  be  observed  that  the  question  must  be  material  and 
approved  by  the  judge  or  referee.  If  the  bankrupt  refuses  to 
answer  such  a  question,  he  is  not  entitled  to  his  discharge." 

^Kuntz  V.  Young    (C.  C.  A.  8th  640;   In   re  Jordan,    142  Fed.   Rep. 

Cir.),    131    Fed.    Rep.   719,    12   Am.  292,  15  Am.  B.  R.  449. 

B.  R.  505.  '  B.  A.  1898,  Sec.  \^h,  as  amended 

Vn   re  Claff,   iii   Fed.  Rep.  506,  Feb.   5,   1903,  32  Stat,  at  L.  797. 

7  Am.  B.  R.  128.  ^/"    re    Dresser    (C.    C.    A.    2d 

"/n  re  Little  (C.  C.  A.  7tli  Cir.),  Cir.),    146   Fed.   Rep.  383,    16  Am. 

137   Fed.   Rep.  521,    13  Am.   B.   R.  B.  R.  561,  affirming  144  Fed.  Rep. 

318,    13   Am.   B.    R.   616. 


J 


DISCHARGE. 


815 


It  does  not  deprive  him  of  his  constitutional  right  of  immunity 
from  self  incrimination.  The  proceeding-  for  a  discharge  is  not 
a  criminal  proceeding,  and  the  constitutional  protection  ex- 
tends to  the  protection  of  the  witness  in  criminal  proceedings 
only,  and  it  may  always  be  waived  by  the  witness  himself.^ 
It  is  within  the  power  of  Congress  to  grant  or  to  refuse  a 
■discharge  to  a  bankrupt  upon  such  conditions  as  it  may  deem 
proper.  Such  a  privilege  is  not  a  natural  right,  or  a  right  of 
property,  but  is  a  matter  of  favor,  to  be  accepted  upon  such 
terms  as  Congress  sees  fit  to  impose. 

§  281.     Pleading  to  a  specification. 

As  has  been  stated,  the  filing  of  a  specification  of  grounds 
of  opposition  to  a  bankrupt's  discharge  in  the  bankruptcy 
proceedings  is  in  the  nature  of  a  new  suit.  It  calls  for  plead- 
ing by  the  bankrupt.^ 

Where  the  allegations  of  the  specification  are  vague  and 
general  he  may  move  to  have  them  stricken  out,'  or  he  may 
rely  upon  this  defense  at  the  time  of  the  hearing,  for  the 
court  v/ill  disregard  vague  and  general  allegations."^  If  the 
allegations  are  insufficient  in  law  he  may  file  exceptions  to 
them  analogous  to  those  allowed  in  equity,*  or  he  may 
demur. ■'^  /Ml  objections  to  specifications  for  formal  defects 
must  be  raised  before  the  issue  is  tried  on  the  merits  or  the 


'  Burrell  v.  Montana,  194  U.  S. 
572,  48  L.  Ed.  1 122,  12  Am.  B.  R. 
132. 

'  See  ante,  Sec.  276. 

'In  re  Waggoner,  No.  17037  Fed. 
Cas.,  I  Ben.  532;  In  re  Crist,  116 
Fed.  Rep.  1007,  9  Am.  B.  R.  i. 

^  In  re  Peck,  120  Fed.  Rep.  972, 
9  Am.  B.  A.  747;  In  re  Goodale, 
log  Fed.  Rep.  783,  6  Am.  B.  R.  493 ; 
In  re  Steed,  107  Fed.  Rep.  682, 
6  Am.  B.  R.  Ji;  In  re  Parish,  122 
Fed.   Rep.  553,   10  Am.   B.   R.  548; 


In  re  Hendrick  138  Fed.  Rep.  47;^., 
14  Am.  B.  R.  795. 

*  In  re  Rosenfield,  No.  12057,  Fed. 
Cas.,  2  N.  B.  R.  116;  In  re  Baern- 
copf,  117  Fed.  Rep.  975,  9  Am.  B. 
R.  133;  In  re  Robinson,  123  Fed. 
Rep.  844,  10  Am.  B.  R.  477. 

*  In  re  Crist,  116  Fed.  Rep.  1007, 
9  Am.  B.  R.  r ;  In  re  Levey,  133 
I'^d.  Rep.  572.  13  Am.  B.  R.  312; 
In  re  Burk,  No.  2156  Fed.  Cas., 
Doady,  425 ;  In  re  McVey,  No.  8932 
Fed.  Cas.,  2  N.  B.  R.  257. 


816  LAW    AXn    IMUH-F.KPIXGS    IN'    ItW  K  Kl' 1' TCY. 

defect  is  waiveil "  W  here  the  bankrupt  desires  to  make  a  gen- 
eral defense,  as  bv  confession  and  avoickmce,  or  otherwise,  he 
niav  do  so  by  answer. 

When  a  l)ankrui)t  has  been  allowed  {o  file  his  [jctition  for 
discharge  more  than  a  year  after  adjudication  insuflicient 
gnnuids  for  the  delay  should  be  seasonably  set  up  by  motion 
to  vacate." 

§  282,     The  hearing  of  objections  to  a  discharge. 

The  statute  provides  that  "the  judge  shall  hear  the  appli- 
cation iov  a  discharge  and  such  proofs  and  pleas  as  may  be 
made  in  opposition  thereto  by  parties  in  interest,  at  such  time 
as  will  give  parties  in  interest  a  reasonable  opportunity  to  be 
heard,  and  investigate  the  merits  of  the  application.^ 

It  is  the  duty  of  the  bankrupt  to  set  his  application  for  a 
discharge  for  hearing.  But  laches  in  so  doing  is  not  a  ground 
for  dismissal."  If  the  bankrupt  is  dilatory  in  bringing  the 
matter  on  for  hearing  an  opposing  creditor  may  set  the  appli- 
cation for  discharge  and  specification  of  objections  for  hear- 
ing.^ If  a  creditor,  who  has  duly  filed  specification  of  objec- 
tions to  the  bankrupt's  discharge,  abandons  it,  the  court  in  its 
discretion  may  permit  other  creditors  to  carry  on  the  oppo- 
sition, as  if  they  had  originally  filed  the  specification.^ 

The  bankrupt  may  be  required  to  attend  the  heairng,   if 

^  In    re    Baldwin,    iig    Fed.    Rep.  R.  428;  In  re  Dietz,  97  Fed.  Rep. 

796,  9  Am.  B.  R.  591 ;  In  re  Baern-  563,  3  Am.  B.  R.  316. 
copf,   117  Fed.  Rep.  975,  9  Am.  B.  In    re    Houghton,    supra.    Judge 

R.    133;   In   re    Robinson,    123   Fed.  Lowell  said:  "I  will  not  undertake 

Rep.  844,  ID  Am.  B.  R.  477 ;  In  re  at  this  time  to  lay  down  any  rules 

Scott,  126  Fed.  Rep.  981,  11  Am.  B.  for   the   appHcation   of  this   discre- 

R.   327.  tionary  power.     A  great  variety  of 

'hi  re  Haj-nes  &  Sons,   122  Fed.  circumstances  may  be  found  in  the 

Rep.   560,   10  Am.   B.   R.   13.  different  cases.     But   it   is   obvious 

^  B.  A.  1898,  Sec.  14b.  that  among  them   may  be  the   fact 

^In  re  Wolff,   132  Fed.  Rep.  396,  that  tlie  debtor  has  bought  off  the 

13  Am.  B.  R.  95.  original  objecting  creditor  after  the 

^  In  re  Sutherland,  No.  13640  Fed.  time     for    filing    specifications    has 

Cas.,  Deady,  573.  passed;    and    this    could    not    have 

*  In  re  Houghton,  No.  6730  Fed.  been  availed  of  before  it  occurred. 

Cas.,  10  N.  B.  R.  Z27\  ^n  re  San-  No    doubt    many   other   cases    may 

born,  131  Fed.  Rep.  397,  12  Am.-^B.  call  for  the  exercise  of  the  power." 


DISCHARGE.  817 

creditors  request  it."'     If  he  fails  to  do  so,  his  application  for 
a  discharge  may  be  dismissed.'^ 

The  application  for  a  discharge  must  be  heard  and  decided 
by  the  judge."  He  may  try  the  issues  himself  or  may  refer  such 
an  application  to  the  referee  to  ascertain  and  report  the  facts.^ 
The  referee  can  not  finally  determine  the  question  of  discharge 
or  non-discharge,''  but  he  may  be  ordered  to  report  the  facts 
and  his  recommendation  or  conclusion  as  to  the  matter.  He 
aids  the  court  like  a  master  in  chancery. 

By  the  act  of  1867  authority  was  given  the  court  "in  its  dis- 
cretion" to  order  any  question  of  fact  presented  by  the  speci- 
fication in  opposition  to  a  discharge  to  be  tried  by  jury."'  Idie 
court  may  in  its  discretion  under  the  present  act  direct  an 
isrue  to  be  tried  by  the  jury."  This  course  is  seldom  if  ever 
resorted  to. 

Where  an  application  for  a  discharge  is  contested  it  is 
common  practice  for  the  judge  to  refer  the  matter  to  the  ref- 
eree for  a  report.  Hie  clerk  thereupon  sends  the  referee  all 
papers  connected  with  the  application.  The  referee  sets  a  time 
and  place  for  the  hearing  or  trial,  which  is  had  before  him. 
It  is  the  duty  of  the  referee  to  determine  the  sufficiency  of  the 
specification  so  far  as  to  decide  whether  to  permit  testimony. 
If  the  specification  is  insufficient,  he  should  report  back  to  the 
court  that  nothing  has  been  filed  with  him  in  the  way  of 
objections  requiring  the  taking  of  testimony."  Application 
to  amend  should  be  made  to  the  judge.^'' 

'B.    A.    1898,    Sec.    7,    clause    i;  '"  R.    S.    Sec.    5111.      Morgan    v. 

In   re   Shanker,    13S  Fed.   Rep.  862,  Thornhill,    11    \\:x\\.    65,    77-    20   L. 

15  Am.   B.   R.   109.  Kd.  60;   In   re   Hoist,   11    VqA.  Rep. 

V«    re    Shanker,    138    Fed.    Rep.  856. 

862,    15   Am.    B.    R.    109.  "B.    A.    1898,    Sec.    igb   and    i9f. 

'B.  A.  1898,  Sec.  14/?.   .Gen.  Ord.  See   Barton  v.   Barbour,    104  U.   S. 

12,   clause  3.  126,    26    L.    Fd.    672. 

'Gen.  Ord.  12,  clause  3.     Watson  "In   re   Hendrick,   138  Fed.  Rep. 

V.  McDuff  (C.  C.  A.  3th  Cir.),  loi  473,     14    Am.    B.    R.    795;    /'^    re 

Fed.   Rep.   241,  4   Am.   B.    R.    no;  Kaiser,  99  Fed.  Rep.  689,  3  Am.  B. 

In  re  Rauchenplat,   i    P.   R.  47'-  9  R.  767- 

Am.    B.    R.    763;    III    re    Kaiser,   99  '"In  re  Kaiser.  99  Fed.  Rep.  689, 

Fed.  Rep.  689.  3  Am.   i'..   R.  767-  3    A'"-    ^-    R-    767- 

»B.   A.    1898,   Sec.   38(7,  clause  4-  As  to  when  amendments  will  be 

Gen.  Ord.  12,  clause  3.  allowed  see  Sec.  277,  ante. 


818 


TAW    AXn    rUOCFEDTNGS   TX    !?AXKUrrTCY. 


It  the  si)ec.ihcatioii  is  suriiciciit.  ju-oofs  arc  iiitrodncecl  in  sup- 
port of  and  aj^ainst  the  gnnnuls  of  opposition  t(^  the  (hscharge. 
The  testimony  may  be  taken  down  in  narrati\e  fiM-m  or  by 
Unestion  and  answer/"*  ^^'luM1  objiTtinns  are  made  to  (|ncsti(^ns 
and  answers,  the  ^'rounds  of  the  ohjcetions  and  the  rnhngs  of 
the  referee  should  be  noted  by  the  referee.  He  should  also 
inelude  evidence  offered,  although  he  may  ilecide  it  to  be  incom- 
petent, immaterial  or  irrelevant. '''  lie  sh(~)uld  receive  all  tlie 
e\  idence  offered  and  make  a  record  of  all  that  transpires  on 
the  examination  of  the  witness.  Questions,  objections,  rul- 
ings, exceptions  and  answers  should  all  be  taken  down  for  the 
use  of  the  court.  The  judge  who  is  to  decide  the  question  of 
discharge  is  entitled  to  have  all  of  the  evidence  for  that  purpose 
and  to  determine  what  evidence  shall  be  excluded  and  what 
mav  be  included. 

The  burden  of  proof  is  on  the  objecting  creditor  to  establish 
by  clear  and  convincing  evidence  his  ground  of  objection.^®  It 
is  not  necessary  for  the  objecting  party  to  prove  his  case  beyond 
a  reasonable  doubt;  a  fair  preponderance  of  evidence  is  suffi- 
cient.^' Testimony  taken  upon  examination  of  the  bankrupt 
is  taken  in  the  whole  proceeding  and  may  be  introduced  and 
read  upon  the  hearing  of  a  petition  for  a  discharge. ^^  Testi- 
mony of  persons  other  than  the  bankrupt  is  not  admissible  upon 
such   hearing.^"      The   proof   in   support   of   the   specification 


"Gen.  Ord.  22. 

"Ill  re  Lipset,  119  Fed.  Rep.  379, 
9  Am.  B.  R.  32;  In  re  Romine, 
138  Fed.  Rep.  837.  14  Am.  B.  R. 
785.    See  also  Sec.  208,  ante. 

"/n  re  Gaylord  (C.  C.  A.  2d 
Cir.),  112  Fed.  Rep.  668,  7  Am.  B. 
R.  i;  /n  re  Fades  (C.  C.  A.  7th 
Cir.),  143  Fed.  Rep.  293,  16  Am.  B. 
R.  30;  In  re  Chamberlain,  125  Fed. 
Rep.  629,  II  Am.  B.  R.  95;  In  re 
Hamilton,  133  Fed.  Rep.  823,  13 
Am.  B.  R.  ■^zz\  ^"  ''^  Keefer,  133 
Fed.  Rep.  885,  14  Am.  B.  R.  290. 

"/«    re    Gaylord    (C.    C.    A.    2d 


Cir.),  112  Fed.  Rep.  668,  7  Am.  B. 
B.  R.  T ;  In  re  Dauchy,  122  Fed. 
Rep.  688,   10  Am.  B.  R.  527. 

'Un  re  Gaylord  (C.  C.  A.  2d 
Cir.),  112  Fed.  Rep.  668,  7  Am.  B. 
R.  i;  In  re  Wilcox  (C.  C.  A.  2d 
Cir.),  109  Fed.  Rep.  628,  6  Am.  B. 
R.  362;  In  re  Goodhile,  130  Fed. 
Rep.  782,  12  Am.  B.  R.  380.  See 
Sec.  2To6,  ante. 

"/n  re  Wilcox  fC.  C.  A.  2d 
Cir.),  109  Fed.  Rep.  628,  6  Am.  B. 
R.  362 ;  In  re  Goodhile,  130  Fed. 
Rep.  782,  12  Am.  B.  R.  380.  See 
Sec.  210/',  ante. 


DISCHARGE.  819 

should  be  confined  to  proving  the  allegations  contained  in 
it.  The  opposing  party  is  bound  by  them  and  cannot  go  beyond 
them  and  produce  evidence  outside  of  them.-'*  He  is  not  re- 
quired to  prove  all  the  grounds  alleged.  If  any  one  ground  is 
sustained  by  the  evidence  is  sufficient  to  defeat  the  discharge."^ 
The  creditor  may  be  estopped  by  his  own  consent  to  an  act 
from  proving  it  against  his  debtor  on  the  question  of  his  dis- 
charge," or  may  be  barred  from  objecting  to  his  discharge  by 
laches." 

At  the  conclusion  of  the  testimony  the  referee  will  hear  argu- 
ments of  counsel  and  report  to  the  judge  his  findings  of  fact 
and  conclusions  of  law  together  with  a  recommendation  as  to 
whether  the  bankrupt  is  entitled  to  a  discharge  or  not."^  To 
this  report  the  bankrupt  or  the  persons  opposing  his  discharge 
may  file  exceptions.  The  referee  should  fix  a  date  within  which 
to  file  them.  The  exceptions  should  be  presented  to  the  ref- 
eree within  such  time  to  permit  him  to  correct  his  report  if  he 
is  in  error.--^  The  report  together  with  his  record  of  evidence 
and  all  papers  and  pleadings  connected  with  the  application  are 
then  sent  to  the  clerk. 

The  report  is  considered  by  the  judge,  either  upon  a  motion 
to  confirm  or  upon  the  exceptions.  A  day  is  fixed  for  hearing 
before  the  judge.  Counsel  may  be  heard  on  behalf  of  the 
objecting  creditors  and  the  bankrupt.  The  judge  reviews  both 
law  and  fact.  He  will  ordinarily  give  the  same  weight  to  the 
findings  of  fact  by  the  referee  as  are  given  to  reports  of  masters 

"/m  re  Taplin,  135  Fed.  Rep.  861,  In  re  Kraft,  3  Fed.  Rep.  892;  John- 

14  Am.   B.   R.   360;   In  re   Halsell,  son  v.  Rogers,  No.  7408  Fed.  Cas., 

132   Fed.   Rep.   562,    13   Am.    B.   R.  15    N.    B.    R.    i;    Judson    v.    The 

106;    In    re    Kaiser,    99    Fed.    Rep.*  Courier    Co.,   8   Fed.    Rep.   422. 

689,  3  Am.   B.   R.  767.  ^  Kentucky  National  Bank  v.  Car- 

"^  Hudson  V.   Mercantile   National  ley    (C.    C.    A.   3d    Cir.),    121    Fed. 

Bank  (C.  C.  A.  8th  Cir.),  119  Fed.  Rep.  822,   10  Am.  B.  R.  375. 

Rep.  346,  9  Am.  B.  R.  432.  ""^^  ''^  Steed  &  Curtis,  107  Fed. 

""/h   re   Sawyer,   No.    12394  Fed.  Rep.  682,  6   Am.   B.    R.   -jz. 

Cas.,  2  Mask.  337;  In  re  Schuyler,  '°As  was  done   In   re  Kahn,    130 

No.    12494    Fed.    Cas.,  3   Ben.   200;  Fed.  Rep.  1023,  12  Am.  B.  R.  793. 


820 


LAW    AXl)    PROCEEDINGS    IN    BANKRUPTCY 


in  chancery.-'"  Tho  jndi^c  may  permit  additicMial  testimiMiy 
to  be  introdnced  before  him  or  he  may  refer  the  matter  again 
to  the  referee  for  further  investigation.-'  He  may  withhold 
a  discharge  for  the  pnri)ose  oi  allowing  a  crecUtor  to  assert  in  a 
state  court  a  right  to  subject  exempt  property  to  the  payment 
of  his  debt  which  wouUl  be  released  by  the  discharge.-' 

The  court  will  not  re-open  a  case  for  the  purpose  of  intro- 
ducing additional  evidence  in  opposition  to  a  discharge  where 
the  creditor  has  had  ample  opportunity  to  present  his  case."" 

A  referee  is  not  entitled  to  extra  compensation  for  services 
on  a  reference  of  a  specification  of  objections  to  the  discharge 
of  a  bankrupt.^'*  Such  compensation  has  been  allowed  in  a 
few  cases  on  the  ground  that  the  service  performed  w^as  that  of 
a  special  master  and  was  not  included  among  the  duties  re- 
quired of  a  referee."''^  It  should  be  observed  that  General  Order 
12  expressly  provides  for  such  reference  to  "the  referee"  and 
not  to  a  special  master.     Section  72  added  by  the  amendment 


'^  In  re  Covington,  no  Fed.  Rep. 
143.  6  Am.  B.  R.  $7s;  In  I'r  La- 
fleche,  109  Fed.  Rep.  307,  6  Am. 
B.  R.  483;  In  re  Stout,  109  Fed. 
Rep.  794,  6  Am.  B.  R.   505. 

As  to  the  weight  to  be  given  a 
report  of  a  referee  generall_v,  see 
observation  of  Judge  Lowell  In  re 
Swift,  118  Fed.  Rep.  348,  9  Am. 
B.   R.  22,7. 

''In  re  Sanborn,  131  Fed.  Rep. 
397,  12  Am.  B.  R.  428;  In  re  Steed 
&  Curtis,  107  Fed.  Rep.  682,  6  Am. 
B.  R.  73- 

^In  re  Brumbaugh,  128  Fed.  _  Rep. 
971,  12  Am.  B.  R.  204;  /"  re  Tif- 
fany, 147  Fed.  Rep.  314. 

In  Lockwood  v.  Exchange  Na- 
tional Bank,  190  U.  S.  294,  300,  47 
L.  Ed.  1061,  10  Am.  B.  R.  107,  the 
supreme  court  said :  "There  would 
exist  in  favor  of  a  creditor  holding 


a  waiver  note,  like  that  possessed 
by  the  petitioning  creditor  in  the 
case  at  bar,  an  equity  entitling  him 
to  a  reasonable  postponement  of  the 
discharge  of  the  bankrupt,  in  order 
to  allow  the  institution  in  the  state 
court  of  such  proceedings  as  might 
be  necessary  to  make  effective  the 
rights  of  the  creditor. 
^Kentucky  Nat.   Bank  v.   Carley 

(C.  C.  A.  3d  Cir.),  121   Fed.  Rep. 
822,  10  Am.  B.  R.  375. 

'°  Bragassa    v.    St.    Louis    Cycle 

(C.  C.  A.  5th  Cir.),  107  Fed.  Rep. 
.  77,  5  Am.  B.  R.  700.     B.  A.   1898, 

Sec.    72,   added   by    amendment   of 

Feb.  5,  1903,  32  Stat,  at  L.  797. 
"'  Fellows    V.      Freudenthal,      102 

Fed.    Rep.   731,  4   Am.   B.   R.  490; 

In  re  Grossman,  in  Fed.  Rep.  507, 

6  Am.  B.  R.  510. 


DISCHARGE. 


821 


o^  1903^-  clearly  prohibits  such  compensation.     Costs  may  be 
taxed  to  the  losing  party.'*'' 

§  283.     The  order  granting  a  discharge. 

It  is  the  duty  of  the  court  to  discharge  the  applicant  unless 
he  has  committed  one  of  the  acts  specifically  set  out  as  a  rea- 
son for  refusing  the  discharge.'  The  fact  that  the  discharge 
may  not  have  the  effect  to  release  debts  is  no  ground  for  refus- 
ing it.-  The  issue  upon  the  effect  of  a  discharge  cannot  prop- 
erly arise  or  be  considered  in  determining  the  right  to  a  dis- 
charge.^ 

These  are  the  only  grounds  on  which  the  court  can  refuse 
a  discharge,  except  that  the  judge  may  refuse  it  when  the 
court  is  without  jurisdiction  of  the  proceedings.^  An  honest 
bankrupt  is  regularly  entitled  to  a  discharge,  which  releases 
him  from  all  his  provable  debts  except  such  as  are  expressly 
excepted  b)'  the  statute.^  The  court  will  not  seek  for  grounds 
for  refusing  a  discharge  unless  they  are  properly  presented 


^'32  Stat,  at  L.  797. 

^/n  re  Chamberlain,  125  Fed. 
Rep.  629,  II  Am.  B.  R.  95;  In  re 
Grossman,  11 1  Fed.  Rep.  507,  6 
Am.  B.  R.  510;  In  re  Young,  140 
Fed.  Rep.  728,  15  Am.  B.  R.  477. 

'B.  A.  1898,  Sec.  14b,  and 
amendment  of  Feb.  5,  1903,  ^2  Stat. 
at  L.  797;  Official  Form  No.  59;  see 
Form  No.  164,  post.  Smith  v.  Kee- 
gan  (C.  C.  A.  ist  Cir.),  in  Fed. 
Rep.  157,  7  Am.  B.  R.  4;  In  re 
Maher,  144  Fed.  Rep.  503,  16  Am. 
B.  R.  340;  In  re  Marshal  Paper 
Co.  (C  C.  A.  ist  Cir.),  102  Fed. 
Rep.  872,  4  Am.  B.  R.  468;  In  re 
Ilcrrman,  134  Fed.  Rep.  566,  4  Am. 
B.  R.  139,  on  appeal  (C.  C.  A.  2d 
Cir.),   13  Am.   B.  R.  778. 

'In  re  Clafif,  in  Fed.  Rep.  506, 
7   Am.    B.    R.    128;    In    re    Marshal 


Paper  Co.  (C.  C.  A.  ist  Cir.),  102 
Fed.  Rep.  872,  4  Am.  B.  R.  468; 
In  re  Black,  97  Fed.  Rep.  493,  4 
Am.    B.    R.   471,   note. 

^  In  re  Marshal  Paper  Co.   (C.  C. 

A.  1st  Cir.),  102  Fed.  Rep.  872, 
4  .Am.  B.  R.  468;  /;;  re  Thomas.  92 
Fed.  Rep.  912,  i  Am.  B.  R.  515; 
In  re  Mussey,  99  Fed.  Rep.  71,  3 
Am.  B.  R.  592;  In  re  Rhutassel,  96 
Fed.  Rep.  597,  2  .\m.  B.  R.  697; 
In  re  Claff,  in  Fed.  Rep.  506, 
7  .\m.  B.  R.  128;  In  re  Tinker,  99 
Fed.  Rep.  79,  3  Am.  B.  R.  580. 
See  also,  as  to  the  effect  of  this 
discharge.  Tinker  v.  Caldwell,  193 
U.   S.  473,  48  L.    Fd.   754,    II    Am 

B.  R.   56S. 

*  See   ante,   Sec.   278. 
"15.  .\.   1898,  Sec.   17,  and  Sec.  i, 
clause   12. 


8J2 


LAW    WD    PROCEEDIXGS   TN    1V\XKRl' I'TcV. 


by  iho  jiartics.'"'  If  the  i)arties  dd  not  raise  objoctions,  the 
court  will  consiilcr  iIkmu  in  consent  to  the  disehariie,  or  that 
no  reason  exists  for  not  granlins^-  it.  The  eonlirniatioii  of  the 
composition  with  creditors  operates  as  a  discharge  of  the 
bankrupt.' 

An  order  denxing  a  discharge  to  a  bankrupt  is  a  bar  to  a 
second  application  in  the  same  bankrn|)te\-  i)roeeedings.^ 

It  has  been  held  that  a  court  of  bankruptc)'  has  power  to 
amenil  a  discharge  after  the  term  at  which  it  was  granted."'* 

§  284.     The  general  nature  and  effect  of  a  discharge. 

A  discharge  in  bankruptcy  is  in  the  nature  of  a  personal 
privilege  granted  to  a  debtor  in  consideration  of  his  yielding 
up  all  of  his  property  for  distribution  among  his  creditors. 
It  does  not  extinguish  the  bankrupt's  liability.  It  is  a  release 
from  the  unpaid  balance  of  debts  existing  at  the  time  the 
petition  was  hied,  which  may  be  pleaded  in  bar  of  any  action 
upon  a  debt  so  released.^  Where  no  discharge  is  granted 
there  is  no  release,  and  the  unpaid  balance  of  a  debt  may  be 
rcovered."  Bankruptcy  proceedings  alone  do  not  operate  to 
bar  suits. 

The  confirmation  of  a  composition  has  the  same  effect  as  a 
discharge." 

The  discharge  of  a  plaintiff  in  a  state  court,  where  the  trustee 
did  not  intervene,  does  not  abate  the  suit.* 


"In  re  Royal.  113  Fed.  Rep.  M^. 
7  Am.  B.  R.  636 ;  In  re  Schuyler, 
No.  12494  Fed.  Cas.,  3  Ben.  200; 
In  re  Rosenfield,  No.  12057  Fed. 
Cas.,  2  X.  B.  R.  116;  In  re  Frey, 
9  Fed.  Rep.  376. 

'  B.  A.  1898,  Sec.  14c;  Sec.  250, 
ante. 

^ In  re  Fiegenbaum  (C.  C.  A. 
2d  Cir.),  121  Fed.  Rep.  69,  9  Am. 
B.  R.  595;  In  re  Royal,  113  Fed. 
Rep.    140,   7   Am.   B.   R.  636. 


^  In  re  Kaufman,  136  Fed.  Rep. 
262,  14  Am.  B.  R.  393. 

'  See  Pleading  a  discharge,  Sec. 
298,  post. 

"  Dingee  v.  Becker,  No.  3919  Fed. 
Cas.,  9  N.  B.  R.  508;  Greenwald 
V.  Appell,  17  Fed.  Rep.  140;  Whit- 
ney V.  Crafts,  10  Mass.  23.  See 
also  In  re  Sweet,  36  Fed.  Rep. 
761. 

^  See    Sec.   250,    ante. 

*  Griffin  v.  Mut.  Life  Ins.  Co.,  119 
Ga.  664. 


DISCHARGE.  823 

§  285.     The  effect  of  a  discharge  upon  liens. 

The  effect  of  a  discharge  is  to  release  the  personal  liability 
only.  It  does  not  affect  liens  npon  his  property.  If  they  are 
valid,  under  the  laws  of  the  state  and  the  bankrupt  act,  they 
may  be  enforced  after  a  discharge  is  granted. 

Thus  a  judgment  which  has  become  a  lien  on  property  will 
continue  to  be  so,^  but  if  the  judgment  is  merely  a  personal 
liability  it  is  released  by  a  discharge.  In  an  action  to  enforce 
a  mechanic's  lien  or  mortgage  the  discharge  will  not  bar  the 
proceedings  except  as  to  a  personal  judgment  for  a  deficiency." 
A  lien  created  b}-  the  levy  of  an  execution  mc^re  than  four 
months  before  bankruptcy  is  not  aft'ected  by  the  discharge  of 
the  defendant."  A  vendor's  lien  for  the  purchase  price  of 
property  sold  may  be  enforced  after  a  discharge,  provided  such 
lien  is  recognized  by  the  state  laws.*  Nor  can  a  discharge  be 
pleaded  when  the  question  in  issue  is  one  of  title  to  prop- 
erty.^ 

The  lien  of  a  mortgage  given  more  than  four  months  before 
bankruptcy  is  not  discharged.® 

^^'here  property  of  the  bankrupt  has  been  attached  by  legal 

'Blum    V.    Ellis,    -JT,    N.    C.    293;  v.  Ellery,  142  U.  S.  381,  35  L-  Ed. 

Pfck  V.  Jcniiess,  :    How.  612,  12  L.  1050;     Pierce    v.    Wilco.x;,    40    liui. 

Kd.  841;   Crosby  v.   Wentvvorth,  48  70;   Roberts  v.  Wood,  38  Wis.  60; 

Mass.  10;  McCuIlough  v.  Caldwell,  Stewart  v.   .\nderson,   10  Ala.  504; 

5  Ark.  237;   Grandin   v.   First   Nat.  Truitt   v.   Truitt,   38   Ind.    16;    City 

Bank,    98    N.    W.    Rep.    70;    Bas-  Bank  v.  Walton,  5  Rob.  (La.)   158; 

sett   V.   Thackara,    72  X.    J.   81,   60  Holland    v.    Cunliff,    9    6M0.    App. 

Atl.    Rep.    39;    Marx    v.    Hart,    166  67,   10  Am.   B.  R.  71. 
Mo.    503,    8    Am.    B.    RA.    438«;  '' Philmon    v.    Marshall,    116    Ga. 

Smith   V.   Zachery,    115    Ga.   722,   8  811,  11  Am.  F>.  R.  180. 
Am.  P..  R.  240;  McCance  v.  Taylor,  ^  Lewis  v.   Hawkins,  23  Wall.  119, 

10  Grat.   (Va.)   580;  Bates  v.  Tap-  23  L.  Ed.  113;  Bassett  v.  Thachara, 

pan,    99    Mass.    376;     Bowman    v.  ^i   N.   J.  81,   60  Atl.   Rep.   39.     In 

Harding,   56   Me.   559;   Leighton   v.  Graham  v.  Richerson,  115  Ga.  1002, 

Kelsey,    57    Me.    85;    Ingraham    v.  8  .Am.  B.   R.  700,  it  was  held  that 

Phillips,  I  Day.  (Conn.)  117;  Jones  no  vendor's  lien  existed  in  the  state. 
V.   Lellyett,   39   Ga.   64.  "Berry  v.  Jackson    (Ga.),  8  Am. 

'  Second  Nat'l  Bank  v.  State  Nat'l  B.   R.  485. 
Bank.    10    Bush.    ( Ky. )    367;    Reed  "Evans    v.    Rounsaville,    115    Ga. 

V.    Uullingon,   49    Miss.    223;    Scott  684,  8  Am.   P..   R.  236. 


824 


LAW    AND    l>Rori:Kl)lNi;S    IX    HANKRUPTCY. 


proceedings  prior  to  the  ikmIocI  of  four  iiioiitlis  next  preced- 
ing tlie  ci">tnnietK\'nicnt  of  proceedings  in  l)ankrnptcy,  a  jndg- 
ment  niav  he  enlered  in  the  ciun't  in  wliich  such  judgment 
is  pending,  to  be  enforced  against  the  proi)erty  attached,  even 
though  the  cHscharge  is  pleaileil  in  l)ar  itf  the  further  main- 
tenance oi  the  judgment  suit.'  In  such  cases  the  judgment 
can  not  he  enforced  against  the  person  of  the  l)ankrupt.  It 
was  held  under  the  former  act  thai  where  a  suit  has  been 
begun  before  a  petition  in  bankruptcy  had  been  filed,  a  person 
might  prosecute  a  suit  to  enforce  a  lien  upon  property  frautlu- 
lently  conveyed  by  the  bankrupt,  even  though  a  discharge  is 
pleaded  in  bar  of  the  suit.** 

The  liability  of  a  person  who  is  a  codebtor  with,  or  guar- 
antor, or  in  any  manner  a  surety  for  a  bankrupt,  is  not  altered 
by  the  discharge  of  the  bankrupt." 

§  286.     The  effect  of  a  discharge  on  foreign  creditors. 

A  discharge  under  the  national  bankruptcy  act  of  the 
United  States  operates  to  release  a  bankrupt  from  all  his 
provable  debts,  except  certain  debts  enumerated  in  the  stat- 
ute.' A  discharge  operates  as  a  release  from  any  such  debt 
or  liability,  wherever  it  has  been  contracted  or  arisen,"  through- 
out the  several  states  and  territories  of  the  United  States.'' 
It  may  be  set  up  as  a  defense  in  bar  of  any  action  upon  a 


'Doe  V.  Childress,  21  Wall.  642, 
22  L.  Ed.  549;  Bates  v.  Tappan,  gg 
Mass.  376;  Ingraham  v.  Piiilips, 
I  Day  (Conn.)  117;  Bowman  v. 
Harding,  56  Me.  559;  Leighton  v. 
Kelsey,  57  Me.  85.  See  also  In  re 
Marshall  Paper  Co.,  102  Fed.  Rep. 
872,  4  Am.  B.  R.  468;  In  re  Rem- 
ington Motor  Co.,  1 19  Fed.  Rep. 
141,  9  Am.   B.   R.   533- 

'Fetter  v.  Cirode,  4  B.  Mon. 
(Ky.)  482;  Payne  v.  Able,  7  Bush. 
(Ky.)  344;  Lowry  v.  Morrison,  11 
Paige    (N.    Y.)    32?- 

"B.   A.    1898,   Sec.    16.     See   Sec. 
296,  post. 


'  B.  A.  1898,  Sec.  17,  and  amend- 
ment of  1903,  32  Stat,  at  L.  798; 
Sec.   292,   f>ost. 

'  Zarega's  Case,  No.  18204  Ftd. 
Cas.,  4  L.  R.  480 ;  Ruiz  v.  Eicker- 
man,  5  Fed.  Rep.  790;  Pattison  v. 
Wilbur,    10  R.   I.  448. 

But  see  Lizardi  v.  Cohen,  3  Gill. 
(Md.)  430;  McMenomy  v.  Murray, 
3  Johns.  Chan.    (N.  Y.)   435. 

'  Hargadine-M  c  K  i  1 1  r  i  c  k  Dry 
Goods  Co.  V.  Hudson  (C.  C.  A.  8th 
Cir.),  122  Fed.  Rep.  232,  10  Am 
B.    R.    225. 


DISCHARGE.  825 

debt  thereby  released,  in  any  court,  either  state  or  federal, 
within  the  United  States.*  The  reason  for  this  is  that  the 
territorial  effect  of  a  discharge  is  coextensive  with  power 
of  the  legislature  enacting  the  law.  It  may  oe  possible  that 
a  foreigner  can  not  enforce  a  claim  in  the  courts  of  this 
countr},  although  he  may  be  able  to  enforce  it  in  a  foreign 
court. 

The  rule  of  comity  of  nations  is  that  a  discharge  from 
any  debt  or  liability  under  the  bankrupt  law  of  the  country 
where  the  debt  or  liability  has  been  contracted  or  has  arisen, 
or  possibly  where  it  is  to  be  paid  or  satisfied,  will  be  recog- 
nized as  a  discharge  or  satisfaction  everywhere.'''  "The  rule 
was  laid  down  by  Lord  Mansfield  in  Ballantine  vs.  Golding, 
that  what  is  a  discharge  of  a  debt  in  the  country  where  it 
was  contracted  is  a  discharge  of  it  everywhere."  "  Hence 
a  discharge  obtained  in  a  court  of  bankruptcy  in  the  United 
States,  releasing  a  debt  or  obligation  contracted  or  incurred 
in  the  United  States,  will  be  recognized  as  a  discharge  of  that 
debt  or  liability  in  any  country.  Thus  where  a  debtor  and 
creditor  both  resided  in  the  United  States,  where  the  debt 
was  created  and  where  the  discharge  v/as  granted,  and  after- 
wards both  parties  became  residents  of  England,  and  a  suit 
was  there  commenced  against  the  debtor  on  the  original  in- 

*  See  Pleading  a  discharge,  Sec.  with  the  remedies  or  course  of  pro- 
298,  post.  cedure  to  enforce  it,  wil  be  an  cf- 

*  Story  on  Conflict  of  Laws,  Sec.  fectual  answer  to  the  claim,  not  only 
340;  Dicey  on  Conflict  of  Laws,  in  the  courts  of  that  country,  but 
449.  in    every    other    country.      This    is 

"Lord  Ellenborough  in  Potter  v.  the  law  of  England,  and  is  a  prin- 

Brown  (1804),  5  East,  130.  ciplc    of    private    international    law 

In  Ellis  V.  McHenry,  6  L.  R.  C.  adopted  in  other  countries.  It  was 
P.  234,  Bovill,  C.  J.  (1871),  apply-  laid  down  by  Lord  King,  in  Dur- 
ing this  principle  to  the  British  rows  v.  Jemino,  2  Stra.  ■/t,2,\  by 
Colonies,  said:  "In  the  first  place  Lord  Mansfield,  in  Ballantine  v. 
there  is  no  doubt  that  a  debt  or  Golding.  Cook's  Bk.  Law.  419;  by 
liability  arising  in  any  country  may  Lord  Ellenborough,  in  Potter  v. 
be  discharged  by  that  laws  of  that  Brown,  5  East,  124;  by  the  Privy 
country,  and  that  such  a  discharge,  Council,  in  Odwin  v.  Forbes,  Buck, 
if  it  extinguishes  the  debt  or  liabil-  571  '"  Qnelin  v.  Moisson,  i  Knapp, 
ity,  and   does  not  merely   interfere  265,  6,  n;  by  the  court  of  Queen's. 


826  LAW    AXn    PROCEEDINGS    I\    H  AX  KKU  I'TCY. 

debtednoss.  the  dischari>e  was  held  a  bar  \o  recovery.^  The 
same  rule  with  rekM-etiee  to  a  discharj^e  in  the  states  has  been 
applied  in  C'anada.^  The  authorities  seem  to  recog-ni/.e  no  dis- 
tinction with  reference  t"  the  residence  of  the  parties  to  the 
contract,  whether  between  citizens  or  between  citizens  antl  a 
foreigner,  or  l^etween  forcic^ners." 

A  discharge  from  any  del)t  or  liability  untler  the  national 
bankrupt  act  of  this  country  will  not  be  recognized  as  a  re- 
lease of  a  debt  or  liability  which  has  not  been  contracted  or 
arisen,  and  is  not  to  be  paid  or  satisfied  in  this  country."*  It 
has  been  held  in  luigland  th.at  a  contract  made  in  luigland  is 
not  discharged  under  an  insolvent  act  of  one  of  the  United 
States  so  as  to  bar  a  suit  upon  contract  in  the  English  courts." 

\\here  a  foreigner  comes  into  a  court  of  bankruptcy  for 
the  purpose  of  proving  a  debt,  he  thereby  submits  himself  to 
the  jurisdiction  of  the  court.  A  discharge  in  such  case  will 
probably  bar  the  foreigner's  claim  asserted  in  either  a  domestic 
or  foreign  court.'*  But  where  a  foreigner  does  not  prove  his 
debt  in  a  court  of  bankruptcy,  and  has  not  knowledge  of  the 
proceedings,  his  debt  is  not  barred  in  any  court  by  the  dis- 
charge.'^ 

\Miere  a  discharge  does  not  release  a  debt  or  claim  under 
the  national  bankruptcy  act,  such  debt  or  claim  is  not  released 
in  any  other  country.'^ 

Bench,  in  Gardner  v.  Houghton,  2  &  S.  375;  Story  on  Conflict  of  Laws, 

B.  &  S.  743 ;  and  by  the  Court  of  Sec.  342 ;  Dicey  on  Conflict  of  Laws, 

Exchequer  Chamber,  in  Philhps  v.  451. 

Eyre,  L.  R.  6  Q.  B.  i.  "  Smith  v.   Buchanan,   I   East,  6, 

'^  Potter  V.  Brown,  5  East,  124.  11.     See  also  Lewis  v.  Owen,  4  B. 

'Ohlemacher  v.  Broek,  44  Upper  &  Aid.  654;   Philips  v.  Allan,  8  B. 

Canada    Rep.    366.  &  Aid.  477. 

'Story  on  Conflict  of  Laws,  Sec.  ''Consult  Peck  v.  Hibbard,  26  Vt. 

340.  698;    Phelps    V.    Borland,    103    N. 

'"Lizardi  v.  Cohen,  3  Gill.   (IMd.)  Y.  406. 

430;     McMenomy     v.     Murray,     3  ''' B.   A.    1898,    Sec.    17,   clause  3; 

Johns.  Chan.   (N.  Y.)  435;  Ellis  v.  Lizardi    v.    Cohen,    3    Gill.    (Md.) 

McHenry,  L.  R.  6  C.  P.  228.  430;     McMenomy     v.     Murray,     3 

See  also  Bartley  v.  Hodges,  L  B.  Johns.  Chan.    (N.  Y.)   435. 


DISCHARGE. 


827 


§  287.     The  effect  of  a  foreign  discharge  on  American  debts. 

The  same  principles  which  have  been  stated  in  the  last 
section  as  governing  the  effect  of  an  American  discharge  in  a 
foreign  country  are  true  with  reference  to  the  effect  of  a  for- 
eign discharge  in  the  United  States.  Thus  it  has  been  held 
that  a  discharge  under  a  foreign  law  was  no  bar  to  an  action 
on  a  contract  made  in  this  country.^  Where  a  person  volun- 
tarily submits  himself  to  the  jurisdiction  of  the  court  grant- 
ing the  discharge,  to  prove  his  claim  and  participate  in  the  pro- 
ceedings, he  is  bound  thereby,  and  the  courts  of  this  country 
will  recognize  the  discharge  as  a  bar  to  an  action  upon  a 
debt  released  thereby."  The  courts  of  this  country  will  also 
recognize  the  binding  force  of  a  discharge  under  a  foreign 
law,  releasing  a  debt  or  a  liability  which  had  been  contracted 
or  had  arisen  in  that  country. 

There  are  many  cases  decided  in  the  federal  and  state  courts 
which  apply  to  discharges  granted  by  the  courts  of  one  state 
when  sought  to  be  asserted  against  the  citizens  of  another.^ 
These  cases  can  not  be  considered  authority  in  determining 
the  effect  of  a  discharge  between  sovereign  states  unrestricted 
by  constitutional  limitations.  All  of  these  cases  turned  upon 
the  peculiar  structure  of  the  constitution  of  the  United  States 
prohibiting  the  states  from  passing  laws  impairing  the  obli- 
gation of  contracts.  This  limitation  upon  state  legislatures 
has  been  discussed  in  another  place.* 

'  McMillan  v.   McNeill,  4  Wiicat.  Anderson  v.  Wheeler,  25  Conn.  603; 

2og,  4  L.   Ed.   552;    Green  v.    Sar-  Whitney  v.  Whiting,  35  N.  11.  4571 

miento,  No.  5760  Fed.  Cas.,  3  Wash.  Murphy     v.     Manning,     134     Mass. 

C  C.   17.  4<^^;    Hicks    V.    llotchkiss,    7    John. 

-Peck   V.    Hibbard,    26    Vt.    698;  Chan.    ( N.  Y.)    297;   Van   Hook  v. 

Phelps  V.  Borland,  103  N.  Y.  406.  Whitlock,   26   Wend.    (N.   Y.)    43; 

"Oilman    v.    Lockwood,    4    Wall.  Savoyc  v.  Marsh.   10  Met.    (Mass.) 

409,     18    L.    Ed.    432;    Baldwin    v.  594:    Producers    Bank    v.    Farnum, 

Hale,    I    Wall.  223,   17  L.  Ed.  531;  5    Allen     (Mass.)     10;    Dunlap    v. 

Baldwin   v.    Bank,    i    Wall.   234.    '7  Rogers,    47    N.    H.    281;    Pierce    v. 

L.  Ed.  534;  Ogden  v.  Saunders,   12  O'Brien,    129  Mass.  314;   Towne  v. 

Wheat.   213,   6   L.    Ed.    606;    Boyle  Smith,  No.  141 15  Fed.  Cas.,  i  Wood. 

V.    Zacharie,   6   Pet.   348,  8   L.    Ed.  &  M-   ii5- 

423;    Felch    V.    Bugbee,   48    Me.   9;  *  Sec.   u,  ante. 


828  l.AW    AND    1'K(H1:ED1NGS   in    BAN' KlUTTCY. 

§  288.  In  what  court  the  effect  of  a  discharge  is  determined 
A  discharge  in  bankruptcy  discharges  the  bankrupt  from 
all  debts  and  claims  which  are  made  provable  ag^ainst  his 
estate,  antl  which  existed  on  the  d:\\  the  jx^tition  was  tiled, 
excepting  such  debts  as  are  by  law  exce[ited  from  the  opera- 
tion of  a  discharge  in  bankruptcy/ 

The  court  oi  bankruptcy  decides  whether  or  not  a  discharge 
shall  be  granted,  and  if  granted,  it  b.as  the  sole  power  to 
entertain  a  proceeding  to  vacate  the  same.  It  does  not  construe 
the  extent  of  the  discharge  with  reference  to  particular  debts 
of  the  bankrupt."  That  inquiry  is  ]-)rnperly  to  be  made  only 
by  the  court  in  which  a  direct  suit  un  the  debt  is  pending, 
and  when  the  discharge  is  properly  pleaded  in  bar  of  the  par- 
ticular debt."''  The  court  in  which  such  a  direct  suit  is  pending 
and  the  discharge  pleaded  does  not  modify  the  order  of  the 
court  of  bankruptcy.  Its  inijuiry  should  be,  is  the  debt  sued  on 
a  debt  which  is  released  by  the  discharge  pleaded?  If  it  is 
released  under  the  bankrupt  act,  the  plea  should  be  sustained 
and  the  action  dismissed.  If  such  court  determines  that  it 
is  a  debt  not  released  by  the  discharge,  the  plea  is  bad  and 
should  be  overruled. 

§  289.     What  debts  are  released  by  a  discharge. 

A  discharge  in  bankruptcy  releases  a  bankrupt  from  all  of 
his  provable  debts, ^  except  such  as  ( 1 )  are  due  as  a  tax  levied 
by  the  United  States,  the  state,  county,  district  or  municipality 
in  which  he  resides;  (2)  are  liabilities  for  obtaining  property 

'Official  Form  No.  59;  sec  Form  ''In  re  Rosenberg,  No.  12054  Fed. 

No.  164,  post.  Cas.,  3   Ben.   14. 

-In  re  Mussey,  99  Fed.  Rep.  71,  In    re    Wright,    No.    18065    Fed. 

3  Am.   B.   R.  592;   In  re  Marshall  Cas.,  2  Ben.  509,  Judge  Blatchford 

Paper  Co.    (C.  C.  A.   ist  Cir.),   102  said:  "Tliere  is  nothing  in  the  proof 

Fed.   Rep.  872,   4  Am.   B.   R.  468;  of  debt  in  this  case  which  can  in 

In  re  Thomas,  92  Fed.  Rep.  912,  i  any  manner  conclude  or  prejudice 

Am.    B.    R.    515;    In   re    Rhutasscl,  any  party  in  any  tribunal  so  far  as 

96    Fed.    Rep.    597,    2    Am.    B.    R.  regards  the  issue  of  fraud  in  con- 

697;    In    re    Claff,    in    Fed.    Rep.  trading  the  debt." 

506,  7  Am.  B.  R.  128.  '  B.  A.  1898,  Sec.  17,  as  amended 

Feb.  5,   1903,  2,2  Stat,  at  L.  797. 


DISCHARGE.  829 

by  false  pretences  or  false  representations,  or  for  willful  and 
malicious  injuries  to  the  person  or  property  of  another,  or  for 
alimony  due  or  to  become  due,  or  for  maintenance  or  support 
of  wife  or  child,  or  for  seduction  of  an  unmarried  female,  or 
for  criminal  conversation;  (3)  have  not  been  duly  scheduled 
in  time  for  proof  and  allowance,  with  the  name  of  the  creditor 
if  known  to  the  bankrupt,  unless  such  creditor  had  notice  or 
actual  knowledge  of  the  proceedings  in  bankruptcy;  or  (4) 
were  created  by  his  fraud,  embezzlement,  misappropriation 
or  defalcation  while  acting  as  an  officer  in  any  fiduciary 
capacity. 

The  inquiry  of  the  court,  to  which  is  presented  the  question 
of  whether  a  debt  is  barred  or  not,  should  be,  first:  is  the  debt 
one  which  was  provable  in  bankruptcy?  And  second,  is  such 
debt  included  in  the  exceptions  specified  in  Section  17?  If 
the  debt  was  provable  and  not  included  in  the  exceptions 
it  is  released  by  a  discharge. 

It  is  not  necessary  that  the  creditor  actually  proved  his 
claim  in  the  proceedings.  If  it  was  provable,  it  is  released, 
although  it  was  disallowed,  as  where  the  creditor  did  not 
surrender  a  preference  or  the  debt  was  barred  by  statute 
of  limitations." 

An  unliquidated  claim,  which  might  have  been  liquidated 
and  proved  under  Section  636,  is  discharged.^  The  liability 
of  the  maker  of  a  note  to  the  surety  is  a  provalile  claim 
against  the  maker's  estate  and  the  surety's  claim  is  barred 
by  the  maker's  discharge.'*  After  a  discharge  of  the  debtor, 
a  creditor  can  not  enforce  his  debt  against  his  exempt  prop- 

"  Hargardine-M  c  K  i  1 1  r  i  c  k  Dry  "In  re  lliltc^n.   104  I'cd.  Rep.  981, 

Goods    Co.    V.    Hudson    (C.    C.    A.  4  Am.  B.  R.  774. 

8th  Cir.),  122  Fed.  Rep.  232,  10  Am.  *  Haver  v.  Com.stock.  115  Ga.  187, 

B.  R.  225.  7  Am.  B.  R.  493. 

As    to    the    distinction    between  °  Groves  v.  Osbiirn,  79  Pac.   Rep. 

provable   and  allowable  claims,   see  500;    Bell   v.   Dawson    Grocery   Co., 

In  re  Hornstein,  122  Fed.  Rep.  2«i,  120    Ga.    628,    12    Am.    B.    R.    160; 

ID  Am.  B.  R.  308.  Clastcr   v.    Soble,    22    Pa.    .Sup.    Ct. 

631,  10  Am.  B.  R.  446. 


830 


LAW    AMI    l'R(H-KF.mXGS    IX    r.AXKKUPTCY. 


erty."^  unless  a  lien  IkuI  been  fastened  on  such  prnperly  before 
the  tliseliarye  was  j^ ranted." 

Where  a  debtor  assii^ns  Iiis  unearned  \\a<;es  to  seciu'e  a 
debt,  a  ilischari^e  releases  Inni  from  lia\ m^-  his  wag-es  earned 
after  the  adjudication  applied  to  the  payment  of  the  debt/ 
W  here  such  assignment  creates  a  lien  it  is  nt)t  alTected  l)y  his 
discharge.'' 

If  a  debt  was  not  pri)\al)le  it  is  not  released  by  a  dis- 
charge.'"' In  order  therefore  to  be  (hscli.argetl.  it  must  come 
within  one  of  the  classes  enumerated  in  the  statute  as  being 
provable  against  the  estate  of  the  bankrupt.^"  What  debts 
are  provable  against  the  debtor's  estate  in  bankruptcy  is 
considered  at  length  elsewliere.^^  .Vn  unlicjuidated  claim  for 
damages  for  tort  is  not  a  provable  claim  and  therefore  is 
not  released  by  a  discharge.^"  A  judgment  for  damages  in 
tort  obtained  prior  to  bankruptcy  is  provable  and  released 
by  a  discharge.^"  Tlie  liability  of  a  sheriff  for  the  escape 
of  the  bankrupt  is  not  a  debt  owed  by  the  bankrupt  and 
therefore  is  not  released  by  a  discharge.^^  Onlv  such  delits 
as  are  in  existence  at  the  time  of  filing  the  petition  are  dis- 
charged^* 

The  statutory  exceptions  and  the  classes  of  debts  not  re- 
leased by  a  discharge  are  further  considered  hereafter.^^ 

'Leitch  V.  Northern  Pac.  Ry.  Co.,     ■  Ct.   App.  Div.).  7  Am.   B.  R.  714; 


95  Minn.  35,  14  Am.  B.  R.  409; 
In  re  West,  128  Fed.  Rep.  205, 
II    Am.    B.    R.    782. 

*  Mallin  v.   Wenliam,  209  III.  252, 
13  Am.  B.  R.  210. 

°  Wetmore  v.   Markoe,    196  U.   S. 
68,   49   L.   Ed.   390.    13    Am.    B.    R. 

"  McKenney  v.  Cheney,  118  Ga. 
387,  II  Am.  B.  R.  54;  Powers  Dry 
Goods  Co.  V.  Nelson,  10  N.  D.  580, 
7  Am.  B.  R.  506. 
I ;  Dunbar  v.  Dunbar,  190  U.  S. 
340,  47  L.  Ed.  1084,  ic  .\m.  B.  R. 
139;  Audubon  v.  Shufeldt,  181  U. 
S.  577,  45  L.  Ed.  1009,  5  Am.  B.  R. 
829;  demons  v.  Brinn  (N.  Y.  .Sup. 


Murray  v.  DeRottenham,  6  John. 
Chan.  (N.  Y.)  52;  Monroe  v.  Up- 
ton, 50  N.  Y.  593 ;  Genn  v.  How- 
ard, 65  Md.  40;  Bush  V.  Cooper, 
18  How.  82,  15  L.  Ed.  273; 
Riggin  V.  Magwire,  15  Wall.  551, 
21  L.  Ed.  232 ;  Porter  v.  Lazear, 
109  U.  S.  84,  27  L.  Ed.  865. 

'"B.    A.    1898.    Sec.   63. 

"  See  Provable  debts.  Chap.  XTII. 

"  See  Sec.   128,  ante. 

"Baer  v.  Grell  (N.  Y.  Mun.  Ct.), 
6  Am.  B.  R.  428. 

"  In  re  Burka,  T04  Fed.  Rep. 
32(1,   5  Am.   B.   R.    12. 

'°  Sees.  290  to  296,  post. 


DISCHARGE,  831 

§  289a.     The  effect  of  a  discharge  in  a  second  proceeding. 

Debts  from  which  a  discharge  was  denied  under  a  former 
bankrupt  act.'  or  insolvency  proceedings,-  are  provable  and 
released  by  a  discharge  in  bankruptcy. 

A  discharge  obtained  in  a  new  proceeding  will  not  release 
debts  provable  in  a  former  proceeding  under  the  bankrupt 
act  of  1898.  where  the  bankrupt  failed  to  obtain  a  discharge 
in  that  proceeding.^  The  undischarged  debts  are  provable  in 
the  new  proceeding.  The  reason  that  they  are  not  released 
by  a  discharge  is  that  the  failure  to  obtain  a  discharge  in 
the  former  proceeding  is  res  judicata  as  to  whether  or  not 
the  bankrupt  is  entitled  to  be  discharged  from  the  claims  of 
the  creditors  scheduled  and  provable  in  the  former  proceed- 
ing.* If  this  were  not  so,  a  bankrupt,  who  failed  to  apply 
for  a  discharge  within  the  time  specified  in  the  statute,  by 
filing  a  new  petition  for  the  purpose  of  obtaining  a  discharge 
only,  could  thereby  avoid  the  statutory  limitation  as  to  time 
within  wliich  to  apply  for  a  discharge.  If  a  bankrupt  was 
denied  a  discharge  in  the  first  proceeding,  he  might  file  a 
petition  and,  because  the  defense  set  up  in  t!ie  first  proceeding 
to  the  granting  of  the  discharge,  as  a  fraudulent  transfer 
within  four  months  of  bankruptcy  or  of  a  false  oath  or  account 
in  the  first  proceeding,  could  not  be  made  in  the  second  pro- 
ceeding, be  able  to  obtain  a  discharge  from  the  very  debts 
which  the  court  liad  held  should  not  be  released.  If  the  same 
defenses  could  be  made,  it  would  recjuire  the  creditors  to  liti- 
gate'again  a  question  already  settled.  The  reason  that  res 
judicata  does  not  ai)ply  to  prevent  a  release  of  debts,  prov- 
able in  a  proceeding  under  a  former  bankrupt  act.  or  in  insol- 

' /m   re    Herrman,    io2   Fed.   Rep.  R.  505;  In  re  Claff,   in   Fed.  Rep. 

753,  4  Am.  B.  R.   139,  affirmed   (C.  506,  7  Am.  B.  R.   128:  In  re  Dris- 

C.  A.  2d  dr.),  106  Fed.  Rep.  987.  coe,  No.  4090  Fed.  Cas.,  Low.  430; 

'In    re    Bybee,     124    Fed.     Rep.  /;/    re    Weintraub,    133    Fed.    Rep. 

ion,    TO  Am.   B.   R.   761;    Dean  v.  1000,    13  Am.   B.   R.   71T. 

Justices,    173   Mass.  453,  2  Am.   B.  *  Kuntz  v.  Young    ( C.  C.  A.  8th 

R.    i'')3.  Cir.),    131    Fed.    Rep.    719.    12   Am. 

'Kuntz  V.  Young   (C.   C.   A.  8th  B.    R.    505;    In    re   Weintraub.    133 

Cir.),  131  Fed.  Rep.  719,  12  .Am.  R.  Fed.  Rep.   1000,   13  Am.  B.  R.  711. 


SiZ  LAW    AND   rROCKKDINT.S    IN    RAN  KRT  I'TCV. 

veiicv  proceed inos,  is  that  the  issue  is  not  the  same.  A  bank- 
rupt niii;ht  not  he  entitled  tn  a  (hscharj^e  under  these  acts,  and 
vet  be  entitled  to  one  untler  the  act  of  1898. 

^  290.     The  effect  of  a  discharge  on  debts  due  the  United 
States. 

The  act  expressly  excepts  invm  the  effect  of  a  discharge 
debts  due  as  taxes  levied  by  the  L'nited  States,  the  state, 
county,  district  or  nuniicipality  in  \vhich  the  bankrupt  re- 
siiles.^ 

Wliether  a  debt  due  the  United  States,  or  one  of  the  states, 
other  than  taxes,  is  released  by  a  discharge  under  the  present 
act,  is  not  free  from  difficulty.  It  was  held  that  a  debt  due 
the  United  States  was  not  barred  by  a  bankrupt's  certificate 
of  discharge  under  the  act  of  1800,"  or  under  the  act  ot 
1867,^  where  it  was  extended  to  a  surety  on  the  bond  of  a 
public  officer.*  The  ground  of  this  rule  was  that  a  discharge 
will  not  release  the  debtor  from  a  debt  due  the  sovereign,  un- 
less the  sovereign  is  expressly  named  in  the  clause  relating 
to  discharge  of  debts.     This  rule  is  recognized  in  England.^ 

The  leading  case  in  this  country  upon  this  subject  is  U.  S. 
V.  Herron.®  The  reasoning  of  the  court  in  that  case  would 
appear  to  apply  with  equal  force  to  the  act  of  1898.  There 
are.  however,  two  points  of  distinction  to  be  noted  between 
the  act  of  1867  and  the  act  of  1898  with  reference  to  this 
opinion.     In  the  act  of  1867  there  was  no  provision  in  the 

'  B.  A.   1898,  Sec.  17,  clause  i.  No.    14929    Fed.    Cas.,    3    McLean, 

=  U.   S.  V.   King,   No.   15536  Fed.  483- 

Cas.,  Wall.  Sen.  13.  'Anon.,  1  Atk.  262;  Rex  v.  Pix- 

'U.  S.  V.   Herron,  20  Wall.  251,  ley,  Bunbury,  202;  Craufurd  v.  At- 
22  L.  Ed.  275;   U.   S.  V.   Rob  Roy,  torney  General,  7  Price,  5;   i   Dea- 
No.  16179  Fed.  Cas.,  i  Woods,  42;  con's  Bankruptcy,  784. 
Smith    V.    Hodson,    50    Wis.    279;  Sec.  150  of  the  English  bankrupt- 
Hamilton  V.  Reynolds,  88  Ind.  191.  cy  act  of  1883,  46  and  47  Vic,  Chap. 

*  U.   S.   V.   Herron,  20  Wall.   251,  52,    provides   that    "save    as    herein 

22  L.   Ed.  275,  overruling  U.   S.  v.  provided  the  provisions  of  this  act 

Throckmorton,  No.  16516  Fed.  Cas.,  relating  to   ...   a   discharge   shall 

8   N.   B.    R.   309;    U.   S.  V.   Davis,  bind   the   Crown." 

"20  Wall.   251,  22  L.   Ed.   275. 


DISCHARGE.  833 

clause  relating  to  discharges  with  reference  to  the  United 
States,  but  the  tifth  class  of  claims  entitled  to  priority  '  pro- 
vided that  "nothing  contained  in  this  title  shall  interfere 
with  the  assessment  and  collection  of  taxes  by  the  authority 
of  the  United  States  or  any  state."  It  is  clear  that  that  pro- 
vision is  the  same  in  import  as  clause  1  of  Section  17  of  the 
present  act.  The  only  difference  noticeable  is  the  position  the 
clauses  occupy  in  the  two  acts.  In  the  act  of  1898  it  is  in  the 
section  relating  to  discharges.  Does  this  rule  cxpressio  nnuis, 
exclusio  altcrius  apply  to  exclude  all  debts  due  the  United 
States  except  for  taxes? 

In  Section  57/  the  act  provides  that  debts  owing  to  the 
United  States,  a  state,  a  county,  a  district,  or  a  municipality 
as  a  penalty  or  forfeiture  shall  not  be  allowed,  except  for 
the  amount  of  the  pecuniary  loss  sustained  by  the  act,  trans- 
action, or  proceeding  out  of  which  the  penalty  or  forfeiture 
arose,  with  reasonable  and  actual  costs  occasioned  thereby  and 
such  interest  as  may  have  accrued  thereon  according  to  law. 
This  provision  is  a  limitation  upon  the  rights  of  the  sovereign. 
\\>re  it  not  for  this  provision  the  debtor  would  be  liable  for 
the  whole  amount  of  the  penalty.  It  can  not  be  contended 
but  what  the  United  States  may  or  may  not  prove  its  debts  in 
the  bankruptcy  proceedings.^ 

It  would  seem  therefore  that  these  two  points  of  difference 
can  hardly  be  urged  as  sufficient  to  take  the  present  act  out 
of  tl\e  general  rule  announced  and  followed  in  U.  S.  v.  Her- 
ron.  It  would  seem  that  if  congress  had  intended  a  depart- 
ure from  the  general  rule  relating  to  the  sovereign  not  being 
bound  by  the  provisions  of  a  bankrupt   statute,   which   has 

'  R.  S.  Sec.  5101,  which  embraces  '  Commonwealth    v.    Hutchinson, 

a   part  of   Sec.   28  of  the  original  10    Pa.    St.   466;    Saunders   v.    The 

act.  Commonwealth,  10  Grat.  (Va.)  494; 

"Lewis  V.  The  United  States,  92  Connecticut    v.    Shelton,    47    Conn. 

U.   S.   618,   23   L.   Ed.   513;    Bayne  400;    Johnson    v.    The   Auditor,    78 

V.    United'  States,    93    U.    S.    642,  Ky.    282.      But    see    Jones    v.    The 

23  L.  Ed.  997;  Harrison  v.  Sterry,  State,  28  Ark.    119. 
5  Cranch,  289,  3  E.  Ed.   104. 


834  LAW    AND   rROCKEDIXGS   IN    BANKRUPTCY. 

k>ng-  been  reco^ni/.ecl  in  lilngkuul  ;uul  in  this  ct)nntr}'.  it  would 
have  expressed  its  intention  more  clearly  in  this  respect. 

By  a  similar  course  of  reasoninj^-  niau)-  of  the  state  courts 
reached  the  same  conclusion  with  reference  to  debts  due  a 
state.  Such  debts  were  held  not  barred  by  a  dischar«-e  in 
bankruptcy  either  under  the  act  of  1841  or  the  act  of  1867." 

§  291.     The  effect  of  a  discharge  upon  judgments  against  the 
bankrupt. 

A  discharge  releases  all  judgments,  provable  in  bankruptcy, 
except  such  as  are  judgments  in  actions  for  frauds,  or  obtain- 
ing property  by  false  pretenses  or  false  representations,  or  for 
willful  and  malicious  injuries  to  the  person  or  property  of  an- 
other.^ Subject  to  these  exceptions,  judgments  entered  prior 
to  the  filing  of  the  petition,  granted  in  actions  founded  in 
contract,  are  discharged."  Since  the  amendment  of  1903  it 
is  immaterial  whether  or  not  the  claim  is  in  the  form  of  a 
judgment,  as  the  word  "judgments"  has  been  omitted  and 
"liabilities"  substituted.  If  it  is  a  liability  for  obtaining 
property  by  false  pretenses  or  false  representations,  or  for 
willful  and  malicious  injuries  to  the  person  or  property  of 
another,  or  for  alimony  due  or  to  become  due,  or  for  main- 
tenance or  support  of  a  wife  or  child,  or  for  seduction  of 
an  unmarried  female  or  for  criminal  conversation,  it  is  not 
discharged.^ 

Judgments  and  decrees  are  not  released  where  they  are 
in  the  nature  of  penalties  or  fines,  imposed  for  wrongful  or 
criminal  acts,  or  to  enforce  a  moral  or  natur^  duty.  Such 
are  judgments   imposing  a  fine   for  contempt,*   or  directing 

'B.   A.    1898,    Sec.    17,   clause   2.  '' B.  A.  1898,  Sec.  17  as  amended 

As  to  what  judgments  are  provable,  Feb.  5,   1903,  32  Stat,  at  L.  797. 

see    Sec.    115,    ante.  ^People    v.     Spalding,    10    Paige 

'B.    A.    1898,    Sec.   63,   clause    i;  (N.    Y.)    284,   4    How.   21;    Macey 

Sec.  115,  ante;  Blake  v.  Bigelow,  5  v.    Jordan,    2    Dem.    (N.    Y.)    57a 

Ga.  437;  Comstock  v.  Grout,  17  Vt.  See  also  In  re  Moore,  iii  Fed.  Rep, 

512;  In  re  Comstock,  22  Vt.  642;  145,  6  Am.  B.  R.  590;  but  see  In  re 

In   re   Sidle,    No.    12844   Fed.    Gas.,  Alderson,  98  Fed.  Rep.  588,  3  Am. 

2   N.    B.   R.   220;    Duncan   v.    Har-  B.  R.  544. 
grove,  22  Ala.  150. 


DISCHARGE. 


835 


the  payment  of  certain  sums  periodically,  for  the  support  of 
a  bastard  or  other  child/''  or  in  actions  for  seduction,"  or 
directing  the  payment  of  alimony/  These  judgments  are 
not  deemed  debts  within  the  meaning  of  that  word  as  used  in 
bankruptcy.^  The  amendment  to  1903  expressly  excludes 
such  liabilities  from  those  to  which  a  discharge  will  be  a  re- 
lease. A  verdict  is  not  a  judgment,^  and  the  report  of  a 
referee  or  master  is  equivalent  to  the  verdict  of  a  jury.^" 
A  judgment  for  costs  in  a  criminal  case  is  released  by  a 
discharge. ^^  A  judgment  against  a  firm  is  not  released  by  the 
discharge  of  a  partner.^"  A  judgment  in  a  "stockholders' 
liability"  suit  against  the  stockholders  severally  for  the  par 
value  of  their  respective  holdings,  is  a  provable  debt  against 
a  non-resident  bankrupt  stockholder's  estate  and  is  released 
by  his  discharge. ^^ 


^  Dunbar  v.  Dunbar,  190  U.  S. 
340,  47  L.  Ed.  1084.  10  Am.  B. 
R.  139;  In  re  Hubbard,  98  Fed. 
Rep.  710,  3  Am.  B.  R.  528;  In  re 
Baker,  96  Fed.  Rep.  954,  3  Am. 
B.  R.  10 1 ;  In  re  Cotton,  No.  3269 
Fed.  Cas.,  2  N.  Y.  Leg.  Obs.  370; 
Comm.  V.  Erisman,  21  Pitts.  L. 
Jour.  69. 

"In  re  Cotton,  No.  3269  Fed. 
Cas.,  2  N.  Y.  Leg.  Obs.  370;  Nas- 
sau V.  Parker,  2  Penn.  L.  Jour. 
298.  Such  cases  are  put  on  the 
ground  of  not  being  judgments  for 
willful  and  malicious  injury.  In  re 
Freche,  109  Fed.  Rep.  620,  6  Am. 
B.  R.  479;  In  re  Maples,  105  Fed. 
Rep.  919,  5  Am.  B.  R.  426;  Distler 
V.  McCauley,  35  Misc.  (N.  Y.)  411, 
6  Am.  B.  R.  491 ;  so  also  of  a  judg- 
ment for  criminal  conversation, 
Col  well  V.  Tinker,  35  Misc.  (N.  Y.) 
330,  6  Am.  B.  R.  434. 

'Audubon  v.  Shufeldt,  181  U.  S. 
575,  45  L.  Ed.  1009,  5  .Am.  B.  R. 
829;  Wctmore  v.  Markoe,  196  U.  S. 
68,  49  L.  Ed.  390,  13  Am.  B.  R. 
I ;    Dunbar    v.    Dunbar,    190    U.    S. 


340,  47  L.  Ed.  10S4,  10  Am.  B.  R. 
139;  Barkley  v.  Barklej',  184  111. 
375 ;  Turner  v-  Turner,  108  Fed. 
Rep.  785,  6  Am.  B.  R.  289;  In  re 
Shepard,  97  Fed.  Rep.  187,  5  Am. 
B.  R.  857. 

As  to  a  judgment  for  breach  of 
promise,  see  In  re  Sidle,  No.  12844 
Fed.  Cas.,  2  N.  B.  R.  220;  Aling 
V.    Egan,    II    Rob.    (La.)    244. 

*  See  Sec.   no,  ante. 

"  Kellogg  V.  Schuyler,  2  Denio 
(N.  Y.)  y2>''  Nassau  v.  Parker,  2 
Penn.  L.  Jour.  298;  Audubon  v. 
Shufeldt,  181  U.  S.  575,  45  L.  Ed. 
1009,  5  Am.  B.  R.  829;  Barkley  v. 
Barkley.    184    111.    375. 

"Crooch  V.  Gridley,  6  Hill  (N. 
Y.)  250. 

"  Olds  V.  Forrester,  126  la.  456, 
102  N.  W.  Rep.  419. 

*'"  Dodge  V.  Kaufman,  91  N.  Y. 
Supp.  727. 

'"  Dight  V.  Cliapman,  44  Ore.  265 ; 
Longfield  v.  Minnesota  Savings 
Bank,  95  Minn.  54,  14  Am.  B.  R. 
413- 


SoO  LAW    AND    PRDCEEOINGS    IN    BANKRUPTCY. 

Jiulji'incnts  fouiulcil  ui>i>ii  pioNahlc  tlobts,  wliicli  h;i\c  been 
entereil  after  the  liliiii;  of  the  petition  and  before  the  eon- 
sideration  of  the  bankrupt's  appheation  for  a  (bsehai\qe,  are 
released  to  the  same  extent  as  jinlginents  entered  prior  to  tlie 
coniniencement  ni  the  bankrnptey  proeecdings.  Such  jtidg- 
nients  are  made  provable  debts  mider  the  present  act/'*  and 
therefore  discharg"ed  under  Section  17.  L'nder  tlie  act  of  1867 
there  was  a  conHict  of  opinion  among  the  judges  as  to  whether 
a  jtulgment  entered  after  the  commencement  of  bankruptcy 
proceetlings  and  before  the  discharge  was  granted  was  a  prov- 
able debt  or  not.  Some  judges  held  that  the  original  debt 
was  I'nerged  in  the  judgment  and  the  original  debt  extin- 
guished; and  some  judges  held  to  the  contrary.  The  supreme 
court  finally  held  that,  notwithstanding  the  change  in  its  form 
from  that  of  a  simple  contract  debt  or  unliquidated  claim,  or 
whatever  its  character  may  have  been,  by  merger,  into  a  judg- 
ment of  a  court  of  record,  it  still  remained  the  same  debt 
on  which  the  action  was  brought  and  the  existence  of  which 
was  provable  in  bankruptcy  and  therefore  discharged. ^'^  This 
is  the  rule  in  cases  arising  under  the  present  act. 

Where  a  judgment  is  entered  upon  a  debt,  wdiether  prov- 
able or  not,  after  a  discharge  has  been  granted,  it  is  not  re- 
leased by  the  discharge.  The  reason  for  this  is  that  the  dis- 
charge does  not  extinguish  the  debt  and  can  only  be  used  as  a 
defense  to  the  action.  Where  it  is  not  set  up  as  a  defense  it  is 
w^aived.^"  If  the  discharge  is  pleaded  and  the  judgment  ren- 
dered against  the  bankrupt  the  adjudication  is  in  effect  that 
the  discharge  is  not  a  sufficient  defense. 

Judgments  Expressly  Excepted  by  the  Statute. — 
The  statement  as  originally  enacted  expressly  excepted  from 
the  effect  of  a  discharge  judgments  in  three  classes  of  cases, 


17 


"  B.  A.  1898,  Sec.  63,  clause  5.  chanics   Bank  v.   Hazard,  9  Johns. 

"Boynton  v.  Ball,  121  U.  S.  457,  (N.  Y.)  392;  Desobry  v.  Morange, 

466,  30  L.  Ed.  985.  18   Johns.    (N.    Y.)    336. 

"Dimock  v.  Revere  Copper  Co.,  See    also    Pleading    a    discharge, 

117  U.  S.  559,  29  L.  Ed.  994;  Mc-  Sec.  298,  post. 
Donald   v.    Davis,    105    N.    Y.    508;  "  B.  A.  1898,  Sec.  17,  clause  2. 

Park  V.   Casey,  35   Tex.   536;   Me- 


DISCHARGE.  837 

namely :  Judgments  in  actions  for  frauds,  or  obtaining  prop- 
erty by  false  pretenses  or  false  representations,  or  for  willful 
and  malicious  injuries  to  the  person  or  property  of  another. 

These  judgments  may  be  proved  in  bankruptcy  and  a  divi- 
dend paid  out  of  the  bankrupt's  estate  on  such  claims.  The 
effect  of  this  provision  is  merely  to  deprive  the  bankrupt  of 
the  privilege  of  pleading  his  discharge  in  an  action  for  any 
balance  of  such  judgments  remaining  unpaid.  Such  balance 
may  be  collected  out  of  his  after-acquired  property. 

First,  a  discharge  does  not  release  judgments  in  actions  for 
frauds.  The  act  of  1867  did  not  contain  a  similar  exemp- 
tion in  terms.  It  was,  however,  held  under  that  act  that  a 
judgment  upon  a  debt  fraudulently  created  did  not  merge  the 
debt  in  the  judgment  so  as  to  take  it  out  of  the  provision  in 
that  act  that  "no  debt  created  by  fraud  or  embezzlement  of 
the  bankrupt  shall  be  discharged."  ^^  It  was  held  under  that 
act  that,  where  a  judgment  for  a  fraudulent  debt  created  by 
two  persons,  one  of  whom  afterwards  received  a  discharge, 
and  the  other  purchased  the  judgment,  he  might  enforce 
the  judgment  against  the  discharged  bankrupt,  as  there  could 
be  no  contril:)ution  between  wrong-doers.^"  A  debt  created 
by  fraud  whicli  lias  not  gone  to  judgment  is  not  released  be- 
cause of  clause  4  of  Section  17.'° 

Whether  a  discharge  is  obtained  in  an  action  for  fraud  or 
not  is  a  question  for  the  court  to  determine,  upon  the  inspec- 
tion of  the  record,  including  the  pleadings,  and  not  one  to  be 
submitted  to  a  jury.-^  Fraud  must  be  the  sfi'ound  of  the  re- 
covery of  the  judgment." 


is' 


"R.    S.    Sec.    51T7:    In    re    Pitts,  516,    9    Am.    B.    R.   685    and   cases 

No.    1 1 190  Fed.   Cas.,    19   N.   B.   R.  cited. 

63;  Warner  V.  Cronkhite,  No.  17180  "'Flanagan    v.    Pearson,   42    Tex. 

Fed.    Cas.,    6    Biss.    453.      But    see  i.      Burnhani    v.    Pidcock    (N.    Y. 

Palmer   v.    Preston,   45   Vt.    154.  Sup.  Ct.),  5  Am.  B.  R.  590;  Bullis 

'"  P)allictt  V.  Sceley,  34  l<"cd.  Rep.  v.   O'Beirne,    195    U.   S.   606,  49   L. 

.3ofj.   reversing-  27   Fed.   Rep.  507.  Fd.   340,    13  Am.   B.  R.    108. 

'^  Crawford   v.    Burke,    195   U.    S.  "  lUdlis    v.    O'Beirne,    195    U.    S. 

176,  49  F.   Fd.    T47.    12  Am.   B.   R.  fofi.  49  L.   Fd.  340,   13   Am.    !'..   R. 

659;    I'ullis   V.   O'Beirne,   195   U.   S.  108;  In  ic  Bknnberg,  94  Fed.  Rep. 

60O,  49  L.    Fd.   340,    13  Am.    B.   R.  476,   1   Am.  B.   R.  633. 
108;  In  re  Wollock,   120  Fed.  Rep. 


8v^8  i.Aw  AN'n  i'K(H'i-i:i)i xcs  i\   ii w  Ki^-prcY. 

The  clause  in  regard  [o  jiult;nients  ior  fi-amls  was  omitted 
from  the  amoiulment  oi  190v\'''  In  proooodini^s  bci^un  since 
then  juclj;"ments  in  actions  for  frauds  arc  released  by  a  dis- 
charge to  the  same  extent  as  if  the  claim  had  not  lieen  reduced 
to  a  juiii^nient. 

Sccoiul.  a  discharge  in  bankruptcy  does  not  release  a  judg- 
ment in  an  action  for  obtaining  property  under  false  pre- 
tenses or  false  representations.-'  1die  rules  gox-erning  this 
class  of  judgments  are  the  same  generall}'  as  those  relating  t(j 
judgments  in  actions  for  frauds.  The  action  must  be  founded 
upon  the  false  pretenses  or  false  representations.  Incidental 
or  immaterial  false  representations  in  connection  with  the 
transaction  are  not  sufficient.  They  must  have  been  essen- 
tial to  maintaining  the  action  to  avail  to  take  the  judgment 
out  of  the  rule  that  judgments,  provable  in  bankruptcy,  are 
released  by  a  discharge. 

By  the  amendment  of  1903  the  word  "judgments"  was 
changed  to  read  "liabilities." 

Third,  a  discharge  in  bankruptcy  does  not  release  judg- 
ments in  actions  for  willful  and  malicious  injuries  to  persons 
or  property  of  another.-^ 

The  effect  of  this  provision  is  not  to  except  all  judgments 
for  torts  from  the  effect  of  the  discharge.  In  order  that  a 
judgment  shall  not  be  released,  the  injury  to  the  person  or 
property  must  have  been  willful  and  malicious.  Seduction  has 
been  held  to  be  a  willful  and  malicious  injury  both  to  the 
female  -"  and  to  the  father ; ""  alienation  of  affections  may 
also  be  a  willful  and  malicious  injury.^^  A  judgment  by  a 
husband  for  criminal  conversation  with  his  wife  is  not  re- 
leased by  a  discharge.""  A  judgment  founded  upon  negligence 
without  malice   is   not   such   a   judgment.      Such   judgments 

** 32  Stat,  at  L.  797.  ""In    re    Freche,    109    Fed.    Rep. 

"B.   A.    1898,   Sec.    17,   clause   2;      620,  6  Am.  B.  R.  479. 

In   re    Pitts.    No.    11 190  Fed.    Cas.,         ""Leicester   v.    Hoadley,   66   Kas. 

19  N.  B.  R.  63.  172.   9   Am.    B.    R.    318. 

"B.  A.   1898,  Sec.   17,  clause  2.              '"Tinker    v.    Colwell,    193    U.    S. 

"/n    re    Maples,    105  Fed.    Rep.      473,  48  L.   Ed.  754,   11   Am.   B.   R. 

919,  5  Am.  B.  R.  426.  568. 


DISCHARGE.  839 

undoubtedly  are  released  by  the  discharge.  \Miether  the  act 
was  willful  and  malicious  must  be  determined  by  the  record 
of  the  court  in  which  the  judgment  was  recovered.  It  is  a 
question  of  law  for  the  court,  and  should  not  be  submitted  to 
a  jury. 

"Judgment"  is  here  also  changed  to  "liability"  by  the  amend- 
ment of  1903.^^  The  amendment  also  enumerates  liabilities 
for  injury  not  released  by  discharge,  which  were  held  by  the 
courts  to  be  included  in  the  original  act  as  the  cases  cited 
above  in  this  section  show.  They  are  liabilities  for  "alimony 
due  or  to  become  due,  for  maintenance  or  support  of  w'ife 
or  child,  or  for  seduction  of  an  unmarried  female,  or  for 
criminal  conversation."  This  has  been  interpreted  by  the 
supreme  court  as  "merely  declaratory  of  the  true  meaning 
and  sense  of  the  statute."  ^-  _  A  debt  for  medical  attendance 
to  the  wife  or  child  of  the  bankrupt  at  his  request  while  the 
recipient  is  a  member  of  his  family,  is  not  a  debt  "for  main- 
tenance or  support  of  wife  or  child,"  which  is  excepted  from 
the  effect  of  a  discharge.^^ 

§  292.     The  effect  of  a  discharge  upon  debts  not  scheduled. 

A  discharge  will  not  release  a  bankrupt  from  debts  which 
have  not  been  duly  scheduled  in  time  for  proof  and  allow- 
ance, with  the  name  of  the  creditor  if  known  to  the  bankrupt, 
unless  such  creditor  had  notice  or  actual  knowledge  of  the 
proceedings  in  bankruptcy.^  Where  tlie  court  has  jurisdic- 
tion and  the  claims  have  been  placed  upon  the  schedule,  or 
if  omitted  from  it  and  the  creditors  have  had  notice  or  actual 
knowledge  of  the  proceedings,  the  debt,   if  provable,   is  re- 

^Sce    Flanagan    v.    Pearson.    42  *  B.    A.    1898,    Sec.    17,   clause   3; 

Tex.    I.  Birkett  v.   Columbia   Bank,   195   U. 

"'32  Stat,  at  L.  797.  S.  345,  49  L.  Ed.  231,  12  Am.  B.  R. 

"Wetmore  v.  Markoe,  196  U.  S.  69T.     In  re  Monroe,  114  Fed.  Rep. 

68,   77,  49  L.    Ed.   390,    13   Am.    B.  398,   7    Am.    B.    R.    706;    Tyrrel    v. 

R.  I.  Uammerstein,  67  N.   Y.   Supp.  717, 


a3 


fn  re  Ostrandcr,  139  Fed.  Rep.      6  Am.   B.   R.  430;   see  also  Knapp 
592,   15  Am.   B.   R.  96.  V.    Harrold,    i  "C.    C.    New    Series, 

Ohio,  469. 


840 


LAW    ANO    rROCEEDINGS    IN     llA  N  KRT  1' ICV. 


leased  l\v  the  discharj^e.-  Notice  to  an  ao-eiit  is  surficicnt." 
\\"here  the  debt  is  not  scliednled  "actual  kntnvlcds^e  of  the 
proceedings  contcniplalcil  by  the  section  is  a  knowledge  in 
tinie  to  avail  the  creilitor  of  the  benehts  of  the  law — in  time 
to  give  him  an  e<|ual  opponunity  with  other  creditors — not  a 
knowledge  that  may  come  so  late  as  to  deprixe  him  cii  partici- 
pation in  the  ailministration  of  the  affairs  of  the  estate  or  to 
deprive  him  o\  dixidends."' 

\\  here  a  bankrupt  inserts  in  his  schetlules  an  incorrect  name 
or  residence  of  a  creditor,  upon  a  suit  for  the  debt  such  cred- 
itor may  show  that  he  never  had  actual  knowledge  of  the  bank- 
ruptcy ])roccedings." 

The  rule  established  by  the  present  act  is  quite  different  in 
many  res]')ects  from  that  under  the  act  of  1867.  Under  that 
act.  if  the  notice  required  by  the  statute  has  been  duly  pub- 
lishetl.  the  discharge  was  held  to  bar  the  debt,  although  the 
name  of  tlic  creditor  was  not  placed  on  the  schedule  or  notice 


given  to  him.' 


"  Zimmerman  v.  Kctclium,  66  Kan. 
98.  II  Am.  B.  R.  igo;  Cla,sler  v. 
Soble,  22  Pa.  Sup.  Ct.  631,  10  Am. 

B.  R.  446;  Knapp  v.  Harold,  i  Ohio 

C.  C.    Rep.    (N.    S.)    469,  25   Oliio 
C.  C.  Rep.  213. 

"  Atkinson  v.  Elmore,  103  i\Io. 
App.  403;  Light  V.  Chapman,  44 
Ore.  265;  Longfield  v.  Minnesota 
Savings  Bank,  95  Minn.  54,  14  Am. 
B.  R.  413. 

*  Birkett  v.  Columbia  Bank,  195 
"t^-  S.  345,  49  L-  Ed.  231,  12  Am. 
B.   R.  691. 

''  Westheimer  v.  Howard,  93  N. 
Y.  Supp.  518,  14  Am.  B.  R.  547- 

In  Custard  v.  Wigderson,  the  Su- 
preme Court  of  Wisconsin  (Feb., 
1907)  held  debt  of  plaintifif  received 
in  schedule  as  "A.  Castard,"  was 
not   relaesed  by  discharge. 

See  also  Sutherland  v.  Lasher, 
84  X.  Y.  Supp.  56,  ir  Am.  B.  R. 
7.%.  Liesum  v.  Krauss,  35  Misc. 
Rep.  (N.  Y.)  376,  Schiller  v.  Wein- 


stein.   91    N.   Y.    Supp.   76,    15   Am. 
B.   R.    183. 

Ml  ill  V.  Robbins,  i  Mich.  (N. 
P)  305;  Thurmond  v.  Andrews,  to 
Bush,  400;  Payne  v.  Able,  7  Bush, 
344;  Blum  V.  Ricks,  39  Tex.  112; 
Sj'monds  v.  Barnes,  59  Me.  191 ; 
Hood  V.  Spencer,  No.  6665  Fed. 
Cas.,  4  McLean,  168;  Knabe  v. 
Hayes,  71  N.  C.  109;  Burnside  v, 
Brigham,  49  Mass.  75;  Fox  v. 
Paine,  10  Ala.  523 ;  Strong  v.  Claw- 
son,  10  111.  346;  Stern  v.  Nussbaum, 
47  How.  Pr.  (N.  Y.)  489;  Campbell 
V.  Perkins,  8  N.  Y.  430;  Morse  v. 
Presby,  25  N.  H.  299;  Magoon  v. 
Warlicld,  3  Greene  (la.)  293;  Hub- 
bill  V.  Cramp,  11  Paige,  310; 
Thomas  v.  Jones,  39  Wis.  124; 
Downer  v.  Dana,  22  Vt.  337;  Rus- 
sell V.  Cheatham,  16  Miss.  703; 
Mitchell  V.  Singletary,  19  Ohio, 
291 ;  Pattison  &  Co.  v.  Oliver,  10 
R.  I.  448. 


DISCHARGE. 


841 


§  293.     Debts  created  by  fraud  or  embezzlement. 

Under  the  act  of  1867  "no  debt  created  by  fraud  or  embez- 
zlement of  the  bankrupt"  was  discharged/ 

Under  the  act  of  1898,  after  conflicting  decisions  by  the 
state  and  federal  courts,-  it  is  now  definitely  settled  by  the 
decision  of  the  supreme  court,  that  provable  debus  created  by 
fraud  or  embezzlement  of  the  bankrupt  are  generally  released 
by  his  discharge.^  If  such  a  debt  is  not  provable  against  the 
estate  of  the  bankrupt  is  not  discharged.  Only  such  prov- 
able debts  fraudulently  created  are  not  discharged,  as  are 
first,  liabilities  for  obtaining  property  by  false  pretences  or 
false  representations,  and,  second,  debts  created  by  the  fraud 
or  embezzlement  of  the  bankrupt  while  acting  as  an  officer 
or  in  any  fiduciar}-  capacity.'* 

First.  As  originally  enacted  clause  2  of  Section  17  pro- 
vided "that  judgments  in  actions  for  frauds,  or  obtaining 
property  by  false  pretences  or  false  representations,"  are  not 
released  l:)y  a  discharge.  This  provision  was  held  to  apply 
to  judgments  alone  and  not  to  affect  simple  contract  debts 
not  reduced  to  judgment.^  The  judgment  must  have  been 
obtained   in   an  action   for   fraud   or   for   obtaining-  pr()])ertv 


'  R.  S.  Sec.  5117.  Forsyth  v. 
Vehmeyer,  177  U.  S.  177.  44  L- 
Ed.  yi^,  and  cases  cited  in  the 
opinion. 

"In  re  Butts,  120  Fed.  Rep.  966, 
ID  .'\m.  B.  R.  16;  Frey  v.  Torre}', 
75  N.  Y.  Supp.  40,  8  Am.  B.  R. 
196,  affirmed  on  opinion  below,  175 
X.  Y.  5or ;  Crawford  v.  Burke,  2or 
111.  581,  reversed  195  U.  S.  176, 
49  L.  Ed.  147,  12  Am.  B.  R.  659; 
Watertown  Carriage  Co.  v.  Hall, 
176  N.  Y.  313,  II  Am.  B.  R.  15; 
In  re  Cole,  106  Fed.  Rep.  837, 
5  Am.   B.  R.  780. 

'Crawford  v.  Burke,  195  U.  S. 
176,  49  L.  Ed.  147,  12  Am.  B.  R. 
659;  Bullis  V.  O'Bcirnc,  195  U.  S. 
606,  49  L.   Ed.  340,    13  .\m.    Pi.    R. 


108;  Tindle  V.  Birkett,  183  X.  Y. 
264,  564,  15  .\m.  B.  R.  179;  Jewctt 
Bros.  &  Jewett  v.  Bentson,  18  S.  D. 
57.S,  105  N.  W.  Rep.  173;  In  re 
Wollock,  120  Fed.  Rep.  516,  9  Am. 
B.  R.  685;  In  re  Adler  (C.  C  A. 
2d  Cir.),  144  h'ed.  Rep.  659,  16  Am. 
B.  R.  414. 

■*  B.  A.  1898.  Sec.  17,  clauses  2  and 
4,  as  amended  Feb.  5,  1903,  32  Stat, 
at  L.  797. 

'^  Crawford  v.  Burke,  195  U.  S. 
176,  49  L.  Ed.  147,  12  Am.  B.  R. 
659;  Howe  V.  Xoyes,  93  X.  Supp. 
476,  15  Am.  B.  R.  103;  Smitli 
&  Wallace  Co.  v.  Lambert,  69 
X.  J.  L.  487;  Morse  &  Rogers 
V.  Kaufman,  100  Va.  218,  7  Am. 
15.  R.  549. 


84?  LAW    AXn   PROCEEDINGS    TX    P.AX  KUU  I'TCV. 

by  false  proteticcs  tir  1)\-  lalso  ropresentatitMis.'"'  P.iil  tlie 
supreme  court  said  that  "a  correct  iuterprelation  of  the  law 
does  noi  reiiuire  a  close  exaniiuation  iiit(^  the  form  of  the 
action  to  determine  whether  technically  il  is  r.v  Jcliclo  or 
otherw  ise.  Inil  the  real  iiueslion  is.  was  the  relief  i^rantetl  in  the 
indj^ineni  based  upon  actual  as  dislins^uished  from  construc- 
li\e  Irauil  oi  the  bankrupt?  If  the  jud<;-ment  is  thus  founded, 
whatever  the  form  oi  the  action,  it  is  the  intent  and  purpose 
of  the  law  that  the  bankrui)t  shall  not  be  discharged  from  it, 
but  shall  still  rest  under  its  obligation,  so  far  as  the 
bankrupt  law  is  concerned."  '  "Fhe  words  "judgments  in 
actions  for  frauds"  were  omitted  in  the  amendment  of  Feb- 
ruary 5,  1903.^  In  proceedings  begun  since  that  time  judg- 
ments in  that  class  of  actions  are  relerised  by  a  discharge 
to  the  same  extent  as  if  the  claim  had  not  been  reduced  to  a 
judgment. 

As  clause  2  of  Section  17  stands  since  the  amendement  of 
I<"ebruar}-  5.  1903."  "liabilities  for  obtaining  property  by  false 
pretences  or  false  representations"  are  not  discharged.^**  The 
word  "liabilities"  was  substituted  for  "judgments"  by  the 
amendment.  Prior  to  that  time  it  was  necessary  to  reduce  a 
debt  arising  from  obtaining  property  by  false  pretenses  or 
false  representations  to  a  judgment  prior  to  bankruptcy  to 
prevent  its  being  discharged."  All  such  debts  and  claims 
against  the  estate  of  the  bankrupt,  whether  reduced  to  judg- 
ment or  not,  are  now  preserved  against  the  bankrupt  not- 
withstanding his  discharge. 

*  Hargardine-M  c  K  i  1 1  r  i  c  k  Dry  '  Bnllis    v.    O'Beirne,    195    U.    S. 

Goods   Co.    V.    Hudson    (C.    C.    A.  606,  620,  49  L.  Ed.  340,  13  Am.  B. 

8th    Cir.),    122    Fed.    Rep.    232,    10  R.    108. 

Am.    B.    R.   225;    In   re    Rhutassel,  "  :i2  Stat,  at  L.  797. 

96    Fed.    Rep.    597,    2    Am.    B.    R.  ^32  Stat,  at  L.  797. 

697;   Morse  &  Rogers  v.   Kaufman,  '"  Mackel   v.    Rochester,    135   Fed. 

100  Va.  218,  7  Am.  B.  R.  549;  Bullis  Rep.    904,    14    Am.    B.    R.    429. 

V.   O'Beirne,   195   U.   S.  606,  49  L.  "  Mackcl   v.   Rochester,    135   Fed. 

Ed.  340,  13  Am.  B.  R.   108;  Good-  Rep.  904,   14  Am.  B.  R.  429;  In  re 

man  v.   llerrman,   172  Mo.  344.  Cole,     106    l"'cd.    Rep.    807,    5    Am. 

B.  R.  780. 


DISCHARGE. 


843 


To  fall  within  this  provision  the  debt  must  be  fraudulent. 
The  essential  character  of  the  fraud  is  the  same  as  under  the 
former  statutes,  which  was  held  to  mean  positi\e  fraud  or 
fraud  in  fact  involving  moral  turpitude  or  intentional  wrong 
and  not  implied  fraud,  which  may  exist  without  any  imputa- 
tion of  bad  faith. ^-  In  this  class  of  debts  the  fraud  most 
usually  consists  in  misstatements  of  the  buyer  as  to  his  ability 
to  pay  or  means  of  payment,  sucli  as  false  statements  as  to 
what  property  he  owns,  what  debt  he  owes,  what  kind  of 
business  he  is  doing,  that  his  property  is  unencumbered  and 
the  like.  \Miere  the  vendee  purchases  with  a  positive  inten- 
tion not  to  pay  for  the  goods  a  debt  is  created  which  is  not 
discharged. 

A  fraudulent  representation  which  would  justify  the  rescis- 
sion of  a  contract  of  sale  is  sufficent  to  prevent  a  discharge 
of  the  (lel)t  upon  the  affirmance  of  the  sale.  Cases  relating 
to  fraudulent  sales  are  instructive  in  construing  this  provision 
In  order  to  bring  a  debt  within  the  exception  it  must  be 
shown  that  the  bankrupt  made  the  representations  knowing 
them  to  be  false  and  they  must  ha\e  in.duced  the  seller  to  con- 
summate the  sale  when  he  otherwise  would  not  liave  done 
so.^^  It  is  not  necessary  tliat  the  false  representations  should 
be  the  sole  and  exclusive  consideration  for  the  credit,  Init  only 
that  they  were  a  material  consideration,  witliout  whicli.  in 
all  probability,  the  credit  would  not  have  been  given. '^  ^Idie 
seller  must  have  relied  upon  tlie  statements  of  the  bu}er  as  an 
inducement  to  make  the  sale.^''     It  is  not  necessarv  that  the 


"Bullis  V.  O'Bcinic,  195  U.  S. 
606,  49  L.  Ed.  340,  1.3  Am.  B.  R. 
108;  For.syth  v.  Vehmcyer,  177  U. 
S.  177,  44  L.  Ed.  72.3,  and  cases 
collected  in  the  opinion.  In  re 
Adler  (C.  C.  A.  2d  Cir.),  144  Fed. 
Rep.  659,  16  .Am.  B.  R.  414;  West- 
ern Union  Cold  Storage  Co.  v. 
Hurd,  n6  Fed.  Rep.  442,  8  Am.  B. 

R.  633. 

"  In  re  Patterson  &  Co.,  125  Fed. 
Rei).  5O2,   10  Am.   B.  R.  748;  In  re 


Cany,  103  Fed.  Rep.  930,  4  Am.  B. 
I^-  576;  In  re  Roalswick,  no  Fed. 
Rep.  639,  6  .'\m.  B.  R.  572;  In  re 
O'Conncr,  114  Fed.  Rep.  J77,  7 
Am.  15.  R.  428;  Pd(K)mingdale  v. 
Empire  Rubber  Co.,  1 14  -l-'cd.  Rep. 
1016,  8  Am.  B.  R.  74. 

"  In  re  Gany,  103  Fed.  Rep.  930, 
4  Am.  B.  R.  576. 

""In  re  Epstein,  109  I'od.  Rep. 
87S,  6  Am.  B.  R.  60;  /;/  re  Davis, 
112  Fed.  Rep.  294,  7  \m.  B.  R.  276. 


844  LAW    AND   rROCEEDlNC.S    IX    I?A.\  KRL'l' ICY. 

false  representations  ho  in  writing-.  A  promise  to  pay  cash, 
when  the  goods  are  ileh\eretl  and  faiUne  to  do  so,  is  not  a 
franthdent  representation.'"  The  more  omission  of  a  pur- 
chaser of  goods  to  disclose  his  insohonoy  to  the  \endor  is  not 
reii'arded  as  franduloiU  in  itself.''  There  is  a  distinction  he- 
tween  withholding  information  and  making  false  statements 
\vith  reference  to  one's  luiaticial  conditicni. 

Where  a  hankrnpt  \endee  obtains  property  from  a  bank- 
rnpt  vendor  with  the  intent  to  hintler,  delay  and  defraud  the 
creditors  of  the  vendor,  well  knowing  that  he  was  insolvent 
antl  contemplated  bankruptcy,  the  property  was  obtained  by 
false  pretenses  and  a  debt  for  the  value  of  the  property  exists 
in  favor  of  the  trustee  of  the  vendor  against  the  estate  of  the 
vendee  which  is  not  released  by  the  discharge  of  the  vendee.^^ 

Scco)i(f.  I^he  construction  of  clause  4  of  Section  17  re- 
sulted in  widely  different  opinions  by  the  courts  as  to  the  effect 
of  a  discharge  upon  fraudulent  debts.  Some  courts  held  that 
"fraud"  should  be  segregated  from  the  qualifying  language 
"while  acting  as  an  officer  or  in  any  fiduciary  capacity,"  and 
that  all  debts  created  by  fraud  w^ere  not  discharged.^''  Other 
courts  held  that  all  debts  created  by  fraud  were  discharged, 
except  those  created  while  acting  in  an  official  character  or  in 
any  fiduciary  capacity."*'  When  the  question  reached  the 
supreme  court  it  held  that  clause  4  of  Sectional?  is  limited 
to  frauds,  embezzlements,  misappropriations  or  defalcations 
while  acting  in  an  official  character  or  in  a  fiduciary  capacity, 

"/n  re  Lewis,  125  Fed.  Rep.  143,  16;    Watertown    Carriage    Co.    v. 

10  Am.  B.  R.  741.  Hall,    176   N.    Y.   313,    ii    Am.   B. 

"In  re  Davis,  112  Fed.  Rep.  294,  R.    15. 

7  Am.  B.  R.  276.  ^"Goodman  v.   Herman,   172  Mo. 

'^Mackel   v.   Rochester,    135   Fed.  344;   Gee  v.   Gee,  84  Minn.   384,  7 

Rep.  904,  14  Am.  B.  R.  429.  Am.  B.  R.  500;  In  re  Wollock,  120 

"Frey  v.  Torrey,  75  N.  Y.  Supp.  Fed.   Rep.   516,  9  Am.   B.   R.   685; 

40,  8  Am.   B.   R.    196,   affirmed  on  In  re  Rhutassel,  96  Fed.  Rep.  597, 

opinion    below,     175     N.     Y.     501;  2  Am.  B.  R.  697;  In  re  Bullis,  yz 

Crawford    v.    Burke,    201    111.    581,  N.    Y.    Supp.    Ct.    1047,    7   Am.    B. 

reversed   195  U.   S.   176,  49  L.  Ed.  R.    238,    affirmed    195    U.    S.    606, 

147,  12  Am.  B.  R.  659;  In  re  Butts,  49  L.  Ed.  340,   13  Am.  B.  R.  108. 
120   Fed.   Rep.   966,    10  Am.   B.   R. 


DISCHARGE. 


845 


but  does  not  apply  to  other  debts  or  obligations  fraudulently 
created.-^  The  ettect  of  a  discharge  on  this  class  of  debts  is 
considered  in  the  section  dealing  witli  fiduciary  debts."- 


§  294.     Fiduciary  debts. 

A  discharge  does  not  release  a  bankrupt  from  debts  which 
were  created  by  his  fraud,  embezzlement,  misappropriation  or 
defalcation  while  acting  as  an'  otificer  or  in  any  fiduciary 
capacity.^  After  conflicting  adjudications  by  the  state  and 
federal  courts  it  is  now  definitely  settled  by  the  supreme  court 
that  this  provision  is  limited  to  frauds,  embezzlements,  mis- 
appropriations or  defalcations  while  acting  in  an  official  char- 
acter or  in  a  fiduciary  capacity,  but  does  not  apply  to  other 
debts  or  obligations  fraudulently  created." 

The  phrase  "while  acting  in  any  fiduciary  capacity"  relates 
to  special  trusts,  and  does  not  include  those  trusts  which  the 
law  implies  from  the  contract,  and  which  form  an  element  in 
every  agency  and  in  nearly  all  the  commercial  transactions  in 
the  country.  It  is  confined  to  technical  trusts,^  and  the  fidu- 
ciarv  character  is  not  that  which  the  debt  gives  rise  to,  but 
must  exist  independently  of  it.*  Thus  a  factor,  commission 
merchant,  or  agent,  who  has  sold  property  of  liis  principal  and 
has  failed  to  pay  over  to  him  the  proceeds,  is  held  not  to  owe 
to  him  a  debt    created    in    a    fiduciary  capacity.^     Where  a 


^  Crawford  v.  Burke,  195  U.  S. 
176,  49  L.  Ed.  147,  12  Am.  B.  R. 
659;  Bulli.s  V.  O'Beirne,  195  U.  S. 
6d6,  49  L.  Ed.  340,  13  Am.  B.  R. 
108. 

-'*  Sec   294. 

'B.  A.  1898,  Sec.  17,  clause  4. 

'  Crawford  v.  Burke,  195  U.  S. 
176,  49  L.  Ed.  147,  12  Am.  B.  R. 
659;  Bullis  V.  O'Beirne,  195  U.  S. 
606,  49  L.  Ed.  340,  13  Am.  B.  R. 
108. 

See   Sec.   293,  ante. 

'/«  re  Benedict,  75  N.  Y.  Supp. 
165,  8  Am.  B.  R.  463;  Bracken  v. 


IMilner,  104  Fed.  Rep.  522,  5  Am.  B. 
R.  23;  Crosby  v.  Miller,  Vaughn  & 
Co.,  25  R.  '..  172;  Goodman  v.  Mer- 
man. 172  Mo.  344;  Gee  v.  Gee,  84 
Minn.  384.  7  Am.  H.  R.  500;  Chap- 
man V.  Forsyth,  2  IIow.  202,  11  L.  Ed. 
236;  Hennequin  v.  Clewes,  iii  U. 
S.  676,  28  L.  Ed.  565;  Palmer  v. 
Hussey,  119  U.  S.  96,  30  L.  Ed. 
362,  affirming  87   N.   Y.  303. 

*  Bracken  v.  Milner,  104  Fed. 
Rep.  522,  5  Am.  B.  R.  23. 

^'  In  re  Benedict,  75  N.  Y.  Supp. 
165,  8  Am.  B.  R.  463;  Knott  v.  Put- 
nam, 107  Fed.  Rep.  907,  6  Am.  B.  R, 


846  LAW   AND  rUOCEEDlNGS   JN    liWKRUPTCY. 

broker,  to  secure  a  debt  from  himself.  liNpotliecates  securities 
Avhich  IkuI  been  pledgetl  to  him  to  secm-e  the  obboation  of 
another,  and  failed  to  return  them  when  such  ohlig-ation  was 
discharged,  was  held  not  thereby  to  create  a  debt  in  a  fiduciary 

capacity.'"' 

The  implied  trust  relations  existing  between  jiartners  does 
not  bring  their  affairs  within  the  definition  of  the  excepted 
term  "fiduciary."  ' 

A  balance  due  on  the  subscrii)ticMi  t(^  capital  stock  of  a  cnr- 
poration  has  been  held  not  to  be  a  fiduciary  debt.'  A  sum 
of  money  to  which  a  wife  was  entitled  on  the  sale  of  certain 
real  estate  in  partition  proceedings  was  decreed  to  be  paid  to 
her  husband  to  have  the  use  of  the  interest  and  give  bond  for 
the  pavment  oi  the  principal  at  his  death  or  when  ordered  to 
do  so  by  the  court.  In  an  action  to  recover  such  a  principal 
sum  it  was  held  that  the  liability  incurred  by  the  husband  was 
incurred  while  acting  in  a  fiduciary  capacity,  and  was  not  dis- 
charged by  proceedings  in  bankruptcy." 

Executors,  Trustees,  Guardians,  etc. — A  discharge 
does  not  release  a  debt  due  by  a  testamentary  trustee,  execu- 
tor, administrator,  or  guardian,  as  such.  These  are  the  spe- 
cial or  technical  trusts,  which  have  been  uniformly  held  to 
create  obligations  not  released  by  a  discharge.  Idins  it  has 
been  held  to  be  a  fiduciary  debt  where  a  sum  of  money  is  due 
from  an  executor,  as  such,  for  the  residuary  legatee,'"  or  where 

80;  In  re  Basch,  97  Fed.  Rep.  761,  3  was  made  under  the  1)ankriiptcy  act 

Am.   B.   R.   23s;    Chapman   v.   For-  of  1841,  and  has  since  been  repeated 

svth,   2   How.    202,    II    L.    Ed.    236.  many  times  under  subsequent  acts." 

'  In  Crawford  v.  Burke,  195  U.  S.  "  Crosby  v.  Miller.  Vaughn  &  Co., 

176,  189,  49  L.  Ed.  147,  12  Am.  B.  R.  25  R.  I.  172;  Hennequin  v.  Clewes, 

659,  the  Supreme  Court  said :  "We  i  n  U.  S.  676,  28  L.  Ed.  565 ;  Palmer 

may    remark    here    in    passing   that  v.  Hussey,   119  U.  S.  96,  30  L.   Ed. 

ever  since  the  case  of  Chapman  v.  2,(i2,  affirming  87  N.  Y.  303. 

Forsyth,  2  How.  202,  this  court  has  '  Gee  v.  Gee,  84  Minn.  384,  5  Am. 

held    that    a    commission    merchant  B.  R.  500;   Hill  v.  Sheibley,  68  Ga. 

and   factor   who   sells   for  others   is  556. 

not  indebted  in  a  fiduciary  capacity  "  Morrison  v.  Savage,  56  Md.  142. 

within  the  bankruptcy  acts  by  with-  "  Mock  v.  Howell,  loi  N.  C.  443- 

holding    the     money     received     for  '"  Crisfield  v.   State,  55  Md.    192. 
property    sold    by    him.      This    rule 


DISCHARGE.  847 

a  guardian  fails  to  account  for  money  belonging  to  his  wards. 
In  such  cases  a  surety  of  the  bankrupt,  having  paid  his  habihty 
on  a  bond,  may  recover  such  amount  from  the  bankrupt  out  of 
property  acquired  after  the  discharge. ^^ 

It  shoukl,  lK)\vever,  be  observed  that  the  (lel)t  must  be  due 
from  the  trustee,  executor,  administrator,  or  guardian  in  his 
official .  capacity.  An  individual  indebtedness,  even  thougli 
connected  with  the  trust  estate,  is  not  a  fiduciary  debt.  Thus 
where  a  guardian  gave  his  note  under  seal  to  the  ward's  hus- 
band in  settlement  of  his  account  and  received  a  release  from 
them  he  was  held  not  liable  in  a  fiduciary  capacity.^-  Where 
a  note  is  given  as  new  evidence  of  an  old  debt,  without  a  re- 
lease, no  release  of  the  debt  is  effected  by  the  discharge. ^^ 
Wliere  an  executor  gave  his  personal  guarantee  of  a  claim  of 
a  creditor  against  the  testate's  estate  the  guarantee  was  held 
an  ordinary  debt  and  not  one  created  while  acting  in  a  fidu- 
ciary capacity.^^ 

Attorneys. — An  attorney,  who  collects  debts  for  a  client, 
has  been  held  to  act  in  a  fiduciary  capacity,  and  will  not  be 
released  by  a  discharge  from  his  obligation  to  pay  the  money 
to  his  client. ^^'  \Miere  an  attorney  acts  as  a  gratuitous  bailee, 
and  his  liability  is  merely  for  negligence  in  failing  to  return 
a  note,  he  is  released  by  a  discharge.^" 

Officers. — A  discharge  in  bankruptcy  does  not  release  a 
bankrupt  from  a  debt  which  was  created  l)y  his  defalcation 
while  acting  as  an  officer.''  Precisely  who  arc  included  in  tlie 
term  "officer"  can  not  be  stated.  It  manifestly  includes  all 
public  officers.     A  collector  of  city  taxes  is  such  an  officer, 

"  Carlin  v.  Carlin,  <S  Bush.   (Ky.)  "Ileffrcn   v.   Leroy,  39  Tnd.    171; 

141 ;  Halliburton  v.  Carter,  55  Mo.  Heffren    v.    Jayne,    39    Ind.    463 ; 

435.  Fanagan    v.    Pearson,    43    Tex.    i  ; 

'"Coleman  v.  Davies,  45  Ga.  489.  White    v.    Piatt.    5    Den.    (N.    Y.) 

See  also   Elliot   v.    llipp^ins,   83    N.  274.     But  see  Wolcott  v.  TTodcfc.  81 

C.  459.  Mass.   547;   Williamson  v.   Dickons, 

"Madison    v.    Dunklc,     114     Ind.  5   Ircd.  Law    (N.  C.)   259. 

262.  '"  ]\TcAdoo    V.    I.uinniis,    43    Te.x. 

"  .\mf)skeag     Manufacturing     Co.  227. 

V.  Barnes,  49  N.   II.  312.  ^' B.  A.  1898,  Sec.   17,  clause  4. 


848  LAW     AM)    l'KO(.KKl)lNGS    IN     1'.  A  N  K  U I   1"  ICY. 

aiul  a  ilclu  due  from  him  lo  the  inuiiicipal  corporation  for 
taxes  rooci\cil  aiul  not  acconiUod  for  is  not  dischari^ed.^'*  So 
whore  a  retirinj;  township  trnstee  gives  his  note  to  his  succes- 
sor in  satisfaction  of  a  dcht  (hio  the  townshi])  iov  funds  wrong- 
full}'  appropriatoil  to  his  own  use.  it  was  hckl  that  the  debt 
was  not  so  changed  thereby  as  to  be  released  b}-  a  discharge.^" 

The  mere  negligence  of  a  public  olVicer  in  collecting  moneys, 
which  it  is  his  duty  to  collect,  has  been  held  not  to  be  a 
tlefalcation.-'^ 

Sureties  on  bonds  of  public  officers  are  not  within  the  ex- 
emption. It  has  l)ccn  held  that  a  discharge  granted  to  a 
surety  will  release  him  from  any  liability  actually  incurred 
upon  his  bond,  e\-en  though  his  principal  is  guilty  of  a  defal- 
cation.-^ 

An  officer  of  a  national  bank  having  the  management  and 
control  of  its  affairs  is  acting  in  a  fiduciary  capacity  and  an 

indebtedness  arising  from  the  embezzlement  or  misappro- 
priation of  the  funds  of  the  bank  by  him  is  not  discharged."^ 

§  295.     Debts  created  by  misappropriation. 

It  will  be  observed  that  clause  4  of  Section  17  is  substan- 
tially a  reenactment  of  the  provision  of  the  act  of  1867,^  with 
the  addition  of  the  word  "misappropriation"  after  "embezzle- 
ment." It  is  a  new  word  in  bankrupt  laws.  It  is  not  con- 
tained in  the  English  statutes  nor  in  the  former  United  States 
statutes  on   the  subject  of  bankruptcy. 

1die  word  "misappropriation,"  construed  by  the  maxim 
noscitur  a  sociis,  means  something  like  embezzlement.  It 
means  the  fraudulent  missapplication  of  funds  intrusted  to  an 

"Morse  v.  Lowell,  48  Mass.  152;      Jones  v.  Knox.  46  Ala.  53;  Saunders 
Richmond   v.    Brown,  66   Me.   37,3.         v.    Commonwealth,    10   Grat.    (Va.) 


19 


Madison    v.    Dunkle,    114    hid.      494.     But  see  U.  S.  v.   Herron,  20 
262.  Wall.  251,  22  L.  Ed.  275. 


20 


Courtney  v.  Bcale,  84  Va.  692.  ""'lfar])er    v.    Rankin     (C.    C.    A. 

^McMinn    v.    Allen,    67    N.    C.  4th    Cir.),    141    Fed.    Rep.    626    15 

131 ;   Steele  v.  Graves,  68  Ala.  21 ;  Am,    B.    R.   608. 

Fowler    v.    Kendall,    44    ]\Ie.    448;  '  R.  S.  Sec.  51 17. 
Reitz   V.   The    People,   72   111.   435; 


DISCHARGE.  849 

officer  or  person  acting  in  a  fiduciary  capacity  for  a  particular 
purpose.  It  is  not  necessary  that  the  bankrupt  actually  em- 
bezzles the  property  or  that  he  reaps  any  benefit  personally 
from  the  transaction.  It  is  sufficient  if  he  fraudulently  deals 
with  the  money,  goods,  securities,  etc.,  intrusted  to  him  in  a 
fiduciary  capacity ;  or  as  an  officer  of  a  corporation  fraudu- 
lently misapplies  any  of  its  property;  or  as  a  public  officer 
fraudulently  misapplies  public  funds  which  come  into  his 
possession.  In  order  to  constitute  misappropriation  the  mis- 
use must  be  tainted  with  fraud."  The  misuse  of  trust  funds 
owing  to  bad  judgment  will  not  constitute  misappropriation. 
The  payment  of  an  extravagant  price  for  services  or  materials 
properly  appertaining  to  the  business  of  the  corporation  is  not 
misappropriation  by  an  officer  of  the  corporation.'^  In  order 
to  constitute  a  misappropriation  of  negotiable  paper  there 
must  be  fraudulent  perversion  of  the  original  object  or  design.* 
It  was  suggested  in  an  early  case  ^  that  the  word  "misap- 
propriation applied  to  debts  arising  from  the  misuse  or  per- 
version of  the  property  of  a  principal  by  a  factor,  agent,  com- 
mission merchant,  etc.  Since  the  decision  in  Crazvford  v. 
Burke  ^  holding  that  clause  4  of  Section  17  applies  only  to 
debts  created  by  the  bankrupt  "while  acting  in  an  official 
character  or  in  a  fiduciary  capacity,"  it  is  clear  that  misap- 
propriation does  not  apply  to  debts  of  factors,  etc.,  which  are 
not  fiduciary  debts. ^ 

§  296.     Codebtors  not  discharged. 

The  liability  of  a  person  who  is  a  codebtor  with,  or  guaran- 
tor, or  in  any  manner  a  surety  for  a  bankru])t,  is  not  altered 
by  the  discharge  of  such  bankrupt.^ 

^Jackson  v.  First  Nat.   Bank,  42  °  Frey   v.    Tourcy,   8   Am.    B.    R. 

N.  J.  L.   177;   Fox  V.  Hale  &  Nor-  196,  75   N.   Y.   Supp.  40. 

cross   Silver    Mining   Co.,    108   Cal.  "  195  U.  S.  176,  49  L.  Ed.  147,  12 

369,    426;    Winchester    v.    Howard,  Am.    B.   R.   659. 

136  Cal.  432.  '  Sec.  294,  ante. 

'  Fox  V.  Hale  &  Norcross  Silver  '  B.    A.    1898,   Sec.    16.     Compare 

Mining    Co.,    108    Cal.    369,    426.  R.    S.    Sec.   51 18. 

*  Jackson   v.    First   Nat.   Bank,  42 
N.  J.  T..  177. 


S50 


LAW    AXO    rUOCliEDINGS   IN    l!A.\  KRUPTCY. 


This  section  applies  to  the  discharg-e  in  hankrnptcy,  and 
does  not  refer  to  nor  ha\o  in  view  any  act  of  the  parties 
etTccting-  a  release  ol  liability  in  law  or  in  equity."  It  applies 
to  sureties  liable  for  the  debts  of  the  bankrupt  existing  before 
and  which  would  be  released  by  his  discharge.'' 

The  fact  that  one  of  the  codel)tors  has  received  a  discharge 
will  not  prevent  the  creditor  from  suing  any  i^ie  else  liable 
on  the  same  debt ;  and  proceedings  pending  against  others, 
and  unsatisfied  judgments  already  obtained  against  others 
for  the  same  debt,  are  not  affected  by  a  discharge  or  surren- 
dered by  proving  the  debt.'*  Thus  the  discharge  of  the  maker 
in  no  way  aiTects  the  endorser."'  There  is  no  obligation  rest- 
ing on  the  creditor  to  prove  his  claim  in  bankruptcy.*'  The 
bankrupt  statute  protects  the  surety  in  such  cases."  The  pro- 
vision quoted  above  undoubtedly  includes  partners  jointly 
liable,  aalthough  they  are  not  expressly  mentioned  in  the 
section.^  Where  two  general  partners  are  discharged, 
a  special  partner  can  not  avail  himself  of  their  discharge  to 
bar  an  action  against  him  on  a  firm  obligation.''  It  has  been 
held  that  a  guarantor  for  rent  under  a  lease  was  not  released 
of  his  obligation  by  the  discharge  of  the  lessee.^" 

The  question  of  the  eft'ect  of  a  discharge  on  the  liability  of 
sureties  on  bonds  given  by  the  bankrupt,  to  release  property 
of  his  which  had  been  attached,  where  the  suit  was  pending 


-In  re  McDonald.  No.  8753  Fed. 
Cas.,   24   Pitts.    L.   J.   4^. 

^  Carpenter  v-  Turrell,  100  Mass. 
450;  Odell  V.  Wootten,  38  Ga.  224; 
Knapp  V.  Anderson,  71  N.  Y.  466; 
Wolf  V.  Stix,  99  U.  S.  I,  25  L. 
Ed.  309;  Klipstein  &  Co.  v.  Allen- 
Miles  Co.  (C.  C  A.  5th  Cir.),  136 
Fed.  Rep.  385,   14  Am.  B.  R.   15. 

*  In     re     Levy,     No.     8297     Fed. 


Smith,  40  Md.  602 ;  Phillips  v.  Sol- 
omon, 42  Ga.  192. 

°  King  V.  Central  Bank,  6  Ga. 
257;    Clopton    V.    Spratt,    52    Miss. 

251- 

"Clopton  v.  Spratt,  52  Miss.  251. 

'  B.  A.  1898,  Sec.  S7f. 

*As  to  the  effect  of  a  discharge 
upon  partners  see  Sec.  102,  ante. 
See  also  In  re  Dillon,  100  Fed.  Rep. 


Cas.,   2   Ben.    169;    Payne   v.   Abel,      627,  4  Am.  B.  R.  63. 
7  Bush.  (Ky.)  344;  Moore  V.  Wal-  "  Abendroth   v.    Van   Dolsen,    131 

ler,    I    A.    k.    Marsh.    (Ky.)    488;       U.  S.  66,  33  L.  Ed.  57. 
Bowery   Savings   Bank   v.    Clinton,  '"  Witthaus  v.  Zimmerman,  91  N. 

2  Sandf.    (N.  Y.)    113;   Seldner  v.       Y.    App.    Div.   202,    11    Am.    B,    R. 

314. 


DISCHARGE.  851 

at  the  time  of  the  commencement  of  bankruptcy  proceedings, 
was  variously  answered  by  the  courts  under  the  act  of  1867. 
Some  held  when  a  discharge  had  been  granted  to  a  bankrupt, 
pending  a   suit   in   which   a  judgment  on   his   property   had 
previously  beer  dissolved  by  the  giving  of  a  bond,  no  judg- 
ment could  be  subsequently  entered  against  him  or  his  sure- 
ties.    Others  held  otherwise.     The  question  came  before  the 
supreme  court  ten  years  after  the  bankrupt  act  had  been  re- 
pealed in  the  case  of  Hill  v.  Harding}'^     It  was  held  in  that 
case  that  where  the  attachment  of  property  in  an  action  in 
the  state  court  was  dissolved  by  the  defendant  entering  into 
a  bond  with  sureties  to  pay  any  final  judgment,  and  the  de- 
fendant after  a  \-erdict  against  him  obtained  his  discharge  in 
bankruptcy,  the  bankrupt  act  did  not  prevent  the  state  court 
from  rendering  judgment  against  him  on  the  verdict,  with  a 
perpetual  stay  of  execution,  so  as  to  leave   the  plaintiff  at 
liberty  to  proceed  against  the  sureties.     In  that  case  the  court 
said :     "If   the   sureties   should   ultimately   pay   the   amount 
of  any  such  judgment,  and  thereby  acquire  a  claim  to  be  re- 
imbursed by  their  principal,  the  amount  so  paid   (which  is  a 
point  not  now  in  issue),  it  would  be  because  his  liability  to 
them  upon  such  claim  did  not  exist  at  tlie  time  of  the  com- 
mencement of  the  proceedings  in  bankruptcy,  and  therefore 
could  not  be  proved  in  bankruptcy  nor  barred  by  the  discharge, 
and  consequently  would  not  be  affected  by  any  provision  of 
the  bankrupt  act." 

Whether  a  state  court  can  render  a  formal  judgment 
against  the  debtor  for  the  single  purpose  of  charging  such 
sureties  depend  upon  the  authority  of  the  state  court  under 
the  local  law.^-     If  the  state  court  does  not  have  the  power, 

"  130  U.  S.  699,  32  L.  Ed.  1083.  fore  bankruptcy,   which   was  a   lien 

In  re  Martin,   105  Fed.  Rep.  753,  under    the    local    law    and    was    not 

5    Am.    B.    R.    423,    the    court    of  released    by    the    discharge    of    the 

bankruptcy  enjoined  the  prosecution  debtor,    130   U.    S.    699,   ^2   L.    Ed. 

of  such  a  suit  under  Sec.  11.  1083. 

In  Marx  v.  Hart,  166  Mo.  503.  8  '"  Klipstcin  &  Co.  v.   Allen-Miles 

Am.    B.    R.   438rt,   a   judgment    was  Co.    (C.   C   A.   5th   Cir.),    136   Fed. 

entered  against   the   garnishees  be-  Rep.  385,  14  Am.  B.  R.  15;   Hill  v. 


SS2 


LAW    AXD  PROCEEDINGS  IN   BANKRUPTCY. 


or.  liavin<;-  ihc  power,  docs  not  exercise  it,  to  render  snch 
jiulgnient  the  surety  is  releasetl/''  The  reason  is  tliat  the 
surety  in  snch  case  is  bound  only  to  pay  the  judg'ment  that 
may  be  rendered  in  the  specified  action.  If  no  judgment  re- 
suhs  the  event  has  not  happened  on  which  the  liabihty  of  the 
surety  was  made  to  depend.  In  other  words,  the  liability  of 
the  surety  rests  upon  the  terms  of  his  undertaking.  Section 
16  of  the  bankrupt  act  does  not  enlarge  the  liability  of  the 
surety,  but  only  preserves  such  liability  as  may  exist  under  the 
terms  of  his  suretyship  from  being  released  by  the  discharge 
of  his  principal. 

An  attachment  lien  which  is  avoided  by  Section  67/  can  not 
be  enforced  by  judgment  and  therefore  the  surety  on  the 
attachment  bond  will  be  released.  If  such  proceedings  in  the 
state  court  are  stayed  under  Section  11  until  the  time  within 


Harding,  130  U.  S.  699,  32  L.  Ed. 
1083. 

"Klipstein  &  Co.  v.  Allen-Miles 
Co.  (C.  C.  A.  5th  Cir.),  136  Fed. 
Rep.  385,  after  considering  the  state 
statute  the  court  said :  "The  condi- 
tion of  the  bond  dissolving  the 
garnishment  is  for  the  payment  of 
the  judgment  that  shall  be  ren- 
dered on  the  garnishment  proceed- 
ings. This  must  be  taken  to  mean 
for  the  payment  of  such  a  judgment 
as  could  have  been  rendered 
against  the  garnishee,  if  the  bond 
had  not  been  given.  Guilford  v. 
'Reeves,  103  Ala.  301,  15  South.  661; 
Collins  V.  Baldwin,  109  Ala.  402, 
19  South.  862.  No  judgment  could 
have  been  rendered  against  the 
garnishee  on  the  garnishment  pro- 
ceedings, if  the  bond  had  not  been 
given,  because  such  proceedings 
were  invalidated  by  the  adjudica- 
tion  in  bankruptcy." 

In  Wolf  v.  Stix,  99  U.  S.  18.  25 
L.  Ed.  309,  the  supreme  court  said : 


"The  cases  are  numerous  in  which 
it  has  been  held  ,and  we  think  cor- 
rectly, that  if  one  is  bound  as 
surety  for  another  to  pay  any  judg- 
ment that  may  be  rendered  in  a 
specified  action,  if  the  judgment  is 
defeated  by  the  bankruptcy  of  the 
person  for  whom  the  obligation  is 
assumed,  the  surety  will  be  re- 
leased. The  obvious  reason  is  that 
the  event  has  not  happened  on 
which  the  liability  of  the  surety  was 
made  to  depend.  Of  this  class  of 
obligations  are  the  ordinary  bonds 
in  attachment  suits  to  dissolve  an 
attachment,  appeal  bonds,  and  the 
like." 

In  Payne  v.  Able,  70  Ky.  344, 
the  court  said :  "No  judgments 
were  or  could  have  been  rendered 
against  Able,  and  hence  the  contin- 
gencies upon  which  they  [the  sure- 
tics  on  an  attachment  bond]  were 
to  become  liable  as  sureties  have 
not  arisen,  and  can  not  now  arise." 


DISCHARGE.  853 

which  to  obtain  a  discharge  has  expired,  no  judgment  can  be 
rendered,  if  he  pleads  his  discharge,  except  a  formal  judg- 
ment for  the  purpose  of  charging  the  sureties.  It  then  falls 
under  the  rule  above  stated.  If  no  discharge  is  obtained 
neither  the  principal  nor  the  sureties  are  released.  Where 
a  trustee  is  subrogated  for  an  attachment  creditor  under 
Section  67/  of  the  bankrupt  act,  he  can  only  enforce  the  lien 
against  the  property  attached  and  no  liability  of  the  sureties 
arises  as  in  case  of  a  personal  judgment. 

For  the  same  reason  a  surety  on  an  appeal  bond  is  not 
released  when  the  discharge  can  not  affect  the  appeal  or  stay 
proceedings  upon  it  or  prevent  a  judgment  therein.^*  If  the 
debtor  could  have  availed  himself  of  his  'discharge  to  prevent 
a  judgment  and  terminate  the  appeal  and  the  action  before 
judgment,  or  a  dismissal  of  the  appeal,  the  surety  would  have 
been  released,  for  the  obvious  reason  that  the  contingency  upon 
which  his  liability  was  made  operative  could  not  arise.^" 

The  statutory  liability  of  officers  and  stockholders  of  a 
corporation,  being  in  the  nature  of  surety,  is  not  released  by 
the  discharge  of  the  corporation.  The  amendment  of  Feb- 
ruary 5,  1903,  expressly  provides  that  the  bankruptcy  of  a 
corporation  shall  not  release  its  officers,  directors  or  stock- 
holders, as  such,  from  any  such  liability.^*'  A  suit  to  enforce 
such  statutory  liability  may  be  maintained  against  such  of- 
ficers or  stockholders  notwithstanding  the  fact  that  the  cor- 
poration has  obtained  a  discharge.^^  A  court  of  bankruptcy 
may  refuse  to  stay  a  suit  against  the  corporation,  but  may  per- 
mit a  judgment  to  be  entered  with  stay  of  execution  for  the 
purpose  of  fixing  the  liability  of  the  stockholders  and  officers, 
when  such  judgment  is  required  as  a  condition  precedent  to 
maintaining  suit  to  enforce  the  statutory  liability  of  officers 

"Knapp  V.   Anderson,  71   N.   Y.  8  Am.  B.  R.  437;  Odell  v.  Wootteii, 

466,  affirming  7  Hun.  (N.  Y.)  295;  38  Ga.  224. 

Hall  V.  Fowler,  6  Hill  (N.  Y.)  730;  "  B.  A.  1898,  Sec.  4  as  amended, 

World    Pub.    Co.    v.    Rialto    Grain  32    Stat,   at   L.  974. 

Co..   loS  Mo.  App.  480.  "Wood  V.  Vandervcer,  55  N.  Y, 

"Goyer   v.   Jones,   79    Miss.    253,  App.    Div.    549. 


854  LAW  AND  PROCEEDINGS  IN   BANKRUPTCY. 

aiul  Stockholders.'-'  A  jiult;nient  against  a  corporation  ob- 
tained after  a  discharge  granted  and  pleadeil  in  the  snit  is  not 
such  a  judgment  as  is  rcc|uirod  hy  the  Massachusetts  statute 
as  a  condition  precedent  to  maintain  a  suit  to  enforce  the 
statutory  habihty  of  its  officers  and  stockholders.'''  it  is  error 
for  a  state  court  to  enter  such  a  juilgment.^''  But  where  the 
judginent  is  entered  before  the  discharge  is  granted  or  when 
it  is  not  pleatled  it  would  seem  to  be  a  sufilcient  compliance 
with  such  statute. 

A  discharge  does  not  have  the  effect  of  releasing  a  liability 
of  a  surety  upon  replevin  bonds;  -"  or  upon  an  administrator's 
bond;  "^  or  upon  an  auctioneer's  bond;  --  or  upon  jail  bonds,"^ 
except  where  the  bankrupt  leaves  the  prison  limits  after  he 
receives  his  discharge."*  \\'here  one  of  several  cosureties  is 
discharged,  so  that  he  is  released  from  his  liability  as  such, 
he  is  also  released  from  the  duty  of  contribution  to  his  co- 
sureties."^ 

One  of  several  joint  debtors  discharged  in  bankruptcy  may 
be  made  a  party  to  a  suit  upon  a  debt  from  which  he  is  dis- 
charged.-°  The  reason  for  this  is  that  the  discharge  is  a  per- 
sonal privilege  which  he  may  or  may  not  plead  as  a  defense. 
If  he  does  not  plead  his  discharge  a  judgment  may  be  entered 
against  him.^^ 


'Vn   re   Marshal   Paper   Co.,    102  =' Dyer  v.  Cleaveland,  18  Vt.  241; 

Fed.   Rep.  872,  4  Am.    B.   R.   468;  Claflin    v.    Cogan,    48    N.    H.    411; 

In    re   Remington    Auto.    &    Motor  Goodwin  v.  Stark,  15  N.  H.  218. 

Co.,    119  Fed.   Rep.  441,  9  Am.   B.  "  Kirby  v.  Garrison,  21   N.  J.  L. 

R-  533-  17 

'"Train    v.    Alarshal    Paper    Co.,  ''Tobias  v.  Rogers,  13  N.  Y.  59. 

180  Mass.  513.  But  see  Miller  v.  Gillespie,  59  Mo. 

""  Flagg  V.  Tyler,  6  Mass.  Z3.    See  220. 

also  Wolf  V.   Stix,  99  U.   S.   I,  25  '"Jenks    v.     Opp,    43    Ind.     108; 

L.  Ed.  309.  Camp  v.   Gifford,   7   Hill    (N.  Y.) 

"Moore    v.     Waller,     i     A.    K  169. 

Marsh.    (Ky.)    488;    Miller   v.   Gil-  ""See  Pleading  a  discharge,  Sec. 

lespie,  59  Mo.  220.  298,  post. 

^  Jones  V.  Russell,  44  Ga.  460. 


DISCHARGE.  855 

§  297.  The  effect  of  a  new  promise  upon  a  discharged  debt. 
As  has  been  pointed  out,  the  effect  of  a  discharge  is  to  re- 
lease a  bankrupt  from  his  Habihty  for  provable  debts. ^  He 
is  not  bound  in  law  to  pay  any  debt  released  by  his  dis- 
charge. The  moral  obligation  of  the  bankrupt  to  pay  it 
remains.  It  is  due  in  conscience  although  discharged  in 
law,  and  this  moral  obligation,  together  with  a  subsequent 
promise  by  the  bankrupt  to  pay  the  debt,  gives  a  right  of 
action.- 

There  is  considerable  conflict  in  the  decisions  under  the 
former  bankrupt  acts,  as  to  whether  the  action  should  be 
founded  on  the  original  debt  or  on  the  new  promise.  Some 
judges  were  of  the  opinion  that  the  discharge  extinguished 
the  debt,  and  the  only  cause  of  action  was,  therefore,  on  the 
new  promise.^  The  better  authority,  however,  is  to  the  effect 
that  the  new  promise  revives  a  debt  barred  by  the  discharge, 
and  that  the  creditor  should  declare  on  the  original  debt  and 
not  on  the  new  promise.^  If  the  debt  were  wholly  extin- 
guished by  the  discharge  it  is  hard  to  see  what  consideration 
would  support  a  new  promise.  Upon  principle,  therefore,  it 
would  seem  that  the  new  promise  should  be  considered  a 
waiver  of  the  discharge  as  a  defense. 

Where  there  is  no  state  law  requiring  the  promise  to  pay  a 
debt  discharged  in  bankruptcy  to  be  made  in  writing,  the 
promise  may  be  proved  by  parole,  and  when  proVed  is  bind- 

'  See    General    nature   and    effect  bough  v.  Murphy,  114  Pa.  St.  358; 

of  a  discharge,  Sec.  284,  ante.  ^Murphy   v.    Crawford,    114    Pa.    St. 

-Dusenbury    v.    Hoyt,    53    N.    Y.  496;    Fleming  v.   Lullman,    11    Mo. 

52T ;  Maxim  v.  Morse,  8  Mass.  127 ;  App.   104 ;    Ross  v.  Jordan,  62   Ga. 

Fletcher  v.   Neally,  20  N.   H.  464;  298;    Horner   v.    Speed,   2    Patt.   & 

Herdon    v.    Givens,    16    Ala.    261;  H.   (Va.)  616. 

Blanc  V.  Banks,  10  Rob.  (La.)  115;  *  Dusenbury   v.    Hoyt,    53    N.    Y. 

Williams  V.   Robbins,  32   Me.    181;  309!  Maxim  v.  Morse,  8  Mass.  127; 

Spooner   v.   Russell,   30   Me.   454.  Marshal  v.  Tray,  74  111.  379;  Badger 

'  Eckler    v.    Galbraith,    12    Bush.  v.  Gilmore,  i^^  N.  H.  361;  Apper- 

(Ky.)  71;  Carson  v.  Osborn,  10  B.  son  v.  Stewart,  27  Ark.  619;  Riggs 

Mon.    (Ky.)     155;    Egbert    v.    Mc-  v.    Robert.s,   85    N.    C.    151;    Fraley 

Michael,  9  B.  Mon.   (Ky.)  44)  Mo-  v.  Kelly,  67  N.  C.  78. 


856  LAW    ANP  rRo(,i:KniNc;s  i.\    i;a.\  kuittcv. 

iiiii'.''  An  oral  proniiso  made  before  a  slaluto  re([uii-In_!;;-  it  to 
ho  in  writinj;'  is  hintliiij;-.  and  will  defeat  the  delense  of  a  dis- 
charg-o   in   hankniptcy    in   aetions   snhsecjucnlly   hron^iit." 

It  is  iniinalerial  at  what  date  a  new  ])ronhse  is  made.  It  is 
a  siitVicient  ce)nsideratii>n  if  the  new  pronhse  is  made  helore 
the  discharue  as  well  as  after  it.'  It  niav,  however,  be 
doubted  if  a  new  pronhse  wonld  entitle  a  judgment  cred- 
itor to  sue  execution  on  a  jntl^inent  released  by  a  tlLscbarge.® 
An  cM-iginal  debt  is  re\  i\ed  only  as  of  the  ilate  of  the  new 
promise.'' 

All  the  autnorities  agree  that  the  promise  by  which  a  dis- 
charged debt  is  revived  nurst  be  clear,  distinct  and  unequiv- 
ocal. It  may  be  an  absolute  or  a  conditional  ])roniise,  but 
in  either  case  it  must  be  unequivocal,  and  the  occurrence  of 
the  condition  must  be  averred,  in  case  the  promise  be  condi- 
tional. The  rule  is  different  in  regard  to  the  defense  of  the 
statute  of  limitations  against  a  debt  l)arrcd  by  the  lapse  of 
time.  In  any  case  acts  or  declarations  recognizing  the  pres- 
ent existence  of  the  debt  have  often  been  held  to  take  the 
case  out  of  the  statute,  but  not  so  in  the  class  of  cases  relating 
to  new  promises  reviving  debts  discharged  in  bankruptcy. 
In  order  to  receive  a  discharged  debt  the  jury  must  be  author- 
ized by  it  to  say  that  there  is  the  expression  by  the  debtor  of 
a  clear  intention  to  bind  himself  to  the  payment  of  the  debt.^" 

Thus  it  has  been  held  to  be  a  sufficient  promise  to  support 

Mlill    V.    Robins,   22    Mich.    474;  ^  Shuman    v.    Strauss,    52    N.    Y. 

Barron    v.    Benedict,    44    Vt.    518;  404.     This   case   was   dismissed   on 

Apperson  v.   Stewart,   27   Ark.  619.  another  ground. 

Brooks  V.   Paine,  25  Ky.  Law  Rep.  "Willis  v.  Cushman,  T15  Ind.  100. 

1125.  ^^  Allen  V.   Ferguson,   18  Wall,    i, 

"Williams  v.  Robins,  32  Me.  181;  21  L.  Ed.  854;  Stewart  v.  Reckless, 

Spooner    v.    Russell,    30    Me.    454.  24   N.   J.   L.   427 ;    Fraley   v.   Kelly, 

But  see  Kingley  v.  Cousins,  47  Me.  67   N.   C.   78;    Pratt  v.   Russell,  61 

gr.  Mass.    462;    Thornton    v.    Nichols, 

"Jersey  City   Ins.   Co.   v.  Archer,  119    Ga.    50;    Brooks    v.    Paine,    25 

122   N.   Y.   376;    Griel   v.   Solomon,  Ky.    Law    Rep.     1125;     Church    v. 

82  Ala.  85;  Otis  V.  Gazlin,  31   Me.  Winkley,  7$  Mass.  460. 
567;    Wheeler    v.    Wheeler,    28    111. 
App.  385. 


DISCHARGE.  857 

an  action  where  a  debtor  promises  "to  settle"  a  liquidated 
demand  concerning  which  there  was  no  dispute  between  the 
parties,"  or  where  a  debtor  declared  that  lie  was  "able  and 
willing  to  pay  the  debt,"  ^"  or  the  statement  "I  intend  to 
pay,"  upon  the  happening  of  a  particular  event/"  or  any 
agreement  to  pay  or  any  word  signifying  an  intention  to  pay 
or  giving  assurance  that  the  debtor  would  pay  (although  he 
did  not  use  the  word  promise)/*  or  a  promise  "to  pay  the  old 
debts  as  well  as  the  new,"  ^"  or  a  promise  to  pay  the  debt  he 
owed  "when  he  shall  be  able,"  ^'^  It  is  nc^  necessary  that 
the  new  promise  be  made  by  the  l^ankrupt  to  the  creditor  or 
his  authorized  agent/'  It  may  be  made  to  a  third  person. 
The  refusal  to  give  a  new  note  is  not  inconsistent  with  a 
promise  to  pay  an  existing  note.^^  A  debt  revived  by  a  new 
promise  may  be  enforced  although  it  was  proved 'in  the  bank- 
ruptcy proceedings.^*^ 

If  the  promise  is  not  clear,  distinct  and  unecjuivocal  it  does 
not  revive  a  debt.  '  It  is  necessary  that  there  be  an  express 
promise  or  an  expression  by  the  debtor  of  a  clear  intention  to 
bind  himself  to  the  payment  of  the  debt."'^  It  has  been  held 
not  sufficient  to  constitute  a  new  jjromise  where  the  debtor 
merely  expressed  an  intention  to  pay  the  debt,-^  or  declared 
that  he  "expects"  or  "hopes"  to  pay  as  fast  as  lie  could,'-  or 

"Stillwell  V.  Cope,  4  Denio    (N.  "Mason  v.   llnghart,  9  B.  IMon. 

Y.)  225.  n<y.)  480. 

"Evans   v.    Carey,   29   Ala.   99.  ""Allen  v.   Ferguson,    18  Wall,    i, 

"Bearing  v.  IMo     tt.  6  Ala.  776.  21   L.  Ed.  854;   I-Valcy  v.  Kelly,  67 

"Harris   v.   Peck,    i    R.    I.   262.  N.    C.   78;    Sannicl    v.    Cravens,    10 

"Hornthal   v-    McRae,   67    N.    C.  Ark.   380;    Sherman   v.    llobart,   26 

21.                                                •  Vt.   fin;    Taylor   v.    Ni.xon,   4   Sneed 

'*  Mason  v.   Hughart,  9  B.   Mon.  (Tenn.)    352. 

(Ky.)   480.  =' Allen  v.  Ferguson,   18  Wall,   i, 

"Bennett  v.  Everett,  3  R.  T.  152;  21  L.  Ed.  854;  Stewart  v.  Reckless, 

Comfort   V.    Eisenbeis,    11    Pa.    13;  24    N.    J.    L.    4-7;    Yoxtheinier    v. 

Evans  v.  Carey,  29  Ala.  99;  Haines  Keyser,   11    Pa.  St.  364;   Dcaring  v. 

V.  Stauffer,  13  Pa.  541.  Moftitt,  6  Ala.  776;  Church  v.  Wink- 

"  Pratt  V.  Russell,  6r  Mass.  462;  ley,  -jj,  Mass.  460. 

Underwood  v.   Ea.stman,   18  N.   H.  ^'Barllctt    v.    Peck,    5    La.    Ann. 

582.     See  also   Horner  v.   Speed,  2  669. 

Patt.   &    II.   616. 


85S  LAW      AM)     I'KOCEEDliNGS    IN     1!A  .\  KlUM' ICY. 

mere  ailinissioiis  of  tlie  iloht  or  ackinnvledg'tncnt  of  the  obli- 
ji'alion,'"'"  ov  where  he  promised  to  !L;"i\e  his  note  and  chd  not 
exeenle  it,'"'  or  where  he  has  made  partial  payments,"''  or  the 
mere  payment  of  interest.'""  It  has  been  held  that  the  benefit 
of  the  new  promise  will  not  pass  to  the  endorsee  of  a  note  to 
whom  it  is  snbseciuently  endorsed,  for  the  new  promise  is  not 
negotiable.'"' 

Where  the  debtor  has  promised  to  pay  the  debt  after  his 
discharge  the  creditor  may  bring  his  action  upon  the  original 
demand  and  reply  the  new  promise  in  avoidance  of  a  plea  of 
discharge."*  A  conditional  promise  and  an  unconditional 
promise  may  be  joined  in  the  same  petition.""  Where  the 
words  are  capable  of  being  construed  as  a  promise  it  is  for 
the  jury  to  determine  whether  the  bankrupt  intended  to 
promise  to  pay  the  debt,'"'  or  whether  the  promise  was  abso- 
lute or  conditional  in  case  the  evidence  is  conflicting.''^^ 

§  298.     Pleading  a  discharge. 

A  discharge  in  bankruptcy  may  be  pleaded  in  bar  of  an 
action  founded  upon  a  debt  released  by  it.  A  state  court 
does  not  lose  jurisdiction  of  the  person  of  a  defendant  by  his 
being  adjudged  a  bankrupt.  A  judgment  may  be  rendered 
against  him  if  he  does  not  plead  his  discharge.  Unless  a 
defendant  pleads  his  discharge  he  is  deemed  to  have  waived 

^  Prewett  v.   Caruthers,  20  Miss.  "'  Dusenbury  v.    Hoyt,    53    N.    Y. 

491 ;    Bennett    v.    Everett,    3    R.    I.  521 ;  Maxim  v.  Norse,  8  Mass.  127. 
152.  In   those    states   which   held   that 

"  Porter  v.  Porter,  31  Me.  169.  the   action    must   be   brought   upon 

^  Stark  V.  Stinson,  23  N.  H.  259;  the  new  promise  and  not  upon  the 

Viele  V.  Ogih-ie,  2  Greene  (la.),  326.  original    debt   a    different    rule    ex- 

"'  Cambridge    Inst.    v.    Littlefield,  ists.     See   Egbert  v.   McMichael;  9 

60  Mass.  210.  B.  Mon.    (Ky.)   44;   Carson  v.  Os- 

"Warwell  v-  Foster,  31  Me.  558;  born,  9  B.  Mon.    (Ky.)    155. 
White    V.    Cushing,    30    Me.    267;  ^Horner  v.  Speed,  2  Patt.  &  H. 

Walbridge  v.  Harroon,  18  Vt.  448.  616. 

But  see  Way  v.  Sperry,  60  Mass.  '"  Pratt  v.  Russell,  61  Mass.  462 ; 

238;    Underwood    v.    Eastman,    18  Bennett  v.  Everett,  3  R.  I.  152. 
N.  H.  582.  ^'La  Tourette  v.   Price,  28  Miss. 

702. 


DISCHARGE. 


859 


it  as  a  defense/  Xo  proceeding  in  bankruptcy  can  be  pleaded 
in  bar  of  an  action  upon  ante-bankruptcy  debts  except  the 
discharge.' 

A  discharge  may  be  pleaded  by  the  bankrupt,^  or  by  a  per- 
son who  has  derived  title  from  the  bankrupt  subsequent  to 
his  bankruptcy/  but  not  by  other  persons.^  A  discharge  of 
two  general  partners  can  not  be  set  up  in  favor  of  a  special 
partner  in  an  action  against  the  three  as  general  partners  on 
the  ground  that  the  special  partner  has  made  himself  liable 
as  a  general  partner.'^  Where  a  bankrupt  joins  his  sureties 
in  pleading  his  discharge,  if  the  plea  is  insufficient  for  them 
all,   it   is  bad   for  all.' 

In  what  pleading,  answer  or  plea,  the  defense  of  a  discharge 
may  be  set  up  depends  upon  the  practice  relating  to  particular 
action  and  court  in  which  it  is  pleaded.  A  plea  of  discharge 
is  sufficient  if  it  sets  out  a  discharge  duly  authenticated  ^  with 


'  Dimock  v.  Revere,  117  U.  S. 
559,  29  L.  Ed.  994,  affirming  90  N. 
Y.  S3'>  Horner  v.  Speman.  78  III. 
206;  Sej'mour  v.  Browning,  17  Ohio, 
362 ;  Manwarring  v.  Kouns,  35  Tex. 
171;  Park  V.  Casey,  35  Tex.  536; 
Jenks  V.  Opp,  43  Ind.  108. 

'Whitney  v.  Crafts,  10  Mass.  23; 
Atkinson  v.  Fortinberry,  15  Miss. 
302;  Hayes  v-  Flowers,  25  Miss. 
169 ;  Dick  V.  Powell,  2  Swan 
(Tenn.)  632;  Ingalls  v.  Savage,  4 
Pa.  224. 

In  Nat.  Bank  v.  Taylor,  120 
Mass.  124,  the  defendant  was  al- 
lowed a  continuance  of  the  suit 
upon  filing  a  copy  of  an  adjudica- 
tion until  his  right  to  a  discharge 
should  be  determined  by  the  court 
of  bankruptcy. 

'  Boynton  v.  Ball,  121  U.  S.  457, 
30  L.  Ed.  985 ;  Banque  Franco- 
Egypticnne  v.  Brown,  24  Fed.  Rep. 
106;  Ruiz  V-  Eickerman,  5  Fed. 
Rep.  790. 

*  Upshur    V.    Briscoe,    138    U.    S. 


365,  34  L.  Ed.  931;  Fleitas  v. 
Mellen,  39  Fed.  Rep.  129;  Fleitas 
V.  Richardson,  147  U.  S.  550,  $7 
L.  Ed.  272. 

As  to  the  effect  of  a  discharge 
granted  a  feme  sole  who  marries, 
see  Chadwick  v.  Starrett,  27  Me. 
138. 

^  Moyer  v.  Dewey,  103  U.  S.  301, 
26  L.  Ed.  394,  as  explained  in  Up- 
shur V.  Briscoe,  138  U.  S.  378, 
34  L.  Ed.  931 ;  Frazier  v.  Banks, 
II  La.  Ann.  31. 

^Abendroth  v.  Van  Dolson,  131 
U.  S.  66,  33  L.  Ed.  57. 

'Dyer  v.  Cleaveland,  18  Vt.  241; 
Hall  V.  Fowler,  6  Hill  (N.  Y.)  630. 

*  McNeil  V.  Knott,  11  Ga.  142; 
Rowan  V.  1  lolcombe,  16  Ohio,  463 ; 
Downer  v.  Chamberlin,  21  Vt.  414; 
Morrison  v.  Woolson,  23  N.  H.  11 ; 
Preston  v.  Simons,  i  Rich.  (S. 
Car.)  262;  Lathrop  v.  Stuart,  No. 
8113  Fed.  Cas.,  5  McLean,  167; 
White  v.  How,  No.  17549  Fed. 
Gas.,  3  McLean,  2^. 


800  "law      AM)     I'KOCEEUINGS     IN      1!  A  N  KRL' 1' ICY. 

allco-ation.  wliicli  make  il  olToctivc  ai;ainsl  the  plaiiitilT."  A 
ccrtiHeil  coin  of  an  order  conlinninj;-  a  composition  or  grant- 
ing a  discharge,  not  revokcil,  is  evidence  of  the  juris(hctii)n  of 
the  court,  the  regularity  of  the  prcK-eethngs,  and  of  the  fact 
that  the  order  was  nuule.'"  The  l)m(len  of  the  proof  is  upon 
the  bankrupt  to  show  that  the  dehl  of  the  i)1aintirf  is  within 
the  ch\ss  of  debts  as  to  which  his  thscharge  in  Ijankruptcy 
operates  as  a  release.'^ 

Where  a  discharge  has  been  granted  before  the  suit  on  the 
debt  is  commenced  the  plea  of  discharge  should  be  set  up  in 
the  first  instance.  The  court  will  not  permit  it  to  be  set  up 
bv  amendment,  unless  a  good  excuse  for  omitting  it  is  shown. 
Where  a  discharge  is  granted  pending  the  suit  the  defense  of 
discharge  in  bankruptcy  is  regularly  permitted  to  be  set  up 
by  amendment  or  supplemental  answer  or  other  proper  plead- 
ine.^'  It  will  not  be  allow^ed,  however,  where  application  to 
amend  is  not  seasonably  made.'^  Where  a  discharge  is 
granted  after  a  judgment  has  been  entered  it  is  usually  un- 
availing as  a  defense."  Such  a  defense  may  be  made  in 
Tennessee  by  a  bill  in  chancery  after  the  decree  of  the 
supreme  court,  but  not  by  the  suggestion  of  the  fact  in  that 
court.  Such  proceeding  performs  the  of^ce  of  a  plea  of  dis- 
charge in  bankruptcy  and  enforces  the  same  rights.^'^    Judg- 

•  Bailey's   Admx.    v.    Gleason.    -/d  Kohatis,  5  Hill  (N.  Y.)  317;  Keene 

Vt.   115;   Fowler  v.   ]\Iichael,    (Tex.  v.  Mould,  16  Ohio,  12. 

Civ.  App.,  June  i,  1904),  81  So.  W.  In    Nat.    Bank    v.    Taylor',     120 

Rep.  321.  Mass.    124,   the    defendant  filed   an 

'°B.   A.    1898,    Sec.   21/;    Boas   v.  order   of   adjudication   in   the   state 

Hetzel,  3  Pa.  298 ;  Morse  v.  Cloyes,  court   and   was   permitted    to   have 

II   Barb.    (N.   Y.)    100;    Pennell  v.  a   continuance  to    await   the   deter- 

Percival,   13   Pa.   197.  mination  of  the  question  of  wheth- 

"Wineman  v.   Fisher,    135   Mich.  er   he    received   a   discharge. 

604;  Imhoff  V.  Whittle,   (Tex    Civ.  '' Medbury    v.    Swan,    46    N.    Y. 

App.,  Nov.  2,  1904),  82  So.  W.  Rep.  200;    Barstow    v.    Hansen,   2    Hun. 

1056.  (N.  Y.   Supr.)    zzz. 

"Richards  v.  Nixon,  20  Pa.   19;  "  Dimock   v.    Revere,    117   U.    S. 

Lvon  V.   Isett,  34  N.  Y.   Supp.  41;  559,  29  L.  Ed.  994;   Wolf  v.   Stix, 

Holyoke  v.  Adams,  59  N.  Y.  22,Z',  96  U.  S.  S4i,  24  L.  Ed.  640;  Lane  v. 

Fellows    V.    Hall,    No.    4722    Fed.  Holcombe,    182    Mass.    360. 

Cas.,   3    McLean,   281;    Kunzler   v.  '°Wolf   v.    Stix,   99   U.   S.    i,   25 


DISCHARGE,  861 

ments  by  default  have  frequently  been  set  aside  to  allow  a 
plea  of  discharge/**  An  execution  should  not  issue  upon  a 
judgment  after  the  debtor  has  obtained  a  discharge.^^  If  an 
execution  is  issued  it  may  be  perpetually  stayed.'*' 

Where  a  discharge  is  not  granted  until  the  case  is  in  an 
appellate  court  it  will  not  avail  the  defendant  ordinarily  as 
a  defense/"  because  there  is  no  way  in  which  it  can  be 
brought  before  the  court.  It  has  been  held,  however,  that 
the  appellate  court  might  enter  a  judgment  pro  forma  where 
a  discharge  was  suggested."" 

§  299.     Revoking  discharges. 

The  statute  provides  that  ''the  judge  may,  upon  the  appli- 
cation of  parties  in  interest  who  have  not  been  guilty  of  un- 
due laches,  filed  at  any  time  within  one  year  after  a  discharge 
shall  have  been  granted,  revoke  it  upon  a  trial  if  it  shall  be 
made  to  appear  that  it  was  obtained  through  the  fraud  of  the 
bankrupt,  and  that  the  knowledge  of  the  fraud  has  come  to 
the  petitioners  since  the  granting  of  the  discharge,  and  that 
the  actual  facts  did  not  warrant  the  discharge.' 

L.    Ed.    309,   96    U.    S.    541,    24   L.  Pierson,  6  Hill  (N.  Y.)  247;  Stcw- 

Ed.    640.  art  v.  Hargrove,  23  Ala.  429;  Bank 

"Savings    Bank    v.    Webster,    48  v.  Franciscus,  10  Mo.  27. 

N.   H.  21;   Lee  v.   Phillips,  6   Hill  "Wolf  v.  '  Stix,   99   U.    S.    I,   25 

(N.  Y.)    246;   Carter  v.   Goodrich,  L.   Ed.   309;    Wolf   v.    Stix,  96  U. 

I  How.  Prac.   (N.  Y.)  239;  Shurt-  S.   541,  24  L.   Ed.  640;    Cornell  v. 

leff  V.  Thompson,  63  Me.  118;  Park  Dakin,    38    N.    Y.    253;    Riggs    v. 

V.  Casey,  35  Tex.  536;  Manwurring  White,  4  Ileisk.  (Tenn.)  503;  Long- 

V.    Kouns,   35   Tex.    171.  ley    v.    Swayne,   4    Heisk.    (Tenn.) 

'•  Francis  v.  Ogden,  22   N.  J.  L.  506. 

210;  Alcott  V.  Avery,  I  Barb.  Chan.  ™  Bank    v.    Onion,     16    Vt.    470; 

(N.    Y.)     347;     Hill    v.     Harding,  Haggerty  v.   Morrison,  59  Mo.  324. 

130   U.    S.    699,    32    L.    Ed.    1083;  'B.  A.  1898,  Sec.  15  and  Sec.  2, 

Wolf   V.    Stix,   99   U.    S.    I,   25    L.  clause  12. 

Ed.  309.  Compare   R.    S.    Sec.   5120.     The 

"Alcott  V.  Avery,   l  Barb.  Chan.  act    of    1841    provided    that    a    dis- 

CN.   Y.)    347;  Thomas  v.   Shaw,  2  charge  might   be   impcacITccl   in  all 

Cin.     Sup.    Ot.    97;     Chambers    v.  courts  of  justice  for  certain  cause? 

Neal,   13  B.  Mon.    (Ky.)    256;   Mc-  and     in     tlie     manner     in     tlic     act 

Dougald  V.  Reid,  5  Ala.  810;  Curtis  .stated.     (Act  of  1841,  Sec.  4.  5  Stat. 

V.   Slosson,  6   Pa.   265;   Graham   v.  at  L.  440.)     Under  the  act  of  1800 


862  LAW     AMI     I'ROCRRniXGS    I\     BANKRUPTCY. 

This  pi\)\ision  proscribes  tlio  fonn,  the  lime  within  which 
anil  the  grounds  upon  which  diiect  procee(hni;s  to  ini[)each 
a  chscharu'e  max-  he  had  The  reincih-  thus  <ji\en  is  exchisive. 
The  application  must  l)e  nuule  to  the  court  which  granted  the 
discharge.  'Jhe  order  of  discharge  can  not  he  tiuestioned 
or  attacked  collaterally  in  any  other  court,  either  state  or 
federal."  A  certiiied  copy  of  the  order  granting  a  discharge, 
not  revoked,  is  evidence  of  the  jurisdiction  of  the  court,  tlie 
regularity  of  the  proceeding,  and  of  the  fact  that  the  order 
was  niade.^ 

'Idle  application  must  be  made  by  a  party  in  interest.  A 
creditor,  whose  name  has  been  omitted  from  the  schedule,  and 
who  has  had  no  notice  or  knowledge  of  bankruptcy  proceed- 
ings, or  who  has  no  provable  claim,  has  not  such  an  interest 
as  will  enable  him  to  institute  proceedings  to  vacate  a  dis- 
charire.  The  reason  for  this  is  that  his  debts  are  not  afifected 
by  the  discharge.*  The  fact  that  a  creditor  is  barred  from 
proving  his  claim  by  Section  S7n  does  not  prevent  him  from 
being  a  party  in  interest.^ 

The  application  must  be  filed  within  one  year  after  the 
discbarge  has  been  granted,  and  by  one  who  has  not  been 
guilty  of  undue'  laches.*'  Where  the  petition  is  not  filed 
within  one  year  from  the  date  of  the  discharge  it  is  absolutely 

discharge  might  be  impeached  when  But    see    Batchelder   v.    Low,    43 

pleaded  as  a  defense.  (Act  of  1800,  Vt.    662;    Poillon   v.   Lawrence,    yy 

Sec.  34,  2  Stat,  at  L.  19.)  N.  Y.  208. 

"Corey    v.    Ripley,    57    Me.    69;  '^  B.  A.    1898,   Sec.  21/;   Allen  v. 

Oates  V.  Parish,  47  Ala.  157;  Ocean  Thompson,  10  Fed.  Rep.  ti6;  In  re 

National  Bank  v.   Olcott,  46  N.  Y.  Adams,   29   Fed.   Rep.  843. 

12;   Dusenbury  v.    Iloyt,  53   N.   Y.  '  B.   A.    1898,    Sec.    17,  clause  3; 

521 ;   Reed  v.   Bullington,  49  Miss.  In  re  Monroe,  114  Fed.  Rep.  398,  7 

223;  Way  V.  Howe,  108  Mass.  502;  Am.    B.    R.    706;    In    re    Chandler 

.Alston    V.    Robinctt,    2,7    Tex.    56;  (C.  C.  A.  7th  Cir.),  138  Fed.  Rep. 

Beardsley   v.    Hall,    36    Conn.    270;  637,   14  Am.   B.   R.   512;   Arrington 

Smith   V.    Ramsey,    27    O.    S.    339;  v.  Arrington,  132  Fed.  Rep.  200;  13 

Seymour  v.  Street,  5  Neb.  85 ;  Com-  Am.  B.  R.  89. 

mercial     Bank    of     Manchester    v.  ^  In   re   Bimberg,    121   Fed.   Rep. 

Buckner,   20   How.    108,    15   L.    Ed.  942,   9   Am.    B.    R.   601. 

862;  Black  V.  Bla/.o,  117  Mass.  17;  °  B.   A.    1898,   Sec.    15. 
Parker  v.  Atwood,  52  N.  H.  181. 


DISCHARGE.  863 

barred  by  the  statute.''  The  Hmitation  is  not  in  any  way 
controlled  by  the  discovery  of  the  fraud.^  A  person  will  not 
be  permitted  to  amend  his  application  after  the  expiration 
of  one  year  from  the  date  of  the  discharge  by  adding  new 
grounds  or  acts.** 

What  causes  such  laches  on  the  part  of  the  applicant  as  to 
prevent  his  making  an  application  within  a  3'ear  from  the 
granting  of  a  discharge  depends  upon  the  circumstances  of 
each  case.^°  Mere  averments  by  the  creditor  that  he  has  not 
been  guilty  of  laches  are  not  sufficient. ^^ 

The  application  is  made  by  petition,  addressed  to  the  judge 
and  filed  in  the  clerk's  office,  and  not  with  the  referee.  It 
should  state  ^"  the  names  and  residences  of  the  creditors  and 
their  interest  in  the  matter;  the  date  upon  which  the  order  of 
discharge  was  made ;  the  particular  acts  complained  of  as 
fraudulent  on  the  part  of  the  bankrupt ;  that  the  knowdedge  of 
the  fraud  has  come  to  the  petitioners  since  the  granting  of  the 
discharge;  that  the  actual  facts  did  not  warrant  a  discharge; 
and  pray  that  the  discharge  be  annulled  and  set  side.     The 

'  Mall    V.    Ullrich,    2>7    Fed-    Rep.  of   the    creditors,   upon   a    showing 

653.  that  their  counsel  was  unavoidably 

*  Pickett  V.  McGavick,  No.   11 126  prevented   from   being  present   and 

Fed.   Cas.,   14  N.  B.  R.  236;   In  re  from  informing  them  in  order  that 

Brown,     No.     1983    Fed.     Cas.,     19  they  might  obtain  a  postponement. 

N.  B.  R.  312.  In    re    Mclntire,    No.    8823    Fed. 

°/h  re  Sims,  9  Fed.  Rep.  440.  Cas.,  2  Ben.  345,  a  specification  of 

"/n  re  Upson,  124  Fed.  Rep.  980,  objections  to  a  discharge  had  been 

10  Am.   B.  R.   758;  In  re  Murray,  filed,  which  was,  however,  too  vague 

No.  9953  Fed.  Cas.,   14  Blatch.  43,  to  be  triable,  and  a  discharge  had 

five  months  was  held  an  unreason-  been  granted.     An   application  one 

able  delay  under  the  circumstances  month  afterward  to  have  the  case 

of  that  case.     See  also  In  re  Beck,  reopened,  with  leave  to  amend  the 

31    Fed.    Rep.    554;    Jn   re    Hunter,  specification,    was    denied    on    the 

No.  6902  Fed.  Cas.,  3  McLean,  297.  ground   of   laches. 

Tn   In    re   Dupee,    No.   4183    Fed.  " /«    re    Oleson,    no    Fed.    Rep. 

Cas.,  2  Low.   18,  Judge  Lowell  re-  796,   7   Am.    B.    R.    22. 

opened  a  decree  of  discharge  where  '"as   to    what    a   petition    should 

the  date  had  been  set   for  hearing  contain,  see  In  re  Oliver,  133  Fed. 

an   application    for   discharge   upon  Rep.  832,  13  Am.  B.  R.  582;  In  re 

specification    of    objections,    and    a  Toothaker  Bros.,  128  Fed.  Rep.  187, 

discharge    granted    in    the    absence  12  Am.  B.  R.  99. 


804  J.AW     AND     I'ROCEEDINGS    IN     BANKRUPTCY. 

petition  sluniKl  \k  sionca  :uul   \  oritiod  '"  by  the  creditors  or 
their   authori/cil   aj^eut   or   attorney. 

The  proce(hn-e  on  snch  a  petition  is  not  prescribed  by  act 
or  the  general  orders.  The  bankrnpl  shnuld  have  reasonable 
notice  of  the  lihnj;-  oi  such  itctition  in  nnler  to  t;ive  him  an 
opportnnitv  to  make  a  delense.  il'  any  he  has.  11iis  he  may 
do  bv  demnrrer  if  the  petition  is  not  snllicient  in  law.  lie 
should  set  up  his  det'ense  on  the  merits  in  an  answer  or  a 
plea.  The  time  within  which  sncli  i)leading  should  be  filed 
may  be  tixed  by  the  jndi;e.  W  hen  an  issue  is  made,  the  case 
is  ripe  for  a  hearing  or  trial.  This  may  be  had  before  the 
jutlge  or  a  jury.'^  Evidence  may  be  introduced  by  the  peti- 
tioning creditors  and  by  the  bankrupt,  and  counsel  heard  for 
both  parties.* 

The  fact  that  a  creeditor  can  adduce  new  facts  happening 
since  the  discharge,  which  would  be  competent  evidence  for 
a  new  trial,  does  not  authorize  a  rehearing  or  a  new  trial  upon 
specifications  filed  in  opposition  to  the  discharge  of  a  bank- 
rupt, heard  and  determined  before  the  discharge.^^ 

There  is  only  one  ground  specified  in  the  statute  upon 
which  a  discharge  can  be  revoked;  and  that  is,  that  the  dis- 
charge "was  obtained  through  the  fraud  of  the  bankrupt."  "^ 
The  creditor  has  the  right  to  have  the  discharge  set  aside 
when  such  fraud  was  used  in  obtaining  it  as  would  have  pre- 
vented the  granting  of  the  discharge  if  it  were  known  at  the 
time.^^     It  may  be  doubted  if  constructive  fraud  is  sufficient 

"B.  A.  iSqcS,  Sec.  i8c.  In    re    Rainsford,    No.    11537    Fed. 

"B.'  A.  1898,  Sec.  19c.  Cas.,  5  N.  B.  R.  381;  In  re  Fowler. 

"7n  re  Corwin,  i  Fed.  Rep.  847;  No.   4999   Fed.    Cas.,   2   Low.    122; 

In  re  Mclntire,  No.  8823  Fed.  Cas.,  In  re  Douglass,  11  Fed.  Rep.  403. 

2  Ben.  345.  I^^   ^^    Augenstein,    2    MacArthur 

But   see  In   re   Dupee,   No.   4183  CD-  C.)   322,  the  court  said:  "The 

Fed.  Cas.,  2  Low.  18,  where  a  case  fraud    of   the   bankrupt   in   relation 

was   reopened   after   discharge  was  to    his    property    is    too    clear    for 

granted.  doubt  or  discussion.     He  is  shown 

"  B.  A.   1898,   Sec.   15.  to  have  possessed  considerable  prop- 

"/n  re  Roosa,  119  Fed.  Rep.  542,  erty,  of  which  he  gives  no  rational 

9  Am.  B.  R.  531 ;  Ex  parte  Brigps,  account,    no    assets    came    to    the 

No.    1868    Fed.    Cas.    2    Low.    384);  hands  of  the  assignee,  and  his  wife. 


DISCHARGE. 


865 


to  maintain  an  application  to  revoke  a  discharge.  It  should 
be  actual  fraud,  as  distinguished  from  fraud  in  law.  The 
courts  have  set  aside  decrees  of  discharge  which  were  entered 
either  through  mistake  or  by  default.^^ 

A  discharge  will  not  be  vacated  unless  the  court  is  satisfied 
that  the  creditor  or  his  representatives  had  no  knowledge  of 
the  objections  at  the  time  the  discharge  was  granted.'^  Where 
an  attorney  has  knowledge  of  objections  it  will  be  presumed 
that  the  client  knows  the  same  facts.''* 

If  the  court  finds  that  the  fraudulent  acts  alleged  are  not 
proved,  or  that  they  were  known  to  the  creditors  before  the 
granting  of  the  discharge,  the  judgment  should  be  rendered 
in  favor  of  the  bankrupt."^  In  such  case  the  validity  of  his 
discharge  is  not  affected  by  the  proceedings.  If  the  court 
finds  that  the  fraudulent  acts,  or  any  of  them,  alleged  by  the 
creditor  in  his  petition  are  proved,  and  that  the  creditor  had 
no  knowledge  of  the  same  until  after  the  granting  of  the  dis- 
charge, and  that  the  actual  facts  would  not  warrant  the  dis- 
charge, the  judgment  should  be  given  in  favor  of  the  creditor 
and  the  discharge  of  the  bankrupt  should  be  annulled. 

The  court  may  set  aside  the  discharge  of  a  trustee  which 
has  inadvertently  found  its  way  into  the  files  and  order  him 
to  proceed." 

Costs  may  be  awarded  to  the  prevailing  party  in  such  a 
proceeding.-^ 

A  court  of  bankruptcy  will  not  set  aside  a  discharge  to  per- 
nn't   the  bankrupt   to   amend   his   schedules  by   including   an 


when  interrogated  as  to  how  she 
came  to  have  a  large  sum  of  money, 
refused  to  give  any  explanation. 
Tke  traces  of  fraud  are  apparent 
upon  the  slightest  examination  of 
the  evidence,  and  little  or  nothing 
need  be   said  upon  the   subject." 

'"In  re  Amory  &  Leeds,  No. 
336a,  Fed.  Cas.,  Betts  Scr.  Bk.  97; 
In  re  Dupee,  No.  4183  Fed.  Cas., 
2  Low.   18. 

"B.    A.    1898,    Sec.     15;    In    re 


Bates,   27  Fed.   Rep.  604;    Marion- 
neaux's   Case,   No.  9088   Fed.   Cas., 
I    Woods,   2,"/;   In   re   Douglass,    11 
Fed.  Rep.  403. 
'-"In    re   Douglass,    ir    Fed.    Rep. 

403- 
"■^/h   re   Hoover,    105    Fed.    Rep. 

354,   5    Am.    B.    R.   247. 

"'  Maybin  v.  Raymond,  No.  9338 
Fed.  Cas.,  15  N.  B.  R.  353. 

^  In  re  Holgate,  No.  6601  Fed. 
Ca.s.,  8  Ben.  355. 


8(/>  LAW    AND    PRdCKRnixGS    IX    nANMvurprcv. 

oinitteil  creditor  more  lluui  a  _\car  alter  llic  adjudication  in 
bankruptcy."^ 

§  300.     The  effect  of  revoking  a  discharge. 

The  etTect  of  anmdliiiL;-  an  tn-dcr  granting-  a  discharge  ren- 
ders the  dischavi^o  in\alid  as  a  ilofense  to  actions  upon  debts 
of  the  bankrupt.  W  licro  it  is  pleack'd,  tlie  order  revoking  it  is 
a  good  answer  to  the  plea.  If  the  judgment  of  the  court  is  in 
favor  of  the  bankrupt  the  vahdity  of  his  discharge  is  not 
affected  by  the  proceethngs  to  revoke  it. 

The  granting  of  a  discharge  is  in  no  way  dependent  upon 
the  settlement  of  the  bankrupt's  estate.^  It  may  therefore 
be  granted  and  revoked  before  the  estate  is  settled  and  the 
original  trustee  discharged.  Where  this  is  the  case  a  new 
trustee  is  not  necessary.  Otherwise  the  creditors  of  the  bank- 
rupt estate  may,  at  their  first  meeting  after  a  discharge  has 
been  revoked  or  if  there  is  a  vacancy  in  the  of^ce  of  trustee, 
appoint  one  trustee  or  three  trustees  of  such  estate.  If  the 
creditors  do  not  appoint  a  trustee  or  trustees  as  herein  pro- 
vided the  court  sln)uld  do  so."  Whenever  a  discharge  is  re- 
voked, the  trustee,  upon  liis  appointment  and  qualification,  is 
vested  with  the  title  of  all  of  the  property  of  the  bankrupt  as 
of  t\]^  date  of  the  final  decree  revoking  the  discharge.^ 

In  the  event  of  a  discharge  being  revoked,  the  property  ac- 
quired by  the  bankrupt,  in  addition  to  his  estate  at  the  time 
the  adjudication  was  made,  .shall  be  applied  to  the  payment 
in  full  of  the  claims  of  creditors  for  property  sold  to  him  on 
credit,  in  good  faith,  ^vhile  such  discharge  was  in  force,  and 
the  residue,  if  any,  is  ;»pplied  to  the  payment  of  the  debte 
which  were  owing  at  tlie  time  of  the  adjudication.* 

'*  In    re    Spicer,    145    Fed.    Rep.  "^  B.  A.   1898,  Sec.  44. 

431,    16    Am.    B.    R.    802;    in    re  '  B.    A.    1898,    Sec.    7od;    McAl- 

Hawk,    114    Fed.    Rep.    916,   8   Am.  pine  v.  Tourtclotte,  24  Fed.  Rep.  69. 

B.  R.  71.  *B.  A.   1898,  Sec.  64c. 

'B.   A.    1898,    Sec.    14. 


APPELLATE    PROCEEDINGS.  867 


CHAPTER  XXVII. 

APPELLATE   PROCEEDINGS. 

§  301.     The  appellate  courts. 

The  statute  confers  appellate  jurisdiction  in  bankruptcy 
upon  three  classes  of  existing  courts,  as  follows:'  "The 
supreme  court  of  the  United  States,  the  circuit  courts  of 
appeals  of  the  United  States,  and  the  supreme  courts  of  the 
territories,  in  vacation  in  chambers  and  during  their  respec- 
tive terms,  as  now  or  as  they  may  be  hereafter  held,  are 
hereby  invested  with  appellate  jurisdiction  of  controversies 
arising  in  bankruptcy  proceedings  from  the  courts  of  bank- 
ruptcy from  which  they  have  appellate  jurisdiction  in  other 
cases.  The  supreme  court  of  the  United  States  shall  exercise 
a  like  jurisdiction  from  courts  of  bankruptcy  not  within  any 
organized  circuit  of  the  United  States  and  from  the  supreme 
court  of  the  District  of  Columbia."  No  other  court,  federal 
or  state,  has  any  appellate  jurisdiction  to  review  proceedings 
in  a  court  of  bankruptcy.  The  circuit  courts  have  no  such 
power  under  tlie  present  statute  as  they  had  under  the  act 
of  1867.= 

The  circuit  court  of  appeals  within  whose  jurisdiction  a 
territorial  court  happens  to  be  is  vested  with  jurisdiction  to 
review  by  petition  of  revision  questions  of  law  arising  in  the 
progress  of  bankruptcy  proceedings  in  such  territorial  courts, 
but  appeals  and  writs  of  error  in  controversies  at  law  and  in 
equity  arising  in  bankruptcy  proceedings  and  ai)peals  in  bank- 
ruptcy proceedings  proper,  lie  to  the  supreme  court  of  the 
terrritories.^ 

'B.  A.  1898,  Sec.  240  and  Sec.  i,  "Compare    R.    S.    Sees.    4980    to 

clause  3.     Compare  R.  S.  Sees.  4980      4986. 

to  4989.  '  Plymouth  Cordage  Co.  v.  Smith, 

194  U.  S.  311,  48  L.  Ed.  992. 


808  LAW     AM)     PKcnKF.inxns     TX     I^AXKUrPTCV. 

^  301a.     The  different  kinds  ot  appellate  jurisdiction. 

How  TO  l\i:\ii"\\  rill'.  l^KCisiox  oi^  a  C'ouu'r  of  Rank- 
RurTCV. — An  appeal  or  w  rit  of  error  ma}-  ho  taken  to  the  sii- 
preiiie  court  of  the  L'nited  States  in  any  ease  in  which  the 
jurisdiction  of  the  court  o\  l)ankrnptc)-  is  in  issue. ^  In  such 
cases  the  (juestion  of  jurischction  alone  is  certilied  to  the  su- 
preme court   from  the  court  helow  for  decision.^ 

There  are  three  methods  of  procedure  by  which  an  order, 
judgment  or  ilecree  of  a  court  of  l)ankruptcy  may  be  revised 
i)y  a  circuit  court  of  appeals."  with  power  to  aflirm,  reverse  or 
modify  the  same  as  follows;  to-wit : 

First.  A  final  judgment  or  decree  of  a  court  of  bank- 
ruptcy is  a  controversy  at  law  or  in  equity  arising  in  bank- 
ruptcy proceedings  may  be  reviewed  on  writ  of  error  or  appeal 
by  the  circuit  court  of  appeals,  which  has  appellate  jurisdic- 
tion of  other  cases  from  the  same  court. ^  Such  controversies 
are  not  proceedings  in  bankruptcy  proper,  but  suits  at  law 
and  in  equity  arising  out  of  the  settlement  of  the  estates 
of  bankrupts. 

Second.  An  order,  judgment,  or  decree,  final  or  inter- 
locutory, in  a  proceeding  in  a  court  of  bankruptcy,  may  be 
superintended  and  revised  in  matters  of  law  on  petition  for 
review,  by  the  circuit  court  of  appeals.'* 

Third.  A  judgment  in  a  bankruptcy  proceeding  proper  may 
be  reviewed  on  appeal,  as  in  equity,  in  three  classes  of  cases 
only;  namely,  judgments  adjudging  or  refusing  to  adjudge 
the  defendant  a  bankrupt;  granting  or  denying  a  discharge; 
and  allowing  or  rejecting  a  claim  of  five  hundred  dollars  or 
over.° 

The  circuit  courts  of  appeals  have  generally  held  that  the 

'Act   of   March   3,    1891,    Sec.    5,  A.  ist  Cir.),  125  Fed.  Rep.  217,  11 

clause   I,   26   Stat,   at  L.  826.     See  Am.  B.  R.  74. 

Certifying  Jurisdictional  Questions,  ^  B.  A.  1898,  Sec.  24a.     Sec  Sees. 

Sec.  309,  post.  302  and  302a,  post. 

'In    re    Mueller    (C.    C.    A.    6th  *  B.  A.  1898,  Sec.  24^.     See  Sees. 

Cir.),  135  Fed.  Rep.  711,  14  Am.  B.  312  and  313,  post. 

R.  256;  Burleigh  v.  Forman  (C.  C.  "  B.  A.  1898,  Sec.  25.      See    Sec. 

314,  et  seq.,  post. 


APPELLATE  PROCEEDINGS. 


869 


right  of  appeal  and  the  right  of  revision  by  petition  are  ex- 
clusive of  each  other.''  A  different  rule  exists  in  the  eighth 
circuit,  where  these  provisions  are  held  to  be  cumulative  and 
not  exclusive  of  each  other.'  In  that  circuit  the  parties  ag- 
grieved in  many  cases  have  the  option  to  present  the  questions 
of  law  by  petition  for  revision  and  questions  of  law  and  fact 
by  an  appeal. 

The  supreme  court  has  not  expressly  decided  whether  the 
right  of  appeal  and  the  right  of  revision  by  petition  are  cumu- 
lative or  exclusive  of  each  other.  That  court  has  often  re- 
ferred to  the  distinction  between  steps  in  bankruptcy  pro- 
ceedings proper  and  controversies  arising  out  of  the  settle- 
ment of  the  estates  of  bankrupts  as  recognized  in  Sections 
23,  24  and  25  of  the  bankruptcy  act,^  and  has  said:     "The 


'In  re  Worcester  County   (C.  C. 

A.  1st  Cir.),  102  Fed.  Rep.  808,  4 
Am.  B.  R.  496;  In  re  jMertens  (C. 
C.  A.  2d  Cir.),  142  Fed.  Rep.  445, 
15  Am.  B.  R.  701 ;  In  re  Kuffler 
(C.  C.  A.  2d  Cir.),  127  Fed.  Rep. 
125,  II  Am.  B.  R.  469;  Doroshow  v. 
Ott  (C.  C.  A.  3d  Cir.),  134  Fed. 
Rep.  740,  14  Am.  B.  R.  34;  Cook 
Inlet  Coal  Fields  Co.  v.  Caldwell 
(C.  C.  A.  4th  Cir.),  147  Fed.  Rep. 
475;  In  re  Abraham  (C.  C.  A.  5th 
Cir.),  93  Fed.  Rep.  767,  784,  2  Am. 

B.  R.  266;  Liddon  &  Bro.  v.  Smith 
(C.  C.  A.  5th  Cir.),  T35  Fed.  Rep. 
43,  14  Am.  B.  R.  204 ;  In  re  Mueller 

(C.  C.  A.  6th  Cir.),  135  Fed.  Rep. 
711,  14  Am.  B.  R.  256;  In  re  First 
Nat.  Bank  (C.  C.  A.  6th  Cir.),  135 
Fed.  Rep.  62,  14  Am.  B.  R.  180; 
In  re  Friend  (C.  C.  A.  7th  Cir.), 
134  Fed.  Rep.  779,  13  Am.  B.  R. 
595;  In  re  Good  CC.  C.  A.  8th 
Cir.),  99  Fed.  Rep.  389,  3  Am.  B. 
R.  605. 

This  last  case  is  overruled  In 
re  McKenzie  fC.  C.  A.  8th  Cir.), 
142    Fed.     Rep.    383,     15     Am.     B. 


R.    679,    and    In    re    Holmes     (C. 

C.  A.  8th  Cir.),  142  Fed.  Rep.  391. 

IS  Am.  B.  R.  689. 

Vn   re  ]\IcKenzie    (C.   C.   A.   8th 

Cir.),  142  Fed.  Rep.  383,  15  Am.  B. 

R.   679;   In   re   Holmes    (C.   C.  A. 

8th    Cir.),    142    Fed.    Rep.    391,    15 

Am.  B.  R.  689. 
See  also  Burleigh  v.  Foreman  (C. 

C.  A.  1st  Cir.),  125  Fed.  Rep.  217, 
II    Am.   B.    R.   74. 

*  Denver  First  Nat.  Bank  v.  Klug, 
186  U.  S.  202,  46  L.  Ed.  1 127; 
Elliott  v-  Toeppner,  187  U.  S.  327, 

333-4,  47  L.  Ed.  200,  9  Am.  B.  R. 
50;  Hewit  V.  Berlin  Mach.  Wks., 
194  U.  S.  296,  48  L.  Ed.  986,  II 
Am.  B.  R    709;  Plymouth  Cordage 

Co.  V.  Smith,  194  U.  S.  311,  48  L. 
Ed.  992;  Hutchin.son  v.  Otis,  190 
U.  S.  552,  47  L.  Ed.  1179,-10  Am. 
B.  R.  135 ;  First  Nat.  Bank  v.  Title 
&  Trust  Co.,  198  U.  S.  280,  49  L. 
Ed.  1051,  14  Am.  B.  R.  102;  Louis- 
ville Trust  Co.  V.  Comingor,  184 
U.  S.  18,  46  L.  Ed.  413,  7  Am.  B.  R. 
421 ;  Grant  Shoe  Co.  v.  Laird,  203 
U.    S.   502,    17   Am.   B.   R.   I. 


870  LAW      AND     PROCEEDINGS     IN     BANKRUPTCY. 

provisions  as  to  rc\isions  in  matters  of  law  and  appeals  were 
framed  antl  must  be  construed  in  view  of  that  distinction."  " 
In  Hczi'it  V.  Berlin  Machiitc  // O/A-.s- '"  that  court  has  said: 
''Section  25(7  relates  ti^  appeals  from  judi^ments  in  certain 
enumerated  steps  in  hankruptc}'  i)rt)ceedini;s,  in  respect  of 
which  special  provision  therefor  was  re(|uired,  while  Section 
24(/  relates  to  controversies  arisini^-  in  bankruptcy  proceedings 
in  the  exercise  by  the  bankruptcy  courts  of  the  jurisdiction, 
vested  in  them  at  law  and  in  equity  by  Section  2,  to  settle  the 
estates  of  bankrupts  and  to  determine  controversies  in  rela- 
tion thereto."  In  other  cases  it  has  been  held  that  where 
a  decision  is  not  open  to  revision  by  appeal  or  writ  of  error 
under  either  of  these  sections,  it  might  be  reviewed  on  peti- 
tion for  revision  under  Section  24&."  This  v\^as  the  only 
method  of  reviewing  the  action  of  the  court  of  bankruptcy 
in  these  cases,  because  they  did  not  fall  wdthin  the  provisions 
regulating  appeals  either  in  bankruptcy  proceedings  proper  or 
controversies  arising  in  bankruptcy.  It  has  also  been  held 
that  the  rulings  of  a  court  in  the  progress  of  a  trial  by  jury 
can  only  be  reviewed  on  writ  of  error.^- 

'  Holden   v.    Stratton,    191    U.    S.  In  Bryan  v.  Bernheimer,    181   U. 

115,  48  L.  Ed.   116,   10  Am.  B.   R.  S.  188,  45  L.  Ed.  814,  5  Am.  B.  R. 

786.  523,    an    appeal    was    treated    as    a 

""  194   U.    S.   296,   300,   48  L.   Ed.  petition   for  revision  by  the  circuit 

986,  II  Am.  B.  R.  709.  court  of  appeals  for  the  fifth  circuit 

"Louisville  Trust  Co.  v.  Comin-  (In  re  Abraham,  93  Fed.  Rep.  767, 

gor,  184  U.  S.  18,  46  L.  Ed.  413.  7  784,    2   Am.    B.    R.   266),   and   the 

Am.  B.  R.  421 ;  Schweer  v.  Brown,  supreme   court    considered   the    de- 

19s  U.  S.  172;  49  L.  Ed.  144;  Hold-  cree  as  rendered  in  the  exercise  of 

en  v.   Stratton,    191    U.    S.    115,  48  the  supervisory  power  in  that  case. 

L.  Ed.  116,  10  Am.  B.  R.  786.  See    Holden    v.    Stratton,    191    U. 

In  First  Nat.  Bank  v.  Trust  Co.,  S.  115,   119,  48  L.  Ed.  116,  10  Am. 

198  U.  S.  291,  49  L.  Ed.   1051,   14  B.   R.   786. 

Am.  B.  R.   102,  it  was  said :  "And  "  Grant    Shoe   Co.   v.   Laird,   203 

in  any  view,  the  proceding  was  a  U.  S.  502,  17  Am.  B.  R.  i ;  Elliott 

proceeding    in    bankruptcy.      Being  v.  Toeppner,   187  U.  S.  327,  47  L. 

such,  an  appeal  from  the  decree  of  Ed.  200,  9  Am.  B.  R.  50;  Ins.  Co. 

the  district  court  under  Section  25a  v.   Comstock,    16   Wall.   258,  21   L. 

did  not  lie,  and  the  parties  aggrieved  Ed.  493. 
could  only    invoke   the    .supervisory 
power  under  Section  24^." 


APPELLATE  PROCEEDINGS.  871 

Whether  a  petition  for  revision  will  lie  to  revise  an  inter- 
locutory order  in  a  controversy  at  law  or  in  equity,  which  is 
not  appealable  under  Section  24a  because  not  final,  depends 
upon  the  meaning  of  the  word  "proceedings"  as  used  in  Sec- 
tion 24b.     It  will  be  observed  that  Section  24b  provides  for 
revising  in  matters  of  law  "the  proceedings  of  the  several 
inferior  courts  of  bankruptcy."     If  the  word  "proceedings" 
relates  only  to  proceedings  in  bankruptcy,  it  is  clear  that  the 
supervisory  power  does  not  extend  to  any  order  either  inter- 
locutory or  final,  in  such  a  controversy.     If,  however,  it  in- 
cludes any  action  of  the  court  of  bankruptcy  in  the  exercise 
of  the  jurisdiction  at  law  and  in  equity  as  well  as  in  bank- 
ruptcy, vested  in  it  by  Section  2,  a  suit  at  law  or  in  equity 
arising     in     bankruptcy     proceedings     may     be     interrupted 
at  any  stage  to  review,  as  to  matters  of  law\  any  ruling  of 
the   court   of  bankruptcy   before   final   judgment   or   decree. 
The  result  would  be  that  a  circuit  court  of  appeals  might 
be  required  to  pass  on  the  several  questions  of  law  arising  in 
the  progress  of  the  trial,  and  after  final  decree  the  wdiole  mat- 
ter could  be  again  brought  into  that  court  by  an  appeal  to 
review  both  the  law  and  the  facts.     This  clearly  can  not  be 
done  with  respect  to  rulings  of  the  court,  in  a  jury  trial. ^^ 
The  great  weight  of  authority  at  present  is  that  the  summary 
jurisdiction   is  confined  to  a  revision  of  rulings  relating  to 
the  administration  of  estates  in  bankruptcy  proper,  and  that 
the  doors  of  the  appellate  courts  are  not  open  to  a  separate 
review   of  each   ruling  made   during   the   trial,   or   of   inter- 
locutory orders  generally,  in  suits  at  law  or  in  equity  arising 
out   of  the   settlement   of   the   bankrupts'   estates.      In   most 
circuits  a  dissatisfied  litigant  can  not  review  a  question  of 
law  by  a  petition  for  revision,  where  the  final  decision  of  the 
court  may  be  reviewed  on  appeal  or  writ  of  error.' 


14 


"Grant   Shoe   Co.   v.   Laird,   203  " /«   re   Mueller    (C.    C.    A.   6th 

U.  .S.  502,  17  y\ni.  B.  R.  i;  Elliott  Cir.),  135  Fed.  Rep.  711,  14  Am.  R. 

V.    Toeppner,    187    U.    S.    327,    47  R.    256;    In    re    Friend    (C.    C.    A. 

L.     Ed.    200,    9    .Am.    B.     R.    50;  7th    Cir.),    134    Fee].    Rep.    778,    13 

[ns.     Co.    V.     Comstocl<,     16    Wall.  Am.    B.    R.    595;    /;;    re   Worcester 


S72 


LAW     AXn     TROCEEDINGS     IX     UANM^RUPTCY. 


The  (lilVicullx-  in  |M-acticc  is  to  (Iclcniiinc  wlu-lhcr  the  ]^^.•■:- 
ticular  case  in  han^l  is  a  "controNorsy  arising  in  hankrnptcy" 
or  a  proceed  in;;'  in  hankrnptcy  proper.'"  A  decision  ol  a  eonrl 
o\  bankniptcN'  in  the  former  chiss  of  cases  is  reviewahle  on 
writ  oi  error  or  appeah  in  the  latter  by  petition  for  revision. 
The  iMily  safe  ])raclice  for  a  lawyer  in  inan\-  instances  is  to 
take  an  appeal  and  t'lle  a  jjctition  lor  revision  in  the  same  ease 
in  order  to  i)e  snre  to  obtain  a  review  of  the  rnling  chal- 
leiiiied."'  This  has  become  common  practice.  In  some  cases 
an  appeal  has  been  treated  as  a  petition  lor  review,  when 
only  a  question  of  law  was  presented  by  the  appeal/^  but  this 
will  not  be  ilone  where  questions,  of  fact  and  law  are  both 
involved  in  the  appeal.""  If  these  remedies  are  exclusive  of 
each  other  "there  is  no  more  reason  for  treating  an  appeal 
as  a  petition  for  review  than  there  would  be  for  treating  an 
appeal  as  a  writ  of  error  or  z'icc  versa.''  ^" 

How  TO  Review  a  Decision  of  a  Circuit  Court  of  Ap- 
peals.— A  judgment  or  decree  of  a  circuit  court  of  appeals 
in  a  controversy  arising  in  bankruptcy,  on  appeal  or  writ  of 


County  (C.  C.  A.  ist  Cir.),  102 
Fed.    Rep.    808,   4   Am.    B.    R.    496. 

But  see  In  re  Holmes  (C.  C.  A. 
Sth  Cir.),  142  Fed.  Rep.  391,  15 
Am.   B.   R.  689. 

'^As  to  controversies  arising  in 
bankruptcy,  see  Sec.  302a,  post ;  as 
to  orders  in  bankruptcy  which  may 
be  revised  by  petition,  see  Sec.  312, 
post;  as  to  appeals  in  bankruptcy, 
see  Sec.  314. 

"/m  re  Worcester  County  (C.  C. 
A.  ist  Cir.),  102  Fed.  Rep.  808,  4 
Am.  B.  R.  496;  In  re  Holmes  (C. 
C.  A.  8th  Cir.),  142  Fed.  Rep.  391, 
15  Am.  B.  R.  689. 

''  Chesapeake  Shoe  Co.  v.  Seld- 
ner  (C.  C.  A.  4th  Cir.),  122  Fed. 
Rep.  593,  10  Am.  B.  R.  466;  In  re 
Russell  (C.  C  A.  2d  Cir.),  loi 
Fed.  Rep.  248,  3  Am.  B.  R.  658. 

In  Bryan  v.  Bernheimer,    r8i   U. 


S.  188,  45  L.  Ed.  814,  5  Am.  B.  R. 
523,  an  appeal  was  treated  as  a 
petition  for  revision  by  the  circuit 
court  of  appeals  for  the  fifth  cir- 
cuit {In  re  Abraham,  93  Fed.  Rep. 
767,  784,  2  Am.  B.  R.  266),  and 
the  supreme  court  considered  the 
decree  as  rendered  in  the  exercise 
of  the  supervisory  power  in  that 
case.  Sec  Holden  v.  Stratton,  191 
U.  S.  115,  119,  48  L.  Ed.  116,  10 
Am.    B.    R.    786. 

''In  re  Whitener  (C.  C.  A.  5th 
Cir).  105  Fed.  Rep.  180,  S  Am.  B. 
R.  198;  Dickas  v.  Barnes  (C.  C. 
A.  6th  Cir.),  140  Fed.  Rep.  849, 
15  Am.  B.  R.  566;  Davidson  v 
Friedman  (C.  C.  A.  6th  Cir.),  140 
Fed.  Rep.  853,  15  Am.  B.  R.  489. 

'"Davidson  v.  Friedman  (C.  C. 
A.  6th  Cir.),  140  Fed.  Rep.  853, 
15  Am.  B.  R.  489. 


APPELLATE  PROCEEDIXGS. 


873 


error  in  the  exercise  of  its  general  appellate  jurisdiction,  is 
not  made  final  by  Section  6  of  the  act  of  ]\Iarch  3,  1891."** 
It  may  therefore  be  reviewed  by  the  supreme  court  of  the 
United  States  on  writ  of  error  or  appeal."^ 

Where  a  proceeding  in  bankruptcy  is  revised  on  petition 
by  the  circuit  court  of  appeals  its  decision  may  be  reviewed 
by  the  supreme  court  of  the  United  States  by  writ  of  cer- 
tiorari, but  not  on  appeal  or  writ  of  error."  The  decision  of  a 
court  of  appeals  on  appeal  has  been  reviewed  by  the  supreme 
court  on  writ  of  certiorari,  where  it  was  a  case  in  bankruptcy 
reviewable  in  the  court  of  appeals  only  by  petition  to  review."^ 

When  a  case  is  taken  to  a  circuit  court  of  appeals  by  an 
appeal  to  review  a  judgment  in  a  proceediiig  in  bankruptcy 
proper,  no  appeal  lies  from  that  court  to  the  supreme  court, 
except  that  an  appeal  may  be  taken  to  the  supreme  court  of 
the  United  States  from  a  final  decree  of  a  circuit  court  of  ap- 
peals allowing  or  rejecting  a  claim  under  the  bankrupt  act 
in  two  classes  of  cases : 

First.  Where  the  amount  in  controversy  exceeds  the  sum 
of  two  thousand  dollars  and  tl^.e  question  in\-olved  is  one 
which  might  have  been  taken  from  the  highest  court  of  a 
state  to  the  supreme  court  of  the  United  States,"'*  or, 

Second.  Where  some  justice  of  the  supreme  court  of  the 
United  States  shall  certify  in  his  ojiinion  the  determination 
of  the  question  or  questions  involved  in  the  allowance  or 
rejection  of  such  claim  is  essential  to  a  uniform  c(Mistruction 
of  the  bankrupt  act."^ 


"26  Stnt.  at  L.  826.  This  section 
is  quoted  in  full   in   Sec.  302,  post. 

"  Hewit  V.  Berlin  Mach.  Wks., 
194  U.  S.  295,  300,  48  L.  Ed.  986,  10 
Am.  B.  R.  709;  York  Mfg.  Co.  v. 
Cassell,  201  U.  S.  344,  50  L.  Ed. 
782,    15   Am.   B.   R.  633. 

°  Mueller  v.  Nugent,  180  U.  S. 
640,  s.  c.  184  U.  S.  I,  46  L.  Ed. 
405,  7  Am.  B.  R.  224;  Louisville 
Trust  Co.  V.  Comingor,  181  U.  S. 
620,  45  L.   Ed.    103 1,   184  U.   S.    18, 


46  L.  Ed.  4r3,  7  Am.  B.  R.  421; 
Bryan  v.  Bernhcimcr,  175  U.  S. 
724,  44  L.  Ed.  338,  s.  c.  i8r  U.  S. 
188,  45  L.  Ed.  814,  5  Am.  B.  R 
523;  Holden  v.  Stratton,  191  U. 
S.  115,  48  L.  Ed.  116,  10  Am.  B. 
R.  786.     See  Sec.  307,  post. 

="  First  Nat.  Bank  v.  Title  & 
Trust  Co.,  198  U.  S.  280,  49  L.  Ed. 
105 1,   14  Am.  B.   R.   102. 

"'  See  Sec.  304,  f>(>st. 

"  See  Sec.  304,  post. 


S74 


LAW     AND     PRUCEEDl.Xr.S    IN     BANKUUl'TCY. 


In  all  oilier  cases  ilie  decision  of  the  circuit  court  of  appeals 
on  an  appeal  in  Uankruptey  is  llnal  and  can  be  reviewed  by 
the  supreme  court  only  on  writ  of  certiorari. 

I  low  TO  kiAiKw  A  Decision  oi-"  a  Stati-:  Coukt. — The  ac- 
tion of  the  hig"hest  court  of  a  state  in  a  suit  at  law  or  in  e(|uity 
involving  rights  or  privileges  claimed  under  the  bankrupt  law 
may  be  rexiewed  by  the  supreme  court  of  the  I'nited  States 
pro\idetl  it  falls  w  iihin  Section  709  of  the  Revised  Statutes."" 

§  302.     Appellate  jurisdiction  at  law  and  in  equity  to  revise 
the  action  of  federal  courts. 

The  bankrupt  statute  does  not  affect  the  appellate  jurisdic- 
tion of  procedure  at  law  or  in  equity.  Decrees  in  e(juity  and 
judgments  at  law,  although  in  controversies  relating  to  bank- 
ruptc}',  are  revised  by  the  appellate  coiu'ts  as  before  the  pas- 
sage of  the  act.' 

The  statute  regulating  the  jurisdiction  in  cases  from  fed- 
eral courts  provides : " 

"Sec.  5.  That  appeals  or  writs  of  error  may  be  taken  from 
the  district  courts  or  from  the  existing  circuit  courts  direct  to 
the  supreme  court  in  the  following  cases : 

"In  any  case  in  which  the  jurisdiction  of  the  coiu^t  is  in 
issue;  in  such  cases  the  question  of  jurisdiction  alone  shall 
be  certified  to  the  supreme  court  from  the  court  below^  for 
decision.^ 


"  See  Sec.  303,  post.  Rector  v. 
City  Deposit  Bank,  200  U.  S.  405, 
411,  50  L.  Ed.   527,    15  Am.   B.   R. 

336. 

'  Bardes  v.  Hawarden  Bank,  175 
U.  S.  526,  44  L.  Ed.  261;  178  U. 
S.  524,  44  L.  Ed.  1175.  4  Am.  B. 
R.  163;  Hewit  V.  Berlin  Machine 
Works,  194  U.  S.  296.  48  L.  Ed. 
986,  II  Am.  B.  R.  709;  Scott  v. 
Wilson  (C.  C.  A.  7th  Cir.),  115 
Fed.  Rep.  2S4.  8  Am.  B.  R.  349; 
Stelling  V.  Jones  Lumber  Co.  (C. 
C.  A.  7th  Cir.),  116  Fed.  Rep.  261, 


8  Am.  B.  R.  521 ;  Booneville  Nat. 
Bank  v.  Blakey  (C.  C.  A.  7th  Cir.), 
107  Fed.  Rep.  891,  6  Am.  B.  R. 
13;  Steele  v.  Buel  (C.  C.  A.  8th 
Cir.),  104  Fed.  Rep.  968,  5  Am.  B. 
R.  165;  Burleigh  v.  Foreman  (C.  C. 
A.  1st  Cir.),  125  Fed.  Rep.  217,  11 
Am.   B.   R.   74. 

'Act  of  March  3,  1891,  26  Stat. 
at  L.  826. 

^  In  such  cases  there  must  be  a 
certificate  of  the  judge  that  only 
the  question  of  jurisdiction  was  in 
issue    and    an    appeal    will    not    lie 


APPELLATE    PROCEEDINGS. 


875 


"From  the  final  sentences  and  decrees  in  prize  causes. 

"In  cases  of  convicition  of  a  capital  [or  otherwise  infa- 
mous] *  crime. 

"In  any  case  that  involves  the  construction  or  applicat'or- 
of  the  constitution  of  the  United  States. 

"In  any  case  in  which  the  constitutionality  of  any  law  of 
the  United  States,  or  the  validity  or  construction  of  any  t'-eaty 
made  under  its  authority,  is  drawn  in  question. 

"In  any  case  in  whicli  the  constitution  or  law  of  a  state  is 
claimed  to  be  in  contravention  of  the  constitution  of  the 
United   States. 

"Nothine-  in  this  act  shall  affect  the  jurisdiction  of  the 
supreme  court  in  cases  appealed  from  the  highest  court  of  a 
state,  nor  the  construction  of  the  statute  providing-  for  review 
of  such  cases. 

"Sec.  6.  That  the  circuit  courts  of  appeals  established  by 
this  act  shall  exercise  appellate  jurisdiction  to  review  by  ap- 
peal or  by  writ  of  error  final  decision  in  the  district  court  and 
the  existing  circuit  courts  in  all  cases  other  than  those  pro- 
vided for  in  the  preceding  section  of  this  act,  unless  otherwise 
provided  by  law,  and  the  judgments  or  decrees  of  the  circuit 
courts  of  appeals  shall  be  final ""  in  all  cases  in  which  the 
jurisdiction  is  dependent  entirely  upon  the  opposite  parties  to 
the  suit  or  controversy,  being  aliens  and  citizens  of  the  United 
States  or  citizens  of  different  states;  also  in  all  cases  arising 
under  the  patent  laws,  under  the  revenue  laws,  and  under  the 
criminal  laws  and  in  admiralty  cases,  excepting  that  in  every 

where    other    questions    were    also  For  form  of  certificate  and  prac- 

considered.   Denver  First  Nat.  Bank  tice  generally,  see  Loveland's  Forms 

V.   Klug.   i86  U.  S.  203.  46  L.   Ed.  of  Fed.  Practice,  Xos.  1334  to  1336. 

I127;   or   where  no   final   judgment  *  The     words     in    brackets     were 

has  been  entered.     Bardes  v.  Bank,  stricken  out  by  the  act  of  January 

17s   IJ.  S.  526,  44  L.  Ed.  261;   178  20,  1897;  29  Stat,  at  L.-492. 

U.   S.   524,   44   L.    Ed.'  1175,   4   Am.  "Spencer    v.    Duplan.    191    U.    S. 

B.    R.    163;    Mitchell    v.    McClure,  526,    48   L.    Ed.    287;    Spreckles    v. 

178   U.    S.    539,  44   L.    Ed.    1 182,   4  McCIain,   192  U.  S.  397,  48  L.  Ed. 

Am.  B.   R.   177.  496. 

See  also  Certifying  Jurisdictional 
Questions,  Sec.  309,  post. 


S76  l.AW    AXn     rUOCKEDINC.S    IX     1!AX  KKll'TCY. 

sucli  subject  within  its  appellate  juristliclion  the  circuit  court  I 

of  appeals  at  any  lime  may  certify  to  the  sui)reme  court  nt  the  | 

United  States  any  cpiestions  or  propositions  of  law  concern- 
ing- which  il  ilesires  the  instruction  of  that  court  tor  its  i)rop- 
er  ilccisiou.''  An^l  thereupon  the  supreme  court  may  either 
give  its  instruction  on  the  (|uestions  and  propositions  certi- 
fied to  it,  which  shall  be  binding  upon  tlic  circuit  courts  of 
appeals  in  such  case,  or  it  may  recjuire  that  the  whole  record 
and  cause  mav  he  sent  up  to  it  for  its  consideration,  and  there- 
upon shall  decide  tlie  whole  matter  in  controversy  in  the 
same  manner  as  if  it  had  been  brought  there  for  review  by 
writ  of  error  or  appeal. 

"And  excepting  also  that  in  any  such  case  as  is  herein- 
before made  linrd  in  the  circuit  court  of  appeals  it  shall  be 
competent  for  the  supreme  court  to  require,  by  certiorari  or 
otherwise,  any  such  case  to  be  certified  to  the  supreme  court 
for  its  review-  and  determination  with  the  same  power  and 
authorit}'  in  the  case  as  if  had  been  carried  by  appeal  or 
writ  of  eerror  to  the  supreme  court. 

"In  all  cases  not  hereinbefore,  in  this  section,  made  final 
there  shall  be  of  right  an  appeal  or  writ  of  error  or  review  of 
the  case  by  the  supreme  court  of  the  United  States  where  the 
mater  in  controversy  shall  exceed  one  thousand  dollars  be- 
sides costs.  But  no  such  appeal  shall  be  taken  or  \vv'\t  of 
error  sued  out  unless  within  one  year  after  the  entry  of  the 
order,  judgment  or  decree  sought  to  be  reviewed." 

What  judgments  and  decrees  are  reviewable  under  this 
general  appellate  jurisdiction  at  law  and  in  equity  and  the 
proceedings  to  review'  them  is  considered  hereafter.'^ 

°As  was  done  in  Hicks  v.  Knost,  142;   Metcalf  v.  Barker,  187  U.  S. 

178  U.    S.   541,   44   L-    Ed.    1 183,   4  165,   47  L.   Ed.    122,  9   Am.   B.    R. 

Am.  B.  R..178;   White  v.  Schloek  36;   Elliott  v.  Toeppner,   187   U.  S. 

178  U.    S.   542,  44   L.   Ed.    1 183,  4  327,  47  L.  Ed.*  200,  9  Am.  B.  R.  50; 

Am.  B.  R.   178;   Wall  v.   Cox,   181  Randolph    v.    Scruggs,    190    U.    S 

U.  S.  244.  45  L.  Ed.  485,  5  Am.  B.  533,  47  L.  Ed.  1165,  10  Am.  B.  R.  i. 

R.  727;   Wilson  V.   Nelson,    183  U.  'See  Sec.  302a,  post. 
S.  191,  46  L.  Ed.  T47,  7  .'\m.  R.  R. 


APPELLATE    PROCEEDINGS.  877 

§  302a.     Controversies  arising  in  bankruptcy. 

It  is  well  settled  that  a  circuit  court  of  appeals  may  review 
a  final  judgment  or  decree  of  a  district  court  in  a  controversy 
arising  in  bankruptcy  proceedings  on  writ  of  error  or  appeal 
in  the  exercise  of  its  general  appellate  jurisdiction  as  in  other 

cascs.^ 

A  "controversy  arising  in  bankruptcy  proceedings"  is 
in  the  nature  of  a  plenary  action  and  not  a  summary  pro- 
ceeding. It  may  be  an  independent  suit  at  law  or  in  equity," 
or  an  intervention,  by  petition  or  otherwise,  in  the  bank- 
ruptcy proceedings  in  which  a  separable  and  distinct  issue 
is  made  and  tried  on  proper  pleadings  and  proofs.^  A  sum- 
mary order  by  a  court  of  bankruptcy  on  a  rule  to  show  cause  is 
not  such  a  controversy,  although  the  cause  of  action  is  clearly 
one  at  law  or  in  equity.  Such  orders  may  be  reviewed  and 
corrected  on  petition  to  revise  as  to  matters  of  law  under 
Section  24b,  but  not  on  appeal  or  writ  of  error.* 

By  such  controversies  are  meant  controversies  arising  in 
bankruptcy  proceedings  in  the  exercise  by  the  courts  of 
bankruptcy  of  the  jurisdiction  vested  in  them  at  law  and  in 

*  B.    A.    1898,    Sec.    24a.     Act    of  B.  R.  34.     See  Bardes  v.  Hawarden 

March  3,   1891,   Sec.  6,  26  Stat,  at  Nat.    Bank,    178    U.    S.    524,   44   L 

L.   826.     This   section   is  quoted   in  Ed.  1175,  4  Am.  B.  R.  163. 

Sec.  302,  ante.  ^  Hewit    v.    Berlin    Mach.    Wks.; 

Hewit  V.  Berlin  Mach.  Wks.,  194  I94  U.   S.   296,   48  L.   Ed.   986,    11 

U.  S.  296,  48  L.  Ed.  986,  II  Am.  B.  Am.  B.  R.  709;   Burleigh  v.  Fore- 

R.  709;   Security  Warehousing  Co.  man   (C.  C.   A.   ist  Cir.),   125   Fed. 

V.   Hand    (C.   C.  A.  7th  Cir.),   143  Rcu.  217,  11  Am.  B.  R.  74;  Ilines  v. 

Fed.    Rep.    32,    16    Am.    B.    R.    49;  IMoore    (C.    C.    A.    6th    Cir),    134 

Doroshow    v.    Ott    (C.    C.    A.    3d  Fed.    Rep.    221,    14   Am.    B.    R.    i; 

Cir.),    134   Fed.    Rep.   740,    14  Am.  In  re  Mueller  (C.  C.  A.  6th  Cir.), 

B.  R.  34;  Burleigh  v.  Forman   (C.  135   Fed.    Rep.   711,    14   Am.    B.    R. 

C  A.  1st  Cir.),  125  Fed.  Rep.  217,  256. 

II    .'Xm.   B.   R.   74;   Liddon  &   Bro.  *  Louisville  Trust  Co.  v.  Comin- 

V.   Smith    (C.  C.  A.  5th  Cir.),   135  gor,  184  U.  S.  18,  46  L.  Ed.  413,  7 

Fed.   Rep.  43,    14   Am.   B.    R.   204;  Am.  B.  R.  421;  Schwecr  v.  Brown, 

In   re   First   Nat.   Bank    (C.   C.   A.  195  U.  S.  171,  49  L.  Ed.  144;  First 

6th  Cir.),  135  Fed.  Rep.  62,  14  Am.  Nat.    Bank   v.    Title   &   Trust    Co.. 

B.   R.    180.  198  U.   S.  280,  49  L.  Ed.    105 1,   14 

'Doroshow  v.  Ott    (C.  C.  A.  3d  Am.  B.  R.  102. 
Cir.),    134   Fed.    Rep.   740,    14   Am 


878  LAW     AM)     rROCEEDlNGS    IN     BANKRUPTCY. 

equity  by  Section  2,  to  settle  the  estates  of  bankrupts  and  to 
determine  controversies  in  relation  thereto.''  A  controversy 
of  this  kind  arises  where  a  third  party  intervenes  in  the 
bankruptcy  proceedings  and  submits  to  the  jurisdiction  of 
the  court  for  the  purpose  of  asserting  title  to  or  an  interest 
in  property  in  the  possession  of  the  trustee,  thereby  raising 
a  distinct  anil  separable  issue  at  law  or  in  equity;"  or  where 
the  trustee  prosecutes  an  independent  suit  to  recover  prop- 
ertv  claimed  to  belong  to  the  bankrupt's  estate,  which  is  in 
the  possession  of  the  defendant ;  '  or  where  a  third  person, 
having  possession  of  the  property  claimed  to  belong  to  the 
bankrupt,  comes  into  the  court  of  bankruptcy  and  submits 
to  its  jurisdiction  for  the  purpose  of  enforcing  a  lien  or  other 
interest  in  such  property,  thereby  raising  a  distinct  and  sep- 
arable issue  at  law  or  in  equity.*  If,  however,  the  property 
in  (luestion  is  brought  into  a  court  of  bankruptcy  by  a  se- 
cured creditor  for  administration  only  without  making  an 
issue  of  this  nature,  the  mere  sale  and  distribution  of  the 
proceeds  thereof  is  a  proceeding  in  bankruptcy. 

AMiere  it  becomes  necessary,  in  the  administration  of  prop- 
erty of  a  bankrupt's  estate  in  the  possession  of  the  trustee, 
to  bring  in  third  parties  for  the  purpose  of  adjudicating  the 
title  or  interest  of  such  parties  in  that  property,  a  proceeding 
instituted  by  the  trustee  to  that  end  is  not  a  controversy  aris- 
ing in  bankruptcy,  but  is  a  proceeding  in  bankruptcy  proper.** 

"Hewit    V.    Berlin    Mach.    Wks.,  Co.    (C.  C.  A.  7th  Cir.),   116  Fed, 

194  U.   S.   296,  48   L.   Ed.   986,    II  Rep.  261,  8  Am.  B.   R.   521;   Delta 

Am.  B.  R.  709.  Nat.    Bank  v.    Easterbrook    (C.    C. 

"Hewit  V.  Berlin  Mach.  Wks.,  A.  Sth  Cir.),  133  Fed.  Rep.  521,  13 
194  U.  S.  296,  48  L.  Ed.  986,  II  Am.  B.  R.  338. 
Am.  B.  R.  709 ;  In  re  First  Nat.  *  See  Security  Warehouse  Co.  v. 
Bank  (C.  C.  A.  6th  Cir.),  135  Fed.  Hand  (C.  C.  A.  7th  Cir.),  143  Fed. 
Rep.  62,  14  Am.  B.  R.  180;  Dodge  Rep.  32,  16  Am.  B.  R.  49. 
V.  Norlin,  133  Fed.  Rep.  3^3,  U  "  First  Nat.  Bank  v.  Title  &  Trust 
Am.  B.  R.  176;  Liddon  &  Bro.  Co.,  198  U.  S.  280,  49  L-  Ed.  1051, 
V.  Smith  (C.  C.  A.  5th  Cir.),  13S  H  Am.  B.  R.  102;  Whitney  v.  Wen- 
Fed.  Rep.  43,  14  Am.  B.  R.  204.  man.  198  U.  S.  539.  49  L-  Ed.  1157, 

'Doroshow  v.  Ott    (C.  C.   A.  3d  14  Am.  B.  R.  45;  In  re  McMahon 

Cir.),  134  Fed.  Rep.  740,  14  Am.  B.  (C.  C.  A.  6th  Cir.),  147  Fed.  Rep. 

R.    34;    Stelling    v.    Jones    Lumber      685,    17   Am.   B.    R.   ;    Morgan 


APPELLATE    PROCEEDINGS.  879 

The  decision  of  the  court  of  bankruptcy  in  such  a  case  can 
not  be  reviewed  on  appeal,  but  may  be  on  a  petition  for  re- 
vision. 

It  has  been  held  that  the  following  proceedings  were  con- 
troversies arising  in  bankruptcy  in  which  the  final  decision 
of  the  court  of  bankruptcy  was  reviewable  on  appeal  or  writ 
of  error:  a  suit  in  equity  by  a  trustee  under  Section  67(7 
in  a  district  court  to  recover  property  for  the  estate ;  ^°  or  a 
suit  by  a  trustee  in  the  nature  of  an  equitable  replevin ;  " 
or  a  suit  to  set  aside  a  preference  and  recover  the  property 
for  the  estate;^-  or  a  bill  in  equity  to  establish  and  enforce 
a  lien  by  a  pledgee ;  ^^  or  an  intervening  petition  to  assert 
title  to  property  in  the  possession  of  the  trustee ;  ^*  or  an 
intervening  petition  by  a  vendor  under  a  conditional  sale 
of  chattels  to  recover  the  articles  in  the  possession  of  the 
trustee  under  an  unrecorded  agreement  for  the  retention  of 
title  until  payment  of  the  purchase  price  ;^^  or  an  interven- 
ing petition  in  which  a  creditor  of  the  bankrupt  seeks  to 
enforce  a  mortgage  lien  upon  property  in  the  possession  of 
the  trustee  as  a  part  of  the  bankrupt's  estate ;  ^'^  or  a  claim 

V.  First  Nat.   Bank    (C.  C.  A.  4th  i94  U.   S.  296,   48  L.   Ed.  986,   n 

'  Cir.),  145  Fed.  Rep.  466,  16  Am.  B.  Am.  B.  R.  709. 

R.  639.  But   see  In  re   Whitencr    (C.   C. 

"•Doroshow    v.    Ott    (C.    C.    A.  A.  5th  Cir.),  105  Fed.  Rep.   180,  5 

3d  Cir.),  134  Fed.  Rep.  740,  14  Am.  Am.  B.  R.  198. 

B.   R.  34.  "Dolle  V.   Casscll    (C.  C.  A.  6th 

"  Stelling    V.    Jones    Lumber    Co.  Cir.),  135  Fed.  Rep.  52,  14  Am.  B. 

(C.  C.  A.  7th  Cir.),  116  Fed.  Rep.  R.  5-',  on  appeal  York  Mfg.  Co.  v 

261,  8  Am.  B.  R.  521.      •  Cassell,   201    U.   S.   344,   50  L.   Ed. 

"Boonville  Nat.  Bank  v.  Blakey  782,   15  Am.  B.  R.  633. 

(C.  C.  A.  7th  Cir.),  107  Fed.  Rep.  "/»?   re   First   Nat.   Bank    (C.   C, 

891,   6  Am.    B.    R.    13;    Delta   Nat.  A.  6th  Cir.),   135  Fed.  Rep.  62,   14 

Bank  y  Eastcrbrook   (C.  C.  A.  5th  Am.    B.    R.    iSo;    Dodge   v.   Norlin 

Cir.),    133    Fed.    Rep.   521,    13   Am.  (C.  C.  A.  8th  Cir.).  133  Fed.  Rep. 

B.  R.  338.  Z^^,   13  Am.   B.   R.    176;   Liddnn  & 

"Security    Warehousing    Co.    v.  l-rn.  v.  Smith    (C  C:  .\.  5tli   Cir.), 

Hand  (C.  C.  A.  7th  Cir.).  143  Fed.  13.^  I'cd.  Rep.  43.  I4  Am-  !''•  R-  204. 

Rep.  32,   16  Am.   B.   R.  49.  l'>ut    see    In    re    Antigo     Screen 

"llewit    V.    Berlin    Mach.    Wks.,  Door  Co.    (C.  C.  A.  71)1  Cir.).  123 

Fed.  Rep.  249.   lo  Am.   15.   R.  359. 


880  LAW    AND    rROCEEDINGS    TN    BANKRUPTCY. 

by  a  bankrupt  that  policies  of  insurance  and  their  cash  vahie 
arc  exempt  under  the  state  hiw  and  are  no  part  of  his  estate 
in  bankruptcy;"  or  the  claim  of  a  widow  for  her  dower 
interest  in  the  estate  in  bankruptcy  of  her  deceased  hus- 
baml ; '"  or  a  proceeeding  to  marshal  assets  in  the  hands  of 
a  trustee  as  between  partnership  and  individual  creditors  •/" 
or  where  a  lessor  claims  property  under  a  lease  with  the 
bankrupt  upon  confirmation  of  a  composition."" 

The  manner  of  proceeding  to  obtain  a  review  of  a  decree 
or  a  judgment  in  a  controversy  arising  in  bankruptcy  pro- 
ceedings and  the  practice  in  respect  thereto  is  not  changed 
or  affected  by  the  bankruptcy  statute.''  Only  final  judgments 
and  decrees  in  such  controversies  are  reviewable.''  A  decree 
in  equity  can  be  reviewed  only  by  appeal  and  a  judgment  at 
law  only  on  writ  of  error. '^ 

The  time  within  which  an  appeal  or  writ  of  error  may  be 
sued  out  in  this  class  of  cases  is  six  months  from  the  entry 
of  the  decree  or  judgment  sought  to  be  reviewed,'*  except 
from  an  interlocutory  order  or  decree  in  equity  granting  or 
continuing  an  injunction  or  appointing  a  receiver  when  it 
must  be  taken  within  thirty  days  from  the  entry  of  such 
order  or  decree.'^     An  order  granting  or  continuing  an  in- 

• 

"Steele    v.    Duel    (C.    C.    A.    8th  i75  U.   S.  526,  44  L-  Ed.  261;    178 

Cir.).  104  Fed.  Rep.  968,  5  Am.  B.  U.   S.  524.  44  L-   Ed.    1175,  4  Am. 

R_    165.  B.   R.   163;  Hewit  v.  Berlin  Mach. 

In    Holden    v.    Stratton     (C.    C.  Wks.,    194    U.    S.    296,    48    L.    Ed. 

A.  9th    Cir.),    113    Fed.    Rep.    141.  986,  n  Am.  B.  R.  709. 

7  Am.   B.   R.   615,   s.   c.    198  U.   S  "  Bardes  v.  Hawarden  Nat.  Bank, 

202,  49  L.  Ed.   1018,   14  Am.  B.  R.  i75    U.    S.    526,    44    E-    Ed.    261,    3 

94,  a  similar  question  was  reviewed  Am.  B.  R.  680. 

by   petition.  '^  Delta  Nat.  Bank  v.  Easterbrook 

"In  re  McKenzie    (C.  C.  A.  8th  (C.  C.  A.  5th  Cir.),  133  Fed.  Rep. 

Cir.),    142   Fed.   Rep.    i'^z.    15   Am.  521,   U  Am.  B.  R.  338. 

B.  R.  679.  "Act  of  March  3,   1891,  Sec.   n, 
'"Burleigh  v.  Foreman  (C.  C.  A.  26  Stat,   at  L.  826;   In  re  Mueller 

1st  Cir.),  125  Fed.  Rep.  217,  n  Am.  (C.  C.  A.  6th  Cir.),  135  Fed.  Rep. 

B.  R.  74.  711.   14  Am-   B.   R.   256. 

"^In    re   Winship   Co.    (C.    C.    A.  ''Act  of  March  3.  t^QT,  Sec.  7.  as 

7th  Cir.),  120  Fed.  Rep.  93,  9  Am.  amended    April    14,    1906,    34    Stafc 

B.  R.  638.  at  L.  . 

^  Bardes  v.  Hawarden  Nat.  Bank, 


APPELLATE    PROCEEDINGS.  881 

junction  or  appointing  a  receiver  in  bankruptcy  proceedings 
is  not  reviewable  under  this  provision.'** 

In  proceedings  in  equity  instituted  for  the  purpose  of  carry- 
ing into  effect  the  provisions  of  the  act  or  enforcing  the 
rights  and  remedies  given  by  it,  the  rules  of  equity  pro- 
cedure established  by  the  supreme  court  of  the  United  States 
must  be  followed  as  nearly  as  may  be."^  In  proceedings  at 
law  instituted  for  the  same  purpose,  the  practice  and  pro- 
cedure in  cases  at  law  shall  be  followed  as  nearly  as  may  be."^ 

Judgments  and  decrees  of  a  territorial  court  in  such  cases 
may  be  reviewed  by  the  supreme  court  of  the  territory."** 

§  303.     Appellate  jurisdiction  at  law  and  in  equity  to  revise 
the  action  of  a  state  court. 

The  only  federal  court  which  can  review  the  action  of  a 
state  court  in  a  suit  at  law  or  in  equity  is  the  supreme  court 
of  the  United  States.  The  cases  in  which  the  decision  of  a 
state  court  may  be  reviewed  by  the  supreme  court  are  pointed 
out  in  the  Revised  Statutes,  Section  709.  It  is  immaterial 
whether  the  judgment  or  decree  was  rendered  in  a  case  aris- 
ing in  bankruptcy  or  not.  The  state  courts  have  jurisdiction 
only  of  suits  at  law  or  in  equity  which  may  concern  bank- 
ruptcy matters,  and  not  cases  in  bankruptcy  strictly.  The 
courts  of  bankruptcy  have  exclusive  jurisdiction  in  such 
cases. 

The  Revised  Statutes  provide  for  a  review  in  three  classes 
of  cases,   namely :     Section   709  provides   that : 

"A  final  judgment  or  decree  in  any  suit  in  tlie  highest 
court  of  a  state  in  which  a  decision  in  the  suit  could  be  had, 

"O'Dell  V.  Boyden  CC.  C.  A.  6th  ter's  Fed.  Prac.  Cliap.  3.1:  niles  of 

Cir.),  149  Fed.  Rep.  .  the  circuit  courts  of  appeals  and  of 

"  Gen.  Ord.  36.  the    supreme    court ;    Desty's    Fed 

As  to  the  practice  in  olitaining  a  IVac. ;      Loveland's      Forms      Fed. 

review  of  a  proceeding  at  law  and  Prac,  Nos.   1308  to   1512,  and  notes 

in  equity  in  the  appellate  courts  of  thereto. 

the  United  States,  see  Reach's  Mod  '^  Plymouth  CordaRc  Co.  v.  Smith, 

Eq.    Prac,   Sees.  954  ct  scq.;    Fo.s-  194  U.   S.  311,  48  L.  Ed.  992. 


882  LAW     AXn     PROCF.KniXGS    IX     BANKRl'l'TCY, 

where  i:?  drawn  in  question  the  xahchty  of  a  treaty  or  statute 
of.  or  an  authority  exereised  under,  the  United  States,  and 
the  decision  is  ai;ainst  their  \aH(hty ;  or  wlierc  is  (.h'awn  in 
question  the  \ahihty  of  a  statute  of.  ov  an  autliority  exercised 
under  any  stale,  on  the  j^round  of  their  heins:;;  repug-nant  to 
the  constitution,  treaties,  or  hiws  of  tlie  United  States,  and 
the  decision  is  in  favor  of  their  vahchty;  or  where  any  title, 
right,  pri\ileg"e  or  ininiunit)'  is  ehiinied  under  the  constitu- 
tion, or  any  treaty  or  statute  of,  or  coiuiuission  held  or  au- 
thority exercised  under,  the  United  States,  and  the  decision 
is  against  the  title,  right,  privilege,  or  ininiunity  specially 
set  up  or  claimed,  by  eitlier  party,  under  such  constitution, 
treaty,  statute,  commission,  or  authority,  may  l)e  re-examined 
ami  reversed  or  affirmed  in  the  supreiue  court  upon  a  writ  of 
error.  The  writ  shall  have  the  same  effect  as  if  the  judg- 
ment or  decree  complained  of  had  been  rendei"ed  or  passed  in 
a  court  of  the  United  States;  {and  the  proceeding  upon  the 
reversal  shall  he  the  same,  except  that  the  supreme  court  may, 
at  their  discretion,  proceed  to  a  final  decision  of  the  case,  and 
azvard  execution,  or  remand  the  same  to  the  court  from  which 
it  icas  so  removed).     [See  R.  S.,  Sec.  1017.] 

*'The  supreme  court  may  (reaUirni),  reverse,  modify,  or 
af^rm  the  judgment  or  decree  of  such  state  court,  and  may, 
at  their  discretion,  award  execution,  or  remand  the  same  to 
the  court  from  which  it  was  removed  by  the  writ." 

Unless  a  particular  case  relating  to  matters  in  bankruptcy 
falls  within  one  of  these  classes  it  can  not  be  revised  in  the 
supreme  court.^  Where  a  federal  question  is  drawn  in  ques- 
tion and  the  decision  of  the  highest  court  of  a  state  to  which 
the  case  may  be  taken  is  adverse  to  the  federal  authority  or 
statute,  that  decision  may  be  reviewed  by  the  supreme  court 
of  the  United  States. 

'Cramer    v.    Wilson,    195    U.    S.  S.  265,  29  L.  Ed.  174;  Wolf  v.  Stix, 

408,   49   L.    Ed.    256;    McKcnna    v.  96  U.  S.  541.  24  L.  Ed.  640;   Scott 

Simpson,   129  U.  S.  506,  32  L.  Ed.  v.  Kelly,  22  Wall.  57,  22  L.  Ed.  729; 

771 ;    Boatman's    Savings    Bank    v.  Linton    v.    Stanton,    12    How.    423, 

State    Savings   Association,    114  U.  13  L.  Ed.  1050. 


APPELLATE    PROCEEDINGS.  883 

The  supreme  court  has  entertained  cases  in  which  the  va- 
lidity and  effect  of  a  discharge  in  bankruptcy  was  called  in 
question  and  the  decision  was  against  the  debtor  holding  the 
discharge; "  wdiere  the  judgment  of  a  state  court  w^as  against 
the  trustee  in  bankruptcy,  in  an  action  between  him  and  the 
bankrupt,  where  the  question  at  issue  was  whether  the  matter 
in  controversy  passed  to  the  trustee  or  not;  ^^  where  the  judg- 
ment of  the  state  court  was  against  the  trustee  in  bankruptcy, 
in  an  action  by  him  to  recover  property  from  a  creditor  on 
the   ground   of  a   fraudulent    preference ;  ■*     where   a   sheriff 
was  sued  for  moneys  obtained  by  a  sale,  directed  by  the  court 
of  bankruptcy  to  be  made  in  the  state  court,  and  the  decision 
of  the  state  court  was  adverse  to  that  authority ;  ^  where  the 
suit  was  for  the  foreclosure  of  a  mortgage  on  real  estate, 
when  the  only  controversy  in  the  case  was  as  to  the  effect  to 
be  given  to  a  sale  of  the  property  under  an  order  of  the  court 
of  bankruptcy  to  sell  the  bankrupt's  mortgaged  property  free 
from  encumbrances;**  where  a  state  court  denied  an  applica- 
tion to  stay  a  suit  and  rendered  final  judgment  against  the 
bankrupt ;  '  and  wdiere  an  immunity  was  claimed  by  the  ap- 
pellant (under  the  Revised  Statutes,  Section  711)   from  the 
operation  of  the  decree  of  a  state  court  on  their  rights,  be- 
cause that  statute  made  the  jurisdiction  of  the  courts  of  the 
United  States  exclusive  in  such  cases. ^ 

The  writs  of  error  are  taken  to  review  the  decision  of  a 
state  court  in  the  same  manner  in  a  case  in  which  the  fed- 


I  ■ 


Dunbar   v.    Dunbar,    190    U.    S.  'Williams   v.    Heard,    140   U.    S. 

340,  47  L.  Ed.   1084,   10  Am.  B.  R.  529,  35  L.   Ed.   550. 

139;    Henncquin    v.    Clews,    III    U.  'Rector    v.    City    Deposit    Bank 

S.   677,  28   L.   Ed.   565 ;   Strang  v.  200  U.  S.  405,  50  L.  Ed.  527,  15  Am. 

Bradner,   114  U.   S.  555,  29  L.  Ed.  B.  R.  336. 

248;   Neal  V.   Clark,  95   U.   S.  704.  'O'Brien  v.   Weld,  92  U.   S.  81, 

24  L.  Ed.   586;   Dimock  v.   Revere  23  L.  Ed.  675. 

Copper  Co.,    117   U.   S.    559.   29  T..  "Factors,   etc.,   Ins.    Co.   v.    Mur- 

Ed.  994;   Lonp  V.   Bullard,    117  U.  phy,  iii  U.  S.  738,  28  L.  Ed.  582. 

S.  617,  29  L.  Ed.   1004;   Palmer  v,  'Hill  v.  Harding,  107  U.  S.  631, 

Hussey,  119  U.  S.  96,  30  L.  Ed.  362;  27  L.  Ed.  493. 

Jenkins  v.  International  Bank,   127  "Winchester  v.    Heiskcll,    II9  U. 

U.  S.  484,  32  L.  Ed.  189.  S.  450.  30  L.   F.d.  462. 


884  LAW      AXD     PROCEEDINGS     1\     HANMvRUPTCY. 

eral  question  is  one  relatinj;-  to  bankruptcy  matter^  as  in 
an\-  other  cases.  'The.  same  rules  gt)\ern  the  law  and  pnictice 
in  such  cases." 


^  304.     Jurisdiction  of  the  U.  S.  supreme  court  of  appeals  in 
bankruptcy. 

The  supreme  court  ot'  the  rnited  States  has  no  original  ju- 
risdiction in  bankruptcy.  Nor  does  tiie  statute  provide  for 
takiu"-  a  case  to  that  court  on  writ  of  error. 

Power  to  reverse  on  appeal  the  action  of  other  courts  of  the 
United  States  in  bankruptcy  is  conferred  upon  the  supreme 
court  in  the  following  cases: 

First:  From  the  Supreme  Court  of  the  District  of 
Columbia. — The  supreme  court  is  invested  with  appellate  ju- 
risdiction of  controversies  arising  in  bankruptcy  proceedings 
from  courts  of  bankruptcy  not  within  any  organized  circuit  of 
the  United  States  and  from  the  supreme  court  of  the  District 
of  Columbia.^ 

The  manner  of  taking  and  prosecuting  an  appeal  from  such 
courts  to  the  supreme  court  is  prescribed  by  the  general  or- 
ders "  as  follows : 

Appeals  to  the  supreme  court  from  the  supreme  court  of 
the  District  of  Columbia,  or  from  any  court  of  bankruptcy 
whatever,  must  be  taken  wnthin  thirty  days  after  the  judg- 
ment or  decree,  and  must  be  allowed  by  a  judge  of  the  court 
appealed  from,  or  l)y  a  justice  of  the  supreme  court ;  ^  and  in 
every  case,  in  which  either  party  is  entitled  by  the  act  to  take 
an  appeal  to  the  supreme  court  of  the  United  States,  the 
court  from  w'hich  the  appeal  lies  shall,  at  or  before  the  time 
of  entering  its  judgment  or  decree,  make  and  file  a  finding 
of  the  facts,  and  its  conclusions  of  law  thereon  stated  sepa- 

'For  practice,   see  Foster's   Fed.  bon  v.  Shufeldt,  i8i  U.  S.  575,  45 

Prac,    Sec.  477.     See    Forms   Nos.  L.   Kd.    1009,  5  Am.  B.   R.  829. 

166  to  175,  post.  '  Consult  Sec.  313,  post. 

'  B.  A.  1898,  Sec.  24,  as  in  Audu- 


APPELLATE  PROCEEDINGS.  885 

rately,^  and  the  record  transmitted  to  the  supreme  court  on 
such  an  appeal  consists  only  of  the  pleadings,  the  judgment  or 
decree,  the  finding  of  facts,  and  the  conclusions  of  law.'' 

When  the  case  is  in  the  supreme  court  it  is  governed  by  the 
general  rules  of  practice  of  that  court.* 

Second  :  From  the  Circuit  Courts  of  Appeal. — The 
statute  provides  ^  that  "from  any  final  decision  of  a  court 
of  appeals,  allowing  or  rejecting  a  claim  under  the  act.  an 
appeal  may  be  had  under  such  rules  and  within  such  time  as 
may  be  prescribed  by  the  supreme  court  of  the  United  States 
in  the  following  cases  and  no  other :  First,  where  the  amount 
in  controversy  exceeds  the  sum  of  two  thousand  dollars,  and 
the  question  involved  is  one  which  might  have  been  taken 
on  appeal  or  writ  of  error  from  the  highest  court  of  a  state  to 
the  supreme  court  of  the  United  States;*^  or.  second,  where 
some  justice  of  the  supreme  court  of  the  United  States  shall 
certify  that  in  his  opinion  the  determination  of  the  question 
or  questions  involved  in  the  allowance  or  rejection  of  such 
claim  is  essential  to  a  uniform  construction  of  this  act 
throughout  the  United  States." 

The  supreme  court  has  prescribed  by  rule  36  that  appeals 
under  the  act  to  the  supreme  court  from  a  circuit  court  of 
appeals,  or  from  the  supreme  court  of  a  territory,  or  from 
any  court  of  bankruptcy  whatever,  shall  be  taken  within 
thirty  days  "^  after  the  judgment  or  decree,  and  shall  be  al- 

'  Gen.  Ord.  36.  *As  was  done  in  Jaquith  v.  Al- 

*  Consult    rules    of    the    supreme  den,    189  U.   S.  78,  47  L.   Ed.   717, 

court.  9   Am.    B.    R.    yy^;    Hutchinson   v. 

*B.  A.  1898,  Sec.  25&.  This  pro-  Otis,  190  U.  S.  552,  47  L.  Ed.  1179, 
vision  is  considered  at  length  by  the  10  Am.  B.  R.  135 ;  Page  v.  Ed- 
Circuit  Court  of  Appeals  for  the  munds,  187  U.  S.  596,  47  L.  Ed. 
First  Circuit  in  Hutchin.son  v.  Otis,  318,  9  Am.  B.  R.  277;  Pirie  v. 
10  Am.  B.  R.  275,  123  Fed.  Rep.  Trust  Co.,  182  U.  S.  438,  45  L.  Ed. 
14;  s.  c.  on  appeal,  190  U.  S.  552,  1171,  5  Am.  B.  R.  814;  Western 
47  L.  Ed.  1179.  10  Am.  B.  R.  135.  Tie  &   Timber   Co.   v.    Brown,    196 

See  also  1  loldcn  v.  Stratton,  191  U.  S.  502,  49  L.  Ed.  571,  13  Am.  B. 

U.  S.  115,  48  L.  Ed.  116,  10  Am.  B.  R.  447- 

R.    786;    Spencer    v.    Duplan    Silk  '  Conboy  v.  First  Nat.  Bank,  203 

Co.,  191  U.  S.  526,  48  L.  Ed.  287.  U.    S.    141. 


880  LAW     AND    I'KOCEEDINGS    IN     BANKRUPTCY. 

lowed  by  a  jiulge  of  the  court  appealed  from,  or  l)y  a  justice 
of  the  supreme  court  of  the  L'nited  States. 

In  everv  case  in  which  cither  party  is  entitled  by  the  act 
to  take  an  appeal  lo  the  supreme  court,  the  court  from  which 
the  appeal  lies  shall,  at  or  before  the  time  of  entering  its 
judgment  or  decree,  make  and  lile  a  linding  of  the  facts,  and 
its  conclusions  of  law  thereon,  stated  separately;  and  the 
record  transmitted  to  the  supreme  court  of  the  United  States 
on  such  an  appeal  shall  consist  only  of  the  pleadings,  the 
judgment  or  decree,  the  finding  of  facts,  and  the  conclusions 
of  law. 

When  the  case  is  in  the  supreme  court  it  is  governed  by  the 
general  rules  of  practice  of  that  court.** 

§  305.     Writs  of  certiorari  from  the  supreme  court. 

The  bankrupt  statute  authorizes  the  supreme  court  of  the 
United  States  "to  issue  wa-its  of  certiorari  pursuant  to  the 
provisions  of  the  United  States  laws  now  in  force  or  such  as 
may  be  hereafter  enacted."  ^  This  provision  manifestly  ap- 
plies to  controversies  in  bankruptcy  cases.  It  clearly  confers 
upon  the  supreme  court  the  same  power  wdth  reference  to 
writs  of  certiorari  in  bankruptcy  cases  as  that  court  has  in 
other  cases. 

Under  the  laws  of  the  United  States  now  in  force  the  su- 
preme court  is  authorized  to  issue  writs  of  certiorari  for  two 
purposes,  namely:  First,  for  the  purpose  of  completing  a 
record  in  a  case  pending  in  the  supreme  court,  and,  second, 
for  the  purpose  of  removing  a  case  from  a  circuit  court  of 
appeals  to  be  reviewed  by  the  supreme  court. 

§  306.     Certiorari  to  complete  records. 

The  Revised  Statutes  authorize  the  supreme  court  to  "is- 
sue writs  not  specifically  provided  by  statute,  wdiich  may  be 
necessary  for  the  exercise  of  their  respective  jurisdictions, 
and  agreeable  to  the  usages  and  principles  of  law."  ^ 

"Consult    the    rules    of    the    su-         '  B.   A.    1898,   Sec.  2Sd. 
preme  court.  *  '  R.  S.  Sec.  716. 


APPELLATE  PROCEEDINGS. 


887 


Under  this  provision  the  writ  of  certiorari  has  not  been 
used  as  freely  by  the  supreme  court  as  by  the  court  of  queen's 
bench  in  England."  It  has  been  used  as  an  auxiliary  process 
only,  to  supply  imperfections  in  a  record  of  a  case  already 
before  it;  and,  not  like  a  writ  of  error,  to  review  the  judg- 
ment of  an  inferior  court.''  It  has  never  been  used  to  bring 
up  from  an  inferior  court  of  the  United  States  for  trial  a 
case  within  the  exclusive  jurisdiction  of  a  higher  court.* 

The  Evarts  acts  of  Alarch  3.  1891.'  did  not  affect  this 
power,  and  the  supreme  court  may  still  issue  writs  of  cer- 
tiorari in  proper  cases.** 

The  circuit  courts  of  appeals  are  vested,  by  the  act  creating 
them,'  with  the  power  to  grant  writs  of  certiorari  for  the  pur- 
pose of  supplying  omissions  or  curing  defects  in  a  record  in  a 
case  pending  in  one  of  these  courts.  Under  this  provision 
the  circuit  courts  of  appeals  have  frequently  issued  writs  of 
certiorari  for  such  purposes,  although  the  cases  are  rarely,  if 
ever,  reported. 

The  application  for  a  writ  of  certiorari  to  supply  an  omis- 
sion or  cure  a  defect  in  a  record  should  be  made  to  the  court 


"  Ex  parte  Vallandigham,  i  Wall. 
243,  249.  17  L-  Ed.  589. 

^  Luxton  V.  North  River  Bridge 
147  U.  S.  337,  37  L.  Ed.  194;  U. 
S.  V.  Young,  94  U.  S.  258,  24  L.  Ed. 
153 ;  Ex  parte  Gordon,  i  Black, 
503,  17  L.  Ed.  134;  Barton  v.  Petit 
7  Cranch,  288,  3  L.  Ed.  347 ;  Beach's 
Mod.  Eq.  Prac,  Sec.  963. 

*  Ex  parte  Hitz,  in  U.  S.  766, 
28  L.  Ed.  592;  Patterson  v.  U.  S., 
2  Wheat.  221,  4  L.  Ed.  224;  Fowler 
V.  Lindsey,  3  Dall.  411,  i  L.  Ed. 
658;  In  re  Tampa  Suburban  R.  R. 
Co..  168  U.  S.  583.  42  L.  Ed.  589. 

'26   Stat,   at   L.   826. 

'  Amer.  Const.  Co.  v.  Jackson- 
ville Ry.  Co.,  148  U.  S.  380,  37  L- 
Ed.  486.    Sup.  Ct.,  Rule  14. 

In  re  Chetwood,  165  U.  S.  443, 
41   L.    VA.  782,  a  writ  of  certiorari 


was  allowed  to  bring  up  the  record 
so  that  the  order  adjudging  Chet- 
wood and  his  counsel  in  contempt 
for  being  concerned  in  suing  out 
writs  of  error  and  directing  them, 
or  either  of  them,  to  refrain  from 
prosecuting  the  same,  might  be  re- 
vised and  annulled.  This  case  is 
explained  in  Tampa  Southern  R.  R. 
Co.,  168  U.  S.  587,  42  L.  Ed.  589. 

^  Act  of  March  3,  1891,  26  Stat, 
at  L.  826,  Sec.  12,  provides  "that 
the  circuit  court  of  appeals  shall 
have  the  powers  specified  in  sec- 
tion seven  hundred  and  sixteen  of 
the  Revised  Statutes  of  the  United 
States."  Rule  18,  C.  C.  A.  90  Fed. 
Rep.  clx.  See  also  Loveland's 
Forms  Fed.  Prac,  Nos.  1477  and 
1478. 


888  LAW    AND    PROCEEDINGS    IN     BANKRUPTCY. 

in  which  the  case  is  pciuhnj;-.     ll  is  usnaUy  made  by  petition, 
entillei,!  in  tlie  court  and  cause  and  adihesseil  lo  the  court.     It 
should  state  the  ilefect  or  parts  chiinied  to  he  (uniltech  and 
pray  for  a  writ  of  i\-rtioi\iri  to  issue.     The  petition  should  be 
sis;ned  and  \eritied.     If  a  proper  showin-;-  is  made,  the  court 
will  ordinarily  order  a  writ  to  issue,  directed  to  the  court  be- 
low,  comniaiulino-   it   to   return   a   true   and   complete   record, 
includiui;-    the    onnlled    or    defective    parts,    if    any    there   be. 
The  order  also  regularly  ct)ntains  a  direction  to  the  clerk  of 
the  appellate  court  to  also  return  the  transcript  for  the  pur- 
pose of.  being-  corrected.      The  court  will  not  usually  order 
the  alleged  omitted  portions  or  the  defective  portions  to  be 
corrected.     If  the  record  is  faulty  it  should  be  made  to  con- 
form to  the  record  below^  by  certifying  the  corrections  to  be 
made.     The  appellate  court  will   not  undertake   to  make  a 
record  in  the  inferior  court. 

'Jdie  writ  of  certiorari  is  regularly  issued  under  the  hand 
and  seal  of  the  clerk  of  the  appellate  court,  and  is  transmitted 
to  the  clerk  of  the  court  below,  together  with  the  transcript 
and  a  copy  of  the  petition,  setting  forth  the  alleged  defects  or 
omissions  in  the  record.  The  clerk  of  the  inferior  court 
thereupon  compares  the  transcript  with  the  original  record, 
and  returns  the  writ  with  a  certified  correction,  or  a  certified 
copy  of  the  omitted  papers,  or  with  a  certificate  to  the  effect 
that  the  record  is  true  and  complete,  or  such  other  facts  as 
may  be  necessary  for  a  full  understanding  of  the  matter. 
This  is  returned  under  the  seal  of  the  court.  It  is  not  neces- 
sary to  have  the  return  made  by  the  judge.*  It  is  regularly 
made  by  the  clerk. 

If  a  party  insists  upon  including  in  the  record  unneces- 
sary matter  the  court  may  prevent  injustice  being  done  in 
dealing  with  the  costs. '-^ 


*  Stewart  v-  Ingle,  9  Wheat.  526,      Stewart.  95  U.  S.  279,  284,  24  L.  Ed. 
6  L.  Ed.  151.  4.3r. 

'  Union      Pac.     Railway     Co.     v. 


APPELLATE    PROCEEDINGS.  889 

§  307.     Certiorari  to  remove  a  case  for  review. 

Tlie  provision  of  the  bankrupt  statute,  with  reference  to 
writs  of  certiorari/  clearly  adopts  the  same  rule,  with  refer- 
ence to  removing  a  bankrupt  case  for  review  by  writs  of  cer- 
tiorari, that  applies  to  other  cases.  The  authority  for  the 
supreme  court  to  issue  such  writs  is  found  in  the  act  of 
March  3,  1891."  This  being  the  case  the  rule  announced  in 
other  cases,  with  reference  to  when  such  writs  may  properly 
issue,  will  be  useful  in  determining  under  what  circum- 
stances the  writ  may  issue  in  bankruptcy,  for  the  purpose  of 
removing  a  case  from  a  circuit  court  of  appeals  to  the  supreme 
court  to  be  there  reviewed. 

There  is  no  authority  for  issuing  a  writ  of  certiorari  to 
remove  a  case  to  the  supreme  court,  except  such  as  is  found 
in  the  act  of  March  3.  1891.^  The  language  of  that  act  is 
very  general.  All  that  is  essential  is  that  the  case  be  pend- 
ing in  the  circuit  court  of  appeals,  and  of  those  classes  of 
cases  in  which  the  decision  of  that  court  is  declared  a  finality. 
When  these  two  elements  exist,  the  supreme  court  may  reach 
out  with  its  writ  of  certiorari  and  transfer  the  case  there  for 
review  and  determination.*  A  decision  of  a  circuit  court  of 
appeals  on  petition  for  revision  is  regularly  reviewed  on  writ 
of  certiorari  and  not  by  appeal  or  writ  of  error.'^  The  deci- 
sion of  a  court  of  appeals  on  appeal  has  been  reviewed  by 
the  supreme  court  on  writ  of  certiorari  where  it  was  a  case  in 
bankruptcy  reviewable  in  the  court  of  appeals  only  by  peti- 
tion to  review." 

The  question  at  what  stage  of  the  proceedings,  and  under 

'  B.  A.  189S,  Sec.  25d.  184  U.  S.  18,  46  L.  Ed.  413,  7  Am. 

^26  Stat,  at  L.  826,  Sec.  6,  which  B.    R.   421;    Bryan   v.    Bernheimcr, 

is    quoted    in    full    Sec.    302,    ante.  175  U.   S.  724,  44  L.   Ed.  338,   181 

Denver  National  Bank  v.  Klug,  186  U.    S.    188,   45   L.   Ed.   814,   5  Am. 

U.  S.  202,  46  L.  Ed.  1 127.  B.  R.  523;  Mueller  v.  Nugent,   180 

"26  Stat,  at  L.  826;  Amer.  Const.  U.  S.  640,  45  L.  Ed.  711,  184  U.  S. 

Co.  V.  Jacksonville  Ry.  Co.,  148  U.  1,  46  L.  Ed.  405,  7  Am.  B.  R.  224; 

S.  380,  37  L.   Ed.  486.  Ilolden  v.  Stratton,  191  U.  S.   115, 

*  Forsyth    v.    Hammond,    166    U.  48  L.  Ed.  116,  10  Am.  B.  R.  786. 
S.  513,  41  L.  Ed.  1095.  "First  Nat.  Bank  v.  Title  &  Trust 

'Louisville  Trust   Co.  v.   Comin-  Co.,  198  U.  S.  280,  49  L.  Ed.  1051, 

gor,  181  U.  S.  620,  45  L.  Ed.  1031,  14  Am.  B.  R.  102. 


S90  LAW    AM)     I'ROCEliDiXGS    iX     BANKRUPTCY. 

what  circumstances,  the  case  should  be  rc(|uii\\l  to  be  sent  up 
for  rc\iow.  is  loft  [o  the  ilisovetion  (»!'  the  supreme  court,  as 
the  exig'encies  oi  each  case  uiay  i"e(|uii'e.'  The  suprcuie 
coiu't  has  ileclined  to  issue  writs  ot'  certiorari  in  cases  where, 
there  being  onl}  a  matter  oi  prixate  interest,  there  has  been 
no  tinal  juili^ment  in  the  circuit  court  ^A  aitpeals,""  and  where 
there  was  a  remedy  by  appeal  or  otherwise.''  vMlhongh  a 
writ  oi  certiorari  is  not  usually  issued  milil  after  a  circuit 
court  of  appeals  has  pronounced  its  judgment,  the  supreme 
court  has  issued  a  writ  in  one  case,^"  appealed  to  a  circuit 
court  of  appeals,  before  any  action  has  been  taken  by  that 
court.  But  this  was  a  case  in\-o]\ing  (|tiesti(nis  affecting  the 
relation  of  this  country  to  foreign  nations,  the  decision  of 
which,  by  the  highest  court,  was  important,  not  merely  for  the 
guidance  of  the  executive  department  of  the  government, 
but  also  to  disclose  to  each  citizen  the  limits  beyond  which  he 
might  not  go  in  interfering  in  the  affairs  of  another  nation 
without  violating  the  laws  of  this.  The  writ  may  be  granted 
after  the  mandate  of  the  circuit  court  of  appeals  has  issued." 

§  308.     The  application  for  writ  of  certiorari  to  remove  a  case 
to  the  supreme  court. 

The  application  for  a  writ  of  certiorari  to  remove  a  case 
from  the  circuit  court  of  appeals  to  the  supreme  court  must 
be  made  to  the  suprenie  court.  The  time  within  which  the 
application  must  be  made   is  not  prescribed  by  the  statute. 

^  Amer.    Const.    Co.    v.    Jackson-  there  was  a   right  of  appeal  to   a 

ville  Ry.  Co.,   148  U.   S.  380,   T,y  L.  circuit  court  of  appeals. 

Ed.  486.  See  also  Pullman  Palace  Car  Co. 

See   also    Harris   v.    Barber,    129  v.   Central  Transportation  Co.,   171 

U.  S.  368,  32  L.  Ed.  697.  U.    S.    138,   43   L.    Ed.    108,   where 

*  Chicago     &     Northwestern    Ry.  there  was  a  writ  of  certiorari  and 

Co.  V.  Osborne,   146  U.   S.  354,  36  also  an  appeal. 

L.  Ed.  1002.  "The  Three  Friends,   166  U.   S. 

'In  re  Tampa  Suburban  Ry.  Co.,  i,  41   L.   Ed.  897,   as  explained   in 

168  U.    S.   583,   42  L.   Ed.   589,   an  Forsyth    v-    Hammond,    166    U.    S. 

application  was  made  for  a  writ  of  513,  41  L.  Ed.   1095. 

certiorari  to  a  circuit  court,  where  "The  Conqueror,   166  U.  S.  IIO, 

41  L.  Ed.  937. 


APPELLATE    PROCEEDINGS.  891 

It  should,  however,  be  made  within  a  reasonable  time  after 
the  final  decision  of  the  circuit  court  of  appeals.  One  year  is 
probably  a  reasonable  time.^ 

The  application  is  made  by  petition,'  The  style  of  the 
case  in  that  court  is  A.  B.,  petitioner,  v.  C.  D.,  respondent. 
The  petition  is  filed  in  the  office  of  the  clerk  of  the  supreme 
court,  together  with  a  deposit  of  twenty-five  dollars  on  ac- 
count of  costs  and  an  entry  of  appearance  for  the  petitioning 
party,  signed  by  a  member  of  the  bar  of  the  supreme  court. 
The  case  is  then  docketed.  The  petitioner  must  also  file  a 
certified  copy  of  the  entire  record,  including  all  the  proceed- 
ings in  the  circuit  court  of  appeals.^  A  sufticient  number  of 
the  printed  copies  of  this  record  (not  less  then  ten)  must  also 
be  furnished  to  supply  the  court.  These  printed  copies  may 
usually  be  obtained  from  the  clerk  of  the  circuit  court  of 
appeals.  In  case  they  can  not  be  so  obtained  the  record  must 
be  reprinted  under  the  supervision  of  the  clerk  of  the  supreme 
court.  In  such  cases  it  is  usually  desirable  to  print  at  least 
fifty  copies,  in  order  that  there  may  be  a  sufficient  number 
for  use  on  the  final  hearing,  should  the  petition  be  granted. 

Some  Monday  should  be  fixed  for  the  submission  of  the 
petition,  that  being  motion  day.  Sufficient  notice  must  be 
given  counsel  for  the  respondent  of  the  day  selected  to  enable 
them  to  file  briefs  in  opposition,  if  they  desire- to  do  so.  Proof 
of  service  of  such  notice  must  be  filed  in  the  clerk's  office. 
The  petition  must  be  called  up  and  submitted  in  open  court 

'In    The    Conqueror,    i66    U.    S.  to  review  the  judgment  of  the  (hs- 

114,    41    L.    Ed.    937,    the    supreme  trict  or  circuit  court;  and  it  would 

court   said :   "While   we   think   such  seem  that  he  is,  by  analogy,  entitled 

application    should    be    made    with  to   the   year   within   which,   by    Sec. 

reasonable    promptness,    as    it    was  6,  an  appeal  shall  be  taken  or  writ 

made   during  the   term   and   within  of  error  sued  out  from  this  court  to 

a  year  after  the  original  decree,  we  review    judgments    or    decrees    of 

think  it  was  within  the  time.     We  the  court  of  appeals  in  cases  where 

do  not  think  the  party  complaining  the  losing  party  is  entitled  to   such 

is    limited    to    the    six    months    al-  review." 

lowed  by  Sec.  Ii  of  the  court  of  ap-  '  See   I'orm    No.    log.   post. 

peals  act  for  suing  out  of  a  writ  of  '  Supreme   Court    Rule   2i7- 
error    from    the    cr>urt    of    ri])pc;ils 


892 


LAW     AXn     PKC)C-KHDINGS    IN     HAXKRllTCV 


by  counsel.  'I'lie  application  is  suhniiiloil  on  hricls.  Oral 
arjiiiinents  arc  not  ponnittod. 

Althong-h  invested  with  a  i)o\ver  si)  Ijroad  and  conij)rehen- 
sivc.  and  has  been  sparinj^ly  exercised,  ddie  snprenie  conrt  has 
said  that  writs  of  avtiorari  will  be  allowed  "only  when  the 
circumstances  of  the  case  satisfy  ns  that  the  importance  of 
the  question  in\(d\ed.  tl)e  necessii\-  of  axoiding  conllict  be- 
tween two  or  more  courts  of  appeal,  or  between  courts  of 
appeal  and  courts  of  a  state,  or  some  matter  affecting  the 
interests  of  this  nation  in  its  internal  or  external  relations, 
deuKuuls  such  exercise."  ■* 

These  rules  were  rigidly  adhered  to  by  the  supreme  court 
for  several  years.  In  the  words  of  Mr.  Justice  Brewer,  the 
supreme  court,  "while  not  doubting  its  power,  has  been  chary 
of  action  in  respect  to  ccrtiomrics/'  ^  Of  the  many  applica- 
tions which  liave  l)een  more  recently  made  to  the  supreme 
court,  comparatively  few  ha\-e  been  gi-anted,  yet  that  court 
appears  to  be  much  more  liberal  of  late  in  granting  such  writs 
than  formerlv."  A  writ  of  certiorari  will  be  granted  to  bring 
up  a  case  in  which  one  member  of  the  circuit  court  of  appeals 
sat  on  the  trial  or  hearing  of  the  same  case  or  question  in 
the  district  court.^ 


*Mr.  Justice  Brewer,  in  Forsyth 
V.  Hammond,  i66  U.  S.  514,  41  L. 
Ed.  1095.  Consult  also  Amer. 
Const.  Co.  V.  Jacksonville  Ry.  Co., 
148  U.  S.  383,  37  L-  Ed.  486;  Lau 
Ow  Bew  V.  U.  S.,  144  U.  S.  58, 
36  L.  Ed.  340;  In  re  Woods,  143 
U.  S.  202,  36  L.  Ed.  125;  Lau  Ow 
Bew,  petitioner,  141  U.  S.  583,  35 
L.  Ed.  868;  The  Three  Friends, 
166  U.  S.  I,  41  L-  Ed.  897. 

°  Forsyth  v.  Hammond,  166  U.  S. 
513,  41  L.  Ed.  1095.  Consult  also 
cases  reported  in  163  U.  S.,  pp.  673 
to  712.  Lau  Ow  Beu,  141  U.  S. 
583,  35  L.  Ed.  868;  In  re  Woods, 
143  U.  S.  202,  36  L.  Ed.  125;  Chi- 
cago   &    Northwestern    Ry.    Co.    v. 


Osborne,  146  U.  S.  354,  36  L.  Ed. 
1002;  Hendry  v.  Ocean  Steamship 
Co.,  164  U.  S.  707. 

"  Writs  of  certiorari  have  been 
granted  to  remove  bankruptcy  cases 
from  the  circuit  court  of  appeals  in 
Mueller  v.  Nugent,  184  U.  S.  i, 
46  L.  Ed.  405,  7  Am.  B.  R.  224; 
Louisville  Trust  Co.  v.  Comingor, 
184  U.  S.  18,  46  L.  Ed.  413,  7  Am. 
B.  R.  421 ;  Lockwood  v.  Exchange 
Bank,  190  U.  S.  294,  47  L.  Ed.  1061, 
TO  Am.  B.  R.  107 ;  Clarke  v.  Larre- 
more,  188  U.  S.  486,  47  L.  Ed.  555, 
9  Am.  B.  R.  476. 

'  Amer.  Const.  Co.  v.  Jackson- 
ville Ry.  Co.,  148  U.  S.  372,  386,  37 
L.  Ed.  486. 


APPELLATE  PROCEEDINGS, 


893 


Wlien  a  writ  of  certiorari  is  granted  it  is  issued  by  the 
clerk  of  the  supreme  court  and  sent  to  the  clerk  of  the  circuit 
court  of  appeals  from  which  the  case  is  to  be  removed.  A 
return  to  such  writ  is  ordinarily  made  pursuant  to  a  stipula- 
tion of  counsel  filed  in  the  office  of  the  clerk  of  the  circuit 
court  of  appeals.  The  stipulation  is  in  effect  an  agreement 
that  the  transcript  of  record  filed  with  the  application  for  the 
writ  may  be  taken  as  a  return  to  the  writ  and  no  new  tran- 
script made.  The  clerk  returns  the  writ  by  endorsing  thereon 
a  copy  of  the  stipulation.  This  writ  is  returned  to  the  office 
of  the  clerk  of  the  supreme  court,  and  the  case  is  then  pend- 
ing in  the  supreme  court,  upon  the  wTit  of  certiorari.  The 
questions  arising  upon  the  record  are  determined  accord- 
ing- to  fixed  rules  of  law.^  A  case  so  removed  to  the  su- 
preme  court  is  pending  there  as  if  on  the  appeal  of  the  peti- 
tioner, and  only  his  assignments  of  error  will  be  considered  by 
that  court,^  unless  the  respondent  also  applies  for  certiorari. 
The  burden  is  upon  the  petitioner,  and  he  is  allowed  to  open 
and  close  the  argument,  as  in  the  case  of  an  appeal. 

Whenever  a  case  has  been  reviewed  and  determined  by  the 
supreme  court  on  a  writ  of  certiorari  to  a  circuit  court  of  ap- 
peals, the  mandate  issues  directly  to  and  the  cause  is  remanded 
to  the  proper  district  or  circuit  court  for  further  proceedings 
in  pursuance  of  such  determination.^** 

§  309.     Certifying   questions    to   the   supreme    court. 

The  provisions  of  the  bankrupt  statute,  with  reference  to 
certifying  questions  to  the  supreme  court  from  other  courts  of 
the  United  States  and  giving  the  supreme  court  power  to  ex- 
ercise jurisdiction  of  such  matters,  manifestly  adopt  the  same 
rule  with  reference  to  certifying  questions  in  bankruj^tcy 
cases,  that  applies  to  certificates  in  other  cases.^ 

It    therefore    becomes    necessary    to    examine    the    United 

'Amer.    Const.    Co.    v.    Jackson-  '"  .^ct  of  March  3,   i8gi,  26  Stat, 

ville    Ry.    Co.,    148    U.    S.    37^.    37  at  L.  826.  Sec.   in. 

L.  Ed.  486.  '  B.  A.  i8g8.  Sec.  2Sd.     Sec  Love- 

•  Hubbard  v.  Tod.  171   U.  S.  474-  land's  Forms  Fed.  Prac,  Nos.  1431 

43  L.  Ed.  246.  to  1435.  and  notes  thereto. 


S^M  LAW     AXn     IMUICF.F.niXC.S     IN     HAXKRUl'TCY. 

States  laws  now  in   loroo  witli  reference  to  such  certificates. 
The  supreme  coiu't  is  the  only  conrt  to  which  iinestions  may 
he  certified.     'I'he  Revised  Slalules  nl  the  United  States  pro- 
vided for  certifying  ciuestions  to  the  snpreme  court  in  certain 
cases   where   there   was   a    division   of   opinion    hetween    the 
iudees  holding-  the  inferior  coint.'      These  sections,  however, 
were  repealed  l)y  the  circuit  court  of  appeals  act.''     The  only 
provisions  now   in   force  for  certifying  questions  to  the  su- 
preme court  for  its  action  are  found  in  the  act  creating  the 
circuit  court  of  appeals.-*     This  act  provides  for  a  certificate 
in  two  classes  of  cases.     /■/r.s7.  a  certificate  from  a  district  or 
circuit  court  with  reference  to  the  jurisdiction  of  that  court; 
and,  second,  a  certificate  from  a  circuit  court  of  appeals  of 
any   question  or   proposition   of  law   concerning   which   that 
court  desires  the  instruction  of  the  supreme  court. 

First:  Certifying  Jurisdictional  Questions. — Sec- 
tion 5  of  the  court  of  appeals  act  •"'  provides  that  in  any  case 
in  which  the  jurisdiction  of  a  district  or  circuit  court  is  in 
issue  the  question  of  jurisdiction  alone  may  be  certified  from 
the  court  below   to   the   supreme  court  for  decision. 

This  provision  applies  to  the  jurisdiction  of  district  courts, 
and  will  therefore  include  the  jurisdiction  of  that  court  with 
reference  to  bankruptcy  cases.  It  relates  only  to  cases  where 
the  cpestion  is  as  to  the  jurisdiction  of  courts  of  the  United 
States  as  such.*^  It  must  be  a  question  of  federal  jurisdiction 
of  the  court  of  bankruptcy  and  not  a  question  of  whether 
that  court  has  jurisdiction  in  bankruptcy  to  make  the  order 
complained  of.^  Such  orders  are  reviewable  in  a  circuit 
court  of  appeals  on  petition  to  review.^ 

"  R.   S.    Sees.  630-651-652-693-697.  "  Schweer   v.    Brown,    195    U.    S. 

'March    3,    1891,    26    Stat,    at   L.  171,   49   L.    Ed.    144. 

826,   Sec.    12;    U.   S.   V.   Rider,    163  'Denver  Nat.  Bank  v.  Klug,  186 

U.  S.  132,  41  L.  Ed.  loi;  U.  S.  v.  U.  S.  202,  46  L.  Ed.   1127;  Lucius 

Hewecker,  164  U.  S.  46,  41  L.  Ed.  v.    Cawthon-Coleman    Co.,    196    U. 

345.  S.  149,  49  L.  Ed.  425,  13  Am.  B.  R. 

*Act  of  March  3,   1891,  26  Stat.  696. 

at  L.  826.     See  Sec.  302,  ante.  **  Holden   v.    Stratton,    191    U.    S. 

"Act  of  March  3,   1891,  26   Stat.  115,  48  L.  Ed.    116,    10  Am.  B.   R. 

at  L.  826,   Sec.  5.     This  section  is  786;  Schweer  v.  Brown,  195  U.  S. 

printed  in  full  in  Sec.  302,  ante.  171.  49  L-   Ed.   144.    * 


APPELLATE  PROCEEDINGS.  895 

In  order  to  take  advantage  of  this  provision  a  case  is  re- 
moved to  the  supreme  court  of  the  United  States  direct  from 
the  district  court  on  writ  of  error  or  appeal  as  in  other  cases. 
The  record  must  contain  a  certificate  from  the  court  below 
specifying  the  question  of  jurisdiction  involved  which  was  the 
ground  of  the  decision  of  that  court. '•*  \\'here  the  record 
shows  that  the  only  matter  tried  and  decided  in  the  court  below 
and  the  petition  for  writ  of  error  or  appeal  asked  only  for  the 
review  of  the  judgment  on  the  jurisdictional  question,  it  has 
been  held  to  be  a  sufficient  certificate.^-  The  certificate  must  be 
granted  during  the  term  at  which  the  judgment  or  decree  was 
entered. ^^ 

The  application  for  a  certificate  of  the  question  of  jurisdic- 
tion is  made  to  the  district  court.  It  is  a  matter  of  right  and 
not  of  judicial   discretion. 

Such  cases  are  entitled  to  be  advanced  to  the  supreme 
court  on  motion. ^- 

Second:  Certifying  Questions  of  Law  from  Cir- 
cuit Courts  of  Appeals. — Section  6  of  the  circuit  court  of 
appeals  act  ^^  provides  "that  in  every  such  subject  within  its 
appellate  jurisdiction  the  circuit  court  of  appeals  at  any  time 
may  certify  to  the  supreme  court  of  the  United  States  any 
questions  or  propositions  of  law  concerning  which  it  desires 
the  instruction  of  that  court  for  its  proper  decision.  And 
thereupon  the  supreme  court  may  either  give  its  instruction 
on  the  questions  and  propositions  certified  to  it,  wdiich  shall 
be  binding  upon  the  circuit  courts  of  appeals  in  such  case,  or 
it  may  require  that  the  whole  record  and  cause  may  be  sent 
up  to  it  for  its  consideration,  and  thereupon  shall  decide  the 

'Schweer   v.    Brown,    195    U.    S.  Ed.  401 ;  Shields  v.  Coleman,  157  U. 

171,   49   L.    Ed.    144;    Denver    Nat.  S.    168,    39    L.    Ed.    660;    Smith    v. 

Bank  v.  Klug,  186  U.  S.  202,  46  L.  McKay,   161   U.   S.  355,  40  L.   Ed. 

Ed.   1127;  Davis  v.  Geisler,  162  U.  731. 

S.  290,  40  L.  Ed.  972.  "The    Bayonne,    159   U.    S.    687, 

'"Excelsior  Wooden   Pipe  Co.  v.  40  L.   Ed.  306;   Colvin  v.  Jackson- 
Pacific  Bridge  Co.,  185  U.  S.  285,  46  ville,  158  U.  S.  456,  39  L.  Ed.  1053. 
E.  Ed.  910;  Interior  Const.  &  Imp.  "Sup.  Ct.  Rule  32. 
Co.  V.  Gibney,  160  U.  S.  217,  40  L. 


896  LAW     AND     rUOCEEDINGS    IN     BANKklU'llJY. 

whole  iiKiltor  in  cninro\crsy  in  the  same  manner  as  if  it 
hail  been  brought  there  iov  re\  iew  by  writ  of  error  or  ap- 
peal." '^' 

It  should  be  nbser\ecl  that  the  (piestions  to  be  certified 
under  this  pro\  ision  rest  within  the  discretion  of  the  circuit 
court  of  appeals.  It  is  not  a  discretion  the  exercise  of  wdiich 
may  be  inxoked  by  a  party  as  of  rii^ht.  The  certification  is 
iov  the  instruction  of  the  court  upon  donl)tfnl  (|uestions.  In 
cases  of  magnitude  and  n])on  indirect  and  doubtful  questions 
of  law  the  court,  u])on  the  argument,  may  properly  indulge 
the  suggestion  of  counsel  as  to  the  desirability  of  the  advice 
and  instruction  of  the  supreme  court.  It  is  not,  however, 
good  practice  to  tile  a  moticMt  for  a  certificate,  nor  will  the 
court  usually  grant  such  a  motion.'*  Unless  the  circuit  court 
of  appeals  is  in  doubt  w  ith  reference  to  some  question  of  law, 
and  asks  for  information,  the  supreme  court  will  not  enter- 
tain the  certificate.^'^  The  circuit  court  of  appeals  will  not 
ordinarily  certify  a  question  in  advance  of  the  argument,"'  nor 
after  it  has  decided  the  case.''  d"he  circuit  court  of  appeals 
may  certify  certain  questions  in  a  case  and  file  an  opinion  on 
other  points  in  the  same  case."*  In  such  cases  the  final  decree 
or  judgment  will  await  the  decision  of  the  supreme  court. 

In  certifying  a  question  or  proposition  of  law  to  the  su- 
preme court  the  certificate  should  be  entitled  in  the  circuit 
court  of  appeals,  and  should  contain  such  a  statement  of  the 
facts  as  may  be  necessary  to  the  determination  of  the  ques- 
tions of  law^  certified.     It  should  not  contain  the  whole  record. 

A  certificate  should  not  in  effect  certify  the  whole  case  to 

"Act  of  March  3,  1891,  26  Stat.  '=  Columbus    Watch    Co.    v.    Rob- 

at  L.  826,  Sec.  6.  bins,  148  U.  S.  266,  37  L.  Ed.  445. 

"Louisville,  etc.,  Ry.  Co.  v.  Pope,  '"Louisville,  etc.,  Ry.  Co.  v.  Pope, 

74   Fed.    Rep.    i  ;    Andrews   v.    Na-  74  Fed.  Rep.  i. 

tional   Foundry   &    Pipe   Works,  77  "The  Majestic,  69  Fed.  Rep.  844. 

Fed.  Rep.  774;  Pulhnan  Palace  Car  "  Sigafus  v.  Porter,  84  Fed.  Rep. 

Co.  v.   Central  Transportation   Co.,  430;    McCormick    Harvesting    Ma- 

83  Fed.  Rep.  i.  chine  Co.  v.  Aultman,  69  Fed.  Rep. 

But    see    Farmers    &    Merchants  371 ;  Compton  v.  Jesup,  68  Fed.  Rep. 

State   Bank  v.  Armstrong,  49   Fed.  263,   s.   c.   on   Certificate,    167  U.   S. 

Rep.  600.  I,  42  L.   Ed.   55. 


APPELLATE    PROCEEDINGS.  897 

the  supreme  court,  but  only  certain  questions  or  propositions 
of  law,  unmixed  with  questions  of  fact  or  of  mixed  law  and 
fact.^^  The  certificate  should  show  that  the  instructions  of 
the  supreme  court  are  desired  in  the  particular  case  upon  a 
particular  question  as  to  the  proper  decision.-'^  The  questions 
propounded  should  present  distinct  points  or  propositions 
clearly  stated  so  that  each  can  be  distinctly  answered  without 
reference  to  other   issues  of  law   involved   in  the  case.-^ 

The  certificate  should  be  signed  by  the  judges  constituting 
the  circuit  court  of  appeals  sitting  in  the  particular  case. 
The  clerk  of  the  circuit  court  of  appeals  attaches  to  this 
certificate  a  certificate  to  the  effect  that  the  certificate  was 
duly  filed  and  entered  of  record  in  the  clerk's  office  by  order 
of  the  court,  and,  as  directed  by  the  court,  the  certificate  is 
forwarded  to  the  supreme  court  for  its  action  thereon. 

The  certificate,  including  a  statement  of  facts,  is  transmitted 
to  the  clerk  of  the  supreme  court  and  filed  and  docketed  by 
him.  The  case  is  set  down  for  argument  upon  the  certificate 
like 'a  case  upon  an  appeal  or  writ  of  error.  Counsel  are 
permitted  to  file  briefs  and  make  oral  arguments. 

Upon  the  determination  of  the  supreme  court  a  certificate 
of  its  answers  to  the  propositions  of  law.  under  the  hand  and 
seal  of  the  clerk  of  the  supreme  court,  is  sent  to  the  circuit 
court  of  appeals.  In  case  the  circuit  court  of  appeals  has 
decided  the  other  questions  at  issue  in  the  case,  a  decree  may 
be  usually  entered  upon  the  certificate  without  further  argu- 
ment. In  case  the  circuit  court  of  appeals  desires  further 
argument,  it  may  order  the  whole  case  reargued  in  view  of 
the  certificate  of  the  supreme  court.  In  any  case  the  final 
decree  is  entered  in  the  circuit  court  of  appeals  from  which 
the  question  was  certified. 


ID  , 


Cross  V.    Evans,    167  U.    S.   60,  '"  Coliiml)us    Watch    Co.   v.    Rob- 

42   L.    Ed.    ■]■]■,    Graver    v.    Faurot,  bins,  14S  U.  S.  266,  37  L.  Ed.  445. 
162  U.  S.  435,  40  L.  Ed.  1030 ;  U.  S.         "  U.   S.   v.   Union   Pac.   Ry.    Co., 

V.   Union   Pac.  Ry.   Co.,   168  U.   S.  168  U.  S.  505.  42  L.  Ed.  559;  Mc- 

505,  42  L.  Ed.  559;  Warner  v.  New  Henry    v     Alford,    168    U.    S.    651, 

Orleans,   167  U.   S.  467,  42  L.  Ed.  42    L.    Ed.    614;    Warner    v.    New 

239.  Orleans,   167  U.   S.  467,  42  L.  Ed. 

239- 


898  LAW      WD     l'Ki)(.KKin.\GS     IN     BANKRUPTCY. 

^  310.     Appeals  to  the  supreme  courts  of  the  territories. 

'llic  supreme  courts  of  the  tcrritiM-ies,  in  vacation  in  cham- 
bers and  ilurin<^  their  respective  terms,  as  now  or  as  they 
may  be  hereafter  held,  aic  iiuesU'd  with  apjKdlate  juris(Hc- 
tion  of  ciMitroversies  arisinj;"  in  bankruplcy  proceedings  from 
the  courts  of  bankruptcy  from  which  the}'  ha\e  appellate 
jurisdiction  in  other  cases/ 

Appeals,  as  in  ecjuity  cases,  may  be  taken  in  bankruptcy 
proceedings  from  the  courts  of  bankruptcy  to  the  supreme 
court  of  the  territories  in  tlie  following  cases,  to  wit :  ( 1  }  from 
a  judgement  adjudging  or  refusing  to  adjudge  the  defendant 
a  bankrupt :  (2)  from  a  judgment  granting  or  denying  a  dis- 
charge;  and  (3)  from  a  judgment  allowing  or  rejecting  a 
debt  or  claim  of  live  hundred  dt^Uars  or  over." 

Such  appeal  must  be  taken  within  ten  days  after  the  judg- 
ment appealed  from  has  been  rendered,  and  may  be  heard 
and  determined  by  the  appellate  court  in  term  or  vacation,  as 
the  case  may  be."  The  appeal  is  allowed  by  a  judge  of  the 
court  appealed  from  or  of  the  court  appealed  to,  and  is  regu- 
lated, except  as  otherwise  provided  in  the  act,  by  the  rules 
governing  appeals  in  equity  in  the  courts  of  the  United  States.^ 

A  petition  to  revise  under  Section  24b  lies  to  the  circuit 
court  of  appeals  within  whose  jurisdiction  the  territorial 
court  happens  to  be  and  not  to  the  supreme  court  of  the  ter- 
ritory.^ 

§  311.    The  threefold  jurisdiction  of  the  circuit   courts   of 
appeals. 

The  bankrupt   statute   confers  upon   the  circuit  courts  of 

appeals  power  to  revise  the  orders  and  decrees  of  a  court  of 

bankrutpcy    in    three    different    classes    of    proceedings,  as 

foUow's.      First,   it   invests   these  courts   with   jurisdicticMi  in 

'  B.  A.  1898,  Sec.  24a.  Plymouth  ^  Gen.  Ord.  t,6.    Consult  also  Sees. 

Cordage    Co.    v.    Smith,  194   U.    S.  315  ct  scq.,  post. 

.311,  48  L.  Ed.  992.  ^  Plymouth  Cordage  Co.  v.  Smith, 

''B.  IK.  1898,  Sec.  25a.  Plymouth  194  U.  S.  311,  48  L.  Ed.  992. 

Cordage   Co.    v.    Smith,  194   U.    S. 
311,  48  L.  Ed.  992. 


APPELLATE  PROCEEDINGS.  899 

equity,  "either  interlocutory  or  final,  to  superintend  and  revise 
any  matter  of  law  in  the  proceedings  of  the  several  inferior 
courts  of  bankruptcy  within  their  jurisdiction" ;  '  second, 
it  invests  these  courts  with  appellate  jurisdiction,  as  in 
equity,  in  the  following  cases,  to  wit:  (1)  from  a  judgment 
adjudging  or  refusing  to  adjudge  the  defendant  a  bankrupt; 

(2)  from  a  judgment  granting  or  denying  a  discharge:  and 

(3)  from  a  judgment  allowing  or  rejecting  a  debt  or  claim  of 
five  hundred  dollars  or  over;  -  and,  third,  it  vests  these  courts 
with  appellate  jurisdiction  of  controversies  arising  in  bank- 
ruptcy proceedings  from  the  courts  of  bankruptcy  over  which 
thev  have  appellate  jurisdiction  in  other  cases.^ 

In  the  first  case  the  appellate  court  acts  not  upon  appeal, 
but  by  a  petition  of  a  complaining  party,  and  is  given  author- 
ity to  review  and  revise  a  matter  of  law  only  in  the  proceed- 
ings of  the  bankrupt  court  that  is  complained  of.  In  the  sec- 
ond case  the  review  is  as  in  equity,  which  may  rest  upon  a 
question  of  fact  or  a  question  of  law,  or  both.  In  tlie  third  case 
the  review  is  on  writ  of  error  or  appeal  to  review  the  decision 
of  a  court  of  bankruptcy  in  a  controversy  arising  in  bank- 
ruptcy proceedings  in  the  exercise  by  that  court  of  the 
jurisdiction,  vested  in  it  at  law  and  in  equity  by  Section  2,  to 
settle  the  estates  of  bankrupts  and  to  determine  controversies 
in  relation  thereto.  Such  controversies  are  not  in  any  way 
peculiar  to  bankruptcy,  but  sucli  as  arise  at  common  law  or  in 
equity. 

In  some  cases  the  moving  party,  being  uncertain  as  to  the 
nature  of  his  remedy,  has  both  appealed  and  filed  a  petition 
for  review  and  allowed  the  court  to  select  the  proper  proceed- 
ing and  dismiss  the  other.''     It  has  been  held  that  an  api)eal 

■B.  A.  1898,  Sec.  24/7.     Sec  Sec.      Rep.    808,    4    Am.    R.    R.    496;    /" 

312,  post.  re  Fisher,  103  Fed.  Rep.  860.  4  Am. 

*B.  A.   1898,  Sec.  250.     See  Sec.      B.  R.  646;  In  re  Dickson,  in   Fed. 

314,  post.  Rep.  726,  7  Am.  B.  R.  186;  1  tutch- 

'B.  A.   i8g8.  Sec.  24a.     See  Sec.      inson    v.    LcRoy.     T13     Fed.     Rop. 

3020.  ante.  202.    8    Am.    B.    R.    20.      See    Sec. 

*  fn  re  County  of  Worcester,  102      301a.  ante. 


OQO  I  AW    .\\i>    puoc'KKmNC^;    ix    iian  Kurr  ixv. 

niav  1k>  troaloil  as  a  ])ctition  ior  review  when  only  a  question 
of  law  is  prescntecl.'  l>ut  not  where  (|uesti(>ns  iA  faet  and  law 
are  both  involved  in  the  api)eal." 

§  312.     The  supervisory  jurisdiction  of  the  circuit  courts  of 
appeals. 

The  several  eircuit  courts  of  appeals  have  jurisdiction  in 
equity,  either  interlocutory  or  final,  to  superintend  and  revise 
in  matter  of  law  the  proceedings  of  the  several  inferior  courts 
of  bankruptcy  within  their  jurisdiction.^  A  similar  powder 
was  conferred  upon  circuit  courts  by  the  act  of  18(37  -  and  by 
the  act  of  1841.-' 

A  circuit  court  of  appeals  has  power  to  revise,  as  to  matters 
of  law  under  Section  24b  the  decision  of  a  territorial  court 
which  happens  to  be  within  its  jurisdiction.* 

The  provision  of  the  present  statute  confers  a  complete 
supervision  in  matters  of  law  over  all  the  proceedings  of  the 
court  of  bankruptcy  within  the  limits  specified.  It  extends 
not  only  to  all  cases,  but  to  all  questions  arising  under  the 
statute;  in  other  words,  the  circuit  court  of  appeals  may  re- 
view^ the  whole  case  after  a  final  decree  and  decide  upon  it, 
or  it  may  assume  jurisdiction  of  any  particular  proceeding  or 
order  arising  in  the  progress  of  the  case.  Hie  pow'er  is  ex- 
pressly extended  to  "interlocutory  or  final"  orders  or  decrees. 

Whether  the  supervisory  power  of  a  circuit  court  of  ap- 
peals under  Section  24b  extends  to  any  proceeding  in  a  court 
of  bankruptcy  in  the  exercise  of  the  jurisdiction  vested  in  it 

^Chesapeake  Shoe  Co.  v.  Seldner  R.    198;    Dickas   v.   Barnes    (C.   C. 
(C.  C.  A.  4th  Cir.),  122  Fed.  Rep.  A.  6th  Cir.),  140  Fed.  Rep.  849,  15 
593,  10  Am.  B.  R.  466;  In  re  Abra-  Am.  B.  R.  566;  Davison  v.  Fried- 
ham    (C.   C.  A.   5th   Cir.),  93  Fed.  man   (C.  C.  A.  6th  Cir.),  140  Fed. 
Rep.  767,  784,  2  Am.  B.  R.  266,  s.  c.  Rep.  853,   15  Am.  B.  R.  489.     See 
181  U.  S.  188,  45  L.  Ed.  814,  5  Am.  also  Sec.  301a,  ante. 
B.  R.  623,  as  explained  in  Holden  *  B.  A.    1898,   Sec.  24&. 
~v.  Stratton,  191  U.  S.   115,   iiQ,  48  '  R.  S.  Sec.  4986. 
L.  Ed.  116,  10  Am.  B.  R.  786.  '5   Stat,   at  L.  440,    Sec.  6. 

«/h   re   Whitener    (C.    C.   A.    5th  *  Plymouth  Cordage  Co.  v.  Smith, 

Cir.),  105  Fed.  Rep.  180,  5  Am.  B.  194  U.  S.  311,  48  L.  Ed.  992. 


APPELLATE    PROCEEDINGS. 


901 


at  law  and  in  equity  as  well  as  in  bankruptcy  proper 
is  not  settled.  The  great  weight  of  authority  at  present  is 
to  the  effect  that  the  revisory  jurisdiction  is  confined  to  pro- 
ceedings in  bankruptcy  proper  and  does  not  include  orders  in 
cases,  where  the  final  decree  or  judgment  can  be  reviewed  on 
appeal.'"'  The  circuit  courts  of  appeals  do  not  appear  to  have 
so  restricted  this  revisory  jurisdiction  in  the  early  cases. 
They  entertained  petitions  for  revision  in  many  cases  to 
revieW'  judgments  in  bankruptcy  proceedings  proper  from 
which  an  appeal  lay.  as  well  as  interlocutory  orders  and  final 
decrees  on  intervening  petitions  in  equity.^'    The  objection  that 


°  For  a  discussion  of  this  sub- 
ject see  Sec.  301a,  ante. 

In  re  Mueller  (C.  C.  A.  6th 
Cir.),  135  Fed.  Rep.  711,  14  Am. 
B.  R.  256;  In  re  Friend  (C.  C.  A. 
7th  Cir.),  134  Fed.  Rep.  778,  13 
Am.  B.  R.  595.  But  see  In  re 
Holmes  (C.  C.  A.  8th  Cir.),  142 
Fed.  Rep.  391,  15  Am.  B.  R.  689. 

"In  re  Holmes  (C.  C.  A.  8th 
Cir.),  142  Fed.  Rep.  391.  15  Am. 
B.  R.  689,  the  court  cites  an 
instance  of  the  exercise  of  its 
revisory  jurisdiction  to  review  a 
judgment  refusing  to  adjudge  the 
defendant  a  bankrupt,  which  was 
clearly  appealable  under  Section 
250^  in  the  following  language:  "In 
the  year  1903,  an  original  petition 
to  revise  in  matter  of  law  pro- 
ceedings of  the  district  court  of 
Kingfisher  county,  Okl.,  which  cul- 
minated on  .April  6,  1903,  in  an 
order  which  dismissed  an  involun- 
tary petition  in  bankruptcy  wa;?  pre- 
sented to  this  court.  The  order  of 
the  district  court  was  a  'judgment 
refusing  to  adjudge  the  defendant 
a  bankrupt,'  it  was  appealable  under 
Bankr.  Act  July  i,  1898,  c.  541,  § 
25a,  30  Stat.  553,  and  an  appeal  from 
it  would  have  brought  up    for   re- 


view all  the  preceding  rulings  in 
the  case.  This  court  certified  these 
facts  to  the  supreme  court,  and  in- 
quired whether  it  had  jurisdiction 
to  ^superintend  and  revise,  in  matter 
of  law,  these  proceedings  in  the 
district  court  of  Kingfisher  count_v, 
and  the  supreme  court  answered  in 
the  affirmative.  The  fact  that  the 
only  real  object  of  the  petition  in 
that  case  was  to  reverse  the  judg- 
ment refusing  to  adjudge  the  de- 
fendant a  bankrupt  was  disclosed  by 
the  certificate  to  the  supreme  court 
and  appears  in  the  report  of  the 
case.  Plymouth  Cordage  Co.  v. 
Smith,  194  U.  S.  311,  48  L.  Ed. 
992.  After  the  rendition  of  this  de- 
cision this  court  proceeded  upon  the 
original  petition  for  revision  to  re- 
view and  reverse  the  judgment  of 
the  district  court  of  Kingfisher 
county  and  to  direct  it  to  take  far- 
ther proceedings  in  the  case.  In  re 
Plymouth  Cordage  Co.,  13S  Fed. 
Rep.  1000,  13  Am.  B.  R.  665." 

/;/  re  Gailcy  (C.  C.  A.  7th  Cir.), 
127  b'cd.  Rep.  538,  II  Am.  B.  R. 
539,  the  circuit  court  of  appeals 
reviewed  an  order  denying  a  dis- 
charge on  petition  to  review. 

In   re  Ellis    (C.  C.  A.  6th  Cir.), 


90.? 


LAW      AM)     I'ROCKKIII.NCS     1 X      1?  AX  IvUL' I'TCY. 


these  ctnirts  had  iu>  ie\  isory  jurisihctiiMi  in  sucli  cases  does 
iu>t  appear  lo  ha\e  hccn  hrous^ht  lo  the  alUMitioii  i){  the 
court.  Oiiestions  o\  law  arising-  in  the  process  of  a  jury 
trial  in  hankruptc\-  can  not  he  rc\ie\\cd  under  this  i)rovision, 
but  only  on  w  ril  of  error. 

The  revisorx'  jurisdiction  does  not  include  a  re\-ie\v  of  orders 
made  hy  a  referee.''  To  re\ie\\  an  order  of  a  referee  a  cer- 
tificate must  he  taken  from  tlie  referee  to  the  district  judg'e 
and  the  matter  passed  upon  by  liini.  This  order  may  then  be 
reviewed  by  a  circuit  court  of  appeals.'' 

This  power  is  not  to  be  exercised  by  the  appellate  court 
imtil  after  the  action  of  the  comt  of  bank-ruptcy.  The  power 
to  superintend  and  revise  extends  only  to  (juestious  and  mat- 
ters which  have  been  fairly  presented  to  and  passed  upon  by 
the  court  of  bankruptcy.^"  -\n  action  of  the  court  of  bank- 
ruptcy wliich  is  purely  discretionary  will  not  be  revised  by  an 
appellate  court  unless  clearly  an  abuse  of  discretion. ^^ 

The  exercise  of  such  revisory  power  does  not  operate  to 
transfer  the  entire  proceedings  into  the  circuit  court  of  appeals, 
to  be  there  continued  as  in  a  court  of  the  first  instance.  Its 
jurisdiction  is  appellate  and  not  original.  Where  the  decree 
or  order  is  affirmed,  it  stands  as  a  decree  or  order  of  the  court 
of  bankruptcy,,  and  is  to  be  carried  into  due  execution  by  that 
court. 


143  Fed.  Rep.  103,  16  Am.  B.  R. 
221,  an  interlocutory  order  holding 
a  petitioning  creditor  to  have  a 
provable  claim,  bnt  not  adjudging 
the  defendant  to  be  a  bankrupt 
was  reviewed  on  petition  for  re- 
vision. 

'  Elliott  V.  Toeppner,  187  U.  S. 
329,  47  L.  Ed.  200,  9  Am.  B.  R.  50; 
Grant  Shoe  Co.  v.  Laird,  203  U.  S. 
502,  17  Am.  B.  R.  i. 

^In   re    Pettingill    &   Co.    (C.    C. 


7  Am.  B.  R.  224;  Louisville  Trust 
Co.  V.  Comingor,  184  U.  S.  18,  46 
L.    Ed.   413,   7   Am.    B.    R.   421. 

"Godshalk  Co.  v.  Sterling  (C. 
C.  A.  3d  Cir.),  129  Fed.  Rep.  580, 
12  Am.  B.  R.  302;  In  re  Shoe  & 
Leather  Reporter  (C.  C.  A.  ist 
Cir.),  129  Fed.  Rep.  588,  12  Am. 
B.  R.  248. 

"/w  re  Brown  (C.  C.  A.  sth 
Cir.),  112  Fed.  Rep.  49,  7  Am.  B. 
R.  252;  In  re  Carley   (C.  C.  A.  3d 


A.  1st  Cir.),  137  Fed.  Rep.  840,  14  Cir.),  117  Fed.  Rep.  130,  8  Am.  B. 

Am.  B.  R.  757.  R.  720;  In  re  Levi  &  Klauber   (C. 

'As  was  done  in  Mueller  v.  Nu-  C.  A.  7th  Cir.),  142  Fed.  Rep.  962, 

gent,   184  U.   S.    I,  46  L.   Ed.   405,  15  Am.   B.  R.  294. 


APPELLATE  PROCEEDINGS. 


903 


It  should  be  observed,  also,  that  the  supervisory  power  of 
the  appellate  courts  extends  only  to  matters  of  law/"  They 
can  not  superintend  or  revise  matters  of  fact  or  mixed  mat- 
ters of  fact  and  law.^^  In  this  respect  the  present  statute 
differs  from  the  act  of  1867.  Although  the  former  act  pro- 
vided for  revising  matters  of  fact  as  well  as  points  of  law,  it 
is  noticeable  that  under  the  act  the  questions  presented  were 
generally  mere  points  of  law.  There  were  a  few  cases  in 
which  evidence  was  admitted  in  the  circuit  courts. ^^  It  is 
clear  that  such  proceeedings  can  not  be  had  under  the  present 
act.  If  no  question  of  law  is  presented  by  the  petition  it  should 
be  dismissed. ^^ 

In  the  exercise  of  the  revisory  jurisdiction  under  Section  24b 
the  circuit  court  of  appeals  have  reviewed  an  order  of  a  court 
of  bankruptcy  giving  or  refusing  priority  of  claims  irrespective 
of  the  value,^®  or  with  reference  to  claims  for  exemptions/^ 


"Mueller  v.  Nugent,  184  U.  S. 
I,  46  L.  Ed.  405,  7  Am.  B.  R.  224; 
Cunningham  v.  German  Ins.  Bank 
(C.  C.  A.  6th  Cir.),  103  Fed.  Rep. 
932,  4  Am.  B.  R.  192;  Courier-Jour- 
nal Job  Printing  Co.  v.  Brewing 
Co.,  loi  Fed.  Rep.  699,  4  Am.  B. 
R.  183.  In  re  Taft  (C.  C.  A.  6th 
Cir.),    133   Fed.   Rep.   511,    13    Am. 

B.  R.  417;  Kenova  Loan  &  Trust 
Co.  V.  Graham  (C.  C.  A.  4th  Cir.), 
135   Fed.    Rep.   717,    14  Am.   B.   R. 

313. 

"In  re  Purvine  (C.  C.  A.  Si\\ 
Cir.),  96  Fed.  Rep.  192,  2  Am.  B. 
R.  787;  In  re  Union  Trust  Co.  (C. 

C.  A.  1st  Cir.),  122  Fed.  Rep.  937; 
In  re  Whitener  (C.  C.  A.  5th  Cir.), 
105  Fed.  Rep.  180,  5  Am.  B.  R.  198. 

"  Langley  v.  Perry,  No.  8667  Fed. 
Cas.,  2  N.  B.  R.  596;  Farrin  v. 
Crawford,  No.  4686  Fed.  Cas.,  2 
N.  B.  R.  602 ;  In  re  Alexander,  No. 
160  Fed.  Cas.,  Chase,  295.  But  see 
In  re  Great  Western  Tel.  Co.,  No. 
5739  Fed.   Cas.,   5    Biss.   359;   First 


Nat.  Bank  of  Troy  v.  Cooper,  20 
Wall.  171,  22  L.  Ed.  273. 

'=  Ellis  V.  Kruliewitch  (C.  C.  A. 
8th  Cir.),  141  Fed.  Rep.  954.  15 
Am.  B.  R.  615;  In  re  Taft   (C.  C. 

A.  6th  Cir.),  133  Fed.  Rep.  511,  13 
Am.  B.  R.  417;  In  re  Pettingill  & 
Co.  (C.  C.  A.  1st  Cir.),  137  Fed. 
Rep.  S40.  14  Am.  B.  R.  757. 

"/«  re  Rouse,  Hazard  &  Co.  (C. 
C.  A.  7th  Cir.),  91  Fed.  Rep.  96,  i 
Am.  B.  R.  234.  See  also  Morgan 
V.  First  Nat.  Bank  (C.  C.  A.  4th 
Cir.),    145   Fed.    Rep.   466,    16   Am. 

B.  R.  639. 

"Bashinski  v.  Talbott  (C.  C.  A. 
5th  Cir.),  119  Fed.  Rep.  2>i7'  9  Am. 
B.  R.  513;  In  re  Trvin  (C.  C.  A. 
8th  Cir.),  120  Fed.  Rep.  72,2>,  9  Am. 

B.  R.  689;  White  V.  Thompson  (C. 

C.  A.  Stli  Cir.).  no  I'\h1.  Rep.  868. 
9  Am.  li.  R.  653:  /;/  rr  llolden 
(C.  C.  A.  9th  Cir.),  113  Fed.  Rep 
141,  7  Am.  B.  R.  615;  Steiner  v. 
Marshall  (C.  C.  A.  4th  Cir.),  140 
Fed.  Rep.  710,  15  Am.  B.  R.  486. 


904 


LAW     ANP     PROCEEDINGS    IN     BANKRUPTCY. 


or  refusinj;"  to  stay  proocodin^s  in  a  state  court/"  or  to  vacate 
aiul  set  asiilo  an  itrdcr  selling  aside  a  discharge  and  to  rein- 
state the  discharge,'''  or  refusing  to  enjoin  the  hankrujU  from 
prosecuting  a  second  apphcation  for  liis  (hscharge.'""  or  refus- 
ing to  reconsider  a  decision  aHow  ing  claims  and  for  the  re- 
covery of  di\idends.'"'  or  to  sell  the  propert)'  of  an  adverse 
claiiuaut.'""  or  refusing  to  allow  a  creditor  to  amend  his  speci- 
fication in  (Opposition  to  a  hankrupt's  discharge."''  or  that  a 
]iarty  to  a  hankruptcy  proceeding  is  guilty  of  contempt  in 
refusing  to  obey  an  order  of  the  court,"'  or  directing  the  trus- 
tee to  retm-n  certain  property  to  persons  claiming  it,  which 
property  was  claimed  by  the  trustee  to  be  a  part  of  the  bank- 
rupt's estate,'"'*  or  directing  a  i)ayment  to  the  trustee  in  bank- 
ruptcy of  a  sum  of  money,"''  or  allowing  an  amendment  to  an 
involuntary  petition,"'  or  directing  an  officer  of  the  court  to 
take  possession  of  the  bankrupt's  property  including  that  which 
was  found  in  the  custody  of  a  third  party  and  was  claimed 


"/»  re  Kantcr  &  Cohen  (C.  C. 
A.  2d  Cin),  121  Fed.  Rep.  984,  9 
Am.  B.  R.  372;  In  re  Seebold  (C. 
C.  A.  5th  Cir.),  105  Fed.  Rep.  910, 
5  Am.  B.  R.  358;  White  v.  Thomp- 
son (C.  C  A.  5th  Cir.),  119  Fed. 
Rep.  868,  9  Am.  B.  R.  653;  In  re 
San  Gabriel  Sanitorium  Co.   (C.  C. 

A.  9th   Cir.),   Ill   Fed.   Rep.  892,  7 
Am.  B.  R.  206. 

"•/«  re  Hawk  (C.  C.  A.  8th  Cir.), 
114  Fed.  Rep.  916,  8  Am.  B.  R.  71. 

'"In  re  Fcigenbaum  (C.  C.  A. 
2d  Cir.),   121   Fed.  Rep.  69,  9  Am. 

B.  R.  595. 

'^  In  re  Lewensohn  (C.  C.  A.  2d 
Cir.),  121  Fed.  Rep.  i,  9  Am.  B. 
R.  368. 

"  Beach  v.  Macon  Grocery  Co. 
(C.  C.  A.  5th  Cir.),  120  Fed.  Rep. 
736,  9  Am.  B.  R.  762.  See  also 
Sturgiss  V.  Corbin  (C.  C.  A.  4th 
Cir.),    141   Fed.   Rep.    i,   15   .'\m.   B. 


R.  543;  In  re  McMah'on  (C.  C.  A. 
6th  Cir.),   147  Fed.  Rep.  685. 

'Vw  re  Carley  (C.  C.  A.  3d  Cir.), 
117  Fed.  Rep.  130,  8  Am.  B.  R.  720; 
Kentucky  Nat.  Bank  v.  Carley  (C. 
C.  A.  3d  Cir.),  121  Fed.  Rep.  822, 
10  Am.  B.  R.  375. 

"*  Carting  v.  Seymour  Lumber  Co. 
(C.  C.  A.  5th  Cir.),  113  Fed.  Rep. 
483,  8  Am.  B.  R.  29;  Mueller  v. 
Nugent,  184  U.  S.  i,  46  L.  Ed.  405, 
7  Am.  B.  R.  224;  Louisville  Trust 
Co.  V.  Comingor,  184  U.  S.  18,  46 
L.  Ed.  413,  7  Am.  B.  R.  421. 

''"In  re  Garcewich  (C.  C.  A.  2d 
Cir.),  IIS  Fed.  Rep.  87,  8  Am.  B. 
R.  149. 

"°  Hutchinson  v.  LeRoy  (C.  C.  A. 
1st  Cir.),  113  Fed.  Rep.  202,  8  Am. 
B.  R.  20. 

"^  In  re  Sears  (C.  C.  A.  2d  Cir.), 
117  Fed.  Rep.  294,  8  Am.  B.  R.  713. 


APPELLATE    PROCEEDINGS. 


905 


adversely,'"  or  determining  whether  a  preference  must  be  sur- 
rendered or  not  before  proving  claim,-'"*  or  determining  con- 
flicting claims  to  property  in  the  possession  of  a  court  of 
bankruptcy,""  or  ascertaining  and  liquidating  liens, ^^  or  to 
enjoin  execution  in  a  state  court  against  a  trustee,^'  or  to  set 
aside  an  order  of  dismissal  and  to  reinstate  an  involuntary 
petition,^^  or  sustaining  demurrer  to  petition  filed  for  the  pur- 
pose of  vacating  an  adjudication  in  bankruptcy,^*  or  to  sell 
property  of  the  bankrupt  free  from  liens, ^°  or  requiring  the 
bankrupt  or  other  person  to  surrender  to  the  trustee  property 
alleged  to  be  in  his  possession  belonging  to  the  estate  in  bank- 
ruptcy,^^ or  as  to  the  vacating  of  an  adjudication  upon  a  judg- 
ment lien  under  Section  67f,^''  or  requiring  the  surrender  of 
property  by  an  assignee  for  the  benefit  of  creditors,^^  or  requir- 
ing a  bankrupt  to  endorse  a  liquor  license  for  sale,""  or  to  re- 
move a  trustee,'*'^  or  with  reference  to  the  extradition  of  bank- 


=*/n  re  Young  (C.  C.  A.  8th 
Cir.),  Ill  Fed.  Rep.  158,  7  Am.  B. 
R.  14. 

-^In  re  Dickson  (C.  C.  A.  ist 
Cir.),  Ill  Fed.  Rep.  726,  7  .\m.  B. 
R.  186 ;  In  re  Abraham  Steers  Lum- 
ber Co.  (C.  C.  A.  2d  Cir.),  112 
Fed.   Rep.  406,  7  Am.   B.  R.   332. 

^/h  re  Lemmon  &  Gale  Co.  (C. 
C.  A.  6th  Cir.),  112  Fed.  Rep.  296, 
7  Am.  B.  R.  291 ;  Morgan  v.  First 
Nat.  Bank  (C.  C.  A.  4th  Cir.),  145 
Fed.  Rep.  466,  16  Am.  R.  R.  039. 

"/n  re  Shirley  (C.  C.  A.  6th 
Cir.),  112  Fed.  Rep.  301,  7  Am.  B. 
R.  299;  In  re  Pekin  Plow  Co.  (C. 
C.  A.  8th  Cir.),  112  Fed.  Rep.  308, 
7  Am.  B.  R.  369 ;  In  re  Beaver  Coal 
Co.  (C.  C.  A.  9th  Cir.),  113  Fed. 
Rep.  889,  7  Am.  B.  R.  542. 

="/«  re  Neely  (C.  C.  A.  2d  Cir.), 
113  Fed.  Rep.  210,  7  Am.  B.  R.  312. 

^  In  re  Jcmison  Mercantile  Co. 
(C.  C.  A.  '5th  Cir.),  112  Fed.  Rep. 
966,  7  Am.  B.  R.  588. 


'*/;;  re  Ives  (C.  C.  A.  6th  Cir.), 
113  Fed.  Rep.  911,  7  Am.  B.  R.  692. 

^"/)j  re  Union  Trust  Co.  (C.  C. 
A.  1st  Cir.),  122  Fed.  Rep.  937,  9 
Am.   B.   R.  767;  In   re  Utt    (C.   C. 

A.  7th   Cir.),    105   Fed.   Rep.   754,   5 
Am.  B.  R.  t,St,. 

"'■  Mueller  v.  Nugent,  184  U.  S.  i, 
46  L.  Ed.  405,  7  Am.  B.  R.  224; 
Louisville  Trust  Co.  v.  Comingor, 
184  U.  S.  18,  46  L.  Ed.  413,  7  Am. 

B.  R.  421 ;  In  re  Purvine,  96  Fed. 
Rep.    192,  2   Am.   B.   R.   787. 

"'  In  re  Richards,  96  Fed.  Rep. 
935)  3  Am.  B.  R.  145 ;  In  re  Beaver 
Coal  Co.,  113  Fed.  Rep.  889,  7  Am. 
B.   R.  542. 

^Vn  re  Gutwillig,  92  Fed.  Rep. 
2,3,7,  I  Am.  B.  R.  388;  Davis  v. 
Bohle,  92  Fed.  Rep.  325,  i  Am.  B. 
R.  412;  In  re  Abraham,  93  Fed. 
Rep.  767,  2  Am.  B.  R.  266. 

'"/«  re  Fisher,  103  Fed.  Rep.  860, 
4  .'\m.  B.  R.  646. 

*"/;/  re  IVrkiiis,  No.  10982  Fed 
Cas.,  5  Biss.  254. 


906      l.WV  AXr^  PROCKEHTXCS  IX  BAXKUrPTCY. 

rupt/'  ov  appointiii:^-  ti'ustoo  when  ori-ditors  fail  to  elect  one.'" 
or  an  oiiler  renioN  ini;'  a  proeeedinj;  in  in\  (•Iniitaix'  l)ankrn])tcy 
to  another  clistrict.'" 

§  313.     Application  to  superintend  and  revise  matters  of  law. 

The  snpcrxisory  power  of  the  circuit  courts  of  appeals  is  ex- 
erciseil  on  due  notice  and   [)etition   by  a   party  aggrieved.^ 

The  exercise  of  this  general  jurisdiction  is  not  placed  by 
the  act  under  specified  regulations  and  restrictions,  like  the 
proceeding  l)y  appeal  or  writ  of  error."  Congress  has  left 
these  regulations  to  the  discretion  of  the  circuit  courts  of 
appeals,  and  to  the  rules  to  be  prescribed  by  the  supreme  court. 
As  yet  the  supreme  court  has  prescribed  no  rules  concerning 
it.  L'ntil  it  does,  the  circuit  court  of  appeals  may  prescribe 
rules  and  regulations,  so  far  as  they  do  not  conflict  with  the 
statute. 

The  act  prescribes  no  time  within  which  the  application 
for  a  review  must  be  presented.  An  appeal  is  required  to  be 
taken  within  ten  days.'"  Not  so  with  a  petition  for  a  review. 
Undoubtedly  the  application  should  be  made  within  a  rea- 
sonable time,  in  order  that  the  proceedings  to  settle  the  bank- 
rupt's estate  may  not  l)e  delayed,  but  neither  the  act  nor  any 
rule  of  the  supreme  court  determines  what  that  time  is.  It 
must,  therefore,  be  left  to  depend  upon  the  circumstances  of 
each  case.  It  should  generally  be  fixed  by  analogy  in  the 
period  designated  within  which  appeals  must  be  taken.* 

"In    re    Hassenbusch    (C.    C.    A.  =  B.  A.  1898,  Sec.  25a. 

6th  Cir.),   108  Fed.   Rep.  35,  47  C.  "First  Nat.  Bank  of  Troy  v.  Coo- 

C.  A.  177.  per,  20  Wall.  171,  20  L.  Ed.  27^;  In 

"In    re    McGill     (C.    C.    A.    6th  re  Economical  Printing  Co.   (C.  C. 

Cir.),   106  Fed.  Rep.   57,  5  /\m.  B.  A.   2d   Cir.),   106  Fed.   Rep.  839,   5 

R-  ISS-  Am.  B.  R.  697;  In  re  Good  (C.  C. 


43 


Kyle  Lumber  Co.  v.   Bush    (C.  A.  8th  Cir.),  3  Am.  B.  R.  605,  99 

C.  A.  5th  Cir.),  133  Fed.  Rep.  688,  Fed.  Rep.  389;  In  re  Pettingill  &  Co. 

13  Am.  B.  R.  535.  CC.  C.  A.  ist  Cir.),   137  Fed.  Rep. 

'  B.  A.  1898,  Sec.  24b.  840,     14    Am.    B.    R.    757 ;    In    re 

^Mr.  Justice  Chase,  in  construing  Mueller    (C.    C.    A.    6th    Cir.),    135 

the  act  of   1867,   In  re   Alexander,  Fed.  Rep.  711,   14  Am.   B.  R.  256; 

No.  160  Fed.  Cas.,  Chase,  295.  In  re  Holmes   (C.  C.  A.  8th  Cir.), 


APPELLATE    PROCEEDINGS.  907 

The  application  for  a  review  and  revision  of  the  action  of  a 
court  of  bankruptcy  can  be  made  only  by  a  person  ag-g-rie\-ed 
by  such  action.^ 

A  second  petition  to  review  the  same  matter  as  a  previous 
petition  will  not  be  permitted.'"' 

§  313a.     Petition  and  record  on  revision. 

The  application  for  the  exercise  of  supervisory  power  is 
made  by  petition/  The  petition  slioukl  be  filed  in  the  ciraiit 
court  of  appeals  for  the  circuit  in  which  the  court  of  bank- 
ruptcy, whose  action  is  to  be  reviewed,  is  held."  It  is  not  nec- 
essary that  a  petition  to  revise  be  allowed  by  a  judge  of  the 
appellate  court  or  the  court  below,  or  that  an  appeal  bond  be 
given,  or  that  a  citation  issue  or  a  transcript  of  record  in  the 
court  below  filed. ^  The  filing  of  a  petition  for  revision  is  the 
beginning  of  an  original  proceeding  in  the  circuit  court  of  ap- 
peals, invoking  the  exercise  of  its  appellate  jurisdiction. 

The  petition  should  be  entitled  in  the  appellate  court  with 
the  style  of  the  case,  and  should  state  the  proceedings  in  court 
of  bankruptcy  sufficient  to  show  the  jurisdiction  of  that  court, 
and  clearly  and  specifically  point  out  the  question  of  law  de- 
cided by  the  district  court  and  the  particular  error  or  errors  of 

142   Fed.   Rep.   391,    15   Am.    B.    R.  this  section,  was  a  judoment  cred- 

689;  In  re  Groetzinger  &  Sons  (C.  itor  of  the  bankrupt,  and  so  sched- 

C.  A.  3d  Cir.),   127  Fed.  Rep.   124,  uled  by  liim  in  his  bankruptcy  peti- 

II  Am.  B.  R.  467.  tion.     Whether  he  may  or  may  not 

"  B.  A.  1898,  Sec.  24^;  Ala.  &  C.  hereafter  be   allowed   to   prove   his 

R.  Co.  V.  Jones,  No.  127  Fed.  Cas.,  claim,  he  has  an  interest  as  a  general 

7   N.   B.   R.    145;   In   re   Baker    (C.  creditor  in  the  estate  of  the  bank- 

C.  A.  Tst  Cir.),  104  Fed.  Rep.  287,  rupt." 

4  Am.  B.  R.  778.                     .  "Beach  v.  Macon  Grocery  Co.  (C. 

In   Clark   v.    Pidcock    (C.    C.    A.  C.  .\.  5th  Cir.),  120  Fed.  Rep.  736, 

3d  Cir.),  129  Fed.  Rop.  745,  12  Am.  9  Am.   B.  R.  762. 

B.    R.    309,    the    court    said :    "We  '  B.  A.  i8g8.  Sec.  24/?. 

are  disposed,  however,  to  give  liber-  'In    re   Williams,    105    Fed.    Rep. 

al  construction  to  the  language  used  906,  5  Am.  B.  R.   198,  note, 

here,    and    a    doubt    in    re^^ard    to  ^  Meyer  Drug  Co.  v.  Pipkin  Drug 

the  same  should  be  resolved  in  favor  Co.    (-C.  C.   A.   ?th   Cir.),    136   Fed 

of    the    petitioner.      The    petitioner  Rep.  396,    14  .Am.   15.    R.  477. 
who  invokes  our  jurisdiction  under 


n08 


LAW     AXn     rROCEKDINGS    IN     RANKKUPTCY, 


law  coinplaincil  of,  ohavj^in^  that  tlio  iK-lilinncr  is  ai;-g;ricved 
thercbw  aiul  praviiii;'  tlio  ciicuit  courl  ol'  appeals  Id  review 
aiul  re\  isc  iho  ilocisiiin  oi  the  cmirl  below.' 

It  is  ikU  necessary  {o  alk\<;"e  an\-  \aliie  in  relation  to  the 
question  or  matters  coneerninj;'  which  a  re\  iew   is  soni^"ht.° 

The  petition  shonKl  be  signed  and  verified  by  the  peti- 
tioner, or  his  agent  and  attorney,  if  he  has  knowledge  of  tliQ 
facts  snfticient  to  make  the  affida\  it. 

All  persons  interested  in  the  controversy  shonld  be  made 
parties  to  the  petition  and  have  notice  of  the  filing  of  it.  Where 
the  trnstce  represents  the  creditors  in  the  bankrnptcy  conrt  he 
only  need  be  made  party  respondent  in  the  circuit  court  of 
appeals." 

Petitions  for  review  may  be  amended  in  the  discretion  of 
the  court.' 

The  record  of  a  petition  for  revision  should  consist  of  a 
certified  copy  of  so  much  of  the  record  as  is  necessary  to  ex- 
hibit the  manner  in  which  the  question  of  law  arose  and  its 
determination.'*  It  has  been  held  that  the  record  should  pre- 
sent to  the  appellate  court  simply,  clearly  and  unequivocally  the 
issues  of  law,  to  the  like  effect  as  bills  of  exceptions,  pro- 
ceedings without  a  jury  and  proceedings  in  the  supreme  court 
on  admiralty  appeals  as  provided  in  the  act  of  February  16, 
1875."     The  record  should  ordinarilv  contain  the  order  of  the 


V«  re  Richards  (C.  C.  A.  7th 
Cir.),  96  Fed.  Rep.  935,  3  Am.  B. 
R.  14s;  In  re  Baker  (C.  C.  A.  ist 
Cir.),  104  Fed.  Rep.  287,  4  Am.  B. 
R.  778;  In  re  Seebold  (C.  C.  A.  5th 
Cir.),  105  Fed.  Rep.  910,  5  Am.  B. 
R.  358;  In  re  Taft  (C.  C.  A.  6th 
Cir.),  133  Fed.  Rep.  511,  13  Am.  B. 
R.  417. 

For  form  of  petitions  for  review 
see  Forms,   Nos.   178  et  seq.,  post. 

^  In  re  Rouse,  Hazard  &  Co.  (C. 
C.  A.  7th  Cir.),  91  F"ed.  Rep.  136,  t 
Am.  B.  R.  234. 

"In  re  Utt    (C.   C.  A.  7th  Cir.), 


105  Fed.  Rep.  754,  5  Am.  B.  R.  383. 
'  Gen.  Ord.  i  r.  Knight  v.  Che- 
ney, No.  7883  Fed.  Cas.,  5  N.  B.  R. 
305;  Littlefield  v.  Del.  &  Hud. 
Canal    Co.,    No.   8400   Fed.    Cas.,  3 

Cliff.  371. 

'/»  re  Richards  (C.  C.  A.  7th 
Cir.),  96  Fed.  Rep.  935,  3  Am.  B. 
R.  145. 

^  In  re  Boston  Dry  Goods  Co. 
(C.  C.  A.  1st  Cir.),  125  Fed.  Rep. 
226,  1 1  Am.  B.  R.  97 ;  In  re  Shoe 
&  Leather  Reporter  (C.  C.  A.  ist 
Cir.),  129  Fed.  Rep.  588,  12  Am. 
B.  R.  248;  In  re  O'Connell   (C.  C 


APPELLATE    PROCEEDINGS.  909 

court  of  bankruptcy  sought  to  be  reviewed  and  other  papers 
necessary  to  estabhsh  the  allegations  in  the  petition/"  It 
should  also  include  a  statement  of  the  findings  of  fact  and  con- 
clusions of  law  by  the  court  below,  or  something  else  as  a  sub- 
stitute therefor,  wdien  evidence  has  been  taken  on  issues 
of  fact,  and  not  a  certified  copy  of  the  evidence  itself."  A 
summary  of  evidence  or  finding  of  fact  certified  by  the  referee 
to  the  district  judge  is  sufficient,  unless  a  trial  cic  novo  is  had 
by  the  district  judge.  The  opinion  of  the  court  is  not  sufficient 
for  this  purpose,  but  may  be  referred  to  for  the  purpose  of 
ascertaining  what  propositions  of  law  governed  the  court  in 
which  the  opinion  w^as  filed,  or  for  the  general  purpose  of  de- 
termining whether  the  case  w^ent  ofif  on  facts  or  law.^- 

In  practice  counsel  orders  such  papers,  exhibits  and  other 
proceedings  from  the  clerk  of  the  court  of  bankruptcy  as  he 
deems  necessary  for  the  consideration  of  the  appellate  court 
to  determine  the  question  of  law  involved.  These  papers  are 
attached  to  and  filed  with  the  petition  in  the  appellate  court. 
If  he  fails  to  include  any  papers  which  the  respondent  consid- 
ers necessary  he  my  apply  for  a  w^'it  of  certiorari  to  bring  up 
such  additional  papers  as  he  may  wish.'-''  If  he  shall  insist 
upon  including  in  the  record  unnecessary  matter  the  court  may 
prevent  injustice  being  done  the  petitioner  in  dealing  with  the 
costs. 

A.    Tst    Cir.),    137    Fed.    Rep.    838,  Rep.  840,   14  .\m.  R.  R.  7^7:  In  re 

14  Am.  B.  R.  237:  In  re  Pettingill  Boston    Dry   Goods   Co.    (C.   C.   A. 

(C.  C.  A.  1st  Cir.),   137  Fed.  Rep.  ist  dr.),  125  Fed.  Rep.  226,  11  Am. 

840,  14  Am.  B.  R.  575.  B.  R.  97;   In   re  O'Connell    (C.  C. 

""In   re   Richards    (C.   C.   A.   7th  A.    ist    Cir.),    137    Fed.    Rep.    838, 

Cir.),  96  Fed.  Rep.  935,  3  Am.   B.  14  Am.  B.  R.  2t,7. 
R-  145-  '-In  re  Pettingill  &  Co.  (C.  C.  A. 

"/n  re  Taft  (C.  C.  A.  6th  Cir.),  ist  Cir.),  137  Fed.  Rep.  840,  14  Am. 

133   Fed.   Rep.   511,    13   Am.    B.    R.  B.  R.  757;  In  re  Boston  Dry  Goods 

417;  Steiner  v.  Marshall   (C.  C.  A.  Co.    (C.   C.  A.    ist   Cir.),    125  Fed. 

4th    Cir.),    140    Fed.    Rep.    710.    15  Rep.  266,  11  Am.  B.   R.  97. 
Am.   B.   R.  486:    /)/   re   Pettingill  &  "See  Sec.  306. 

Co.    (C.   C.    A.    1st    Cir.),    137    Fed. 


910  l-AW     AM)     PROCEEDINGS     IN     BANKRUPTCY. 

§  313b.     Proceedings  on  a  petition  to  review  and  revise  mat- 
ters of  law. 

Upon  filing-  a  petition  for  review  in  a  circuit  court  of  appeals 
duo  notice  must  be  given  ailversc  iiartios.'  The  notice  rctiuircd 
mav  be  given  bv  the  petitioner  (»r  his  attorney  (^r  other  person 
delivering  a  copy  of  the  petition  to  the  respondent  and  i)roof 
of  service  made  either  in  the  form  of  an  affidavit  or  accept- 
ance of  service.  The  proof  of  service  should  be  hied  in  the  ap- 
pellate court.  1'he  clerk  of  the  appellate  court  may  be  request- 
ed to  serve  a  copy  of  the  printed  petition  upon  the  respondent 
or  his  attorney  after  the  petition  has  been  docketed  and  printed. 
This  is  sufficient  notice,  but  the  better  practice  is  to  serve  a  for- 
mal notice.-  The  service  of  a  petition  upon  a  person  who  acted 
as  counsel  for  the  respondent  in  the  original  proceedings  is 
sufficient.^ 

The  proceeedings  in  review  are  a  part  of  the  original  case, 
and  for  the  purpose  of  review  the  jiarties  are  still  in  court. 
The  proceeding-  in  review  is  intended  to  be  speedy  and  sum- 
mary, and  a  reasonable  notice  to  counsel  accomplishes  the  ends 
of  justice.  A  defective  service  is  cured  by  appearance  in  the 
circuit  court  of  appeals.* 

Upon  filing  the  petition  the  case  is  docketed,  and  the  peti- 
tion and  exhibits  printed  as  in  other  cases.  The  case  is  regu- 
larly heard  upon  the  petition  and  exhibits  filed  therewith.  The 
circuit  court  of  appeals  may  direct  certain  original  papers  to 
be  sent  up,  if  necessary,  to  ascertain  the  facts.  No  answer  is 
required  to  the  petition,  unless  called  for  by  a  rule  or  order  of 
court  for  tlie  reason  that  the  petition  and  exhibits  must  show 
the  question  of  law  to  be  reviewed.^  No  new  evidence  is 
introduced  in  the  appellate  court.     The  court  of  appeals  acts 

'B.    A.    1898,    Sec.    24b:    In    re  *  Ala.  &  C.  R.  Co.  v.  Jones,  No, 

Ult    (C.  C.   A.  7th  Cir.),   105   Fed.  124   Fed.    Cas.,   5   N.   B.    R.  97. 

Rcp-   754.   5  Am.   B.   R.  383;   In  re  ®By    rule    of    court    the    time    to 

Abraham,  93  Fed.  Rep.  767,  2  Am.  plead  'to  a  petition  is  limited  in  the 

B.   R.   266.  circuit  court  of  appeals  for  the  ist 

■  For    form    of   notice   see   Form  circuit.    In  re  Baker,  104  Fed.  Rep, 

No.  176,  post.  287,  4  Am.  B.  R.  778. 

^  Ah.  &  C.  R.  Co.  V.  Jones,  No. 
126  Fed.  Cas.,  5  N.  B.  R.  97. 


APPELLATE  PROCEEDINGS.  911 

to  review  the  question  of  law  upon  the  statement  of  facts 
presented  by  the  petition  and  papers  before  it.  It  is  not  proper 
to  permit  an  issue  of  fact  to  be  made.  The  appellate  court 
revises  only  questions  of  law.  The  practice  under  the  act  of 
1867  was  somewhat  different  in  this  respect,  for  the  reason 
that  the  circuit  courts  were  authorized  to  examine  both  law 
and  facts.  It  is  the  decision  of  the  judge  on  the  record  before 
him  and  not  the  ruling  of  the  referee  that  is  brought  into  the 
appellate  court  for  review.*' 

Counsel  are  permitted  to  file  briefs  and  make  arguments. 
The  attorney  for  the  petitioner  opens  and  closes  the  argument. 
A  supervisory  petition  will  not  ordinarily  be  advanced  for 
hearing. 

The  order  of  the  circuit  court  of  appeals  in  such  cases  is 
regularly  an  affirmance,  reversal  or  modification  of  the  order 
of  the  court  below,  with  such  directions  as  justice  may  require. 
The  appellate  court  does  not  execute  the  order,  but  by  its 
mandate  it  directs  the  court  of  bankruptcy  with  reference  to 
what  should  be  done,  as  in  the  case  of  an  appeal  or  writ  of 
error. 

No  appeal  lies  to  the  supreme  court  from  the  decision  of  the 
circuit  court  of  appeals  upon  a  petition  for  review."  The  only 
method  of  obtaining  a  revision  of  such  decision  In'  the  supreme 
court  is  by  a  writ  of  certiorari.^ 

§  314.     Appellate   jurisdiction   in   bankruptcy    of   the   circuit 
courts  of  appeals. 

As  has  been  observed,  the  present  statute  does  not  affect  the 
appellate  jurisdiction  of  the  circuit  courts  of  appeals,  either 
in  equity  or  law  cases.^ 

The  appellate  powers  of  the  circuit  courts  of  appeals,  in 
bankruptcy,  are  contained  in  Section  25  of  the  act.  11icy  are 
''That   appeals,   as   in   equity  cases,   may  be  taken    in   bank- 

•Vchon  V    Ulliiian   (C.  C.  A.  7th  "See    Writs    of    certiorari,    Sec. 

Cir.'),   147  Fed.  Rep.  694.  307,  ante. 

'  Holdcn    V.    .Straltoii,    igi    U.    S.  '  See    Sees.    301a,    302    and    3020, 

115,  48  L.   Ed.   116.    10  .\m.   B,   R.  anie. 
786. 


c)\2 


LAW     AND     I'ROCKKniNC.S    IN     BANKRUPTCY. 


niptcy  proceedings  from  ihe  courts  oT  bankruptcy  to  the  cir- 
cuit court  of  appeals  of  the  United  States,  and  to  the  supreme 
court  of  the  territories,  in  ihc  following- cases,  to-wit,  (1)  frt)m 
a  iudgmont  adjudging  or  refusing  io  adjudge  the  defendant 
a  bankrupt;  (2)  from  a  judgment  granting  or  denying  a 
discharge;  and  (3)  from  a  judgment  allowing  or  rejecting  a 
debt  or  claim  of  five  hundred  dollars  or  over." 

Unless  a  case  falls  within  one  of  these  three  classes  it  can 
not  be  reviewed  on  a[)peal.'"  Thus  no  appeal  lies  from  an 
interlocutory  order  made  during  the  examination  of  a  bank- 
rupt requiring  him  to  produce  books, ^  or  a  decree  in  a  suit  to 
recover  property  from  the  trustee  as  property  that  belonged 
to  the  plaintiff  and  not  to  the  bankrupt's  estate.*  Where  a 
case  falls  within  one  of  these  provisions  the  review  should  be 
by  appeal  and  not  by  invoking  the  supervisory  powers  of  the 
circuit  court  of  appeals,^  or  suing  on  a  writ  of  error." 


=  In  First  Nat.  Bank  v.  Title  & 
Trust  Co.,  19S  U.  S.  280,  291,  49  L. 
Ed.  1051,  14  Am.  B.  R.  102,  the 
court  said :  "And  in  any  view,  the 
proceeding  was  a  proceeding  in 
bankruptcy.  Being  such,  an  appeal 
from  the  decree  of  the  district  court 
under  Section  250  did  not  He,  and 
parties  aggrieved  could  only  invoke 
the  supervisory  power  under  Section 
24b." 

See  also  Gray  v.  Grand  Forks 
Mercantile  Co.  (C  C.  A.  8th  Cir.), 
138  Fed.  Rep.  344,  14  Am.  B.  R. 
780;  Goodman  v.  Brenner  (C.  C. 
A.  sth  Cir.),  109  Fed.  Rep.  481.  6 
Am.  B.  R.  470;  In  re  Cokunbia 
Real  Estate  Co.  (C.  C.  A.  7th  Cir.), 
112  Fed.  Rep.  643,  7  Am.  B.  R.  441 ; 
In  re  Whitener  (C.  C.  A.  sth  Cir.), 
105  Fed.  Rep.  180,  5  Am.  B.  R.  198; 
Fisher  v.  Cushman  (C.  C.  A.  ist 
Cir.),  103  Fed.  Rep.  860,  4  Am.  B. 
R.  646;  Hutchinson  v.  Le  Roy  (C. 
C.  A.  1st  Cir.),  113  Fed.  Rep.  202, 
8  Am.  B.  R.  20. 


^Goodman  v.  Brenner  (C.  C.  A. 
Sth  Cir.),  109  Fed.  Rep.  481,  6  Am. 
B.  R.  470. 

'In  re  Whitener  (C.  C.  A.  Sth 
Cir.),  105  Fed.  Rep.  180,  5  Am.  B. 
R.  198. 

"/»  re  Good  (C.  C.  A.  Sth  Cir.), 
99  Fed.  Rep.  389,  3  Am.  B.  R.  60s; 
In  re  Dickson  (C.  C  A.  ist  Cir.), 
Ill  Fed.  Rep.  726,  7  Am.  B.  R.  186. 

Consult  In  re  Rouse,  Hazard  & 
Co.,  91  Fed.  Rep.  96,  i  Am.  B.  R. 
234,  in  which  the  court  held  that 
the  case  presented  was  not  within 
the  appellate,  but  properly  in  the 
supervisory,  jurisdiction,  and  that  if 
it  had  been  a  proceeding  in  which 
an  appeal  would  lie,  it  said:  "We 
should  be  wholly  without  jurisdic- 
tion."     See    Sec.    312,    ante. 

'Lockman  v.  Lang  (C.  C.  A.  8th 
Cir.),  128  Fed.  Rep.  279,  12  Am. 
B.  R.  497. 

But  see  Grant  Shoe  Co.  v.  Laird, 
203  U,  S.  502,  17  Am.  B.  R.  I. 


appellate  proceedings.  913 

First.  From  a  Judgment  Adjudging  or  Refusing  to 
Adjudge  the  Defendant  a  Bankrupt. — It  seems  that  an 
appeal  under  this  clause  lies  only  in  involuntary  proceedings 
because  the  word  "defendant"  implies  that  the  proceeding  is 
instituted  against  the  debtor  by  his  creditors.  A  creditor  is 
not  permitted  to  contest  an  adjudication  in  voluntary  bank- 
ruptcy '  and  could  not  therefore  be  aggrieved  by  a  decision 
either  refusing  or  making  an  adjudication.  Whether  the 
bankrupt  would  be  permitted  to  review  on  appeal  a  judgment 
refusing  an  adjudication  on  his  petition  is  very  doubtful. 

It  is  clear  that  an  appeal  in  an  ordinary  involuntary  pro- 
ceeding may  be  taken  by  either  the  petitioning  creditors  or  the 
bankrupt  to  review  a  judgment  either  refusing  or  making  an 
adjudication.^  An  appeal  lies  from  such  judgment,  although 
only  questions  of  law  are  presented  for  review. **  It  has  been 
held  that  an  appeal  will  not  lie  from  an  order  dismissing  a 
petition  for  intervention  by  a  creditor  for  the  purpose  of  a  re- 
hearing to  oppose  the  adjudication.^*'  An  assignee  for  the 
benefit  of  creditors,  who  has  intervened  to  contest  the  peti- 
tion, has  a  right  to  appeal  from  the  decree  adjudging  the  de- 
fendant to  be  bankrupt. ^^ 

An  order  making  or  refusing  to  make  an  adjudication  in 
bankruptcy  can  not  be  reviewed  on  writ  of  error  ^"  unless  there 
is  a  trial  by  jury.^^ 

'  In    re   Jehu,   94   Fed.    Rep.   638,  ""  In  re  Columbia  Real  Estate  Co. 

2  Am.  B.  R.  498.  (C.  C.  A.  7th  Cir.),  112  Fed.  Rep. 

*  Simonson  v-   Sinsheimer   (C.  C.  643,  7  Am.   B.   R.  441. 

A.  6th  Cir.),   100  Fed.  Rep.  426,  3  " /;;  re  Meyer  (C.  C.  A.  2d  Cir.), 

Am.  B.  R.  824;  Parmenter  Mfg.  Co,  98  Fed.  Rep.  976,  3  Am.  B.  R.  559. 

V.  Stoever   (C.  C.  A.   ist  Cir.),  97  "  Lockman    v.    Lang    (C.    C.    A. 

Fed.    Rep.   330,   3   Am.    B.    R.   220;  8th    Cir.).    128    Fed.    Rep.    279,    12 

West  Co.  V.  Lea,  174  U.  S.  590,  43  Am.   B.    R.   497. 

L.  Ed.   1098,  2  Am.   B.   R.  463.  "Elliott  v-   Tocppncr,    1S7  U.   S. 

See  also  Elliott  v.  Toeppner,  187  ^2y,  47  L.  Ed.  200,  9  .'\m.  B.  R.  50; 

U.  S.  327,  47  L.  Ed.  200,  9  Am.  B.  Bower  v.  Holzworth   (C.  C  A.  8th 

R.  50;  Grant  Shoe  Co.  v.  Laird,  203  Cir.),  138  Fed.  Rep.  28,  15  Am.  B. 

U.  S.  502,  17  Am.  B.  R.  i.  R.   22.     Grant   Shoe   Co.   v.    Laird, 

•Taft    Co.    V.    Century    Savings  203  U.  S,  502,  17  Am.  B.  R.  i. 
Bank  (C.  C.  A.  8th  Cir.),  141  Fed. 
Rep.  369,   15  Am.  B.  R.  594. 


914  law  and  proceedings  in   ban  klu' i'tcy. 

Second.  From  a  Judgment  Granting  or  Denying  a 
DisciiARGK. — It  is  clear  that  uiulor  this  clause  a  creditor  or 
the  bankni])!  may  appeal  from  llio  jiul^niciU  nf  llic  court  of 
bankruptcy  either  grantin;;-  or  refusing  a  discharge  to  the 
bankrupt  in  voluntary  or  invc^luntary  proceedings.'''  A  trus- 
tee will  not  ordinarily  be  i)crmilled  to  prosecute  an  appeal 
from  such  judgmciUs,  Un-  the  reason  that  the  contest  is  be- 
tween creditors  and  tlic  bankrujit  and  does  not  affect  the  ad- 
ministration o\'  the  bankrupt's  estate  in  any  respect. 

It  has  been  held  that  an  appeal  lies  from  an  order  refusing 
to  confirm  a  composition  of  creditors  on  the  ground  that  this 
is  in  effect  refusing  a  discharge.^"'  An  appeal  lies  from  an 
order  dismissing  an  appl;cati(^n  for  discharge  for  want  of 
prosecution,  because  such  an  order  is  in  effect  one  denying  a 
discharge.^" 

Third.  From  Judgments  Allowing  or  Rejecting 
Claims. — A  judgment  allowing  or  rejecting  a  debt  or  claim 
of  a  creditor  against  the  estate  of  the  bankrupt  may  be  re- 
viewed on  appeal  provided  the  sum  in  controversy  amounts 
to  five  hundred  dollars  or  over."  This  ai)plies  to  voluntary 
and  involuntary  proceedings.  "A  debt  or  claim  of  five  hun- 
cired  dollars  or  over"  refers  to  a  debt  or  claim  attempted  to 
be  proved  in  the  bankruptcy  proceedings  against  the  bank- 
rupt's estate  for  the  purpose  of  receiving  a  dividend  and  does 
not  include  all  debts  or  claims  arising  in  the  administration 

"/«   re  Marshall   Paper  Co.    (C.  Bro.   (C.  C.  A.  8th  Cir.),  120  Fed. 

C.  A.  1st  Cir.).  102  Fed.  Rep.  872,  Rep.  815,  9  Am.  B.   R.  693;  In  re 

4  Am.   B.   R.   468;   In  re   Feldstein  Friend     fC.    C.    A.    7th    Cir.),    134 

(C.  C.  A.  2d  Cir.),   115  Fed.  Rep.  Fed.   Rep.   778,    13  Am.   B.   R.   595. 

259,  8  Am.  B.  R.  160;  In  re  Gajdord  But   see    Ross  v.    Saunders    (C.   C. 

(C.  C.  A.  2d  Cir.),   112  Fed.  Rep.  A.   ist  Cir.),   105   Fed.  Rep.  915,  5 

668,  7  Am.  B.  R.  t.  Am.    P..   R.   350. 

'»U.   S.   V.   Hammond    (C.   C.  A.  "''In  re  Kuffler  (C.  C.  A.  2d  Cir.), 

6th  Cir.).  104  Fed.  Rep.  862,  4  Am.  127   Fed.    Rep.    125,   11    Am.   B.   R 

B.  R.  736,  overruling  In  re  Adler,  469. 

103  Fed.  Rep.  444,  4  Am.  B.  R.  583;  "  B.  A.   1898,   Sec.  25. 
Marshall,   Field   &   Co.   v.   Wolf  & 


APPELLATE  PROCEEDINGS. 


915 


of  the  bankrupt's  estate.''  It  includes  an  attorney's  fee  '"  and 
also  a  claim  proved  as  a  secured  debt."'  It  does  not  include 
claims  for  services  rendered  or  expenses  incurred  in  the  admin- 
istration of  the  estate.''  The  debt  must  be  provable  at  the  date 
of  bankruptcy.  Where  an  appeal  is  founded  upon  a  claim  or 
debt,  the  circuit  court  of  appeals  may  determine  as  incident 
thereto  the  question  of  the  validity  and  priority  of  such  claim 
in  connection  with  a  lien  or  other  security  of  the  same." 
Where  the  amount  allowed  or  rejected  is  less  than  five  hun- 
dred dollars  and  no  appeal  lies.-"' 

Where  a  claim  is  disallowed  the  creditor  owning  the  claim 
may  prosecute  an  appeal.  Where  a  claim  is  allowed  the 
trustee  representing  all  of  the  creditors  is  the  proper  person 
to  prosecute  the  appeal.-"'  It  has  been  held  that  a  creditor 
may  appeal  from  the  allowance  of  a  claim  of  another  creditor 

"/«   re  Whitener    (C.  C.  A.   5th 
Cir.),  105  Fed.  Rep.   180,  5  Am.  B. 


R.  198.  Davidson  &  Co.  v.  Fried- 
man {C.  C.  A.  6th  Cir.),  140  Fed. 
Rep.  853,  15  Am.  B.  R.  489. 

In  Holden  v.  Stratton,  191  U.  S. 
115,  48  U.  Ed.  116,  10  Am.  B.  R. 
786,  the  Chief  Justice  said:  "While 
the  word  'claim'  is  used  in  its 
signification  of  the  demand  or 
assertion  of  a  right  in  subd.  11  of 
Section  2,  in  respect  of  'all  claims 
of  bankrupts  to  their  exemptions,' 
it  is  also  used  in  many  parts  of 
the  act,  and,  as  we  think,  in  Sec- 
tion 25,  as  referring  to  debts  .... 
presented  for  proof  against  estates 
in  bankruptcy." 

■"/h  re  Curtis  (C.  C.  A.  7th  Cir.), 

100  Fed.  Rep.  784,  4  Am.  B.  R.  17; 
In  re  Roche  (C.  C  A.  5th  Cir.), 
loi  Fed.  Rep.  956,  4  .Am.  B.  R. 
369;  Randolph  v.  Scruggs,  190  U.  S. 
533,  42  L.  Ed.  1 165,  10  Am.  B.  R.  i. 

"/h  re  Roche  (C.  C.  A.  5th  Cir.), 

101  Fed.  Rep.  9.1^.  4  Am.  B.  R.  t,(q\ 
Randolph  v.  Scruggs,  190  U.  S.  533, 


533,  47  L.  Ed.  1 165,  10  Am.  B.  R.  i. 
Pratt  V.  Bothe  { C.  C.  A.  6th  Cir.), 
130  Fed.   Rep.   670,    12  Am.   B.   R. 

529- 

-'  Davidson  &  Co.  v.  Friedman 
(C.  C.  A.  6th  Cir.),  140  Fed.  Rep. 
853,  15  Am.  B.  R.  489- 

"Cunningham  v.  German  Ins. 
Bank  (C.  C.  A.  6th  Cir.),  loi  Fed. 
Rep.  977,  4  Am.  B.  R.  192;  Hutch- 
inson V.  Otis,  190  U.  S.  552,  47  L. 
Ed.  1 179,  10  Am.  B.  R.  135;  In  re 
Worcester  County  ( C.  C.  A.  ist 
Cir.),  102  Fed.  Rep.  808,  4  .\m. 
B.  R.  496;  Burow  v.  Grand  Lodge, 
etc.  (C.  C.  A.  5th  Cir.),  133  Fed. 
Rep.  708,   13  Am.  B.  R.  542. 

-^  Gray  v.  Grand  Forks  Mercantile 
Co.  (C'  C.  A.  8th  Cir.),  138  Fed. 
Rep.   344,    14   .\m.    B.   R.   780. 

-'Foreman  v.  Burleigh  (C.  C.  A. 
ist  Cir.),  109  Fed.  Rep.  313-  6  Am. 
V>.  R.  230;  Livingstone  v.  Heine- 
man  (C.  C.  A.  6th  Cir.),  120  Fed. 
Rep.  786,  10  .Xm.  B.  R.  39;  Chat- 
field  v.  O'Dvvyer  (C.  C.  A.  8th  Cir.), 
101  Fed.  Rep.  797,  4  Am.  B.  R.  313. 


9l0  LAW      AM)     rUOfEKDlXCS     IX     BANKRUPTCY. 

ill  case  the  trustee  refuses  to  ai)poal.-''  A  better  practice  is  for 
the  (.lissatistieil  creditor  to  procure  an  order  of  the  court  of 
baukruptcv  to  eitlier  direct  an  ap])eal  by  ihe  trustee  or  permit 
the  crethtor  to  appeal  in  the  name  of  the  trustee.'"" 

§  314a.     Cross  appeals. 

It  is  sometimes  necessary  f(^r  an  ajipellee  to  proscute  an  ap- 
peal in  order  to  obtain  relief  in  tiie  api)ellate  court. ^  This  is 
called  a  cross-appeal.  An  appellee  is  entitled  to  urge  any 
ground  in  the  appellate  court  to  support  the  decree  below,  but 
if  he  feels  aggrieved  by  any  portion  of  the  decree,  it  is  neces- 
sary for  lu'm  to  prosecute  an  independent  appeal,  with  assign- 
ment of  errors,  citation  and  bond,  in  the  same  manner  and 
within  the  time  allowed  for  prosecuting  an  appeal  for  the  pur- 
pose of  correcting  the  decree  in  this  respect.-  One  record  will 
be  sufficient  ordinarily  for  both  appeals.  A  cross-appeal  may 
be  sued  out  after  record  lodged  in  the  appellate  court  on  the 
original  appeal. 

§  314b.     Writs  of  error. 

A  judgment  in  a  controversy  at  law  arising  in  bankruptcy 
may  be  reviewed  on  writ  of  error  in  the  same  manner  as  any 
other  judgment  at  law.^ 

It  will  be  observed  that  there  is  no  provision  in  the  act  for 
reviewing  a  proceeding  in  bankruptcy  proper  on  a  writ  of 
error.  The  act  provides  for  jury  trials  in  certain  cases,^  which 
may  result  in  a  judgment  adjudging  or  refusing  to  adjudge  a 
defendant  a  bankrupt.  There  may  be  also  a  jury  trial  with  ref- 
erence to  the  facts  in  connection  with  the  application  for  a 

=V;!  rr  Roche  (C.  C.  A.  5th  Cir.),  Stroud  (C.  C.  A.  4th  Cir.),  106 
loi  Fed.  Rep.  956,  4  Am.  B.  R.  369;  Fed.  Rep.  486,  5  Am.  B.  R.  685. 
McDaniel  v.  Stroud  (C.  C.  A.  4th  '  McGahan  v.  Anderson  (C.  C. 
Cir.),  106  Fed.  Rep.  486,  5  Am.  B.  A.  4th  Cir.),  7  Am.  B.  R.  641,  113 
R.  685;  Ohio  Valley  Bank  v.  Mack  Fed.  Rep.  115. 
(C.  C.  A.  6th  Cir.),  149  Fed.  Rep.  =  Farrar  v.  Churchhill,  135  U.  S. 
.  609-612,  34  L.  Ed.  246. 

^-Chatfield  v.  O'Dwyer  (C.  C.  A.  '  B.  A.  1898,  Sec.  240. 

8th  Cir.),  loi  Fed.  Rep.  797.  4  Am.  ^  B.  A.  1898,  Sec.  19. 
B.   R.   313.     See  also   McDaniel  v. 


APPELLATE  PROCEEDINGS.  917 

discharge,  and  possibly  with  reference  to  allowing  or  rejecting 
a  debt.  The  question  therefore  arises  when  such  jury  trial  is 
had,  as  to  the  manner  of  reviewing  the  judgment  in  such  cases. 

Where  a  party  demands  a  trial  by  jury  as  of  right  in  a  bank- 
ruptcy proceeding  under  Section  19  it  is  a  jury  trial  according 
to  the  common  law."  Two  methods  only  were  known  to  the 
common  law  to  re-examine  a  jury  trial,  namely,  first,  to  grant 
a  new  trial  by  the  court  where  the  issue  was  tried,  or  to  which 
the  record  was  returnable,  or,  second,  to  award  a  venire  facias 
de  novo  by  an  appellate  court  for  some  error  of  law  which 
intervened  in  the  proceeding.^  It  is  settled  that  rulings  made 
during  the  course  of  a  trial  by  jury  under  Section  19  in  a  bank- 
ruptcy proceeding  can  be  reviewed  only  on  writ  of  error.^ 
But  where  a  person  waives  his  statutory  right  to  a  jury  trial, 
by  failing  to  apply  for  a  jury  in  writing,  and  the  issues  are 
submitted  to  a  jury,  the  verdict  returned  is  advisory  as  in 
equity.  The  decree  of  the  trial  court  in  such  cases  may  be 
reviewed  on  appeal." 

An  application  for  a  writ  of  error  is  regularly  made  by  fil- 
ing a  petition  for  the  writ  together  with  an  assignment  of 
errors  in  the  clerk's  office.  This  should  be  done  before  it  is 
presented  to  the  judge,^  w^ho  regularly  allows  the  writ,  fixes 
the  amount  of  the  l)ond  and  signs  a  citation.  This  may  be 
done  by  the  trial  judge  or  a  judge  of  the  appellate  court.  The 
bond  and  citation  are  not  jurisdictional,-  but  are  essential  to 
perfecting  a  writ  of  error.  That  is  to  say.  the  bond  may  be 
given  and  the  citation  issued  after  the  time  within  which  a 

'Elliott  V.    Toeppner,    187   U.   S.  B.  R.  649;  Bower  v.  Holzworth  (C. 

327,  47  L.  Ed.  200,  9  Am.  B.  R.  50.  C.  A.  8th  Cir.),   138  Fed.   Rep.  28, 

*  Ins.  Co.  V.   Comstock,   16  Wall.  15  Am.   B.  R.  22;  In  re  Neasmith 

258,  21  L.  Ed.  493;  Elliott  V.  Toepp-  (C.  C.  A.  6th  Cir.),  147  Fed.  Rep. 

ner,  187  U.  S.  327,  47  L.  Ed.  200,  9  160. 

Am.   B.   R.    50.  "In  re   Neasmith    (C.   C.    A.   6th 

"Grant    Shoe    Co.    v.    Laird,    203  Cir.),  147  Fed.  Rep.  160;  Oil  Well 

U.  S.  502,  17  Am.  B.  R.  i;  Elliott  Supply  Co.  v.   Hall    (C.  C.  A.  4th 

V.    Toeppner,    187    U.    S.    327,    47  Cir.),  128  Fed.  Rep.  875,  11  Am.  B. 

L.    Ed.    200,    9    Am.     B.     R.     50;  R.  7.1S. 

Duncan    v.    Landis    (C.    C.    A.    3d  'Rule  11  C.  C.  A. 
Cir.),    106    Fed.    Rep.    839,    5    Am. 


918  LAW     .\Ni>     rkDCKl'lDlXi'iS     IN      T.A  X  K  K I    I' 1(.V. 

writ  of  error  may  be  sued  out.  A  writ  o[  ermr  is  sued  out 
within  the  meaning-  of  the  statute  w  hen  it  is  liled  in  the  elerk's 
otViee.''  It  is  not  neeessary  that  tlie  juilge  actually  allow  the 
writ  pvo\  ided  it  is  issued  and  a  copy  lodged  with  the  clerk  of 
the  court  to  which  it  is  directed.'"'  A  citation  is  necessary  in 
a  case  removed  by  writ  oi  error.^" 

A  clerk  of  a  district  court  has  no  power  to  issue  a  writ  of 
error/^  A  clerk  of  a  circuit  court  may  issue  a  writ  of  error 
from  a  circuit  court  of  appeals  to  the  district  ccnu't  within  the 
same  district.^"  The  clerk  of  the  supreme  court  of  the  United 
States  or  a  clerk  of  a  circuit  court  of  appeals  may  issue  a 
writ  of  error  out  of  each  court  respectively. 

If  the  defendant  in  error  feels  aggrieved  by  any  ruling  of 
the  trial  judge  he  must  sue  out  an  independent  writ  of  error, 
with  assignment  of  errors,  citation  and  bond,  in  the  same  man- 
ner and  within  the  time  allowed  for  prosecuting  error,  for  the 
purpose  of  correcting  such  error.  This  is  called  a  cross  writ 
of  error.  One  record  and  bill  of  exceptions  will  be  sufficient 
ordinarily  for  both  writs. 

A  writ  of  error  propria  vigore  carries  to  the  appellate  court 
for  review  only  the  technical  record  which  consists  of  the 
pleadings,  the  process  and  the  return  thereon,  the  verdict,  the 
judgment  and  the  execution  and  the  return  thereon.  No  bill 
of  exceptions  is  required  to  bring  questions  arising  on  the 
technical  record  into  the  appellate  court.  If  it  is  desired  to 
review^  any  rulings  occurring  during  the  progress  of  the  trial 
these  are  brought  into  the  record  by  a  bill  of  exceptions,  which 
when  properly  signed  and  allowed  becomes  a  part  of  the  record 
and  is  taken  to  the  appellate  court  by  the  writ  of  error.  A  bill 
of  exceptions  to  be  made  a  part  of  the  record  must  be  season- 
ably settled  and  allow^ed  by  the  trial  judge. ^•'' 

'Brooks  V.  Norris,  ii  How.  204,  '"U.  S.  v.  Phillips,  121  U.  S.  254, 

207,    13   L.   Ed.   665;   Credit   Co.   v.  30  L.  Ed.  914. 

Arkansas   Cent.   R.   Co.,   128  U.   S.  "Long  v.   Farmers  Bank    (C.   C. 

260,  32  L.  Ed.  448.  A.  8th   Cir.),   147  Fed.  Rep.  360. 

'  Davidson  v.  Lanier,  4  Wall.  447,  '"  R.  S.  Sec.  1004.    Long  v.  Farm- 

18  L.  Ed.  337 \  Alaska  United  Gold  ers  Bank    (C.  C.  A.  8th  Cir.),   147 

Min.  Co.  V.  Keating,  116  Fed.  Rep.  Fed.  Rep.  360. 
561.  "Michigan    Bank   v.    Eldred,    143 


APPELLATE  PROCEEDINGS. 


919 


§  315.     Time  within  which  an  appeal  may  be  taken. 

An  appeal  or  writ  of  error  under  Section  24a  to  review  a 
judgment  at  law  or  a  decree  in  equity  in  a  controversy  arising 
in  bankruptcy  proceedings  must  be  sued  out  within  six  months 
from  the  entry  of  such  decree  or  judgment/  except  from  an 
interlocutory  order  or  decree  granting  or  continuing  an  in- 
junction or  appointing  a  receiver,  when  it  must  be  sued  out 
within  thirty  days  from  the  entry  of  such  order  or  decree.^ 
An  appeal  under  Section  25a  to  review  a  judgment  in  bank- 
ruptcy proceedings  must  be  taken  within  ten  days  after  the 
judgment  appealed  from  has  been  rendered.'" 

It  will  be  observed  that  the  time  begins  to  run  in  the  case 
of  an  appeal  or  writ  of  error  sued  out  under  Section  24a 
from  the  entry  of  such  judgment  or  decree  or  order.*  This 
has  been  held  to  mean  the  date  the  decree  is  signed  by  the 
judge  or  actually  entered  on  the  records  of  the  court. '^  x\n 
appeal  to  review  a  judgment  in  bankruptcy  under  Section  25a 
must  be  taken  "within  ten  days  after  the  judgment  appealed 
from  has  been  rendered."  The  general  rule  is  that  where  the 
time  begins  to  run  from  the  rendition  of  the  judgment  or  de- 


U.  S.  293.  36  L.  Ed.  162;  Waldron 
V.  Waldron,  156  U.  S.  361,  39  L. 
Ed.  453;  Morse  v.  Anderson,  150 
U.  S.  156,  ^7  L.  Ed.  1037:  U.  S.  V. 
Jones,  149  U.  S.  262,  37  L.  Ed.  726 ; 
Alerchants  Ins.  Co.  v.  Buckner  (C. 
C.  A.  6th  Cir.),  98  Fed.  Rep.  222, 
39  C.  C.  A.  19. 

'Act  of  March  3,  1891,  Sec.  11, 
26  Stat,  at  L.  826.  In  re  Mueller 
(C.  C.  A.  6th  Cir.),  135  Fed.  Rep. 
711,  14  Am.  B.  R.  256;  Steele  v. 
liiiel,  104  Fed.  Rep.  968,  5  Am.  B. 
R.  165;  Boonville  Nat.  Bank  v. 
i'.lakey  (C.  C.  A.  7th  Cir.).  107 
Fed.   Rep.  891.  6  Am.   B.    R.    13. 

^Act  of  March  3,  1891,  Sec.  7,  as 
amended  April  14,  1906,  34  Stat, 
at  L. 

'B.  A.  1898,  Sec.  25fl.  /)(  re  Mc- 
Call    rC.  C.   A.  6t]i   Cir.),   145   Fed. 


Rep.  898,  16  Am.  B.  R.  670;  Nor- 
crcss  V.  Mercantile  Co.  (C.  C.  A. 
8th  Cir.),  loi  Fed.  Rep.  796,  4  Am. 
B.  R.  317;  Peter.son  v.  Nash  Bros. 
(C.  C.  K.  8th  Cir.),  112  Fed.  Rep. 
311,  7  Am.  B.  R.  181;  /;:  re  Good 
(C.  C.  A.  8th  Cir.),  99  Fed.  Rep. 
389,  3  Am.  B.  R.  605;  In  re  Alden 
Electric  Co.  (C.  C  A.  7th  Cir.), 
T23  Fed.  Rep.  415,  10  Am.  B.  R.  370. 

^  R.  S.  Sec.  1008;  Sec.  7  of  the 
act  of  ]\Iarch  3,  1891,  26  Stat,  at 
L.  826. 

^In  re  AlcCall  (C.  C.  A.  6th 
Cir.),  145  Fed.  Rep.  898,  16  Am. 
1'..  R.  670;  Silsby  v.  Foote,  20  ITow. 
290,  IS  L.  Ed.  822;  Boise  County 
V.  Gorman,  19  Wall,  662,  22  L.  Ed. 
226;  Polleys  V.  Black  River  Co., 
113  U.  S.  81,  28  L.  Ed.  938. 


920  LAW      A\n     PROCEEDINGS    IN     BANKRUPTCY. 

crec  it  means  the  ilato  of  the  decision  of  the  court  and  not 
the  date  of  its  subsequent  entry  on  the  journal  ov  signing  by 
the  judge.""'  There  are,  however,  some  cases  which  hold  that 
a  decree  or  judgment  is  not  "rendered"  until  it  is  entered  on 
the  journal  of  the  court."  It  has  not  been  decided  whether  the 
time  limit  in  appeals  in  bankruptc)-  begins  to  run  from  the 
date  of  the  decision  or  from  the  date  of  the  entry  of  the  judg- 
ment."* 

It  is  not  competent  to  contradict  or  explain  the  recital  of 
the  record  with  reference  to  the  date  of  rendition  or  entry  of  a 
judgment  by  evidence  dr  liors  the  record.''  If  the  date  appear- 
ing in  the  record  is  erroneous  the  correction  should  be  made 
upon  application  to  the  court  below^" 

In  computing  this  time  the  number  of  days  are  computed 
by  excluding  the  first  and  including  the  last,  unless  the  last  fall 
on  a  Sunday  or  a  holiday,  in  which  e\ent  the  day  last  included 
shall  be  the  next  day  thereafter  which  is  not  a  Sunday  or  a  le- 
gal holiday."  The  word  "holiday"  includes  Christmas,  the 
fourth  of  July,  the  twenty-second  of  February  and  any  day  ap- 
pointed by  the  president  of  the  United  States  or  the  congress 
of  the  United  States  as  a  holiday  or  as  a  day  of  public  fasting 
or  thanksgiving.^-  In  computing  this  time  Sundays  and  holi- 
days are  counted,  except  when  the  last  day  would  fall  on  Sun- 
day or  a  holiday. ^^ 

An  appeal  in  bankruptcy  lies  only  from  a  final  judgment.^* 

'In    re    McCall     (C.    C.    A.    6th  Cir.),  145  Fed.  Rep.  898,  i6  Am.  B. 

Cir.),  145  Fed.  Rep.  898,  16  Am.  B.  R.  670. 

R.  670;   2  Ency.   of  PI.  &  Pr.  294  '"The  Alaska,  35   Fed.  Rep.   555, 

ef   seq.,   where    the    cases    are    col-  557;   In  re   McCall    (C.   C.   A.  6th 

lected.  Cir.),  145  Fed.  Rep.  898,  16  Am.  B. 

''  Humphrey  v.    Havens,  9   Minn.  R.  670. 

301;    Exley   V.    Berryhill,   36   Minn.  "  B.  A.  1898,  Sec.  31. 

11;.  '''B.  A.  1898,  Sec.  I,  clause  14. 

" /;i  r^  McCall,  145  Fed.  Rep.  898,  "York's    Case,    No.    18139    Fed. 

16  Am.  B.  R.  670,  the  circuit  court  Cas.,   i  Abb.    (U.   S.)    503. 

of    appeals     for    the    sixth    circuit  '*  Goodman  v.  Brenner   (C.  C.  A. 

states  the  distinction  without  decid-  5th  Cir.),  109  Fed.  Rep.  481,  6  Am. 

ing  it.  B.  R.  470. 
Vn    re    McCall     ( C.    C.    A.    6th 


APPELLATE    PROCEEDINGS. 


921 


Only  final  decrees  and  judgments  in  controversies  arising  in 
bankruptcy  can  be  reviewed  on  writ  of  error  or  appeal '"  except 
interlocutory  orders  granting  an  injunction  or  appointing  a 
receiver,  which  is  an  exception  provided  by  statute.  The  time 
within  wdiich  an  appeal  may  be  taken  does  not  run  pending  a 
petition  for  rehearing  because  a  final  judgment  is  not  entered 
until  the  petition  for  rehearing  is  disposed  of.'"  But  where  a 
petition  for  rehearing  is  not  filed  until  the  time  for  appeal  has 
expired  the  right  of  appeal  is  lost  and  can  not  be  revived  by 
filing  a  petition  for  rehearing.''  When  a  judgment  is  amended 
the  time  becfins  to  run  from  the  amendment.'**  When  a  rehear- 
ing  is  granted  and  a  judgment  entered  thereon  the  time  begins 
to  run  from  date  of  the  last  judgment.'^  A  rehearing  may  be 
granted  in  a  proper  case  for  the  purpose  of  giving  a  dissatisfied 
litigant  the  right  to  appeal,  but  the  courts  are  reluctant  to  ex- 
ercise this  power.-" 

The  limit  of  time  is  statutory  and  can  not  be  extended  by 
either  a  court  of  bankruptcy  or  an  appellate  court.-'  It  is  not 
necessary,  however,  to  give  the  appeal  bond,"'  or  file  the  tran- 
script of  record  in  the  appellate  court,"  or  issue  a  citation  "* 


"  Bardes  v.  Hawarden  Bank,  175 
U.  S.  526,  44  L.  Ed.  261,  178  U. 
S.  524,  44  L.  Ed.  1 1 75,  4  Am.  B. 
R.  163. 

"Kingman  v.  Western  ]\Ifg.  Co., 
170  U.  S.  675,  42  L.  Ed.   1 192. 

"  Conboy  v.  First  Nat.  Bank,  203 
U.  S.  141. 

"U.  S.  V.  Gomez,  i  Wall.  690,  \^ 
L.  Ed.  677. 

"/«  re  Worcester  County  (C.  C. 
A.  1st  Cir.),  102  Fed.  Rep.  808,  4 
Am.  B.  R.  496. 

"/n  re  Wright,  96  Fed.  Rep.  820, 
3  Am.  B.  R.  184;  In  re  Girard 
Glazed  Kid  Co.,  129  Fed.  Rep.  841, 
12  Am.  B.  R.  295;  In  re  Hudson 
Clothing  Co.,  140  Fed.  Rep.  49,  15 
Am.  B.  R.  254- 

"  Credit  Co.  v.  Ark.  Cent.  R.  Co.. 


128  U.  S.  258,  32  L.  Ed.  448;  Jn  re 
Alden  Electric  Co.  (C.  C.  A.  7th 
Cir.),  123  Fed.  Rep.  415,  10  Am. 
B.  R.  370. 

■■  Dos  Hermanos,  10  Wheat.  306, 
6  L.  Ed.  328;  Peugh  v.  Davis,  no 
U.  S.  227,  28  L.  Ed.  127;  Dodge 
V.  Knowles,  114  U.  S.  430,  29  L. 
Ed.  144;  Columbia  Iron  Works  v. 
Nat.  Lead  Co.  (C.  C.  A.  6th  Cir.), 
127  Fed.  Rep.  99,  11  Am.  B.  R.  340. 

As  to  what  is  necessary  to  be 
done  within  the  ten  days,  see  Sec. 
315,  anie.  As  to  the  bond,  see  Sec. 
320,  post. 

"^  Green  v.  Elbert,  137  U.  S.  615, 
34  L.  Ed.  792,  and  cases  cited  in 
opinion.    See  also  Sec.  325,  post 

'*  Columbia  Iron  Works  v.  Na- 
tional Lead  Co.  (C.  C.  A.  6th  Cir.), 


922 


LAW     AND     rUOCEEDlNGS     l.\     UAX  KKl' I' ICY. 


within   ton   days.      These  are  necessary   U)   the   cUic   prosecu- 
tion of  an  appeal,  but  arc  not  jurisilictional. 

§  316.     How  to  take  an  appeal, 

W  honcvcr  a  party  fools  himself  ag^grieved  hy  a  jndo-ment 
of  a  court  of  bankruptcy  in  ono  of  the  cases  specihed  in  Section 
25  he  may  prosecute  an  appeal  to  the  circuit  C(nirt  of  appeals 
"as  in  equity."  Appeals  in  ocjuity  are  suhjoct  to  the  same 
rules,  regulations  and  restrictions  as  are  or  may  be  prescribed 
in  law  in  cases  of  writs  of  error.' 

An  appeal  is  regularly  taken  by  presenting  to  the  judge 
of  the  court  of  bankruptcy  or  one  of  the  judges  of  the  circuit 
court  of  appeals  -  a  petition  for  api)eal,  assignments  of  error, 
citation  and  an  appeal  bond.  The  assignment  of  error  and  the 
petition  should  be  filed  in  the  clerk's  of^ce  before  the  appeal  is 
allowed. •■'  If  the  papers  are  regular  the  judge  to  whom 
they  are  presented  allows  the  appeal  and  approves  the  bond. 
The  signing  of  a  citation.*  or  the  approving  of  a  bond  ■'  within 
time,  is  a  sufficient  allow^ance  of  an  appeal.  An  appeal  will  not 
be  allowed  unless  an  assignment  of  errors  is  presented  with  the 
petition."  The  giving  of  a  bond  is  not  essential  to  the  taking, 
although  it  is  to  the  due  prosecution  of  the  appeal."     A  man- 


127  Fed.  Rep.  99,  11  Am.  B.  R.  340; 
Green  v.  Elbert,  137  U.  S.  615.  34 
L.  Ed.  792;  Richardson  v.  Green, 
130  U.  S.  104,  32  L.  Ed.  872;  Hew- 
itt V.  Filbert,  116  U.  S.  142,  29  L. 
Ed.  581 ;  Evans  v.  State  Bank,  134 
U.  S.  330,  33  L-  Ed.  917;  Altenberg 
V.  Grant,  54  U.  S.  App.  312,  s.  c. 
83  Fed.  Rep.  980. 

'Gen.  Ord.  36;  R.  S.  Sec.  1012. 
As  to  procedure  on  writ  of  error, 
see  Sec.  314/',  ante;  R.  S.  Sees.  997 
et  scq.;  rules  of  the  supreme  court; 
and  the  rules  of  the  circuit  courts 
of  appeals,  which  are  compiled  in  90 
Fed.  Rep.  p.  li. 

■Gen.  Ord.  36;  Norcross  v.  Mer- 
cantile   Co.    (C.    C.    A.    8th    Cir.), 


loi  Fed.  Rep.  796,  4  Am.  B.  R.  317. 

^  Rule  1 1  C.  C.  A ;  In  re  Dunning 
(C.  C.  A.  9th  Cir.),  94  Fed.  Rep. 
709;  Lloyd  V.  Chapman  (C.  C.  A. 
9th  Cir.),  93  Fed.  Rep.  599,  35  C.  C. 
A.  474;  Lockman  v.  Lang  (C.  C. 
A.  8th  Cir.),  128  Fed.  Rep.  279,  12 
Am.  B.  R.  497. 

'Brown  v.  McConnell,  124  U.  S. 
489,  31  L.  Ed.  495. 

°  Washington,  etc.  R.  R.  Co.  v. 
Bradleys,  7  Wall.  575,  19  L.  Ed. 
274;  Brandies  v.  Cochrane,  105  U. 
S.  262,  26  L  .Ed.  989 ;  Sage  v.  R.  R. 
Co.,  96  U.  S.  7T2,  24  L.  Ed.  641. 

"Rule  IT,  C.  C.  A.,  90  Fed.  Rep. 
clxvi. 

'Columbia    Iron    Works    v.    Na- 


APPELLATE  PROCEEDINGS. 


923 


damus  will  lie  to  compel  a  judge  to  allow  an  appeal.''  A  sim- 
pler proceeding,  however,  is  to  apply  to  one  of  the  judges 
of  the  appellate  court,  if  the  trial  judge  refuse  to  allow  the 
appeal. 

An  appeal  may  be  allowed  in  open  court.^  In  such  case 
no  citation  is  necessary.^"  Such  an  allowance  of  an  appeal  to 
be  regular  should  be  entered  upon  the  minutes. ^"^ 

Whichever  mode  is  adopted,  the  allowance  of  the  appeal 
constitutes  the  taking  of  an  appeal  contemplated  by  the  stat- 
ute.^^  The  appeal  must,  in  some  way,  be  presented  to  the 
court  which  made  the  decree  appealed  from,  thereby  putting 
an  end  to  its  jurisdiction  over  the  cause,  and  making  it  its 
duty  to  send  it  to  the  RppeWate  court.  This  is  done  by  filing 
the  papers  within  the  clerk's  office  within  the  time  limited  by 
statute.^-  This  must  be  done  within  ten  days  after  the  judg- 
ment appealed  from  has  been  rendered. 


13 


tional  Lead  Co.  (C.  C.  A.  6th  Cir.), 
127  Fed.  Rep.  99,  11  Am.  B.  R.  340. 
The  Dos  Hermanos,  10  Wheat.  306, 
6  L.  Ed.  328;  Peugh  v.  Davis,  no 
U.  S.  227,  28  L.  Ed.  127;  Dodge  v. 
Knowles,  114  U.  S.  438,  29  L.  Ed. 
144. 

*U.  S.  V.  Adams,  6  Wall.  loi, 
18  L.  Ed.  792;  U.  S.  V.  Gomez,  3 
Wall.  752,-18  L.  Ed.  212;  Sage  v. 
R.  R.  Co.,  96  U.  S.  712,  24  L.  Ed. 
641. 

"Brockett    v.    Brockett,    2    How. 
238,    II   L.   Ed.   251;    Rciley   v.    La- 
mar, 2  Cranch,  344.  2  L.  Ed.  300. 
Vansant  v.  Gas  Light  Co.,  99  U. 
S.  213,  25  L.  Ed.  265. 

"  Columbia  Iron  Works  v.  Na- 
tional Lead  Co.  (C.  C.  A.  6th  Cir.), 
127  Fed.  Rep.  99,  11  .Am.  B.  R.  340; 
The  Dos  Ilcrmanos,  10  Wheat.  306, 
6  L.  Ed.  328;  Peugh  v.  Davis,  no 
U.  S.  227,  28  L.  Ed.  127;  Dodge  v. 
Knowles,  114  U.  S.  418.  29  L.  Ed. 
144;   Noonan  v.  Chester  Park  Ath- 


letic Co.,  93  Fed.  Rep.  576,  35  C. 
C.  .A..  457;  Wickelman  v.  Dick  Co., 
85  Fed.  Rep.  851,  29  C.  C.  A.  436. 

'■  Credit  Co.  v.  Ark.  Cent.  R.  Co. 
128  U.  S.  258,  32  L.  Ed.  448;  Farrar 
v.  Churchill,  135  U.  S.  609,  34  L. 
Ed.  246. 

In  Ballance  v.  Forsyth,  21  How. 
389,  16  L.  Ed.  143,  no  appeal  was 
taken  in  court  below,  and  the  ap- 
pellant was  permitted  to  withdraw 
the  transcript  for  purpose  of  taking 
an  appeal. 

In  Credit  Co.  v.  .Ark.  Cent.  R. 
Co.,  supra,  the  appeal  was  allowed 
by  a  justice  of  the  supreme  court 
in  Washington,  D.  C,  on  the  last 
day  within  which  an  appeal  could 
be  taken,  but  was  not  presented  to 
the  circuit  court  until  five  days 
thereafter.  The  appeal  was  not 
taken  in  time. 

"B.  A.  1898,  Sec.  25a.-  Sec.  315. 
ante. 


924  l.AW     AND     rROCKKOlXr.S    IN     UANKkriTCV. 

Whether  a  cmirt  o(  hankriiptcy  has  power  to  set  aside  the  al- 
lowance of  an  appeal  ami  i;rant  a  second  appeal  depends  upon 
whether  the  general  power  of  the  court  over  the  order  is  at 
an  end  hv  reason  of  the  appeal  hein<;-  perfected  and  the  cause 
transferreil  to  the  aj^pellate  cmn-t.  or  hecause  it  was  not  done 
within  the  term  in  which  the  Ih-st  order  was  made/' 

A  jndge  of  a  court  of  hankruptcy  is  not  required  to  make 
findings  of  fact  for  the  purpose  of  an  appeal  from  his  deci- 
sion/' 

§  317.     Parties  to  an  appeal  or  writ  of  error. 

An  appeal  can  only  he  prosecuted  hy  a  party  to  the  pro- 
ceedings upi)n  which  the  judgment  was  entered,  and  who  has 
been  aggrieved  thereby.  Idie  right  of  appeal  depends  upon 
whether  the  appellant  is,  in  a  legal  sense,  aggrieved;  and 
that  must  be  determined  by  considering  not  upon  what  grounds 
the  judge  has  proceeded,  but  what  effect  his  action  has  upon 
the  claims  of  the  appellant.'  1die  party  appealing  must  have 
an  interest  in  the  proceedings.  Where  he  has  parted  with 
all  his  interest  in  the  subject  of  litigation  pendente  lite  he 
can  not  appeal  from  a  judgment  which  injuriously  affects  such 
interest." 

Where  a  claim  is  disallowed  the  creditor  may  prosecute  an 
appeal.  \\'here  a  claim  is  allowed  the  trustee,  representing 
all  of  the  creditors,  is  the  proper  person  to  prosecute  the  ap- 
peal.-'    It  has  been  held  that  a  creditor  may  appeal  from  the 

"Aspen    Min.    &    Smelt.    Co.    v.  bcrlain  v.   Cleveland,   i   Black,  419, 

Billings,    150   U.    S.   31,   37   L-    Ed.  17  L.  Ed.  93. 

986;  First  Nat.  Bank  v.  State  Nat.  ''Foreman  v.  Burleigh   (C.  C.  A. 

Bank  (C.  C.  A.  9th  Cir.),  131  Fed.  ist  Cir.),  109  Fed.  Rep.  313,  6  Am. 

Rep.  430,  12  .A.m.  B.  R.  440.  B.  R.  230;  Livingstone  v.  Heineman 

'"In    re    Meyers,    105    Fed.    Rep.  ( C.  C.  A.  6th  Cir.),   120  Fed.   Rep. 

353,   s   Am.   B.   R.  4.  786,  10  Am.  B.  R.  39;  Chatfield  v. 

'See  Farmers'  Loan  &  Trust  Co.  O'Dwyer    (C.   C.  A.  8th   Cir.),   loi 

V.    Waterman,    106    U.    S.    265,    27  Fed.   Rep.   797,  4  Am.   B.    R.    313; 

L.  Ed.   115.  Gray  v.  Grand  Forks  Mercantile  Co. 

'See  Meyer  v.  Pritchard,  23  Law.  (C.  C.  A.  8th  Cir.),  138  Fed.  Rep. 

Coop.,  S.  C.  R.  961 ;  Lord  v.  Veazie,  344,  14  Am.  B.  R.  780. 
8  How.  251,  12  L.  Ed.  1067;  Cham- 


APPELLATE    PROCEEDINGS.  925 

allowance  of  a  claim  of  another  creditor  in  case  the  trustee 
refuses  to  appeal/  A  better  practice  is  for  the  dissatisfied 
creditor  to  procure  an  order  of  the  court  uf  bankruptcy  to 
either  direct  an  appeal  by  the  trustee  or  permit  the  creditor  to 
appeal  in  the  name  of  the  trustee.^ 

On  an  appeal  by  a  creditor  from  an  order  approving  a  com- 
position all  the  assenting  creditors  who  ha\e  received  money 
due  them  under  the  composition  must  be  made  parties  to  the 
appeal." 

A  creditor  or  the  bankrupt  are  the  proper  parties  to  take  an 
apppeal  from  a  judgment  granting  or  refusing  a  discharge.  A 
trustee  will  not  ordinarily  be  permitted  to  prosecute  an  appeal 
from  such  judgments,  for  the  reason  that  the  contest  is  be- 
tween creditors  and  the  bankrupt  and  does  not  affect  the  ad- 
ministration of  the  bankrupt's  estate  in  any  respect. 

Where  an  appeal  is  prosecuted  from  a  judgment  adjudging 
or  refusing  to  adjudge  the  defendant  a  bankrupt  it  should 
be  prosecuted  by  the  bankrupt  or  by  the  petitioning  creditors 
or  a  creditor  intervening  for  the  purpose  of  contesting  the 
adjudication."  but  not  Ijy  one  who  intervenes  after  the  judg- 
ment for  the  purpose  of  rehearing  the  order  of  adjudication.^ 

It  is  well  settled  that  all  the  parties  against  whom  a  joint 
judgment  is  rendered  must,  except  where  they  have  d/stinct 
and  separate  interests  and  the  decree  is  several  and  does  not 
jointly  affect  them  all.  unite  in  the  appeal.''     Thus  it  would 

*In  re  Roche  (C.  C.  A.  5th  Cir.),  "Marshall,    Field   &   Co.   v.   Wolf 

lOl   "Fed.    Rep.    956,    4    Am.    B.    R.  &   Bro.    Dry   Goods   Co.    (C.   C.   A. 

369;  McDaniel  v.  Stroud  (C.  C.  A.  8th    Cir.),    120    Fed.    Rep.    815.    9 

4th  Cir.),  106  Fed.  Rep.  486,  5  Am.  Am.  B.  R.  693. 

B.   R.  685;   Ohio  Valley  Bank  Co.  'In  re  Meyer  (C.  C.  A.  2d  Cir.), 

V.   Mack    (C.   C.  A.  6th   Cir.),    149  98  Fed.  Rep.  976,  3  Am.  B.  R.  559. 

Fed.  Rep.  .  ^  ^n  re  Columbia  Real  Estate  Co. 

°Chatfield  v.  O'Dwyer   (C.  C.  A.  (C.  C.  A.  7th  Cir.),   112  Fed.  Rep. 

8th  Cir.),  loi  Fed.  Rep.  797,  4  Am.  643.   7  Am.   B.   R.  44i- 

B.   R.   313.     See  also   McDaniel   v.  "  Hardee    v.    Wilson,    146    U.    S. 

Stroud    (C.    C.    A.    4th    Cir.),    106  179,  36  L.  Ed.  933. 

Fed.    Rep.   486.   5   Am.   B.   R.   685;  Crim  v.  Woodford  (C.  C.  A.  4th 

Ohio  Valley  Bank  v.  Mack    (C.  C.  Cir.).  136  Fed.  Rep.  34,  14  Am.  B. 

A.  6th  Cir.),  149  Fed.  Rep.  .  R.  302. 


926 


LAW     AND     I'KOCEEDINGS    IN     BANKRUPTCY. 


seem  tliat  whore  an  appeal  is  taken  I'ldni  a  jml^inent  adjiulg'- 
inq-  a  parlnersliip  bankrupts,  that  aU  the  partners  slionld  unite 
in  the  appeal  W  Iiere  an  appeal  is  taken  tioin  a  jn(li;nient 
reieetinc"  a  JDint  (.lehi  or  elaiin,  the  owners  oi  sneh  claim 
slunikl  luiite  in  the  appeal.  Where  an  ai)peal  is  taken  from 
a  juilo-ment  refusing-  to  adjudi^e  a  defendant  a  bankrupt, 
that  all  the  petitioning-  creditors  at  least,  and  probably  also 
such  creditors  as  may  have  appeared  to  join  in  the  petition 
under  Section  59/,  should  unite  in  the  appeal. 

Where  one  of  several  persons  having'  a  joint  interest  desires 
to  appeal  and  the  others  interested  with  him  do  not,  he  may 
appeal  alone  without  joining-  the  others  as  appellants  by 
showing  a  valid  excuse  for  not  joining  them.  This  can  be 
done  only  by  a  summons  and  severance  or  some  equivalent 
proceeding,  such  as  a  request  to  the  others  and  their  refusal 
to  join  in  the  apppeal,  or  at  least  a  notice  to  them  to  appear 
and  their  failure  to  do  so.^°     This  must  be  evident  upon  the 


"O'Dowd  V.  Russell,  14  Wall. 
404,  20  L.  Ed.  857;  Inglehart  v. 
Stansbury,  151  U.  S.  68,  38  L.  Ed. 
76;  Masterson  v.  Hcrndon,  10  Wall. 
416,  19  L.  Ed.  953. 

In  Masterson  v.  Herndon,  supra, 
the  supreme  court  sand :  "We  do 
not  attach  importance  to  the  tech- 
nical mode  of  proceeding  called 
summons  and  severance.  We  should 
have  held  this  appeal  good  if  it  had 
appeared  in  any  way  by  the  record 
that  Maverick  had  been  notified  in 
writing  to  appear,  or,  if  appearing, 
had  refused  to  join.  But  the  mere 
allegation  of  his  refusal,  in  the  pe- 
tition of  the  appellant,  does  not 
prove  this.  We  think  there  should 
be  a  written  notice  and  due  service, 
or  the  record  should  show  his  ap- 
pearance and  refusal,  and  that  the 
court  on  that  ground  granted  an  ap- 
peal to  the  party  who  prayed  for  it, 
as  to  his  own  interest.  Such  a  pro- 
ceeding   would    remove    the    objec- 


tions made  to  permitting  one  to  ap- 
peal without  joining  the  other;  that 
is,  it  would  enable  the  court  below 
to  execute  its  decree  so  far  as  it 
could  be  executed  on  the  party  who 
refused  to  join,  and  to  stop  that 
party  from  bringing  an  appeal  for 
the  same  matter.  The  latter  point 
is  one  to  which  the  court  has  al- 
ways attached  much  importance,  and 
it  has  strictly  adhered  to  the  rule 
under  which  this  case  must  be  dis- 
missed, and  also  to  the  general  prop- 
osition that  no  decree  can  be  ap- 
pealed from  which  is  not  final  in 
the  sense  of  disposing  of  the  whole 
matter  in  controversy  so  far  as  it 
has  been  possible  to  adhere  to  it 
without  hazarding  the  substantial 
rights  of  parties  interested.  We  dis- 
miss this  appeal  with  less  regret, 
as  there  is  still  time  to  obtain  an- 
other on  proceedings  not  liable  to 
the    objection    taken    to    this." 


APPELLATE    PROCEEDIXGS.  927 

record  of  the  court  appealed  from  in  order  to  enable  the  party 
prevailing  in  that  court  to  enforce  his  decree  against  those 
who  do  not  wish  to  have  it  reviewed,  and  to  prevent  him  and 
the  appellate  court  from  being  vexed  by  successive  appeals  in 
the  same  matter.^^  Where  an  appellant  obtains  an  order  of 
severance  in  the  court  below,  and  does  not  make  parties  to  his 
appeal  some  of  the  parties  below  who  are  interested  in  main- 
taining the  decree,  he  can  not  ask  its  reversal  on  any  matter 
which  will  injuriously  affect  their  interests/" 

It  is  equally  well  settled  that  where  the  judgment  is  sever- 
able in  fact  and  in  law  one  party  thereto  may  be  allowed  to 
prosecute  an  appeal  therefrom  without  joining  a  codefendant 
who  does  not  desire  to  appeal/^  Thus  it  would  seem  that 
an  appeal  from  a  judgment  rejecting  several  distinct  debts  or 
claims  that  any  one  debtor  or  claimant  would  be  entitled  to 
prosecute  an  appeal  without  joining  the  others/*  \Miere  such 
an  appeal  is  taken  it  carries  with  it  so  much  of  the  case  and 
such  of  the  parties  as  are  necessary  for  the  determination  of 
his  rights/^ 

All  the  parties  whose  rights  would  be  affected  should  be 
made  appellees.     Thus,  in  an  appeal  by  a  bankrupt  from  an 

"  Inglehart  v.   Stansbury,    151   U.  the  appeal.     It  is  true  that  each  of 

S.  68,  38  L.  Ed.  76,  and  cases  col-  the  appellants  named  has  a  separate 

lated  in  the  opinion.  interest,    but,    as    the    court    below 

'"Terry    v.    Abraham,    93    U.    S.  entered  but   one   judgment   and   al- 

38,  23  L.  Ed.  794.  lowed    the    joint    appeal,    there    ap- 

"  Forgay  v.  Conrad,  6  How.  201,  pears  to  be  no  good  reason  why 
12  L.  Ed.  404;  City  National  Bank  they  should  not  all  be  heard  to- 
V.  Hunter,  129  U.  S.  557,  578,  32  L.  gether,  as  the  main  question  de- 
Ed.  752;  Brewster  v.  Wakefield,  22  termined  by  the  court  below  and  for 
How.  118,  128,  16  L.  Ed.  301.  consideration  here  is  common  to  all 

"In  Crim  v.  Woodford  (C.  C.  A.  the  appellants,  and  separate  appeals 

4th  Cir.),  136  Fed.  Rep.  34,  14  Am.  would  have  served  no  good  purpose, 

B.   R.   302,   the  court   said :   "There  and  involved  additional  and  unnec- 

is  a   motion   to   dismiss   the   appeal  essary  expen.se.    The  motion  to  dis- 

because  the  interest  of  the  petition-  miss    the    appeal    on    that    ground 

crs  Crim,  Moore,  and  Manown  are  therefore   is  refused." 

not  joint,  but  are  several  and  dis-  "  Milner  v.   IVIeck,  95  U.   S.  252, 

tinct,    and    therefore    it    is    claimed  24  L.  Ed.  444. 
they    can    not    collectively    join    in 


*^^J8  T.AW     AXn     rROrF.KUlNC^S    IN     BANKRUPTCY, 

adjiulication  in  hankniptcy  upon  an  in\olnntaiy  petition,  he 
sluniUl  make  appellees  the  petitioning  creditors  and  prohahly 
snch  L>ther  creditors  as  ha\c  entered  their  appearance  to  join  in 
the  petition  under  Section  59/.  In  an  ap])eal  from  a  judgment 
den\  ing  a  discharge  the  hankrnpt  should  make  the  creditors 
opposing  the  discharge  aj^pellees.  In  an  appeal  hy  creditors 
t'rom  a  judgment  rejecting  a  deht  or  claim  the  trustee  should 
he  made  ap[Kdlee.  lie  represents  all  the  creditors  and  there- 
fore the  cretlitors  are  not  necessary  parties.  In  an  appeal 
from  a  jmlgment  refusing  to  adjudicate  the  defendant  a  bank- 
rupt, or  granting  a  discharge,  the  bankrupt  only  should  be 
made  appellee.  In  an  appeal  from  a  judgment  allowing  a  debt 
or  claim  of  five  hundred  dollars  or  over  the  creditor  or  cred- 
itors only,  owning  such  claims,  need  be  made  appellees. 

On  an  appeal  1)\-  a  bankrupt  from  an  order  refusing  to 
confirm  a  composition  the  creditors  must  be  made  appellees 
and  the  trustee  does  not  represent  them  for  this  purpose.^" 
\\'hen  an  appeal  is  taken  by  a  creditor  from  an  order  approv- 
ing a  composition  all  the  creditors  assenting  to  such  composi- 
tion and  ha\'ing  received  money  due  them  under  the  com- 
position must  be  made  parties  to  the  appeal. ^^ 

In  a  controversy  between  a  trustee  and  certain  lien  cred- 
itors the  stake  holders  of  the  fund  in  controversy  are  not 
necessary  parties  to  the  appeal. ^^ 

§  318.     Petition  for  appeal. 

The  petition  for  appeal  is  regularly  entitled  in  the  court  of 
bankruptcy,  together  with  the  style  of  the  case.  It  may  be 
substantially  in  the  folhnving  words:  "The  above-named  A. 
B.,  conceiving  himself  aggrieved  l)y  the  judgment  made  and 

entered  on  the day  of ,  in  the  above-entitled  cause, 

does  hereby  appeal  front  such  judgment  to  the  United  States 

"Ross    V.    Saunders     (C.    C.    A.  8th  Cir.),  120  Fed.  Rep.  815,  9  Am. 

1st  Cir.),  105  Fed.  Rep.  915,  5  Am.  R.  R.  693. 

B.  R.  350.  '*  Love,  Trustee,  v.   Export  Stor- 

"  Marshall,   Field  &  Co.   v.   Wolf  age    Co.    (C.    C.    A.   6th    Cir.),_  143 

&   Bro.   Drv   Goods   Co.    (C.   C.   A.  Fed.   Rep.   1,   16  Am.   B.   R.    171. 


APPELLATE    PROCEEDINGS.  929 

circuit  court  of  appeals  for  the circuit,  for  the  reasons 

specified  in  the  assignment  of  errors,  which  is  filed  herewith, 
and  he  prays  that  this  appeal  may  be  allowed,  and  that  a 
transcript  of  the  record,  proceedings  and  papers  upon  which 
such  judgment  was  made,  duly  authenticated,  may  be  sent  to 
the  United  States  circuit  court  of  appeals  for  the  cir- 
cuit."^ This  petition  should  be  signed  by  the  petitioner  or 
his  counsel  and  dated.  The  judge  ordinarily  endorses  upon 
the  petition  that  the  foregoing  claim  of  appeal  is  allowed  and 
signs  it,  together  with  the  date  of  the  allowance.  The  approv- 
ing of  an  appeal  bond  or  signing  a  citation  is  a  sufficient  al- 
lowance.^ 

§  319.     Assignments  of  error. 

The  appellant  must  file  with  the  clerk  of  the  court  below, 
with  his  petition  for  the  appeal,  an  assignment  of  errors,  which 
shall  set  out  separately  and  particularly  each  error  asserted 
and  intended  to  be  urged. ^ 

No  appeal  or  writ  of  error  will  be  allowed  until  such  as- 
signment of  errors  has  been  filed.  Such  assignment  of  errors 
forms  part  of  the  transcript  of  the  record  and  must  be  printed 
with  it.  When  this  is  not  done,  counsel  will  not  be  heard, 
except  at  the  request  of  the  court,  and  errors  not  assigned  ac- 
cording to  this  rule  will  be  disregarded,  but  the  court  at  its 
option,  may  notice  a  plain  error  not  assigned."     A  general 

'See  Form  No.  i66,  post.  Bank  (C.  C.  A.  6th  Cir.),  145  Fed. 

=  R.  R.   Co.  V.  Bradleys,  7  Wall.  Rep.  162,  16  Am.  B.  R.  678. 

577,   19  L.  Ed.  274;  Sage  v.  R.  R.  For  forms  of  assignment  of  er- 

Co.,  96  U.   S.  712,  24  L.  Ed.  641 ;  rors,  see  Loveland's  Forms  of  Fed. 

Brown  v.  McConnell,  124  U.  S.  489,  Prac,  Nos.  1403  to  1407. 

31  L.  Ed.  495.  °Dufour    v.    Lang,    4    C.    C.    A. 

'Rule  II,  C.  C.  A.,  and  cases  col-  663,  54  Fed.  Rep.  913,  917;  Mitchell 

lated   in  90  Fed.   Rep.,  p.  cxlvi,  et  v.    Marker,    10    C.    C.    A.    306,    62 

seg.;  In  re  Dunning  (C.  C.  A.  9th  Fed.  Rep.  139;  McClellan  v.  Pyeatt, 

Cir.),  94  Fed.   Rep.  709;   Lloyd  v.  50  Fed.  Rep.  686,  i   C.  C.  A.  613; 

Chapman    (C.    C.   A.  9th   Cir.),  93  Ilaldame    v.    U.    S.,    69    Fed.    Rep. 

Fed.    Rep.    599,    35    C.    C.    A.    474;  819.   16  C.  C.  A.  447;    Prichard  v. 

Lockman    v.    Lang    (C.    C.    A.   8th  Budd,  76  Fed.   Rep.  710,  22  C.  C. 

Cir),    128   Fed.    Rep.   279,    12   Am.  A.  504.     Rule  2  C.  C.  A.  and  cases 

B.  R.  497;  inickingcr  v.  First  Nat.  collated   in  90  Fed.    Rep.,  p.  cxlvi, 

et  seq. 


930 


LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 


assignment  of  error  nuw  be  amended  by  libns^-  a  more  specific 
assignment.''  It  bas  l)een  beld  tbat  wbere  tbe  assignment  of 
errors  is  incUulcd  in  ibo  petiticm  it  is  snfficient.* 


§  320.     Bond  on  appeal. 

An  appeal  l)ond  is  urcbnarily  essential  to  the  prosecution  of 
an  appeal,  allliiuigb  it  is  not  to  tbe  taking  of  an  appeal.^  It 
has  been  permitted  to  be  given  by  tbe  appellant  in  tbe  appellate 
court."      Trustees  are  not  required  to  give  such  bonds.'' 

The  bond  on  appeal  is  regularly  conditioned  that  the  plain- 
tiff shall  prosecute  his  appeal  to  effect  and  answer  all  damages 
and  costs  if  he  fail  to  make  such  plea  good.*  All  the  appel- 
lants need  not  join  in  the  bond.^  The  bond  is  made  payable 
to  the  appellee."  It  is  not  essential  to  the  validity  of  an  appeal 
bond  that  all  of  the  appellees  be  named  in  it.^  It  should  not 
be  made  payable  to  any  other  person.** 

The  amount  of  the  bond  is  fixed  by  the  judge  allowing  the 
appeal.  He  is  the  sole  and  exclusive  judge  of  what  it  should 
be  and  his  decision  is  final,  unless  he  violates  a  statute  or  rule 
of  practice.®    The  judge  can  not  delegate  the  approval  of  the 


'  Flickinger  v.  First  Nat.  Bank 
(C.  C  A.  6tli  Cir.),  145  Fed.  Rep. 
162,  16  Am.  B.  R.  678. 

*  Central  Trust  Co.  v.  Continental 
Trust  Co.,  86  Fed.  Rep.  517,  30  C. 
C.  A.  235. 

^  R.  S.  Sees.  1000  and  1012;  Dodge 
V.  Knowles,  114  U.  S.  430,  29  L.  Ed. 
144;  Peugli  V.  Davis,  no  U.  S.  227, 
28  L.  Ed.  127;  The  Dos  Hermanos, 
ID  Wheat.  306,  311,  6  L.  Ed.  328. 

"Anson,  Bangs  &  Co.  v.  Bkie 
Ridge  R.  R.  Co.,  23  How.  i,  16  L, 
Ed.  517;  Brobst  v.'Brobst,  2  Wall. 
96,  17  L.  Ed.  905;  Seymour  v.  Freer, 
5  Wall.  822,  18  L.  Ed.  564.  See 
also  Peugh  v.  Davis,  no  U.  S.  227, 
28  L.  Ed.  127. 

'  B.  A.  1898,  Sec.  2SC. 


*  For  form  of  bond,  see  Form 
No.  169,  post.  See  also  Gay  v.  Par- 
part,  loi  U.  S.  391,  25  L.  Ed.  841 ; 
Chateaugay  Ore  and  Iron  Co.  v. 
Blake,  35  Fed.  Rep.  804;  Peace 
River  Phosphate  v.  Edwards,  70 
Fed.  Rep.  728,  17  C.  C.  A.  358. 

°  Brockett  v.  Brockett,  2  How. 
238,  II  L.  Ed.  251. 

"  Bigler  v.  Waller,  12  Wall.  142, 
20  L.  Ed.  260. 

'  Flickinger  v.  First  Nat.  Bank 
(C.  C.  A.  6th  Cir.),  145  Fed.  Rep. 
162,  16  Am.   B.  R.  678. 

^  Davenport  v-  Fletcher,  16  How. 
142,  14  L.  Ed.  879. 

"  Jerome  v.  McCarter,  21  Wall. 
17,  22  L.  Ed.  515. 


APPELLATE  PROCEEDINGS.  931 

bond  to  tlie  clerk  ^-  or  to  a  commissioner/^  It  is  not  neces- 
sary that  the  judge  approve  the  bond  in  court. ^-  The  appel- 
late court,  however,  may  change  the  amount  of  the  bond,  in 
a  proper  case,  where  the  circumstances  have  changed  so  that 
the  security  which  was  good  and  sufficient  at  the  time  it  was 
taken  does  not  continue  to  be  so.^^  Where  an  appeal  bond  is 
defective  the  appellate  court  will  not,  for  that  reason,  dismiss 
the  appeal,  but  will  give  the  appellant  an  opportunity  to  fur- 
nish new  security.^* 

§  321.     Supersedeas. 

An  appeal  does  not  necessarily  operate  as  a  supersedeas  to 
stay  proceedings  in  a  court  of  bankruptcy.  A  supersedeas  is 
a  statutory  right.  It  follows  as  a  matter  of  law  from  a  com- 
pliance by  the  appellant  with  the  provisions  of  the  act  of 
congress  in  that  behalf.^  Without  such  compliance  no  court 
can  confer  it." 

The  statute  which  regulates  the  matter  of  supersedeas  is 
as  follows :  'Tn  any  case  where  a  writ  of  error  may  be  a 
supersedeas  the  defendant  may  obtain  such  supersedeas  by 
serving  the  writ  of  error,  by  lodging  a  copy  thereof  for  the 
adverse  party  in  the  clerk's  office  where  the  record  remains, 
within  sixty  days,  Sundays  exclusive,  after  the  rendering  of 
the  judgment  complained  of,  and  giving  the  security  required 
by  law  on  the  issuing  of  the  citation.     But  if  he  desires  to 

•"  O'Reilly  V.  Edrington,  96  U.  S.  "  Davis    v.    Wakelee,    156    U.    S. 

724,  24  L.  Ed.  659 ;  First  Nat'l  Bank  684-5,   39   L.    Ed.    578 ;    N.   O.    Ins. 

V.  Omaha,  96  U.  S.  Tyj^  24  L.  Ed.  Co.    v-    Albro    Co.,    112   U.    S.    506, 

881;  Freeman  v.  Clay,  48  Fed.  Rep.  28  L.  Ed.  809;  Union  Pacific  Co.  v. 

849,  I  C.  C.  A.  115.  Callaghan,  161  U.  S.  95,  40  L.  Ed. 

"  Haskins  v.  R.  R.  Co.,  109  U.  S.'  628. 

106,  27  L.  Ed.  873.  '  R.    S.    Sec.    1007;    Goddard    v. 

'■  Hiidgins  V.  Kemp,  18  How.  530,  Ordvvay,  94   U.    S.   672,   24  L.   Ed. 

15  L.  Ed.  sir,  514.  237;  Gay  v.  Parpart,  loi  U.  S.  391, 

"Jerome   v.    McCarter,   2T    Wall.  25  L.  Ed.  841. 

17,    22    L.    Ed.    515;    Williams    v.  'French  v.   Shoemaker,   12  Wall. 

Claflin,    103   U.    S.    753,   26   L.    Ed.  100,  20  L.  Ed.  270;  Kitchen  v.  Ran- 

606;  Harwood  v.  Diekerhoff,  117  U.  dolph,  93  U.  S.  86,  22,  L.  Ed.  810; 

S.  200,  29  L.   Ed.  887;   Johnson  v.  Sage  v.  R.  R.  Co.,  93  U.  S.  416,  2}, 

Waters,  108  U.  S.  4.  27  L.  Ed.  630.  L.   Ed.  933. 


932  LAW     AXn     PROCEEDINGS    IN     BANKRUPTCY. 

Slav  process  on  the  jiulgniciit,  he  may,  having  served  his  writ 
of  error  as  aforesaid,  give  the  security  required  hy  law  within 
sixtv  ihivs  after  the  renchtion  of  such  judgment,  or  afterward 
with  the  permission  of  a  justice  or  judge  of  the  appellate 
court.  And  in  such  cases  where  a  writ  of  error  may  be  a 
supersedeas,  executions  shall  n<,)t  issue  until  the  expiration  of 
{thr  said  term  of  si.vty)  (ten)  days."  ^ 

The  allowance  of  an  appeal  with  reference  to  superseding  a 
judgment  is  considered  the  equivalent  of  a  writ  of  error.  It 
has  accordingly  been  held  that  an  appeal,  to  operate  as  a 
supersedeas,  must  be  perfected  and  the  security  given  in 
accordance  with  the  provisions  quoted  above.^  Where  a  peti- 
tion for  rehearing,  or  a  motion  to  set  aside  the  judgment,  is 
filed,  the  time  does  not  begin  to  run  until  such  petition  or 
motion  has  been  denied."^  Where  the  appeal  is  taken  within 
sixty  days  a  judge  of  the  appellate  court  may  allow  a  super- 
sedeas after  that  time.*'  But  if  no  appeal  is  taken  within  the 
sixty  days'  period  no  judge  of  the  appellate  court  or  the  court 
itself  has  power  to  grant  a  supersedeas.'' 

The  application  for  a  supersedeas  is  regularly  made  to  the 
court  of  bankruptcy  and  not  to  the  appellate  court.''  The 
amount  of  the  bond  is  fixed  by  the  judge  allowing  it.  He  is 
the  sole  and  exclusive  judge  of  what  it  should  be,  and  his 
decision  is  final,  unless  he  violates  a  statute  or  rule  of  prac- 

'  R.    S.   Sec.    1007.  eluded.    See  Danville  v.  Brown,  128 

*  Adams  v.  Law,  16  How.  148,  14  U.  S.  503,  32  L.  Ed.  507. 

L.  Ed.  880;   Hudgins  v.  Kemp,   18  '  Peugh  v.  Davis,   no  U.  S.  227, 

How.    535,    15    L.    Ed.    511,    514;  28  L.  Ed.  127. 

French    v.    Shoemaker,    112    Wall.  'Kitchen  v.   Randolph,  93  U.   S. 

100,  20  L.  Ed.  270;  Bigler  v.  Waller,  86,  23  L.  Ed.  810;  N.  E.  R.  R.  Co.  v. 

12  Wall.  149,  20  L.  Ed.  260;  Kitchen  •  Hyde  (C.  C.  A.  ist  Cir.),  loi  Fed. 

V.  Randolph,  93  U.  S.  86,  23  L.  Ed.  Rep.  397,  4i  C  C.  A.  404;  Logan  v. 

810.  Goodwin   (C.  C.  A.  8th  Cir.),   loi 

°  Texas  &  P.  Ry.  Co.  v.  Murphy,  Fed.    Rep.   654,   41    C.   C.   A.   537; 

III  U.  S.  488,  28  L.  Ed.  492;  Brock-  Covington    Stock    Yards    v.    Keith, 

ett  V.  Brockett,  2  How.  238,  11  L.  121  U.  S.  248,  30  L.  Ed.  914. 

Ed.    251 ;    Memphis    v.    Brown,    94  As   to   when   the   appellate   court 

U.  S.  715,  24  L.  Ed.  244.     In  com-  will  grant  a  supersedeas,  see  Hunt 

•  puting  this  time,   Sundays  are   ex-  v.  Oliver,  109  U.  S.  177,  27  L.  Ed. 


APPELLATE    PROCEEDINGS. 


933 


tice.^  The  appellate  court  may,  however,  in  a  proper  case 
and  under  proper  circumstances,  change  the  amount  of  the 
bond/  or  vacate  a  supersedeas  when  the  approval  of  the  bond 
was  obtained  by  fraud  or  perjury;  and  in  such  cases  may 
refuse  to  accept  a  new  bond/** 

The  approval  of  the  bond  need  not  be  in  writing/^  The 
signing  of  a  citation  and  taking  the  oath  of  the  sureties  as  to 
their  sufficiency  is  a  sufficient  approval  of  the  bond/"  The 
bond  when  approved  is  a  matter  of  record  in  the  bankruptcy 
court,  and  a  copy  thereof  should  be  included  in  the  transcript 
of  the  record. 


§  322.     Citation. 

The  object  of  a  citation  on  an  appeal  is  to  give  notice  of 
the  removal  of  the  case  into  the  appellate  court.  The  citation 
is  usually  presented  to  and  signed  by  the  judge  ^  at  the  time 
the  appeal  is  allowed.  It  may,  however,  be  signed  by  the 
judge  subseciuently .  or  issued  by  the  appellate  court  at  any 
time  before  the  appeal  becomes  inoperative."  The  issuing 
of  the  citation  is  not  jurisdictional,  but  the  court  will  not 
hear  a  case  until  the  parties  are  brought  into  court  by  cita- 
tion.^    The  order  in  cases,  where  all  of  the  necessary  parties 


897;  Railroad  v.  Bradleys,  7  Wall. 
575,   19  L.  Ed.  274. 

*  Jerome  v.  McCarter,  21  Wall. 
17,  22  L.  Ed.   515. 

"Jerome  v.  McCarter,  21  Wall. 
17,  22  L.  Ed.  515;  Williams  v. 
Claflin,  103  U.  S.  753,  26  L.  Ed.  606; 
Harwood  v.  Dickcrhoff,  117  U.  S. 
200,  29  L.  Ed.  887 ;  Johnson  v. 
Waters,  108  U.  S.  4,  27  L.  Ed.  630. 

"R.  R.  Co.  V.  Schutte,  100  U.  S. 
644,  25   L.   Ed.   605. 

"  Davidson  v.  Lanier,  4  Wall.  447, 
18  L.  Ed.  377. 

"Silver  V.  Ladd,  6  Wall.  440,  18 
L.  Ed.  828. 

'  R.  S.  Sees.  998  and  999.  For 
Form  of  Citation,  see  Form  No.  170, 
post. 


■  Lockman  v.  Lang  (C.  C.  A.  8tli 
Cir.),    132    Fed.    Rep.    i,    12    Am. 

B.  R.  497;  Gray  v.  Grand  Fork 
Mercantile  Co.,  138  U.  S.  344,  14 
Am.  B.  R.  780;  Columbia  Iron 
Works  V.  National  Lead  Co.  (C.  C. 
A.  6th  Cir.),  127  Fed.  Rep.  99,  11 
Am.  B.  R.  340;  Altenberg  v.  Grant, 
54  U.  S.  App.  312,  83  Fed.  Rep.  980, 
28  C.  C.  A.  244;  R.  R.  Equipment 
Co.  V.  Southern  Ry.  Co.  (C.  C.  A. 
6th  Cir.),  92  Fed.  Rep.  541,  34  C. 

C.  A.  519- 

='Mendenhall  v.  Hall,  134  U.  S. 
559.  33  L-  E(l-  1012;  Chicago  &  P. 
R.  Co.  V.  Blair,  100  U.  S.  661,  25  L. 
Jul.  587;  R.  R.  Equipment  Co.  v. 
Southern  Ry.  Co.  (C.  C.  A.  6th 
Cir.),  92  Fed.  Rep.  541,  34  C.  C.  A. 


934  LAW     AND     PROCEEDINGS    IN     BANKRUPTCY. 

have  not  been  served,  is  that  the  case  stand  over  for  the 
purpose  of  giving-  the  appellant  an  opportunity  to  apply  for 
a  citation. 

Ortlinarily  no  citation  is  necessary  on  an  appeal  allowed  in 
open  court  anil  perfectetl  during  the  terui  at  which  the  decree 
appealed  from  was  rendered.'  As  there  .arc  uo  terms  in  bank- 
ruptcy a  citation  is  regularly  issued  in  each  case  because  the 
appeal  can  not  be  said  to  be  perfected  at  the  term  at  which  the 
judgment  below  is  rendered.'' 

The  citation  must  be  served  upon  the  appellee  or  his  attor- 
ney of  record  in  the  court  below.*'  It  may  be  served  by  the 
marshal.  The  usual  practice,  however,  is  for  counsel  for  the 
appellee  to  accept  service  in  writing  upon  the  citation  with- 
out formal  service  to  the  marshal.^  Where  the  citation  is 
actually  issued  upon  the  allowance  of  an  a])peal  the  omission 
to  serve  it  before  the  first  day  of  the  term  does  not  avoid  the 
appeal.  A  new  citation  may  be  ordered  to  be  issued  and 
served.''  It  is  not  sufficient  proof  of  service  of  a  citation 
to  file  an  affidavit  that  notice  of  citation  was  given  to  defend- 
ant's attorney  by  depositing  in  the  postoffice  a  copy  of  said 
citation,  postpaid,  addressed  to  them  at  their  respective  places 
of  abode  and  giving  the  names  and  places." 

\\diere  a  party  dies  before  an  appeal  is  allowed  and  prose- 
cuted, the  suit  should  be  revived  in  the  court  of  bankruptcy 
and  the  citation  should  be  addressed  to  the  proper  party  in 
the  record  at  that  time.^'' 

All  appeals  and  citations  must  be  made  returnable  not 
exceeding  thirty  days  from  the  day  of  signing  the  citation, 

519;  Evans  v.  State  Bank,  134  U.  S.  Natrons  v.  Johnson,  24  How.    195, 

330,  33  L.  Ed.  917;   Richardson  v.  16  L.  Ed.  628.' 

Green,  130  U.  S.  104,  32  L.  Ed.  872.  '  Bigler  v.  Waller,   12  Wall.    142, 

^Jacobs  V.  George,  150  U.  S.  415,  20  L,.   Ed.  260. 

37  L.   Ed.    1127.  *  Dayton  v.  Lash,  94  U.  S.  112,  24 

^Lockman  v.  Lang  (C.  C.  A.  8th  L.  Ed.  33;   Altenberg  v.   Grant,  83 

Cir.),   132  Fed.  Rep.   i,  12  Am.  B.  Fed.  Rep.  980,  28  C.   C.  A.  244. 

R-  497-  'Tripp  v.   Santa  Rosa  Street   R. 

'Bacon  v.   TTart,    i   Black,  39,    17  Co.,  144  U.  S.  126,  36  L.  Ed.  371. 

L.  Ed.  52 ;  Chicago  &  P.  R.  Co.  v.  '"  Bigler  v.  Waller,  12  Wall.  142, 

Blair,  100  U.  S.  661,  25  L.  Ed.  587 ;  20  L.  Ed.  260. 


APPELLATE  PROCEEDINGS.  935 

whether  the  return  day  fall  in  vacation  or  in  term  time,  and 
be  served  before  the  return  day/^ 

A  general  appearance  by  the  appellee,  at  the  term  the  record 
is  filed,  is  a  waiver  of  the  issuing  and  serving  of  a  citation/- 
The  appearance  of  counsel  at  a  subsequent  term  and  making 
a  motion  to  dismiss  does  not  waive  a  citation/^  A  general 
appearance  can  not  be  withdrawn  or  changed  to  a  special  ap- 
pearance without  leave  of  court." 

A  writ  of  mandamus  is  not  ordinarily  granted  to  compel  a 
judge  to  sign  a  citation.^^  If  the  judge  refuses  to  sign  a  cita- 
tion, resort  should  be  had  to  a  judge  of  the  appellate  court. 

§  323.     The  record. 

'\\"hen  an  appeal  has  been  allowed,  a  transcript  of  the  record 
of  the  proceedings  in  the  court  of  bankruptcy  must  be  prepared 
and  filed  in  the  appellate  court.  The  record  required  to  be  cer- 
tified is  the  record  of  the  case  in  the  court  of  bankruptcy.^ 

The  referee  has  no  power  to  certify  a  record  of  proceedings 
before  him  to  a  circuit  court  of  appeals."  It  is  the  duty  of  the 
clerk  to  make  the  transcript  after  and  not  before  he  is  directed 
by  counsel  to  do  so.  His  fees  are  prescribed  by  statute  ^  and 
should  be  paid  before  the  transcript  is  delivered  for  filing.  If 
a  clerk  refuses  to  produce  the  transcript  he  may  be  compelled 
to  do  so  by  mandamus  or  order  of  court.* 

"Rule  14,  C.  C.  A.,  90  Fed.  Rep.  "U.  S.  v.  Armejo,  131  U.  S.  Ap- 
clviii ;  Peace  River  Phosphate  Co.  v.  pendix,   Ixxxii ;   U.    S.   v.   Curry,  6 
Edwards,  70  Fed.  Rep.  728,  17  C.  C.  How.  106,  12  L.  Ed.  363. 
A.  358;  Ahenberg  v.  Grant,  83  Fed.  '°£.v  parfe  Virginia  Commission- 
Rep.  980,  28  C.  C.  A.  244;  Central  ers,  112  U.  S.  177,  28  L.  Ed.  691. 
Trust  Co.  V.  Continental  Trust  Co.,  '  Cook    Inlet    Coal    Fields   Co.    v. 
86  Fed.  Rep.  517,  30  C.  C.  A.  235;  Caldwell    (C.   C.   A.  4th   Cir.),    147 
Freeman  v.  Clay,  48  Fed.  Rep.  849,  Fed.  Rep.  475. 
I  C.  C.  A.  115.  *  Cook   Inlet   Coal   Fields   Co.   v. 

"Richardson  v.  Green,  130  U.  S.  Caldwell    (C.   C.   A.  4th  Cir.),   147 

104,  32  L.  Ed.  872;  Buckingham  v.  Fed.  Rep.  475. 

McLean,    Assignee    in    bankruptcy,  ^  R.   S.    Sec.   828.      See   Thornton 

13  How.  150,  14  L.  Ed.  90;  U.  S.  V.  V.  Ins.  Co.,  125  Fed.  Rep.  250. 

Armejo,  131  U.  S.  Appendix,  Ixxxii.  *  U.  S.  v.  Gomez,  3  Wall.  766,  18 

"Radford  v.    Folsom,    123   U.   S.  L.  Ed.  212;  U.  S.  v.  Booth,  18  How. 

725,  31  L.  Ed.  292.  477,  15  L-  Ed.  464. 


936 


LAW     AM)     rUOCEEDliNCS     IN      BANKRUPTCY. 


■  No  ca.^c  w  ill  Itc  IkmiiI  until  a  (.■oiiiplotc  roconl.  containing 
in  itself,  and  not  by  reference,  all  the  pajjcrs.  exhibits,  dejiosi- 
tions  ami  other  proceedings,  which  are  necessary  to  the  liear- 
ins^"  in  the  appellate  court,  sh.ill  he  lilcd.'  The  appeal  makes 
the  entire  record  a\ailahle  to  connsel  l\)r  the  appellant  and  im- 
poses UDon  him  and  the  clerk  of  the  lower  court  the  duty  of 
inserting  in  the  transcript  of  the  record  sent  to  the  appellate 
court  ever\thin^-  material  to  the  ([uestion  to  he  ])resented 
there.''  Such  orders  and  proceedings  as  are  had  before 
the  referee  in  any  case,  after  the  same  is  concluded  by  him  and 
the  proceedings  certilied,  become  a  part  of  the  record  of  the 
case  and  as  such  belong  in  the  office  of  the  clerk  of  the  court 
antl  tnay  be  included  by  him  as  a  part  of  the  record.  Where  a 
case  has  been  before  an  ap])ellate  court  on  a  former  appeal  the 
record  on  the  second  api)eal  should  be  complete  in  itself,  for 
the  reason  that  an  appellate  court  is  not  bound  to  take  judicial 
notice  of  its  own  records.'^ 

The  record  should  contain  only  such  matter  as  is  necessary 
to  the  hearing,  and  not  irrelevant  matter  or  useless  repetitions.^ 
It  is  the  duty  of  the  parties  or  their  counsel  to  attend  to  this.^ 


^  Rule  14,  C.  C.  A.,  90  Fed.  Rep. 
clvii;  Williams  Bros.  v.  Savage  (C. 
C.  A.  4th  Cir.),  120  Fed.  Rep.  497, 
9  Am.  B.  R.  720 ;  Cunningham  v. 
German  Ins.  Bank  (C.  C.  A.  6th 
Cir.),  103  Fed.  Rep.  932,  4  Am.  B. 
R.  192;  Devries  v.  Shanahan  (C.  C. 

A.  4th  Cir.),  122  Fed.  Rep.  629,  10 
Am.  B.  R.  518. 

'Dodge  V.  Norlin  (C.  C.  A.  8th 
Cir.),    133   Fed.    Rep.   363,    13   Am. 

B.  R.  176. 

See  also  Teller  v.  U.   S.    (C.   C. 


we  are  always  required  to  do  so. 
Cushman  Paper  Box  Machine  Co. 
V.  Goddard,  37  C.  C.  A.  221, 
95  Fed.  Rep.  664,  666.  The  prop- 
er and  safe  way  of  proceeding 
even  with  reference  to  the  tribunal 
in  which  the  prior  record  remains, 
is  by  plea  and  proof.  Nevertheless, 
as  the  practice  with  reference  to  a 
petition  of  the  character  now  before 
us  is  not  yet  fully  understood,  even 
if  it  may  be  said  to  be  thoroughly 
settled,  we  will   avail  ourselves  of 


A.  8th  Cir.),  Ill  Fed.  Rep.  119,  49      the    right   which   we   have   to   take 


C.  C.  A.  263. 

''In  re  Osborne  (C.  C.  A.  ist 
Cir.),  115  Fed.  Rep.  i,  8  Am.  B. 
R.  165,  the  court  said:  "While  it 
is  well  settled  that  wc  can  take 
judicial  knowledge  of  our  own  rec- 


judicial  knowledge  of  our  own  pro- 
ceedings." 

*  See  observation  of  the  supreme 
court  in  Union  Pac.  Railway  Co.  v. 
Stewart,  95  U.  S.  279,  284,  24  L. 
Ed.  431 ;  Burnham  v.  Street  Ry.  Co., 


ords,    it    is    not    at    all    clear    that      87  Fed.  Rep.  168,  30  C.  C.  A.  594; 


APPELLATE    PROCEEDINGS. 


937 


In  taking  appeals  in  bankruptcy  it  will  frequently  occur  that 
many  papers  and  proceedings  ought  not  to  be  included  in  the 
record.  That  the  clerk  may  not  be  left  in  doubt,  he  may  re- 
quire of  the  attorney  for  the  appellant  a  praecipe  stating  spe- 
cifically what  the  record  shall  contain,  and  attach  a  copy  of 
the  praecipe  to  the  transcript.'^  The  certificate  in  such  case 
should  be  that  it  is  a  true  and  correct  transcript,  according  to 
the  praecipe.  If  the  attorney  for  the  appellee  asks  him  to  in- 
clude other  parts  of  the  record  in  the  transcript,  he  may  apply 
to  the  court  of  bankruptcy  for  directions  in  respect  to  such 
matter.^'' 

Where  the  record  is  filed  in  an  appellate  court  and  is  made 
to  appear  by  the  appellee  that  necessary  papers,  etc.,  have 
been  omitted  in  making  the  transcript,  they  may  be  supplied 
upon  application  to  that  court."  \Miere  witnesses  are  exam- 
ined orally,  the  testimony  presented  in  that  form  or  its 
substance  must  be  stated  in  writing  and  made  a  part  of  the 
record,  or  it  will  be  entirely  disregarded  on  appeal.^-  Exhibits 
attached  to  depositions  are  properly  included  in  a  record. ^^ 
The  fact  that  evidence  is  not  included  in  the  transcript  is  not 
a  suflicient  reason  to  dismiss  the  appeal.^*     The  remedy  is 


Nashua  &  Lowell  R.  Corp.  v.  Bos- 
ton &  Lowell  R.  Corp.,  6i  Fed. 
Rep  237.  9  C.  C  A.  468;  Union 
Pac.  R.  Co.  V.  U.  S.,  116  U.  S.  402, 
29  L.  Ed.  677 

If  the  record  contains  such  parts 
as  is  called  for  b}^  either  party  it 
is  sufficient;  Blanks  v.  Klein,  49 
Fed.  Rep.   i,   i  C.  C.  A.  254. 

'  Cunningham  v.  German  Ins. 
Bank  (C.  C.  A.  6th  Cir.),  103  Fed. 
Rep.  932,  4  Am.  B.  R.  192;  Burn- 
ham  V.  Street  Ry.  Co.,  87  Fed.  Rep. 
168,  30  C.  C.  A.  594.  See  also  Penn. 
Co.  V.  Jacksonville,  etc.  Ry.  Co..  55 
Fed.  Rep.  131,  5  C.  C.  A.  53;  I'lor- 
ida  Cent.  R.  R.  Co.  v.  Schutte, 
100  U.  S.  644,  647,  25  L.  Ed.  605. 


But  sec  In  re  Robertshaw  Mfg. 
Co.,  135  Fed.  Rep.  220,  14  Am.  B. 

R.  341. 

"Florida  Cent.  R.  R.  Co.  v. 
Schutte,  100  U.  S.  644,  647,  25  L. 
Ed.  605. 

See  also  Certiorari  to  complete 
record,  Sec.  306,  ante. 

"Williams  Bros.  v.  Savage  (C. 
C.  A.  4th  Cir.).  120  Fed.  Rep.  497, 
9  Am.  B.  R.  720 ;  Blcase  v.  Garling- 
ton,  92  U.  S.  I,  23  L.  Ed.  521.  See 
Rule  (if  ^lay  15,  1893,  149  U.  S.  793. 

"Clark  Thread  Co.  v.  Williman- 
tic  Linen  Co.,  140  U.  S.  481,  35  L. 
Ed.  521. 

"'i'aft  &  Co.  v.  Century  Sav. 
P>ank   (C.  C.  A.  8th  Cir.),  141   Fed. 


Hoc  v.  Kahlcr,  27  Fed.  Rep.  145.       Rep.  369,   15  Am.   B.   R.   594;   Cun- 


938 


LAW    AND    TROCEEDINGS    IN     BANKRUPTCY. 


a  writ  of  certiorari  to  bring  up  the  omitted  parts  of  the  record 
of  the  court  below  if  necessary  to  the  hearing  in  the  appellate 
court.  The  upiniou  of  the  court  of  bankruptcy,  if  in  writ- 
ing, should  be  annexed  to  the  transcript,^"'* 

The  transcript  must  be  authenticated  under  the  seal  of  the 
court  and  be  signetl  by  the  clerk, ^"^  Where  the  certificate  is 
under  the  seal  of  the  court  it  may  be  amended  by  adding  the 
signature  of  the  clerk. ^' 

In  the  case  of  a  writ  of  error  a  bill  of  exceptions  is  nec- 
essary to  bring  up  the  evidence  and  rulings  of  the  court  dur- 
ing the  trial.  A  bill  of  exceptions  has  no  function  and  serves 
no  purpose  on  an  appeal  from  a  decree  in  equity  or  bank- 
ruptcy.^^ A  judge  of  a  court  of  bankruptcy  is  not  required  to 
make  findings  of  fact  for  the  record  on  an  appeal  from  his 
decision.^^ 

§  324.    Amendments  to  the  record. 

\\'here,  from  inadvertence  or  mistake  of  the  clerk  of  the 
court  below,  or  from  any  other  cause,  the  record  transmitted 
to  the  appellate  court  is  defective  or  incorrect,  the  errors  or 
mistakes  are  regularly  corrected  by  a  wa"it  of  certiorari  to 
bring  up  a  full  and  true  transcript  of  the  record,^     The  clerk 


ningham  v.  German  Ins.  Bank  (C. 
C.  A.  6th  Cir.),  103  Fed.  Rep.  932, 
4  Am.  B.  R.  192;  Flickinger  v.  First 
Nat.  Bank  (C.  C.  A.  6th  Cir.),  145 
Fed.  Rep.  162,  16  Am.  B.  R.  678. 

"  Rule  14  C.  C.  A. ;  Teller  v.  U. 
S.  (C.  C.  A.  8th  Cir.),  in  Fed.  Rep. 
119,  49  C.  C.  A.  263. 

"Blitz  V.  Brown,  7  Wall.  693,  19 
L.  Ed.  280. 

A  certificate  signed  "A.  B.,  clerk 
of  said  court,  bj-  C.  D.,  deputy,"  is 
a  sufficient  signature ;  Garneau  v. 
Dozier,  100  U.  S.  7,  25  L.  Ed.  536. 

"  Idaho  &  Ore.  Land  Imp.  Co.  v. 
Bradbury,  132  U.  S.  509,  33  L.  Ed. 
433- 


Cir.),  133  Fed.  Rep.  363,  13  Am, 
B.  R.  176. 

^^  In  re  Meyers,  105  Fed.  Rep. 
353,  5  Am.  B.  R.  4. 

^  See  Sec.  306,  ante. 

In  Devries  v.  Shanahan  (C.  C. 
A.  4th  Cir.),  122  Fed.  Rep.  629,  10 
Am.  B.  R.  518,  the  court  said : 
"The  record  in  this  case,  whilst 
it  suggests  facts  material  to  its  con- 
sideration, does  not  set  them  forth 
as  clearly  as  is  necessary  to  its  de- 
cision. It  is,  therefore,  ordered  that 
the  cause  be  remanded  to  the  dis- 
trict court,  with  instructions  to  re- 
quire all  the  facts  connected  with 
the  failure  to  prove  and  prosecute 


'  Dodge  V.  Norlin  (C.  C.  A.  8th      the  claim  of  the  estate  of  John  M, 


APPELLATE    PROCEEDINGS. 


939 


of  the  court  of  bankruptcy  may  supply  an  omission  in  a  record 
by  certifying  such  omitted  parts  without  an  order  of  court." 
He  can  not  in  this  matter  correct  an  erroneous  statement  in  a 
transcript." 

Appeals  are  heard  upon  the  pleadings  and  proofs  below. 
No  new  evidence  can  be  admitted,  and  the  record  will  not 
ordinarily  be  amended  in  the  appellate  court.'*  It  is  true,  an 
amendment  may  be  had  in  the  appellate  court  by  consent  of 
parties,^  and  so  also  amendments  have  been  allowed  in  the 
appellate  court  to  substitute  the  name  of  an  officer  as  appellant 
in  place  of  his  predecessor  in  office ; ''  and  where  it  appeared 
by  the  certificate  of  the  clerk  that  he  had  committed  a  clerical 

^  Hudgins  v.  Kemp,  i8  How.  530, 
15  L.  Ed.  511,  514. 


Orem,  deceased,  against  the  bank- 
rupt estate  of  W.  Morris  Orem, 
prior  to  the  petition  of  the  appellee, 
to  be  inquired  into  and  reported 
to  it,  and,  when  such  facts  are  so 
reported,  to  pass  upon  the  same." 

In  Barber  v.  Coit  ( C.  C.  A.  6th 
Cir.),  118  Fed.  Rep.  2-/2,  55  C.  C. 
A.  145,  the  following  order  was 
made :  "The  decree  of  the  district 
court  of  the  United  States  is  re- 
versed and  the  cause  remanded  to 
said  court,  with  directions  that  the 
cause  be  remitted  to  the  referee 
by  said  court  with  directions  that 
he  take  proof  of  the  pleadings  in 
said  Ohio  case,  and  that  upon  the 
record  as  thus  completed  the  ref- 
eree proceed  to  reliear  the  matter. 
This  order  is  made  because  the 
case  is  not  properly  prepared  for 
decision  and  because  great  injustice 
may  be  done  if  the  cause  is  to  be 
decided  on  present  record.  The 
order  is  made  upon  our  own  motion 
on   authority   of  Estho    v.    Lear,   7 


^  Pacific  R.  Co.  V.  Ketchum,  95 
U.  S.  I,  24  L.  Ed.  347;  Udall  v. 
Steamship  "Ohio,"  17  How.  17,  15 
L.  Ed.  42 ;  Hudgins  v.  Kemp,  18 
How.  530,  15  L.  Ed.  511,  514;  The 
Protector,  1 1  Wall.  82,  20  L.  Ed.  47. 

In  Kennedy  v.  Bank  of  Geor- 
gia, 8  How.  610,  \2  L.  Ed.  1209, 
tile  supreme  court  said ;  "There  is 
nothing  in  the  nature  of  appellate 
jurisdiction,  proceeding  according 
to  the  common  law,  which  forbids 
the  granting  of  amendments,  etc., 
but  the  practice  has  been  to  re- 
mand the  cause  to  the  lower  court 
for  amendment."  See  also  Denny 
V.  Pironi,  141  U.  S.  121,  35  L.  Ed. 
657;  Metcalf  V.  Watertown,  128  U. 
S.  586,  32  L.  Ed.  543;  Tug  River 
Coal  &  Salt  Co.  v.  Brigel,  67  Eed. 
Rep.  625,  14  C.  C.  A.  577,  remanded 
and  amendment  allowed  in  circuit 
court  in  Tj,  Fed.  Rep.  13. 

°  As  was  done  in  Fletcher  v.  Peck, 


Pet.  130-1,  8  L.  Ed.  632,  and  Illinois      6  Cranch,  £7,  3  L.  Ed.  162. 


Cent.  Rd.  v.  Illinois,  146  U.  S.  387, 
36  L.  Ed.  1018.  The  costs  of  this 
appeal  will  be  divided." 

'  Crandall  v.  Nevada,  6  Wall.  35, 
18  L.  Ed.  744,  745- 


"  Bowden  v.  Johnson,  107  U.  S. 
251,  27  L.  Ed.  386;  Gates  v.  Good- 
loe,  10:  U.  S.  612,  25  L.  Ed.  895; 
U.  S.  V.  Hopewell,  51  Fed.  Rep. 
798,  2  C.  C.  A.  510. 


940  1  AW     AM)     PROCEEDINGS    IN     BANKRl'lTCV. 

error  in  the  transcript  it  was  corrected  in  the  appellate  court 
\vithout  issuiui;  a  writ  oi  certiorari' 

%  325.     Perfecting  an  appeal  and  filing  the  record. 

An  appeal  is  taken  within  tlie  c^nitemplation  of  the  statute 
when  it  is  allow^ed  and  the  i)a[)ers  I'llcd  in  the  clerk's  office/ 
The  taking  of  an  appeal  deprives  the  court  of  bankruptcy  of 
jurisdiction  to  further  consider  matters  involved  in  the  appeal. 
It  can  only  assist  in  perfecting  the  appeal.  An  appeal  does  not 
alTect  its  jurisdiction  over  other  matters  in  the  proceedings 
from  which  no  appeal  is  taken.  Perfecting  an  appeal  by  giv- 
ing a  bond.-  issuing  and  serving  a  citation,^  and  liling  the 
record  in  the  appellate  court  is  essential  to  the  prosecution  of 
a  suit  in  an  appellate  court. 

It  is  the  duty  of  the  appellant  to  file  the  record  with  the 
clerk  of  the  appellate  court  by  or  before  the  return  day, 
whether  in  vacation  or  in  term  time.*  The  appeal  and  cita- 
tion must  be  made  returnable  not  exceeding  thirty  days  from 
the  date  of  the  signing  of  the  citation.'^  The  time  for  filing 
the  record  may  be  enlarged  before  its  expiration  by  the  justice 
or  judge  who  signed  the  citation,  and  the  order  of  enlargement 
should  be  filed  wath  the  clerk  of  the  appellate  court.*"  This 
rule  is  directory,  and  it  is  within  the  sound  discretion  of  the 
appellate  court  to  relieve  parties  who  have  not  complied  with 
it.'^     Unless  the  record  is  filled  within  the  next  term  succeed- 

^  Woodward  v.  Brown,  13  Pet.  i,  An  order  extending  the  time  for 

10  L.  Ed.  31.  filing   the   record   on   appeal,   made 

^  Sec.  316,  ante.  after  the  time  had  expired,  is   in- 

^  Sec.  320,  ante.  effective.     In  re  Alden  Electric  Co. 

'Sec.  322,  ante.  (C.  C.  A.  7th  Cir.),  123  Fed.  Rep. 

'Rule  16,  C.  C.  A.  90  Fed.  Rep.  415,   10  Am.  B.  R.  370. 

clix;  In  re  Alden  Electric  Co.   (C.  No  other  judge  is  entitled  to  ex- 

C.  A.  7th  Cir.),  123  Fed.  Rep.  415,  tend    the    time    for    filing    record; 

10  Am.  B.  R.  370.    See  also  Pender  West  v.  Irwin,  54  Fed.  Rep.  419,  4 

V.  Brown   (C.  C.  A.  4th  Cir.),   120  C.  C.  A.  401. 

Fed.  Rep.  496,  56  C.  C.  A.  646.  'Florida     v.     Charlotte     Harbor 

"Rule  14,  C.  C.  A.  90  Fed.  Rep.  Phosphate    Co.,   70   Fed.    Rep.   883, 

clviii.  17  C.  C.  A.  472. 

"Rule  16,  C.  C.  A.  90  Fed.  Rep. 
clix. 


APPELLATE  PROCEEDINGS.  941 

ing  the  allowance  of  the  appeal,  the  appeal  has  spent  its  force 
and  should  be  dismissed.^  One  term  is  held  annually  by  the 
circuit  court  of  appeals  in  the  several  judicial  circuits.**  Where 
the  appellant  without  fault  on  his  part  is  prevented  from  filing 
the  transcript  within  such  time  by  the  fraud  of  his  opponent 
or  the  contumacy  of  the  clerk  or  the  order  of  the  court  below, 
his  time  to  file  the  transcript  may  be  enlarged  by  the  appellate 
court."  Where  the  record  is  filed  at  the  next  term,  but  after 
the  return  day,  or  the  time  as  enlarged  for  filing  it,  and  before 
a  motion  to  dismiss  is  filed,  the  objection  that  the  record  was 
not  filed  in  time  is  not  sufficient  to  dismiss  the  appeal." 

If  the  appellant  fails  to  file  his  record  on  or  before  the  return 
day.  the  appellee  may  have  the  case  docketed  and  dismissed 
upon  producing  the  certificate,  whether  in  term  time  or  in  vaca- 
tion, from  the  clerk  of  the  court  of  bankruptcy,  stating  the 
case  and  certifying  that  such  appeal  has  been  duly  allowed.^" 
In  no  case  is  the  applicant  entitled  to  docket  the  case  and  file 
the  record  after  the  same  has  been  docketed  and  dismissed, 
unless  by  order  of  the  court.^^  The  appellee  may,  at  his  op- 
tion, docket  the  case  and  file  a  copy  of  the  record  with  the  clerk 
of  the  appellate  court:  and  if  the  case  is  docketed  and  a  copy 

'Wauton   V.   DeWolf,    142   U.    S.  Rep.  980,   28   C.   C.  A.  244;   Jones 

138,  35  L.  Ed.  965;  Evans  v.  State  v.  Mann,  72  Fed.  Rep.  85,  18  C.  C. 

Bank,  134  U.  S.  330,  3  L-  Ed.  917;  A.  442;  Andrews  v.  Thum,  64  Fed. 

Grigsby   v.    Purcell,  99  U.    S.    505>  Rep.    I49>    12    C.    C.    A.    T] ;    West 

25  L.  Ed.  354.  Chicago    St.    R.    R.    Co.    v.    Ells- 

"Act  of  March  3,   1891,  26  Stat.  worth,    T7    Fed.    Rep.    664,    23    C. 

at  L.  826,  Sec.  3.     In  some  circuits  C.    A.   393;    Nashua    &    Lowell    R. 

more  than  one  term  is  held.    Pender  Corp.  v.  Boston  &  Lowell  R.  Corp., 

V.  Brown  (C.  C.  A.  4th  Cir.),  120  61   Fed.  Rep.  237,  9  C.  C.  A.  468. 

Fed.  Rep.  496,  56  C.  C.  A.  646.  '=  Rule  16,  C.  C.  A.  90  Fed.  Rep. 


10 


See   U.    S.    V.    Gomez,   3   Wall.  clx.     See  Loveland's  Forms  of  Fed. 

752,    18    L.    Ed.    212;    Ableman    v.  Prac,  Form  No.  1490. 
Booth,  21  How.  506,  512,  16  L.  Ed.  This  was  done  In  re  Alden  Elcc- 

169.  trie   Co.    (C.   C.   A.    7th   Cir.),    123 

"Bingham  v-   Morris,   7   Cranch,  Fed.  Rep.  415,  10  y\m.  B.  R.  370. 
99,   3    L.    Ed.    281 ;    Farmers   Loan  '"  Rule  16,  C.  C.  A.  90  Fed.  Rep. 

&  Trust   Co.   V.   Chicago   N.    P.    R.  clx;    Florida    v.    Charlotte    Harbor 

Co.,  ^^  Fed.  Rep.  314,   19  C.  C.  A.  Phosphate    Co.,    70    l\-d.    Rep.    883, 

477;    Altenberg    v.    Grant,   83    Fed.  17  C.   C.  A.  472. 


942  LAW     AM)     1'RUCEE1)1N(JS    IN     BANKRUPTCY. 

of  the  roc(U\l  t'lknl  with  the  dork  of  the  appellate  e«nut  by  the 
appelhint  within  the  pericul  limited  ami  preserihed  by  the  rules 
or  by  the  appellee  at  any  time  thereafter,  .the  ease  shall  stand 
for  argument  at  the  term.'' 

Upon  iiling  the  transcript  o\  record  the  appearance  of  coun- 
sel for  the  party  docketing  the  case  must  he  entered.^" 

Filing  the  record  and  ilocketing  the  case  in  the  appellate 
court  confers  jurisdiction  ni)()n  that  court  of  that  case.  The 
trial  court  has  no  power  to  enter  orders  affecting  the  matter 
involved  on  the  appeal  thereafter.^" 

§  326.     Proceedings  in  a  circuit  court  of  appeals. 

The  practice  in  a  circuit  court  of  appeals  is  generally  sub- 
stantially the  same  as  that  of  the  supreme  court  of  the  United 
States.  In  certain  respects  it  has  been  changed  by  rules. 
When  a  transcript  of  record  is  filed  in  the  office  of  the  clerk, 
it  is  his  duty  to  docket  the  case.  He  enters  upon  a  docket  all 
the  cases  brought  to  and  pending  in  the  court  in  their  proper 
chronological  order.  The  transcript  of  the  record  is  then 
printed  in  the  manner  prescribed  by  the  rules  of  the  circuit 
court  of  appeals  in  which  the  case  is  pending.'  The  printing 
rules  vary  in  the  several  courts.  Printed  briefs  are  required. 
The  number  of  briefs,  wdiat  they  shall  contain,  and  the  time 
within  which  they  must  be  filed  is  prescribed  by  the  rules 
of  the  several  circuit  courts  of  appeals." 

"  Rule  i6,  C.  C.  A.  90  Fed.  Rep.  Vider  v.  O'Brien,  62  Fed.  Rep.  326, 

clx.  10  C.  C.  A.  385 ;  Texas  &  P.  Ry.  Co. 

''Rule  16,  C.  C.  A.  90  Fed.  Rep.  v.  Reeder,  76  Fed.  Rep.  550,  22  C. 

clx.  C.  A.  314;   Doe  V.  Mining  Co.,  70 

"First  Nat.   Bank  v.   State   Nat.  Fed.   Rep.  455,   17  C.   C.  A.   190. 

Bank  (C.  C.  A.  9th  Cir.),  131  Fed.  In  City  of  Milwaukee  v.  Schailer 

Rep.  430,   12  Am.  B.  R.  440.     See  &  Schnighiu  Co.,  91  Fed.  Rep.  858, 

also    Aspen    Min.    Co.    v.    Billings,  34  C.  C.  A.  112,  the  circuit  court  of 

150  U.  S.  31,  37  L'.  Fd.  986.  appeals  for  the  seventh  circuit  said : 

'  See  Rule  23,  C.  C.  A.  "Error  is  assigned  upon  the  several 

•  Rule  24,  C.  C.  A. ;  Van  Gunden  rulings  stated,  hut  (lie  brief  for  the 

V.    Iron    Co.,    52    Fed.    Rep.    838,    3  appellant   does   not   contain,   as   re- 

C.    C.   A.   294;    City  of  Lincoln   v.  quired   by   rule    24.    'a    specification 

Sun    Vapor    Street    Light    Co.,    59  of   the    errors    relied    upon.'      The 

Fed.    Rep.    756,   8    C.    C.    A.    253;  intention  of  that   rule   is   that  the 


APPELLATE    PROCEEDINGS.  943 

Counsel  must  also  examine  the  rules  of  the  particular  court 
in  which  a  case  is  pending  with  reference  to  the  time  allowed 
for  argument  and  the  manner  of  setting  the  case  for  hearing. 
The  general  rule  is  that  when  a  petitioner  or  appellant  is  in 
default  for  brief  when  the  case  is  called  it  may  be  dismissed 
on  motion.''  The  court  has  allowed  an  appellant  in  default  for 
brief  at  the  time  of  hearing  additional  time  within  which  to 
file  a  brief  under  penalty  of  having  the  appeal  dismissed.* 
When  a  respondent  or  appellant  is  in  default  the  court  wnll 
hear  the  counsel  for  the  petitioner  or  appellant,  but  will  not 
permit  argument  by  counsel  for  the  respondent  or  appellee, 
except  on  consent  of  his  adversary  and  by  request  of  the  court.^ 

It  should  be  observed  that  it  is  the  decision  of  the  district 
judge  and  the  record  of  the  trial  before  him  wdiich  is  brought 
into  the  appellate  court  for  review.*'  On  an  appeal  in  equity 
the  whole  case  is  open  for  review  in  the  appellate  court.  The 
statute  provides  for  appeals  in  bankruptcy  "as  in  equity  cases." 
On  an  appeal  in  bankruptcy  the  whole  case  is  open  for  review 
in  the  appellate  court."  An  appellant  will  not  be  allowed  to 
urge  error  as  a  ground  for  reversal  unless  contained  in  an 
assignment  of  errors  as  provided  by  rule  11.  An  appellee  may 
urge  any  ground  in  support  of  the  decision  to  be  reviewed 
whether  it  was  presented  to  the  court  below  or  not.  A  judg- 
ment may  be  right  although  the  reasons  assigned  may  not  be 
sound.  An  appellee  will  not  be  permitted  to  challenge  the 
judgment  in  'any  respect  unless  he  has  prosecuted  a  cross- 
appeal. 

On  an  appeal  the  appellate  court  will  review  both  law  and 

brief    shall    contain,    in    the    order  *  Fitch  v.   Richardson    (C.   C.   A. 

stated,  (i)  a  statement  of  the  case,  ist    Cir.),    147    Fed.    Rep.    196. 

(2)   a  specification  of  errors  rehed  ''Rule  24,  C.  C.  A. 

upon,  and  (3)  a  brief  of  the  argu-  "Vchon  v.  Ullman  (C.  C.  A.  7th 

ment.      Each    of    these    should    be  Cir.),  147  Fed.  Rep.  694. 

under    an    appropriate    heading,    in  ^  B.    A.    1898,    Sec.    aSa;    Elliott 

enlarged  type.''  v.  Toeppner,  187  U.  S.  327,  335,  47 

'  Rule  24,  C.  C.  A. ;  Portland  Co.  L.  Ed.  200,  9  Am.  B.  R.  50.     Mer- 

V.  U.  S.,  15  Wall.  I,  21  L.  Ed.  113;  chants  Bank  v.  Cole   (C.  C.  A.  6th 

Ryan  v.   Koch,   17  Wall.   19,  21   L.       Cir.),   150  Fed.  Rep.  . 

Ed.  On. 


944 


LAW     AM)     rROCEliDlN'tiS     IN'     I'.AX  KKl   I'TCY. 


facts  as  distinguishcil  from  the  supervisory  jurisdiction  where 
only  questions  of  hiw  are  suhject  to  review/^  Findings  of 
fact,  dependent  upon  contlicting  testimony,  by  a  judge,  master, 
or  a  referee,  who  sees  and  hears  the  witnesses  testify,  have 
every  reasonable  presumption  in  their  favor  and  will  not  be 
set  aside  or  modified  unless  it  clearly  appears  that  there  was 
error  or  mistake  on  his  i)art.'*  Where  new  evidence  is  intro- 
duced before  the  judge  he  hears  the  matter  dc  novo  and  de- 
cides the  controversy  as  upon  an  original  hearing,  the  appel- 
late court  will  review  the  proceedings  before  the  judge.  If  the 
findings  of  fact  by  a  judge  and  a  referee  differ,  the  appellate 
court  will  ordinarily  examine  the  evidence  for  itself,  but  if 
the  findings  of  fact  of  a  referee  and  a  judge  are  the  same,  the 
facts  w^ill  not  usually  be  inquired  into  by  the  appellate  court. 
The  decree  of  an  appellee  court  is  regularly  an  affirmance, 
reversal  or  modification  of  the  decree  of  the  court  below.  Idie 
decree  should  provide  for  the  costs  and  may  allow  interest  in 
a  proper  case.^"    It  may  contain  a  direction  to  the  court  below 


^  Courier- Journal  Job  Printing 
Co.  V.  Brewing  Co.  (C.  C.  A.  6th 
Cir."),  loi  Fed.  Rep.  699,  4  Ain.  B. 
R.  183;  Rush  V.  Lake  (C.  C.  A. 
9th  Cir.),  122  Fed.  Rep.  561,  10 
Am.  B.  R.  455 ;  In  re  Rouse,  Haz- 
ard &  Co.  (C.  C.  A.  7th  Cir.),  91 
Fed.   Rep.  96,   i   Am.   B.    R.  234. 

In  First  National  Bank  v.  Title 
&  Trust  Co.,  198  U.  S.  280,  291,  49 
L.  Ed.  1051,  14  Am.  B.  R.  102,  the 
supreme  court  said :  "But  this  was 
an  appeal  and  not  a  petition  for  re- 
vision, and  hence  it  was  that  the 
circuit  court  of  appeals  reviewed 
the  questions  of  fact  and  declined 
to  accept  the  findings  of  the  referee 
and  the  district  court.  In  the  ex- 
ercise of  supervisory  power,  it 
would  have  been  confined  to  matter 
of  law." 

'Smith  V.  National  Suffolk  BanK 
(C.  C.  A.  1st  Cir.),  127  Fed.  Rep. 


286,  II  Am.  B.  R.  506;  Barton 
Bros.  V.  Texas  Produce  Co.  (C. 
C.  A.  8th  Cir.),  136  Fed.  Rep.  355, 
14  Am.  B.  R.  502;  Southern  Pine 
Co.  V.  Savannah  Trust  Co.  (C.  C. 
A.  5th  Cir.),  141  Fed.  Rep.  802,  15 
Am.  B.  R.  608,  and  cases  collated 
in  the  opinion. 

'"In  Hutchinson  v.  Otis  (C.  C. 
A.  ist  Cir.),  IIS  r'ed.  Rep.  937,  8 
Am.  B.  R.  382,  the  court*  said : 
"Ordinarily,  an  appellant,  or  other 
party,  who  has  postponed  by  a  pro- 
ceeding in  an  appellate  tribunal  the 
payment  of  an  amount  justly  due, 
should  pay  damages  therefor  equal, 
at  least,  to  legal  interest,  even  if  he 
has  not  received  any  increment  of 
the  fund  corresponding  thereto.  In 
Hutchinson  v.  Le  Roy  (C.  C.  A.  ist 
Cir.).  8  Am.  B.  R.  20,  113  Fed. 
202,  we  allowed  interest  against 
the  petitioner;  but  there  the  fund 


APPELLATE    PROCEEDINGS.  945 

with  reference  to  further  proceedings  to  be  taken  by  the  court 
of  bankruptcy.  The  appellate  court  does  not  execute  its  own 
decrees,  but  directs  the  court  of  bankruptcy  with  reference  to 
what  should  be  done  by  it.  The  mandate  is  directed  to  the 
particular  court  which  is  constituted  a  court  of  bankruptcy 
from  which  tlie  appeal  was  taken. 

A  petition  for  rehearing  may,  in  the  discretion  of  the  court, 
be  allowed  at  any  time  during  the  term,  but  will  not  be  allowed 
after  the  end  of  the  term  at  which  the  decree  was  entered. ^^ 
The  proper  practice  for  a  party  who  desires  a  rehearing  is  to 
submit  a  printed  brief  or  petition  or  suggestion  of  the  points 
thought  important  without  oral  argument.^"  No  reply  to  the 
petition  is  allowed  to  the  other  side,  nor  does  the  court  usually 
write  an  opinion  when  the  petition  is  denied.  If  the  court  so 
desires,  it  will  order  the  adverse  counsel  to  file  a  brief,  showing 
why  a  rehearing  should  not  be  granted,  or  it  may  order  the 
case  to  be  reheard,  or  may  modify  its  decree  or  opinion  if  it 
contains  incorrect  statements. 

§  327.     Death  of  a  party.^ 

Whenever,  pending  a  writ  of  error  or  appeal  in  a  circuit 
court  of  appeals,  either  party  shall  die,  the  proper  representa- 
tives in  the  personalty  or  realty  of  the  deceased  party,  ac- 
cording to  the  nature  of  the  case,  may  voluntarily  come  in 

which   it  was  determined  belonged  Under    the    circumstances,    and    as 
to    him,    had    been    held    adversely  this  appeal  was  taken  by  the  trustee 
from  the  outset,  as  it  grew  out  of  a  in   his  official   capacity   to    settle   a 
tort   of   the   bankrupt    which   arose  question   involving   substantial 
before    proceedings    in    bankruptcy  doubts,  we  think  that  interest  should 
were    commenced.     In   the   present  not  be  allowed." 
case,  however,  the  fund  came  into  "  Hudson  v.   Guestier,  7  Cranch, 
the  hands  of  the  trustee  in  bank-  i,  3  L.  Ed.  249;  Rule  29,  C.  C.  A.; 
ruptcy,   not   through   any   tort,   but  Bushnell  v.  Crooke  Min.  &  Smelt- 
through  the  oversight  of  Otis,  Wil-  ing  Co.,    150  U.    S.   83,   37  L.   Ed. 
cox  X'  Co.    The  trustee  merely  held  1007.  and  cases  there  collated, 
it  until  the  courts  could  determine  "  Public    Schools    v.    Walker,    9 
to  whom  it  belonged,  and  the  rec-  Wall.   603,    19  L.   Ed.  650. 
ord  does  not  show  that  the  trustee  '  Rule  19,  C.  C.  A. 
has  received  any  increment  thereof. 


940  LAW     AND     rROCi:i:iU.N(.;s     in     BA.NKUUrTCY. 

aiul  1)0  ;ulniitk\l  parties  to  the  suit,  and  thereupon  the  case 
is  hcaril  and  dotorniincd  as  in  other  cases,  and  if  such 
roproscniaii\cs  do  not  \olnnlarily  become  parties  then  the 
other  party  may  sugi^est  the  death  on  the  recortl.  and 
thereupon,  on  motion,  obtain  an  order  that,  unless  such 
representatives  shall  become  parlies  within  sixty  days,  the 
party  moving  for  such  order,  if  defcndaiil  in  error,  is  en- 
titled to  have  the  writ  of  error  ov  appeal  dismissed;  and  if 
the  party  so  moving  shall  l)e  plaintiff  in  error,  he  shall  be 
entitled  to  open  the  record  and  on  hearing  have  the  judgment 
or  decree  reversed  if  it  be  erroneous :  Provided,  hoivever,  that 
a  copy  of  every  such  order  shall  be  personally  served  on  said 
representative  at  least  thirty  days  before  the  expiration  of 
such  sixty  days. 

\\"hen  the  death  of  a  party  is  suggested  and  the  representa- 
tives of  the  deceased  do  not  appear  within  ten  days  after 
the  expiration  of  such  sixty  days,  and  no  measures  are  taken 
by  the  opposite  party  wn'thin  that  time  to  compel  their  ap- 
pearance, the  case  abates. 

When  either  party  to  a  suit  in  a  circuit  or  district  court  of 
the  United  States  desires  to  prosecute  a  w-rit  of  error  or 
appeal  to  a  circuit  court  of  appeals  from  any  final  judg- 
ment or  decree  rendered  in  the  circuit  or  district  court, 
and  at  the  time  of  suing  out  such  wa-it  of  error  or  appeal 
the  other  party  to  the  suit  is  dead  and  has  no  proper 
representative  within  the  jurisdiction  of  the  court  which 
rendered  such  final  judgment  or  decree,  so  that  the  suit 
can  not  be  revived  in  that  court,  but  has  a  proper  representa- 
tive in  some  state  or  territory  of  the  United  States,  or  in 
the  District  of  Columbia,  the  party  desiring  such  a  writ  of 
error  or  appeal  may  procure  the  same,  and  may  have  pro- 
ceeding on  such  judgment  or  decree  superseded  or  stayed 
in  the  same  manner  as  is  now^  allowed  by  law^  in  other  cases, 
and  thereupon  proceeds  with  such  \\Y\t  of  error  or  appeal 
as  in  other  cases.  And  wdthin  thirty  days  after  the  filing  of 
the  record  in  the  appellate  court  the  plaintiff  in  error  or 
appellant  must  make  a  suggestion  to  the  court,   supported 


APPELLATE  PROCEEDINGS.  947 

by  affidavit,  that  the  said  party  was  dead  when  the  writ 
of  error  or  appeal  was  taken  or  sued  out,  and  had  no 
proper  representative  within  the  jurisdiction  of  the  court 
which  rendered  such  judgment  or  decree,  so  that  the  suit 
could  not  be  revived  in  that  court,  and  that  said  party  had  a 
proper  representative  in  some  state  or  territory  of  the  United 
States,  or  the  District  of  Columbia,  and  stating  therein  the 
name  and  character  of  such  representatix-e  and  the  state  or 
territory  or  district  in  which  such  representative  resides;  and 
upon  such  suggestion  he  may  on  motion  obtain  an  order  that, 
unless  such  representative  shall  make  himself  a  party  within 
ninety  days,  the  plaintiff  in  error  or  appellant  is  entitled 
to  open  the  record,  and,  on  hearing,  have  the  judgment  or 
decree  reversed  if  the  same  be  erroneous;  Provided,  hozvever, 
that  a  proper  citation  reciting  the  substance  of  such  order  is 
served  upon  such  representative,  either  personally  or  by  being 
left  at  his  residence  at  least  thirty  days  before  the  expiration 
of  such  ninety  davs :  Provided  also,  that  in  every  such  case, 
if  the  representative  of  the  deceased  party  does  not  appear 
within  ten  days  after  the  expiration  of  such  ninety  days,  and 
the  measures  above  provided  to  compel  the  appearance  of 
such  representative  have  not  been  taken  within  the  time,  as 
above  required,  by  the  opposite  party,  the  case  abates:  Arid 
provided  also,  that  the  said  representative  may  at  any  time 
before  or  after  said  suggestion  come  in  and  l)e  made  a  party 
to  the  suit,  and  thereupon  the  case  proceeds  and  is  heard  and 
determined  as  in  other  cases. 

§  327a.     Costs  in  the  appellate  court. 

The  question  of  costs  in  the  appellate  court  is  not  governed 
by  any  statutory  provision.  The  judgment  for  costs  is  award- 
ed in  the  discretion  of  the  court  as  justice  and  right  may  re- 
quire.^ Costs  are  regularly  awarded  in  favor  of  the  prevail- 
ing party "  or  they  may  be  divided  in  proportion  as  the  court 

'  Mansfield,  etc.,  R.  Co.  v.  Swan,      Transportation  Co.,  155  U.  S.  585, 
III  U.  S.  379.  3^7.  28  L.  Ed.  462;      590,  39  L.  Ed.  271. 
Texas  &   Pacific   Ry.  v.   Interstate  =  Sup.  Ct.  Rule  24;  C.  C.  A.  Rule 

31- 


948  LAW    AND    PROCEEDINGS    IN    BANKRUPTCY. 

may  direct,  or  neither  party  may  be  allowed  costs  in  the  appel- 
late coiirt.^ 

Costs  are  not  taxed  for  or  against  tlie  United  States.*  In 
the  supreme  court  the  expense  of  printing-  the  record  by  the 
government  is  taxed  against  the  losing  part}^  except  when  the 
judgnient  is  against  the  United  States." 

It  has  often  been  decided  that  if  a  suit  is  dismissed  for  want 
of  jurisdiction  in  the  appellate  court,  no  judgment  for  costs 
can  be  given."  A  different  rule  prevails  when  there  has  been 
a  reversal  because  the  court  below  did  not  have  jurisdiction, 
as  the  appellate  court  has  authority  to  correct  the  error  of  the 
trial  court  in  taking  jurisdicion.'  The  appellate  court  has 
power  to  adjudge  costs  which  are  incident  to  a  motion  to  dis- 
miss, including  the  amount  of  the  cost  of  printing  the  record 
and  the  clerk's  fees  in  the  appellate  court.® 

The  costs  are  taxed  by  the  clerk  froni  data  in  his  office  and 
no  cost  bill  is  required  to  be  filed  by  counsel.  The  amount  of 
the  costs  is  included  in  the  mandate  and  a  bill  of  items  taxed  in 
detail  is  annexed  thereto."  The  costs  are  collected  in  the  court 
below,  which  may  issue  execution  for  them  if  necessary. 

The  costs  in  the  appellate  court  include  the  statutory  fees 
earned  by  the  clerk  filing  papers,  etc.^'*  The  expense  of  print- 
ing the  record,  including  printed  exhibits,  answers  of  respon- 
dents to  petitions  for  review  when  answers  are  permitted,  and 
the  supervision  fee  prescribed  by  law  for  preparing  the  record 
for  the  printer,  indexing  the  same,  supervising  the  printing 
and   distributing   the  printed   records,   is   taxable  as   costs.^^ 

^New  England  R.  R.  Co.  v.  Car-  3  Cranch,  514,  2  L.  Ed.  516;  Mans- 

negie  Steel  Co.  (C.  C.  A.  ist  Cir.),  field,  etc.,  R.  R.   Co.  v.   Swan,   iii 

75  Fed.  Rep.  54,  21  C.  C.  A.  210.  U.  S.  379,  387,  28  L.  Ed.  462. 

*  Sup.  Ct.  Rule  24;  C.  C.  A.  Rule  *  Bradstreet  Co.  v.  Higgins,  114  U. 

31,  90  Fed.  Rep.  clix.  S.  262,  29  L.  Ed.  176. 

''Act  of  March  3,  1877,  19  Stat.  ®  Sup.   Ct.   Rule  24,  clause  6;   C. 

at  L.  344;   R.  R.  Co.  V.   Collector,  C.  A.   Rule  31. 

96  U.  S.  594,  24  L.  Ed.  825.  "  For   statutory   fees  see   169  U. 

^  Strader  v.  Graham,  18  How.  602,  S.  740. 

15   L.   Ed.   464;   Hornthall  v.   Col-  "  C.  C.  A.  Rule  23;  Lee  Injector 

lector,  9  Wall.  560,  19  L.  Ed.  560.  Co.    v.    Penberthy    (C.    C.    A.    6th 

'Turner  v.  Enrille,  4  Dall.  7,  i  L.  Cir.),   109  Fed.  Rep.  964,  48  C.   C. 

Ed.    717;    Winchester    v.    Jackson,  A.  760;  Ex  parte  Hughes,   114  U. 


APPELLATE    PROCEEDINGS. 


949 


Where  a  party  cause  unnecessary  parts  of  a  record  to  be 
printed  in  an  appellate  court,  the  court  may  impose  costs  upon 
the  guilty  party  as  it  thinks  proper/-  An  attorney's  fee  of 
twenty  dollars  is  taxable  in  favor  of  the  attorney  for  the  pre- 
vailing party.^^ 

The  following  items  are  not  taxable  as  costs  in  the  appellate 
court :  the  amount  paid  the  clerk  below  for  transcript  of  record, 
which  is  properly  taxable  in  the  court  below  as  costs  in  the 
case;"  or  the  amount  paid  a  surety  company  for  furnishing 
an  appeal  bond ;  ^^  or  disbursements  for  printing  briefs.^*^ 

§  328.     The  mandate. 

When  a  case  is  finally  determined,  a  mandate  or  other  proper 
process  in  the  nature  of  procedendo  is  issued  to  the  court  of 
bankruptcy  for  the  purpose  of  informing  that  court  of  the 
proceedings  in  the  appellate  court,  so  that  further  proceedings 
may  be  had  in  court  of  bankruptcy  as  to  law  and  justice  may 
appertain/  It  is  not  necessary  to  recite  in  the  mandate  every 
step  in  the  various  stages  of  a  cause."  It  should  contain  the 
decree  of  the  appellate  court  and  its  directions  to  the  court  of 
bankruptcy. 

The  court  of  bankruptcy  is  bound  by  the  decree  contained 
in  the  mandate  as  the  law  of  the  case,  and  must  carry  it  into 
execution  according  to  the  mandate.       That   court  can   not 


S.  S48,  29  L.  Ed.  281 ;  Bradstreet 
Co.  V.  Higgins,  114  U.  S.  262,  29 
L.  Ed.  176. 

"  Sup.  Ct.  Rule  10,  clause  9 ; 
Railway  Co.  v.  Stewart,  95  U.  S. 
279,  284,  24  L.  Ed.  431;  Ball  & 
Socket  Fastener  Co.  v.  Kraetzer, 
150  U.  S.  Ill,  1 188,  T>7  L.  Ed.  1019; 
The  Sarah  (C.  C.  A.  5th  Cir.),  52 
Fed.  Rep.  233,  3  C.  C.  A.  56. 

"Kansas  City,  etc.,  R.  R.  Co.  v. 
McDonald  (C.  C.  A.  8th  Cir.),  60 
Fed.  Rep.  522,  9  C.  C.  A.  129;  Shil- 
lito  Co.  V.  McClung  (C.  C.  A.  6111 
Cir.),  66  Fed.  Rep.  22,  13  C.  C. 
A.  284. 


"  C.  C.  A.  Rule  31,  clause  3; 
Injector  Co.  v.  Penbcrthy  (C.  C. 
A.  Cth  Cir.),  109  Fed.  Rep.  964,  48 
C.  C.  A.  760. 

'"'Lee  Injector  Co.  v.  Penbcrthy 
(C.  C.  A.  6th  Cir.),  109  Fed.  Rep 
964,  48  C.  C.  A.  760. 

^'^  Ex  parte  Hughes,  114  U.  S. 
548,  29  L.  Ed.  281 ;  Lee  Injector 
Co.  V.  Penbcrthy  (C.  C.  A.  6th 
Cir.),  109  Fed.  Rep.  964,  48  C. 
C.  A.  760. 

'  Rule  32,  C.  C.  A. 

"  .'\ndrews  v.  Thum,  72  Fed.  Rep. 
290,   18  C.  C.  A.  566. 


950  LAW    AND    TROCEEDINGS    IN    BANKRUrTCY. 

vary  it  or  examine  it  for  aii}-  other  purpose  than  execution; 
or  give  any  otlier  or  further  rehef;  or  review  it.  even  for 
apparent  error,  upon  any  mailer  decided  on  the  appeal,  or 
intermeddle  with  it  other  than  to  settle  so  much  as  has  been 
remanded."  U  ihe  court  of  bankruptcy  mistakes  or  miscon- 
strues the  decree  of  the  circuit  court  of  appeals  and  does  not 
give  full  effect  to  the  mandate,  its  action  may  be  controlled 
either  by  a  new  appeal  or  by  a  writ  of  mandamus  to  execute 
the  mandate.*  The  court  of  bankruptcy  may  consider  and 
decide  any  matters  left  open  by  the  mandate  of  the  appellate 
court :  and  its  decision  of  such  matters  can  be  reviewed  by  a 
new  appeal  only.°  The  opinion  of  the  appellate  court  at  the 
time  of  rendering  its  decree  may  be  consulted  to  ascertain 
what  was  intended  by  its  mandate ;  and  either  upon  an  appli- 
cation for  a  writ  of  mandamus  or  upon  a  new  appeal,  it  is  for 
the  appellate  court  to  construe  its  own  mandate  and  to  act 
accordinolv.^   ■ 

It  sometimes  occurs  that  a  mandate  of  the  supreme  court, 
directed  to  a  district  or  circuit  court  in  a  case  removed  by 
writ  of  certiorari  from  a  circuit  court  of  appeals,  can  only  be 
construed  on  appeal  to  the  circuit  court  of  appeals,  because  no 
appeal  will  lie  to  the  supreme  court  in  the  case.  The  supreme 
court  will  usually  grant  a  second  writ  of  certiorari  in  that  case 
so  as  to  construe  its  own  mandate.  This  does  not  follow  as 
a  matter  of  right. 

'  Texas  &  Pac.  Ry.  v.  Anderson,  Petitioner,  153  U.  S.  246,  38  L.  Ed. 

149  U.  S.  237,  27  L.  Ed.  717;  Sib-  703. 

bald  V.  U.   S.,   12   Pet.  488,  492,  ^  °/»    re    Sandford    Fork    &    Tool 

L.  Ed.  1 167.  Co.,  160  U.  S.  247,  40  L.  Ed.  414; 

*Bissell    Carpet    Sweeper   Co.    v.  Hinckley  v.  Morton,  103  U.  S.  764, 

Goshen  Sweeper  Co.,  72  Fed.  Rep.  26  L.  Ed.  458;   Mason  v.   Pewabic 

519,   19  C.   C.  A.  25;  In  re   Postal  Co.,  153  U.  S.  361,  38  L.  Ed.  745; 

Telegraph    Co.,   85    Fed.    Rep.   853,  Nashua  &  Lowell  R.  R.  v.  Boston 

29  C.  C.  A.  456;  Perkins  v.  Fourni-  &  Lowell  R.  R.,  51  Fed.  Rep.  929, 

quet,   14  How.  313,  330,   14  L.  Ed.  5  U.  S.  App.  97. 
435;  In  re  Washington  &  George-  "Gaines  v.  Rugg,   148  U.  S.  228, 

town  R.  R.,  140  U.  S.  91,  35  L.  Ed.  238,  244,  ^7  L.  Ed.  432 ;  Supervisors 

339;  City  Bank  v.  Hunter,  152  U.  S.  v.  Kennicott,  94  U.  S.  498,  24  L.  Ed. 

512,    38    L.    Ed.    534;    City    Bank  260;  West  v.  Brashear,  14  Pet.  51, 

10  L.  Ed.  350. 


GENERAL  ORDERS  AND  FORMS, 


GENERAL  ORDERS  IN  BANKRUPTCY.        953 


GENERAL  ORDERS  IN  BANKRUPTCY. 


In  pursuance  of  the  powers  conferred  by  the  Constitution  and 
laws  upon  the  Supreme  Court  of  the  United  States,  and  particularly 
by  the  act  of  Congress  approved  July  i,  1898,  entitled  "  An  act  to 
establish  a  uniform  system  of  bankruptcy  throughout  the  United 
States,"  it  is  ordered,  on  this  28th  day  of  November,  1898,  that  the 
following  rules  be  adopted  and  established  as  general  orders  in 
bankruptcy,  to  take  effect  on  the  first  Monday,  being  the  second 
day,  of  Januar>^  1899.  And  it  is  further  ordered  that  all  proceed- 
ings in  bankruptcy  had  before  that  day,  in  accordance  with  the  act 
last  aforesaid,  and  being  in  substantial  conformity  either  with  the 
provisions  of  these  general  orders,  or  else  with  the  general  orders 
established  by  this  court  under  the  bankrupt  act  of  1867  and  with 
any  general  rules  or  special  orders  of  the  courts  in  bankruptcy, 
stand  good,  subject,  however,  to  such  further  regulation  by  rule  or 
order  of  those  courts  as  may  be  necessary  or  proper  to  carry  into 
force  and  effect  the  bankrupt  act  of  1898  and  the  general  orders  of 
this  court. 

See  B.  A.  1898,  Sec.  30. 

I. 

Docket. 

The  clerk  shall  keep  a  docket,  in  which  the  cases  shall  be 
entered  and  numbered  in  the  order  in  which  they  are  com- 
menced. It  shall  contain  a  memorandum  of  the  filing  of 
the  petition  and  of  the  action  of  the  court  thereon,  of  the 
reference  of  the  case  to  the  referee,  and  of  the  trans- 
mission by  him  to  the  clerk  of  his  certified  record  of  the 
proceedings,  with  the  dates  thereof,  and  a  memorandum 
of  all  proceedings  in  the  case  except  those  duly  entered  on 
the  referee's  certified  record  aforesaid.  The  docket  sh.ill 
be  arranged  in  a  manner  convenient  for  reference,  and 
shall  at  all  times  be  open  to  public  inspection. 

Sm!  sees.  37,  61,  nutc. 


954       LAW  AM)  rR(K'i<:i:i'iNO.s  in  bankruptcy. 

II. 

Filiuu:  of  Tjipors. 

The  clerk  or  the  referee  shall  indorse  on  each  paper  filed 
with  him  llu-  tl;i)'  ;ukI  hour  of  filing,  and  a  brief  statement 
of  its  character. 

See  sees.  34,  37,  CI,  i:??  find  142,  nvtr. 

Consult  ////■>•  Dean,  No.  3699,  Fed.  Ca.s.,  s.  c.  i  N.  W.  R.  249. 

As  to  correcting  an  erroneous  filing,  see  Alabama,  etc.,  R.  Co. 
V.  Jones,  No.   127,  Fed.  Cas.,  s.  c.  7  N.  B.  R  145. 

III. 

Process. 

All  process,  summons  and  subpoenas  shall  issue  out  of  tht 
court,  under  the  seal  thereof,  and  be  tested  by  the  clerk; 
and  blanks,  with  the  signature  of  the  clerk  and  seal  of  the 
court,  may,  upon  application,  be  furnished  to  the  referees. 

See  sees.  31,  37,  71  and  207,  (inte.  Con.sult  also  R.  S.  Sees. 

911-913. 

IV. 

Conduct  of  Proceedings. 

Proceedings  in  bankruptcy  may  be  conducted  by  the  bank- 
rupt in  person  in  his  own  behalf,  or  by  a  petitionmg  or 
opposing  creditor;  but  a  creditor  will  only  be  allowed  to 
manage  before  the  court  his  individual  interest.  Every 
party  may  appear  and  conduct  the  proceedings  by  attorney, 
who  shall  be  an  attorney  01  counsellor  authorized  to  prac- 
tice in  the  circuit  or  district  court.  The  name  oi  ihe 
attorney  or  counsellor,  with  his  place  of  business,  shah  be 
entered  upon  the  docket,  with  the  date  of  the  entry.  All 
papers  or  proceedings  offered  by  an  attorney  to  be  filed 
shall  be  indorsed  as  above  required,  and  orders  granted  on 
motion  shall  contain  the  name  of  the  party  or  attorney 
making  the  motion.  Notices  and  orders  which  are  not,  by 
ths  act  or  by  these  general  orders,  required  to  be  served  on 
the  party  personally  may  be  served  upon  his  attorne^r. 

See  sees.  61,  80  and  27G,  ante. 


GENERAL  ORDERS  IN  BANKRUPTCY.       955 


Frame  of  Petitions. 

All  petitions  and  the  schedules  filed  therewith  shall  be 
printed  or  written  out  plainly,  without  abbreviation  or  inter- 
lineation, except  where  such  abbreviation  and  interlineation 
may  be  for  the  purpose  of  reference. 

See  sees.  59  and  09,  anie. 

That  an  illegible  petition  can  not  be  filed,  see  Anon.,  i  N.  B.  R. 
215;  M  re  Malcom,  No.  S986,  Fed.  Cas.,  s.  c.  4  Law  Rep.  488. 

That  illegible  schedules  should  be  amended,  in  re  Hall,  No.  5922, 
Fed.  Cas.,  s.  c.  2  X.  B.  R.  192. 

That  dots  can  not  be  used  to  indicate  anything  necessary  to  be 
stated,  in  re  Orne,  No.  10582,  Fed.  Cas.,  s.  c.   i  Ben.  420. 

TI. 

Petition  in  Different  Districts. 

In  case  two  or  more  petitions  shall  be  filed  against  the 
same  individual  in  different  districts,  the  first  hearing  shall 
be  had  in  the  district  in  which  the  debtor  has  his  domicil, 
and  the  petition  may  be  amended  by  inserting  an  allegation 
of  an  act  of  bankruptcy  committed  at  an  earlier  date  than 
that  first  alleged,  if  such  earlier  act  is  charged  in  either  of 
the  other  petitions;   and  in  case  of  two  or  more  petitions 
against  the  same  partnership  in  different  courts,  each  hav- 
ing jurisdiction  over  the  case,  the  petition  first  filed  shall 
be  first  heard,  and  may  be  amended  by  the  insertion  of  an 
allegation  of  an  earlier   act   of  bankruptcy  than   that  first 
alleged,  if  such  earlier  act  is  charged  in  either  of  the  other 
petitions;    and,    in   cither   case,    the  proceedings   upon   the 
other  petitions  maybe  stayed  until  an  adjudication  is  made 
upon  the  petition  first  heard;   and  the  court  which  makes 
the  first  adjudication  of  bankruptcy  shall  retain  jurisdiction 
over  all  proceedings  therein  until  the  same  shall  be  closed. 
In  case  two  or  more  petitions  shall  be  filed  in  different  dis- 
tricts by  (liffcrf:nt  members  of  the  same  partnership  for  an 
adjudication  of   the   bankruptcy   of   said   partnership,    the 
court  in  which  the  petition  is  first  filed,  having  jurisdiction, 
shall  take  and   retain  jurisdiction  over  all  proceedings  in 


056  LAW    AXn    rROCi:KDTNr,S    IN    RANKRITTCY. 

such  bankruptcy  until  the  same  shall  be  closed;  a-nd  if  such 

petitions  shall  be  liled  in  the  same  district,  action  shall  be 

ihst  h;ul  uiH)n  the  one  hrst  hied.      But  the  court  so  retain- 

inj;-   jurisdiction  shall,  if  satisfied  that  it  is  for  the  greatest 

convenience  of    parties   in   interest  that   another  of    said 

courts  should  proceed  with  the  cases,  order  them  to   be 

transferred  to  that  court. 

See  sees.  G8  Jiiid  i)8,  (mlr. 

Consult  i/i  re  Boston  11.  &  IC.  R.  R.  Co  ,  No.  1678,  Fed.  Cas.,  s  c. 
9  Blatoli.  409. 

VII. 

Priority  of  Petitions. 

Whenever  two  or  more  petitions  shall  be  filed  by  credi- 
tors against  a  common  debtor,  alleging  separate  acts  of 
bankruptcy  committed  by  said  debtor  on  different  days 
within  four  months  prior  to  the  filing  of  said  petit/.ons,  and 
the  debtor  shall  appear  and  show  cause  against  an  adju- 
dication of  bankruptcy  against  him  on  the  petitions,  that 
petition  shall  be  first  heard  and  tried  which  alleges  the 
commission  of  the  earliest  act  of  bankruptcy;  and  in  case 
the  several  acts  of  bankruptcy  are  alleged  in  the  differen': 
petitions  to  have  been  committed  on  the  same  day,  the 
court  before  which  the  same  are  pending  may  order  them 
to  be  consolidated,  and  proceed  to  a  hearing  as  upon  one 
petition;  and  if  an  adjudication  of  bankruptcy  be  made 
upon  either  petition,  or  for  the  commission  of  a  single  act 
of  bankruptcy,  it  shall  not  be  necessary  to  proceed  to  a 
hearing  upon  the  remaining  petitions,  unless  proceedings 
be  taken  by  the  debtor  for  the  purpose  of  causing  suet 
adjudication  to  be  annulled  or  vacated. 

See  sees.  G8  and  98,  ante. 

VIII, 

Proceedings  in  Psirtuersliip  Cases. 

Any  member  of  a  partnership,  who  re/ uses  tc  join  in  a 
petition  to  have  the  partnership  declared  bankrupt,  shall 
be  entitled  to  resist  the  prayer  of  the  pet  tion  in  the  same 


GENERAL  ORDERS  IN  BANKRUPTCY,       957 

manner  as  if  the  petition  had  been  filed  by  a  creditor  of 
the  partnership,  and  notice  of  the  fiHng  of  the  petition 
shall  be  given  to  him  in  the  same  manner  as  provided  by 
law  and  by  these  rules  in  the  case  of  a  debtor  petitioned 
against;  and  he  shall  have  the  right  to  appear  at  the  time 
fixed  by  the  court  for  the  hearing  of  the  petition,  and  to 
make  proof,  if  he  can,  that  the  partnership  is  not  insolvent 
or  has  not  committed  an  act  of  bankruptcy,  and  to  make 
all  defences  which  any  debtor  proceeded  against  is  entitled 
to  take  by  the  provisions  of  the  act;  and  in  case  an  adjudi- 
cation of  bankruptcy  is  made  upon  the  petition,  such  part- 
ner shall  be  required  to  file  a  schedule  of  his  debts  and  an 
inventory  of  his  property  in  the  same  manner  as  is  required 
by  the  act  in  cases  of  debtors  against  whom  adjudication  of 
bankruptcy  shall  be  made. 
See  sec.  98,  antr. 

IX. 

Schedule  iu  Involuntary  Bankruptcy. 

In  all  cases  of  involuntary  bankruptcy  in  which  the 
bankrupt  is  absent  or  can  not  be  found,  it  shall  be  the  duty 
of  the  petitioning  creditor  to  file,  within  five  days  after  the 
date  of  the  adjudication,  a  schedule  giving  the  names  and 
places  of  residence  of  all  the  creditors  of  the  bankrupt, 
according  to  the  best  information  of  the  petitioning  credi- 
tor. If  the  debtor  is  found,  and  is  served  with  notice  to 
furnish  a  schedule  of  his  creditors  and  fails  to  do  so,  the 
petitioning  creditor  may  apply  for  an  attachment  against 
the  debtor,  or  may  himself  furnish  such  schedule  as  afore- 
said. 

See  sees.  33  and  81 ,  ante. 

As  to  the  duty  of  the  referee  to  cause  such  schedules  to  be  filed, 
see  B.  A.  189S,  vSec.  39,  clause  6. 

X. 

Indemnity  for  Expenses. 

Before  incurring  any  expense  iu  i)nb]ishing  or  maih'ng 
notices,  or  in  travelling,  or  in  procuring  the  attendance  of 
witnesses,  or  in  jicrpetuating  testimony,  the  clerk,  marshal 


^^58         T.AW   AXD    l'KOCI':KinN(;S   ix    havkruptcy. 

or  referee  may  require,  from  the  bankrupt  or  other  person 
in  whose  behalf  the  duty  is  to  be  })crformcd,  indemnity 
for  such  expense.  Mcuoy  advanced  for  this  purpose  bv 
the  bankrupt  or  other  person  shall  bo  repaid  him  out  of 
the  estate  as  part  of  the  cost  of  administering  the  same. 

Soo  set's.  3(>,  38,  40  mikI  (>1,  mitr. 

Compare  B.  A.  1S9S,  Sees.  62  and  04/',  clause  i. 

XI. 

A  111  end  111  outs. 

The  court  may  allow  amendments  to  the  petitior  and 
schedules  on  application  of  the  petitioner.  Amendments 
shall  be  printed  or  written,  sij^ned  and  verified,  like  orig- 
inal petitions  and  schedules.  If  amendments  are  made  to 
separate  schedules,  the  same  must  be  made  separately,  with 
proper  references.  In  the  application  for  leave  to  amend, 
the  petitioner  shall  state  the  cause  of  error  in  the  paper 
originally  filed. 

Soo  sees.  02,  63  and  92,  aulr. 

XII. 

Duties  of  Referee. 

I.  The  order  referring  a  case  to  a  referee  shall  name  a 
day  upon  which  the  bankrupt  shall  attend  before  the 
referee;  and  from  that  day  the  bankrupt  shall  be  subject 
to  the  orders  of  the  court  in  matters  relating  to  his  bank- 
ruptcy, and  may  receive  from  the  referee  a  protection 
against  arjest,  to  continue  until  the  final  adjudication  on 
his  application  for  a  discharge,  unless  suspended  or  vacated 
by  order  of  the  court.  A  copy  of  the  order  shall  forth- 
with be  sent  by  mail  to  the  referee,  or  be  delivered  to  him 
personally  by  the  clerk  or  other  officer  of  the  court.  And 
thereafter  all  the  proceedings,  except  such  as  are  required 
by  the  act  or  by  these  general  orders  to  be  had  before  the 
judge,  shall  be  had  before  the  referee. 

2.  The  time  when  and  the  place  where  the  referees  shaP. 
act  upon  the  matters  arising  under  the  several  cases  referred 
to  them  shall  be  fixed  by  special  order  of  the  judge,  or  by  the 
referee;  and  at  such  times  and  places  the  referees  may  perform 
the  duties  which  they  are  empowered  by  the  act  to  perform. 


GEN'ERAL    ORDERS    IN    BANKRUPTCY.  959 

3.  Applications  for  a  discharge,  or  for  the  approval  of  a 
composition,  or  for  an  injunction  to  stay  proceedings  of  a 
court  or  officer  of  the  United  States  or  of  a  State,  shall  be 
heard  and  decided  by  the  judge.  But  he  may  refer  such 
an  application,  or  any  specified  issue  arising  thereon,  to 
the  referee  to  ascertain  and  report  the  facts. 

See  sees.  2i),  C.2,  77,  9;),  103,  204,  20()  and  246,  anfp. 

Consult  m  re  Holmes,  No.  6632,  Fed.  Cas.,  s.  c.  8  Ben.  74;  In  re 
Hatcher,  No.  6210,  Fed.  Cas.,  s?  c.  i  X.  B.  R.  390;  In  rf  Stafford, 
N'o.  13274,  Fed.  Cas.,  s.  c.   13  N.  B.  R.  378. 

XIII. 

Appointment  and  Removal  of  Tnistoe. 

The  appointment  of  a  trustee  by  the  creditors  shall  be 
subject  to  be  approved  or  disapproved  by  the  referee  or  by 
ihe  judge;  and  he  shall  be  removable  by  the  judge  only. 
See  sees.  107  and  142,  ante.. 

XIV. 

No  Ofllicial  or  General  Trustee. 

No  official  trustee  shall  be  appointed  by  the  court,  nor 
any  general  trustee  to  act  in  classes  of  cases. 
See  see.  143,  anU. 

XT. 

Trustee  Not  Appointed   in  Certain   Cases. 

If  the  scliedule  of  a  vokmtary  bankrupt  discloses  no 
assets,  and  if  no  creditor  appears  at  the  first  meeting,  the 
court  may,  by  order  setting  out  the  facts,  direct  that  no 
trustee  be  appointed;  but  at  any  time  thereafter  a  trustee 
may  be  appointed,  if  the  court  shall  deem  it  desirable.  If 
no  trustee  is  appointed  as  aforesaid,  the  court  may  order 
that  no  meeting  of  the  creditors  other  than  the  first  meeting 
«hali  be  called. 

See  sees.  IOC),  108,  142  and  271,  rmle. 


9oO  LAW    AXD    TROCKKDINC^.S    IN    HANKIUTTCY. 

XYI. 

Notice  lo  Tnistoo  of  His  Appoiiitmoiit. 

It  shall  be  the  tluty  of  the  referee,  immediately  upon 
the  appointment  and  approval  of  the  trustee,  to  notify  him 
in  porscMi  or  by  mail  of  his  ai-)pointment;  and  the  notice 
shall  require  the  trustee  forthwith  to  notify  the  referee  of 
his  acceptance  or  rejection  of  the  trust,  and  shall  contain 
a  statement  of  the  penal  sum  of  the  trustee's  bond. 

See  sees.  39,  107  and  143.  (intr. 

XVII. 

Duties  of  Trustee. 

The  trustee  shall,  immediately  upon  entering  upon  his 
duties,  prepare  a  complete  inventory  of  all  the  property 
of  the  bankrupt  that  comes  into  his  possession.  The 
trustee  shall  make  a  report  to  the  court,  within  twenty 
days  after  receiving  the  notice  of  his  appointment,  of  the 
articles  set  off  to  the  bankrupt  by  him,  according  to  the 
provisions  of  the  forty-seventh  section  of  the  act,  with  the 
estimated  value  of  each  article,  and  any  creditor  may  take 
exceptions  to  the  determination  of  the  trustee  within 
twenty  days  after  the  filing  of  the  report.  The  referee 
may  require  the  exceptions  to  be  argued  before  him,  and 
shall  certify  them  to  the  court  for  final  determination  at 
the  request  of  either  party.  In  case  the  trustee  shall  neg- 
lect to  file  any  report  or  statement  which  it  is  made  his 
duty  to  file  or  make  by  the  act,  or  by  any  general  order  in 
bankruptcy,  within  five  days  after  the  same  shall  be  due, 
it  shall  be  the  duty  of  the  referee  to  make  an  order  requir- 
ing the  trustee  to  show  cause  before  the  judge,  at  a  time 
specified  in  the  order,  why  he  should  not  be  removed  from 
office.  The  referee  shall  cause  a  copy  of  the  order  to  be 
served  upon  the  trustee  at  least  seven  days  before  the 
time  fixed  for  the  hearing,  and  proof  of  the  service  thereof 
to  be  delivered  to  the  clerk.  All  accounts  of  trustees  shall 
be  referred  as  of  course  to  the  referee  for  audit,  unless 
otherwise  specially  ordered  by  the  court. 


GENERAL  ORDERS  IN  BANKRUPTCY.       961 

See  sees.  141,  18d  and  2(14,  ante. 

As  to  computing  the  twenty  daj's  when  property  is  in  litigation, 
see  in  re  Shields,  No.  12785,  Fed.  Cas,  s.  c.  i  N.  B.   R.  603. 

As  to  the  meaning  of  "  ma}- "  in  this  rule,  see  in  re  Perdue,  No. 
10975,  Fed.  Cas.,  s.  c.  2  N.  B.  R.  183. 

As  to  filing  exceptions,  see  in  re  Perdue,  No.  10975,  Fed.  Cas.,  s. 
c.  2  N.  B.  R.  183;  In  re  Gainey,  No.  51 81,  Fed.  Cas.,  s.  c.  2  N.  B. 
R.  525;  In  re  Jackson,  No.  7127,  Fed.  Cas.,  s.  c.  2  N.  B.  R.  508. 

XVIII. 

Sale  of  Property. 

1.  All  sales  shall  be  by  public  auction  unless  otherwise 
ordered  by  the  court. 

2.  Upon  application  to  the  court,  and  for  good  cause 
shown,  the  trustee  may  be  authorized  to  sell  any  specified 
portion  of  the  bankrupt's  estate  at  private  sale;  in  which 
case  he  shall  keep  an  accurate  account  of  each  articlx..' 
sold,  and  the  price  received  therefor,  and  to  whom  sold; 
which  account  he  shall  file  at  once  with  the  referee. 

3.  Upon  petition  by  a  bankrupt,  creditor,  receiver  or 
trustee,  setting  forth  that  a  part  or  the  whole  of  the  bank- 
rupt's estate  is  perishable,  the  nature  and  location  of  such 
perishable  estate,  and  that  there  will  be  loss  if  the  same  is 
not  sold  immediately,  the  court,  if  satisfied  of  the  facts 
stated  and  that  the  sale  is  required  in  the  interest  of  the 
estate,  may  order  the  same  to  be  sold,  with  or  without 
notice  to  the  creditors,  and  the  proceeds  to  be  deposited  in 

court. 
See  sees.  259  and  260,  mde. 

XIX. 

Accoiiiits  of  Marshal. 

The  marshal  shall  make  return,  under  oath,  of  his  actual 
and  necessary  expenses  in  the  service  of  every  warrant 
addressed  to  him,  and  for  custody  of  property,  and  other 
services,  and  other  actu.-il  and  necessary  expenses  paid  by 
him,  with  vouchers  thcrcfcn"  whenever  practicable,  and  also 
with  a  statement  that  the  amounts  charged  by  him  are  just 
und  reasonable. 


962        i.AW  AND  i'koci-;ki)1N(-;s  in  uankki'I'Tcy. 

See  ht-H".  40,  <intr. 

As  to  fees,  see  B.  A.  1S9S,  Sec.  ^2/>:  R.  vS.  Sec.  829;  act  of  INIay 
28,  1896,  vSco.  6,  29  Stat,  at   1..  179. 

As  to  the  necessity  of  producing  vouchers,  or  explaining  why 
they  are  omitted,  see  ///  n-  Couistock,  No.  3075,  Fed.  Cas.,  s.  c.  9  N. 
B.  R.  88;  ///  /r  Donahoe.  No.  3979,  Fed.  Cas.,  s.  c.  8  N.  B.  R.  453, 
But  see  ///  rr  Talbot,  No.  13727,  Fed.  Cas.,  s.  c.  2  N.  B.  R.  2^0. 

XX. 

Pa|MMs  Filod  Alter  Kefereuce. 

Proofs  of  claims  and   other  papers  filed  subsequently  to 
the  reference,  except  such  as  call  for  action  by  the  judge, 
may  be  filed  either  with  the  referee  or  with  the  clerk. 
See  sees.  29,  103  and  137,  ante. 

xxr. 

Proof  of  Debts. 

1.  Depositions  to  prove  claims  against  a  bankrupt's  estate 
shall  be  correctly  entitled  in  the  court  and  in  the  cause. 
"When  made  to  prove  a  debt  due  to  a  partnership,  it  must 
appear  on  oath  that  the  deponent  is  a  member  of  the  part- 
nership; when  made  by  an  agent,  the  reason  the  deposition 
is  not  made  by  the  claimant  in  person  must  be  stated;  and 
when  made  to  prove  a  debt  due  to  a  corporation,  the  depo- 
sition shall  be  made  by  the  treasurer,  or,  if  the  corporation 
has  no  treasurer,  by  the  of^cer  whose  duties  most  nearly 
correspond  to  those  of  treasurer.  Depositions  to  prove 
debts  existing  in  open  account  shall  state  when  the  debt 
became  or  will  become  due;  and  if  it  consists  of  items 
maturine  qt  different  dates  the  average  due  date  shall  be 
stated,  in  default  of  which  it  shall  not  be  necessary  to  com- 
pute interest  upon  it.  All  such  depositions  shall  contain 
an  averment  that  no  note  has  been  received  for  such 
account,  nor  any  judgment  rendered  thereon.  Proofs  of 
debt  received  by  any  trustee  shall  be  delivered  to  the 
referee  to  whom  the  cause  is  referred. 

2.  Any  creditor  may  file  with  the  referee  a  request  that 
all  notices  to  which  he  may  be  entitled  shall  be  addressed 
to  him  at  any  place,  to  be  designated  by  the  post-office 
box    or   street    number,    as    he   may   appoint;   and   there- 


GENERAL  ORDERS  IN  BANKRUPTCY.  '      963 

after,  and  until  some  other  designation  shall  be  made  by 
such  creditor,  all  notices  shall  be  so  addressed;  and  in  other 
cases  notices  shall  be  addressed  as  specified  in  the  proof 
of  debt. 

3.  Claims  which  have  been  assigned  before  proof  shall 
be  supported  b}'  a  deposition  of  the  owner  at  the  time  of 
the  commencement  of  proceedings,  setting  forth  the  true 
consideration  of  the  debt  and  that  it  is  entirely  unsecured, 
or  'f  secured,  the  security,  as  is  required  in  proving  secured 
claims.  Upon  the  filing  of  satisfactory  proof  of  the  assign- 
ment of  a  claim  proved  and  entered  on  the  referee's  docket, 
the  referee  shall  immediately  give  notice  by  mail  to  the 
original  claimant  of  the  filing  of  such  proof  of  assignment; 
and,  if  no  objection  be  entered  within  ten  days,  or  within 
further  time  allowed  by  the  referee,  he  shall  make  an  order 
subrogating  the  assignee  to  the  original  claimant.  If  objec- 
tion be  made,  he  shall  proceed  to  hear  and  determine  the 
matter. 

4.  The  claims  of  persons  contingently  liable  for  the 
bankrupt  may  be  proved  in  the  name  of  the  creditor  when 
known  by  the  party  contingently  hable.  When  the  name 
of  the  creditor  is  unknown,  such  claim  may  be  proved  in 
the  name  of  the  party  contingently  liable;  but  no  dividend 
shall  be  paid  upon  such  claim,  except  upon  satisfactory 
proof  that  it  will  diminish  pro  tanto  the  original  debt. 

3.  The  execution  of  any  letter  of  attorney  to  represent 
a  creditor,  or  of  an  assignment  of  claim  after  proof,  may 
be  proved  or  acknowledged  before  a  referee,  or  a  Uniteo 
States  commissioner,  or  a  notary  public.  When  executed 
on  behalf  of  a  partnership  or  of  a  corporation,  the  person 
executing  the  instrument  shall  make  oath  that  he  is  a 
member  of  the  partnership,  or  a  duly  authorized  officer 
of  the  corporation  on  whose  behalf  he  acts.  When  the 
person  executing  is  not  personally  known  to  the  officer 
taking  the  proof  or  acknowledgment,  his  identity  shall  be 
established  by  satisfactory  proof. 

6.  When  the  trustee  or  any  creditor  shall  desire  the  re- 
examination of  any  claim  filed  against  the  bankrupt's 
estate,  he  may  apply  by  petition  to  the  referee  to  whom 
the  case  is  referred   for  an  order  for  such  re-examination. 


964  LAW    AND    PROCEEDINGS    IN    RANKRUPTCY. 

and  thei"(.ni|nm  tlir  referee  shall  make  an  onicr  fixing  a 
time  for  hearing  the  petition,  of  which  due  notice  shall  be 
given  by  mail  addressed  to  the  creditor.  At  the  time 
appointed  the  referee  shall  take  the  examination  of  the 
creditor,  and  of  any  witnesses  that  may  be  called  by  either 
party,  and  if  it  shall  appear  from  such  examination  that 
the  claim  ought  to  be  expunged  or  diminished,  the  referee 
may  order  accordingly. 

See  sei-s.  10.",,  VM,  183,  140,  207  and  2(55,  ante. 

As  to  re-exatiiination  of  claims,  ?>/  re  Lount.  No.  8543,  Fed.  Cas., 
s.  c.  II  N.  B.  R.  315;  ///  re  Robinson,  No.  1  1938,  I'ed.  Cas.,  s.  c.  8 
Ben.  406;  Canby  v.  McLear,  No.  2378,  l''ed.  Cas.,  s.  c.  13  N.  B.  R.  22. 

XXII. 

Taking  of  Testimony. 

The  examination  of  witnesses  before  the  referee  may  be 
conducted  by  the  party  in  person  or  by  his  counsel  or 
attorney,  and  the  witnesses  shall  be  subject  to  examination 
and  cross-examination,  which  shall  be  had  in  conformity 
with  the  mode  now  adopted  in  courts  of  law.  A  deposi- 
tion taken  upon  an  examination  before  a  referee  shall  be 
taken  down  in  writing  by  him,  or  under  his  direction,  in 
the  form  of  narrative,  unless  he  determines  that  the  examina- 
tion shall  be  by  question  and  answer.  When  completed  it 
shall  be  read  over  to  the  witness  and  signed  by  him  in  the 
presence  of  the  referee.  The  referee  shall  note  upon  the 
deposition  any  question  objected  to,  with  his  decision 
thereon;  and  the  court  shall  have  power  to  deal  with  the 
costs  of  incompetent,  immaterial,  or  irrelevant  depositions, 
or  parts  of  them,  as  may  be  just. 

See  sees.  31,  34,  140  and  308,  ante. 

XXIII. 

Orders  of  Referee. 

In  all  orders  made  by  a  referee,  it  shall  be  recited,  accord- 
ing as  the  fact  may  be,  that  notice  was  given  and  the  man- 
ner thereof;  or  that  the  order  was  made  by  consent;  or  that 
no  adverse  interest  was  represented  at  the  hearing;  or  that 
the  order  was  made  after  hearing  adverse  interests. 

See  sec.  29,  ante. 


GENERAL  ORDERS  IN  BANKRUPTCY.        965 

XXIV. 

Transmission  of  Proved  Claims  to  Clerk. 

The  referee  shall  forthwith  transmit  to  the  clerk  a  list  of 
the  claims  proved  againt  an  estate,  with  the  names  and 
addresses  of  the  proving  creditors. 

XXY. 

Special  Meeting  of  Creditors. 

Whenever,  by  reason  of  a  vacancy  in  the  office  of  trus- 
tee, or  for  any  other  cause,  it  becomes  necessary  to  call  a 
special  meeting  of  the  creditors  in  order  to  carry  out  the 
purposes  of  the  act,  the  court  may  call  such  a  meeting, 
specifying  in  the  notice  the  purpose  for  which  it  is  called. 
See  sec .  108,  ante. 

XXVI. 

Accounts  of  Beferee. 

Every  referee  shall  keep  an  accurate  account  of  his  trav- 
elling and  incidental  expenses,  and  of  those  of  any  clerk  or 
other  officer  attending  him  in  the  performance  of  his  duties 
in  any  case  which  may  be  referred  to  him;  and  shall  make 
return  of  the  same  under  oath  to  the  judge,  with  proper 
vouchers  when  vouchers  can  be  procured,  on  the  first 
Tuesday  in  each  month. 

See  sec .  36,  nnte. 

XXVII. 

Review  by  Judge. 

When  a  bankrupt,  creditor,  trustee,  or  other  person  shall 
desire  a  review  by  the  judge  of  any  order  made  by  the 
referee,  he  shall  file  with  the  referee  his  petition  therefor, 
setting  out  the  error  complained  of;  and  the  referee  shall 
forthwith  certify  to  the  judge  the  question  presented,  a 
summary  of  the  evidence  relating  thereto,  and  the  finding 
and  order  of  the  referee  thereon. 

See  sees.  29,  30,  32a,  34,  62,  63,  90,  92,  105,  141  and  208,  ante. 


%f        LAW  Axn  i>Roci':i':i»iNi;s  in  p^ankrhptcy. 

XXVIII. 

KcdtMiipHon  of  ProiMMiy  :iimI  CoiiipoiiiHliiic:  of  Clsiiiiis. 

Whenever  it  may  be  deemed  for  the  benefit  of  the  estate 
of  u  bankrupt  t6  redeem  and  discharge  any  mortgage  or 
other  pledge,  or  deposit  or  Hen,  upon  any  property,  real  or 
personal,  or  to  relieve  said  property  from  any  conditional 
contract,  and  to  tender  performance  of  the  conditions 
thereof,  ov  to  compound  and  settle  any  debts  or  other  claims 
ilue  or  belonging  to  the  estate  of  the  bankrupt,  the  trustee, 
or  the  bankrupt,  or  any  creditor  who  has  proved  his  debt, 
may  file  his  petition  therefor;  and  thereupon  the  court  shall 
appoint  a  suitable  time  and  place  for  the  hearing  thereof, 
notice  of  which  shall  be  given  as  the  court  shall  direct,  so 
tJKit  all  creditors  and  other  persons  interested  may  appear 
and  show  cause,  if  any  they  have,  why  an  order  should  not 
be  passed  by  the  court  upon  the  petition  authorizing  such 
act  on  the  part  of  the  trustee. 
See  sees.  253,  256  and  2G3,  ante. 

XXIX. 

Pay  111  out  of  Moneys  Deposited. 

No  moneys  deposited  as  required  by  the  act  shall  be 
drawn  from  the  depository  unless  by  check  or  warrant, 
signed  by  the  clerk  of  the  court,  or  by  a  trustee,  and  coun- 
tersigned by  the  judge  of  the  court,  or  by  a  referee  desig- 
nated for  that  purpose,  or  by  the  clerk  or  his  assistant 
under  an  order  made  by  the  judge,  stating  the  date,  the 
sum,  and  the  account  lor  which  it  is  drawn;  and  an  entry  of 
the  substance  of  such  check  or  warrant,  with  the  date 
thereof,  the  sum  drawn  for,  and  the  account  for  which  it  is 
drawn,  shall  be  forthwith  made  in  a  book  kept  for  that 
purpose  by  the  trustee  or  his  clerk;  and  all  checks  and 
drafts  shall  be  entered  in  tlie  order  of  time  in  which  they 
are  drawn,  and  shall  be  numbered  in  the  case  of  each  estate. 
A  copy  of  this  general  order  shall  be  furnished  to  the 
depository,  and  also  the  name  of  any  referee  or  clerk 
authorized  to  countersign  said  checks. 

See  sec.  2G9,  ante. 


GENERAL  ORDERS  IN  BANKRUPTCY.       967 

XXX. 

luiprisoued  Debtor. 

If,  at  the  time  of  preferring  his  petition,  the  debtor  shall 
be  imprisoned,  the  court,  upon  application,  may  order  him 
to  be  produced  upon  habeas  corp2is,  by  the  jailor  or  any 
officer  in  whose  custody  he  may  be,  before  the  referee,  for 
the  purpose  of  testifying  in  any  matter  relating  to  his  bank- 
ruptcy; and,  if  committed  after  the  filing  of  his  petition 
upon  process  in  any  civil  action  founded  upon  a  claim  prov- 
able in  bankruptcy,  the  court  may,  upon  like  application, 
discharge  him  from  such  imprisonment.  If  the  petitioner, 
during  the  pendency  of  the  proceedings  in  bankruptcy,  be 
arrested  or  imprisoned  upon  process  in  any  civil  action,  the 
district  court,  upon  his  application,  may  issue  a  writ  of 
habeas  corpus  to  bring  him  before  the  court  to  ascertain 
whether  such  process  has  been  issued  for  the  collection  of 
any  claim  provable  in  bankruptcy,  and  if  so  provable  he 
shall  be  discharged;  if  not,  he  shall  be  remanded  to  the 
custody  in  which  he  may  lawfully  be.  Before  granting  the 
order  for  discharge  the  court  shall  cause  notice  to  be  served 
upon  the  creditor  or  his  attorney,  so  as  to  give  him  an 
opportunity  of  appearing  and  being  heard  before  the  grant- 
ing of  the  order. 

See  pecs.  204,  218  and  226,  ante. 

The  statute  (Sec.  9)  provides  for  an  exemption  from  arrest  except 
upon  process  founded  upon  "  a  debt  or  claim  from  which  his  dis- 
charge would  not  be  a  release."  Many  debts  are  provable  which 
are  not  released.  The  statute  undoubtedly  controls.  See  Sec.  218, 
ante.  The  same  discrepancy  existed  between  the  statute  of  1867 
and  General  Order  27,  promulgated  under  that  act.  In  repeated 
decisions  under  that  act  the  rule  was  laid  down  that  if  the  debt  was 
one  from  which  a  di.scharge  was  not  a  release,  the  bankrupt  could 
not  be  released  from  imprisonment  if  the  arrest  was  ba.sed  upon 
such  a  debt;  ///  re  Robinson,  6  Blatch.  253,  s.  c.  36  How.  Pr.  176; 
In  re  Patterson.  2  Ben.  155,  s.  c.  No.  10S17,  Fed.  Cas. ;  ///  re  Boj'st, 
2  B.  R.  171  ;  In  re  Kimball,  No.  7769,  Fed.  Cas.,  s.  c.  6  Blatch.  292; 
s.  c.  below.  No.  7768,  Fed.  Cas.,  s.  c.  2  Ben.  554  ;  In  re  Whitehouse, 
I  Lowell,  429,  s.  c.  No.  17564,  Fed.  Cas.;  In  re  IMigel,  No.  9538, 
Fed.  Cas.,  2  B.  R.  4S1  ;  In  re  Seymour,  Fed.  Cas.  No.  12684,  s.  c 
I  Ben.  348;  ///  re  Williams,  6  Biss.,  233,  s.  c.  No.  17700,  Fed.  Cas. 


968  LAW    AND    PKOCKKDINGS    IN    BANKRUPTCY. 

XXXT. 

Pt'<iti()ii    lor   l)is('lijirc:o. 

The  petition  of  a  bankrupt  for  a  discharge  shall  state 
concisely,  in  accordance  with  the  provisions  of  the  act  and 
the  orders  of  the  court,  the  proceedings  in  the  case  and 
the  acts  of  the  bankrupt. 

See  see.  273,  ante. 

XXXll. 

Opposition   to  Disclinri^o  or  Composition. 

A  creditor  opposing  the  application  of  a  bankrupt  for  his 
discharge,  or  for  the  confirmation  of  a  composition,  shall 
enter  his  appearance  in  opposition  thereto  on  the  day  when 
the  creditors  arc  required  to  show  cause,  and  shall  file  a 
specification  in  writing  of  the  grounds  of  his  opposition 
within  ten  days  thereafter,  unless  the  time  shall  be  enlarged 
by  special  order  of  the  judge. 

See  sees.  247,  275,  276  and  277,  ante. 

Consult  /;/  ;v  Grefe,  No.  5794,  Fed.  Cas.,  s.  c.  2  N.  B.  R.  329  ;  /ft 
re  Baum,  No.  11 16,  Fed.  Cas.,  s.  c.  i  Ben.  274;  In  re  McVey,  No. 
8932,  Fed.  Cas.,  s.  c.  2  N.  B.  R.  257. 

XXXIII. 

Arbitration. 

Whenever  a  trustee  shall  make  application  to  the  court 
for  authority  to  submit  a  controversy  arising  in  the  settle- 
ment of  a  demand  against  a  bankrupt's  estate,  or  for  a 
debt  due  to  it,  to  the  determination  of  arbitrators,  or  for 
authority  to  compound  and  settle  such  controversy  by 
agreement  with  the  other  party,  the  application  shall 
clearly  and  distinctly  set  forth  the  subject-matter  of  the 
controversy,  and  the  reason  why  the  trustee  thinks  it 
proper  and  most  for  the  interest  of  the  estate  that  the 
controversy  should  be  settled  by  arbitration  or  otherwise. 

$ee  sees.  253  and  263,  ante. 


GENERAL    ORDERS    iM    BANKRUPTCY.  969 

XXXIV. 

Costs  in  Coutested  Adiiulieation. 

In  cases  of  involuntary  bankruptcy,  when  the  debtor 
resists  an  adjudication,  and  the  court,  after  hearing,  ad- 
judges the  debtor  a  bankrupt,  the  petitioning  creditor  shall 
recover,  and  be  paid  out  of  the  estate,  the  same  costs 
that  are  allowed  to  a  party  recovering  in  a  suit  in  equity; 
and  if  the  petition  is  dismissed,  the  debtor  shall  recover 
like  costs  against  the  petitioner. 

See  sec.  S8 'ante. 

XXXY. 

Compeusatiou  of  Clerks,  Referees  aud  Trustees. 

1.  The  fees  allowed  by  the  act  to  clerks  shall  be  in  full 
compensation  for  all  services  performed  by  them  in  regard 
to  filing  petitions  or  other  papers  required  by  the  act  to  be 
filed  with  them,  or  in  certifying  or  delivering  paper.'-  or 
copies  of  records  to  referees  or  other  officers,  or  in  receivmg 
or  paying  out  money;  but  shall  not  include  copies  furnished 
to  other  persons,  oi  expenses  necessarily  incurred  in  pub- 
lishing or  mailing  notices  or  other  papers. 

2.  The  compensation  of  referees,  prescribed  by  the  act, 
shall  be  in  full  compensation  for  all  services  perform.ed  by 
them  under  the  act,  or  under  these  general  orders;  but 
shall  not  include  expenses  necessarily  incurred  by  them  in 
publishing  or  mailing  notices,  in  travelling,  or  in  perpetuat- 
ing testimony,  or  other  expenses  necessarily  incurred  in  the 
performance  of  their  duties  under  the  act  and  allowed  by 

special  order  of  the  judge. 

3.  The   compensation   allowed    to    trustees    by  the    act 

shall  be  in  full  compensation  for  the  services  performed  by 
them;  but  shall  not  include  expenses  necessarily  incurred  in 
the  performance  of  their  duties  and  allowed  upon  the  set- 
tlement of  their  accounts. 

4.  In  any  case  in  which  the  fees  of  the  clerk,  referee  and 
trustee  are  not  required  by  the  act  to  be  paid  by  a  debtor 
before  filing  his  petition  to  be  adjudged  a  bankrupt,  the 
judge,  at  any  time  during  the  pendency  of  the  proceedings 


970  LAW   AND   PROCEEDINGS   IN    BANKRLTTCY. 

in  bankruptcy,  may  owWv  those  Ices  to  be  paid  out  of  the 
estate;  or  niav.  after  notice  to  the  bankrupt,  and  satisfactory 
proof  thai  he  then  has  or  can  obtain  the  nu)ney  with  which  to 
pay  those  fees,  order  hun  to  pay  ihcui  within  a  time  specified, 
and.  if  he  fails  to  do  so.  may  order  his  [)etition  to  be  cHsmissed. 
He  mav  also,  pending-  such  proceedings,  both  in  voluntary  and 
involuntary  cases,  order  the  commissions  of  referees  and  trus- 
tees to  be  paid  immediately  after  such  commissions  accrue  and 
are  earned  (as  aniriidcd  Dariiibcr  11,  1905,  199  U.  S.  618). 
See  sees.  38,  6r  and  148,  (j;;/('. 

XXXVI. 
Appeals. 

1.  Appeals  from  a  court  of  bankruptcy  to  a  circuit  court 
of  appeals,  or  to  the  supreme  court  of  a  Territory,  shall  be 
allowed  by  a  judge  of  the  court  appealed  from  or  of  the 
court  appealed  to,  and  shall  be  regulated,  except  as  other- 
wise provided  in  the  act,  by  the  rules  governing  appeals  in 
equity  in  the  courts  of   the  United  States. 

2.  Appeals  under  the  act  to  the  Supreme  Court  of  the 
United  States  from  a  circuit  court  of  appeals,  or  from  the 
supreme  court  of  a  Territory,  or  from  the  supreme  court  of 
the  District  of  Columbia,  or'  from  any  court  of  bankruptcy 
whatever,  shall  be  taken  within  thirty  days  after  the  judg- 
ment or  decree,  and  shall  be  allowed  by  a  judge  of  the 
court  appealed  from,  or  by  a  justice  of  the  Supreme  Court 
of  the  United  States. 

3.  In  every  case  in  which  either  party  is  entitled  by  the 
act  to  take  an  appeal  to  the  Supreme  Court  of  the  United 
States,  the  court  from  which  the  appeal  lies  shall,  at  or 
before  the  time  of  entering  its  judgment  or  decree,  make 
and  file  a  finding  of  the  facts,  and  its  conclusions  of  law 
thereon,  stated  separately;  and  the  record  transmitted  to 
the  Supreme  Court  of  the  United  States  on  such  an  appeal 
shall  consist  only  of  the  pleadings,  the  judgment  or  decree, 
the  finding  of  facts,   and  the  conclusions  of  law. 

See  Chapter  XXVII. 

XXXVII. 

Oeueral  Provisions. 

In  proceedings   in  equity,  instituted   for  the  purpose  of 


1 

I 


GENERAL  ORDERS  IN  BANKRUPTCY.       971 

carrying  into  effect  the  provisions  of  the  act,  or  for 
enforcing  the  rights  and  remedies  given  by  it,  the  rules  of 
equity  practice  established  by  the  Supeme  Court  of  the 
United  States  shall  be  followed  as  nearly  as  may  be.  In 
proceedings  at  law,  instituted  for  the  same  purpose,  the 
practice  and  procedure  in  cases  at  law  shall  be  followed  as 
nearly  as  may  be.  But  the  judge  may,  by  special  order  in 
any  case,  vary  the  time  allowed  for  return  of  process,  for 
appearance  and  pleading,  and  for  taking  testimony  and 
publication,  and  may  otherwise  modify  the  rules  for  the 
preparation  of  any  particular  case  so  as  to  faciliate  a  speedy 
hearing. 

XXXVIII. 

Forms. 

The  several  forms  annexed  to  these  general  orders  shall 
be  observed  and  used,  with  such  alterations  as  may  be 
necessary  to  suit  the  circumstances  of  any  particular  case. 

See  sees.  59,  (iO,  (>!)  and  13:5,  ante. 

Consult  m  re  Sallee,  No.  12256,  Fed.  Cas.,  s.  c.  2  N.  B.  R.  228. 


I 


i 


PETITIONS,    SCHEDULES,    ETC.  9/3 


BANKRUPTCY, 


PETITIONS,   SCHEDULES  ADJUDICATION   AND 
ORDER    OF    REFERENCE. 

No.  1. 

Debtor's  Petition  (i). 

(Official  Form  No.  i.) 

To  the  Honorable  ,  Judge  of  the  District  Court  of  the 

United  States,  for  the District  of : 

The  petition  of ,  of ,  in  the  county  of ,  and 

district  and  state  of , [state  occupation'],  respectfully 

represents : 

That  he  has  had  his  principal  place  of  business  [or,  has  re- 
sided, or,  has  had  his  domicile]  for  the  greater  portion  of  six 
months  next  immediately  preceding  the  filing  of  this  petition 

at ,  within  said  judicial  district;  that  he  owes  debts  which 

he  is  unable  to  pay  in  full ;  that  he  is  willing  to  surrender  all 
his  property  for  the  benefit  of  his  creditors  except  such  as  is 
exempt  by  law,  and  desires  to  obtain  the  benefit  of  the  acts  of 
Congress  relating  to  bankruptcy. 

That  the  schedule  hereto  annexed,  marked  A.  and  verified 
by  your  petitioner's  oath,  contains  a  full  and  true  statement  of 
all  his  debts,  and  (so  far  as  it  is  possible  to  ascertain)  the 
names  and  places  of  residence  of  his  creditors,  and  such  further 
statements  concerning  said  debts  as  are  required  by  the  provi- 
sions of  said  acts : 

That  the  schedule  hereto  annexed,  marked  B,  and  verified  by 
your  petitioner's  oath,  contains  an  accurate  inventory  of  all  his 
property,  both  real  and  personal,  and  such  further  statements 
concerning  said  property  as  are  required  by  the  provisions  of 
said  acts : 


974  BANKRUPTCY. 

Wherefore  your  petitioner  prays  that  he  may  be  adjudged 
by  the  court  to  be  a  bankrupt  within  the  purview  of  said  acts. 

.  Attorney. 


United  States  of  America,  District  c^f ,  ss. 

I.  ,  the  petitioning  debtor  mentioned  and  described  in 

the  foregoing-  petition,  do  hereby  make  solemn  oath  that  the 
statements  contained  therein  are  true  according  to  the  best  of 

mv  knowledge,  information  and  belief.  , 

Petitioner. 

Subscribed  and  sworn  to  before  me  this day  of , 

A.  D.  19—.   (2.) 

[Official  character.'] 

(i)  See  Gen.  Ords.  5  and  11.  B.  A.  1898,  Sec.  4.  As  to  who  may  be 
bankrupts  see  Loveland's  Bankruptcy,  sec.  42  et  seq. 

As  to  the  district  in  which  petition  should  be  filed,  see  in  re  Williams, 
99  Fed.  Rep.  544,  3  Am.  B.  R.  677;  in  re  Brice,  93  Fed.  Rep.  942,  2  Am. 

B.  R.  197 ;  in  re  Waxelbaum,  97  Fed.  Rep.  562,  3  Am.  B.  R.  267. 

As  to  the  form  of  petition,  see  Mahoney  vs.  Ward,  100  Fed.  Rep.  278, 
3  Am.   B.   R.  770. 

A  creditor  cannot  intervene  to  oppose  an  adjudication  under  an  or- 
dinary voluntary  petition  by  setting  up  that  the  petitioner  is  not  in- 
solvent.   In  re  Carleton,  8  Am.  B.  R.  270,  Fed.  Rep. 

(2)  Oaths  required  by  the  act,  except  upon  hearings  in  court,  may  be  ad- 
ministered by  referees  and  by  officers  authbrized  to  administer  oaths  in  pro- 
ceedings before  the  courts  of  the  United  States,  or  under  the  laws  of  the 
state  where  the  same  are  to  be  taken.  Bankrupt  Act  of  1898,  ch.  4,  sec.  20. 
The  oath  should  be  made  by  the  petitioner  or  some  one  familiar 
with  the  facts.  In  re  Nelson,  98  Fed.  Rep.  76;  Leidigh  Carriage  Co.  vs. 
Stengel  (C.  C.  A.  6  Cir.)  95  Fed.  Rep.  637,  2  Am.  B.  R.  283;  in  re 
Chequasset  Bank,  7  Am.  B.  R.  87 ;  Green  River  Deposit  Bank  vs.  Craig 
Bros.,  6  Am.  B.  R.  381. 


PETITIONS,    SCHEDULES,    ETC. 


975 


U^ 

«  "  o 

s^      _g 

H 

«°i2 

^ 
P 

1 

1 

w  uT -^ 

0 

*j  J  u 

M 

wtr-o 

1^ 

--o^. 

< 

ited 

en, 

0th 

4^ 

«o- 

dJI 

h  ±  a  b 
0  5  c  ►-< 

0 

1 

>i 

M%3 

^1 

t5  "       a 

2      «  ^; 

H    K   g   ■<) 

5  a  g 

CS 

03  «<-< 

PQ_o 

ng    to 
es    dui 
tition. 

a>  0 

^j 

*i 

i-(  C  ft,  g     . 

-S 

^ 

3 

°^2 

»3 

ts 

0 

0 

Ut 

0         m  «   W 

HI 

C   rt    1 

PQ 

ured   by   law, 
bts    due    and 
>lity.      (3).— 
fore  filing   tl: 

Nature  and  c 
debt,     and 

TRACTED        Al 
JOINT     CONTl 
so,   WITH    WI 

e 

and   cou 
to     Tie 

ty,  — 

ages   as 

m 
(A 

03 

<4-l 
O 

s| 

sst    I 

O 

irity  is   sec 
es    and    de 
r   municipa 
months   be 

c3  ^  <y        fe 

^ 

'L 

> 

0  0 

Oi  C5             1 

Oi  c; 

.      U-l 

E    A. 

m   pric 
—  Tax 
rict,   o: 
three 

ment. 

a 

1— t   (-H 

<— 1    I-H 

i  al 

rict  c 

'H 

o  « 

UL 

who 
(i). 
dist 
thin 

tate 

c  0 

^ 

CHED 

or  to 

viz. : 
ounty, 
ned  wil 

f   the   s 

a  ^ 
|8 

t/)  =---"«      ° 

^ 

E 

£ 

rt  u 

I    fu 
orde 
any 
:h,   ( 

end 

4J  b  , 

-t^  b  - 

-St 

tes  fo 

<^C^ 

3      J^  t-  0 

J          "5(  t*..,  -iJ 

paid   ir 
owing 
or   to 
300  cac 

at   the 

fa  a  H 

•  be 

0    0    05 

cj 

a  a 

03  Q  "^ 

dule 

United 
ruptcy. 

to  be 
the   foil 
c   state, 
eding  $ 

inkrupt 

IDENCE 
RESI 
FACT 

03 

iche 

f  the 
Bank 

0  are 
d  in 
to   t\v 
exec 

he  ba 

o:  j^  H 

OJ   1—4 

m   o 

j:  U       -t^       v- 

H 

rC 

* 

c 
C 

J      - 

itors   w 

e  enter 

owing 

lunt  no 

ed  by 

AND 
rOBS. 
OWN, 
•ATED. 

3 

; 

e  District 
r  of 

t. 

,11  credi 
re  to  bi 
ne   and 
an  amo 
by    law 
be   sign 

AMES 
CREDI' 
UNKN 
BE    SI 

5 

.  c 

aj  0 
j        0  p. 

^ 

ol^; 

Klz;     HH 

e<i      s    ? 

0  S  «       ■  -  3 

a       ee 

No.  : 

In 
.  the  nia 
A.   B., 
Bankr 

0  M  a 
!5  w  W 

taten 
B.— 

s  she 

FERE 
LEDG 
VOUC 

10 

l-H 

10 

1-1 

c 

<Ji                   -3 

a  _  1. 

>-( 

P^gg 

976 


BANKRUrTCY. 


0^ 


< 

W 
h-) 

o 

w 

M 

u 

m 


Mo 

4-J 

"1  « 

Jiy^ 

Ui 

:3 

en   they   we 
uired    by    A 
rson,   and    i 
temcnt. 

u 
a; 

c 

•  *— » 

.c  cr  ij  rt 

-o 

^Jii^S 

o 

'O  tf)  aj  3J 

ffi 

C/5 

Ui 

e-B  c 

O 

4-' 

'5 

of   sa 
each 
vith   a 
e   end 

<v 

■- j: 

u 


1-  M  1. 

.o  Jih  o. 

"il   C   S   £ 

^^  t-  c." 
lU  «•- 

J--H    o    u 

u  o  £  u 

<U  (fl  "u  c 

■"■«  «.l 
S  "I  Ji 

3  ^  o3 
rt  4J  5 

-      U    O  <j 

o  o  u 
I  '^ 


tn 


PM 


PQ 


h 

o 

- 

o  u 

S  o 

<1 

Vi- 

1 

r         to 

§H 

w  & 

U  PJ 

■  -;- 

J  Ui 

-1   o 

€^ 

««■ 

g?: 

•      • 

■  f 

o 

g8 

O 

05 

^ 

1— 1 

r-H 

pq  o 

u 

.(-* 

- 

- 

Ph 

(d 

05   H 

»-H 

gS^ 

0 

t^  w  as 

C 

K   Q   H 

^ 

<1 

Eh 

1 

M-c      ■ 

.pH 

Co 

> 

•  fH 

o 

fa 

o 
^  «3 

C 

.i4 

y2 

^  w 

'""'     , 

T3 

O    l-l 

i-H 

w   H 

c 

r/:    (13 

o 

.     2-^ 

a> 

=*    ^ 

K   O 

be  ,.. 

'^  «^ 

O   Ed 

a 

M  o 

M   05 

be 

O 

[d 
P 

o 
c 

c 

2? 

3  'c 

3 

0 

IDENCES 

If  res- 

NO  WN 

UST     BE 

^' 

• 

S     .«S 

03     •» 

AMES     AND     R: 
OF    CREDITORS 
IDENCE         U  N 
THAT      FACT 
STATED. 

-       PP 

CO 

u 
Eh 

5 

-*- 

> 

! 
^ 

"^ 

W 

05        . 

—  — - 

.      O     O     M 

c:   H        » 

W     r     OS     M 

Ref 

ENCE 
LEDGE 
VOUC] 

in 

PETITIONS,    SCHEDULES,    ETC. 


977 


(D 
V 

> 

Si 

o 
a! 


S3 

a 
o 

O 


ll    4)    C*        ' — ^  --J       . 

"        ^  2    ^  c 

t-.    kI   C3  ="    >        . - 
Si  ^  -         ■^  ^  •  > 

•■^   CI    c:  —    ;-         K^        w 

<u  3  o  -^  o  ,  ;  ^     ^ 

o  ■-!      5  eg 

---^   i   ;   -  jj-'-^       o 
®.=    ^    H    "    C    O) 


H 


^  ^   ~   -  r^  ^^       la 
c  >  r;  "  s  .,-       !- 

g  ^c  ^  o  3  J     '^ 


o 

C3 


,n 


.2  o 


69- 


GQ 


O 


978 


BANKRUrXCY. 


w 

a 
w 

w 

u 
m 


^ 

rawers, 
re    not 

;.     The 

1 

1^ 

QUO 

<u 

^ 

(U 

s ,, « 

JC 

-l-l 

1-..0 

>. 

XI 

•  1-H 

«  O  c 

03 

-x  «  . 

Cl- 

C-C    fll    U 

<u 

• 

w-^^  0 

r^ 

CO 

-ri         TO-O 

Ui 

2o«.S 

<U 

o 

trt 

^-  ,„  <u  m 

-t-J 

Uh 

.£J=  ra 

O 

(-1 

in  ?:           ^ 

b/;' 

t—i 

CJ              ^ 

— • 

u-C  1-  tf!  rt 

o 

u 

oj     ii      to 

O 

^  u-^  ^ 

en' 

■*-'   OJ    !>   C)    4J 
•3    c          (U 

x: 
> 

O 

-4—* 

3  0  ■"        C 

C 

0  m  0  S^ 

:3 
o 

^^•^g15 

en 

rt      2=  3 

•  «-! 

Q 

0  O'^  i- 

1/3 

r7- 

pq 

O 

0  «•*;*- 

C  •-  °  ,„i3 

C/3 

0      2  £ 

o 

■^^        30 
,    0  ox: 

iz; 

V-     r-  •  — 

c 

o 

^  tn  r^  —  i 
TU  u  3        0 

(/i 

oj  s  v-a 

(U 

u^  S  g  « 

1         ^ 

• »— « 

X 

L        '^ 

rt 

P                w 

•;j 

H 

" 

0 

W< 

^ 

m- 

H 

Q 
U 
H 

H 

0 

H 

< 

n 

,  endorsed  to 
said   firm    of 
which  X.  Y.. 
re    the    other 

pa 

.2 

M 
Hi 

8 

< 

<^' 

n 
< 

< 

0 

0 

0 

»-) 

U 

cs 

0 

o2^ 

§ 

u 

s 

as 

n 

s 
^ 

H 
< 

< 

< 
< 

H 

i 

K 

H 

0        CQ 

CO 

1 

IS  ^'  5 

e3 

Ed 

• 

i§ 

K  H 

^^ 

Place 

CONTR 

0  '^  « 

Q 

CES       1 
KNOW 
NOW 

< 

03 

1  <«M 

Q    <   ^ 

03 

M   BJ   p 

H 
C/3 

• 

«  b  a 

P 

AND 
S    AS 
IDEN 

Eh 
0 

•y 

-<; 

K    t» 

b 

H    W 

,M 

73    0   05 

H 

c 

Cd   ^J 

-< 

a 

^.  2  fc< 

w 

m 

<!    f^i-i 

H 

'^ 

d 

P 

, 

■  0  c 

OS 

03   H    ^ 

H 

oucn 

«  S  k 

PETITIONS,    SCHEDULES,    ETC. 


979 


^^  c 

O   °  i^ 


41 


U-5 


< 

w 
.-1 

Q 
W 
W 

u 
C/2 


Oh 


TOO  — 
^   U   '^ 


E  '-  ''  i: 

u  c  n  a 

u  V  u-- 
•«  ^5  u 

«  S  5 

°:^° 

-  ft)  V 

4>       C  ° 

5-^  U" 


(U 


u 


*;  rt  <n 
3  ui    . 


o 


-a 

•"  ..  o  c  - 


o 
o 
a 


1  i  ""s 


<  :^^ 


r 

^ 

>. 

CI4 

rt 

n 

u 

T; 

3 
u 

, 

c 

~ 

-■< 

en 

U-3 

^ 

a 

.a 

^ 

o 
o 
o 

T3 

J2 

u 

l-l 

U 

a 

o 

il 

n 

•n 

m 

it 

c 
3 

-3 

1; 

o 

C 

0! 

y5 

■n 

■3 

c 

.s 

11 

3 

■■n 

^ 

o 

o 

V 

fft 

O 

"m 

C) 

.a 

u) 

u 
O 

3 
0 

T3 

o 

*-» 

-n 

^ 

u 

« 

n  0 

*j 

1> 

1 

V 

1 

X. 

« 

O 


€©■        €^ 


^■ 


o  z  g 

g  S  ^ 

Q  ^  ^ 

;S  ss  B 

2:  r  ^ 

8  =  0 

^  5  fa 

H-L  ^  r-l 

O  w 

ei  >  5 

o  P  <; 


s 


'C 
s 


•s  ^^ 


^ 


o 
u  a 


Q 

<J  o 
m 

03  o 

a  K 

S  M 

5^ 


X/l 


in 


.  6 


o 
O 


.  o 


fa 


03 

a 
>-; 
o 


a 


Xfl 


m 


o 


.   o 


a 

a 

c: 
a 
fa 
a 

Pi 


0:  a 

a 
o 
o 
a 

a 


1           "^      1 

C    G    G 

oj    ^r    0 

j 

S  |u 

c   ^^ 

0 

perso 

duly 
Acts 

03 
0 

<U       t/3       r- 

13 

Q 
W 

U 

O 
H 

K 

< 
O 


I  8 


<u 


rt   o   c 


>^ 


^    cn" 


O  cT) 

CI.  G  ;=; 

-  (J  O 

c/5    <"  '^  ^ 

^^  S  !^^'  Fi 

I  0-1  rt 

■-    "  ^  «1 

+-;      •  O  O 

CO 


p 

oT 

^    rt    O    rt 

<-M    ~    ^      (A) 


O 


00 

h- ( 

Q 
< 


o 
-a 


(U 


rt 

a;    !-;    i<  »-- 

r-i     aj     \_; 


C    rt 


5 


a;  00 
s-    ir   (« 

o  c« 
b/D-o  T3 

C     (U    c 

■-H  -^  i2 

13  «->  ?; 
u  '^  9 

b/D 


980 


BANKRUPTCY. 


m 


CO 


a 

C 


a 
o 

Ui 


nj 


-t-> 
03 


Q 
W 
W 

u 
m 


o 

o 

l-< 

5zi 

+J 

VI 

c 

W 

0) 

6 

u 

Irt 

1 

^; 

4-> 

.^ 

w 

o 

1. 

M-< 

o, 

(A 

3 

<u 

Vh 

d 

5 

a 

r/l 

V 

•X3 

w 

-3 

v 

t-H 

73 

a> 

B^ 

Xi 

o 

o 

CO 

o 

u 

a 

O 

I 

J 

oh     *^ 

_  nj       iH 

j3    m 


PETITIONS,    SCHEDULES,    ETC. 


981 


Schedule  B.  (2) 
Personal  Property. 

N.  B. —  This  sheet  must  be  signed  by  the  debtor  at  the  end  of  the  statement. 


A.  Cash  on  hand, 

B.  Bills  of  exchange,  promissory  notes,  or  secvu'ities  of 

any  description    (each  to  be  set  out  separately). 

Promissory  note  of  B.   R.,  endorsed  by  X.   Z., 

C.  Stock   in  trade  in   my  business  of   dry  goods  mer- 

chant    at  of  the  value, 

D.  Household   goods    and    furniture,    household   stores, 

wearing   apparel,    and   ornaments    of   the   person, 

viz.,  all  situated  at  No. St., , 

,  valued  at, 

E.  Books,  prints,  and  pictures,  viz.,  family  pictures  at 

No. —  St.,  ,  ,  valued  at, 

F.  Horses,  cows,  sheep,  and  other  animals   (with  num- 

ber of  each),  viz., 

G.  Carriages,  and  other  vehicles,  viz., 

H.     Farming  stock,  and  implements  of  husbandry,  viz., 

I.         Shipping,  and  shares  in  vessels,  viz., 

K.  Machinery,  fixtures,  apparatus,  and  tools  used  in 
business,  with  the  place  where  each  is  situated. 
viz., 

L.     Patents,  copyrights,  and  trade-marks,  viz., 

M.     Goods  or  personal  property  of  any   other   descrip 
tion,  with  the  place  where  each  is  situated,  viz. 

Total,  


$ 


$ 

$ 

None. 
None. 
None. 
None. 

None. 
None. 

None. 


A.  B., 
Petitioner. 


982 


BANKRUPTCY. 


N. 


Schedule  B.   (3) 
Glioses  in  Action. 

B. —  Tliis  sheet  nnist  be  signed  at  llic  ciul  tliereof  by  the  debtor. 


A.     Debts  duo  petitioner  on  open  account,  as  follows: 

J.   S.     $ 

L.  R.     $• 

M.  r.    $ 


B.  Slocks  in  incorporated  companies,  interest  in  joint 

stock  companies,  and  negotiable  bonds,  as  follows : 

shares  stock  of  Z.  F.  Co. 

The  above  are  held   as  collateral   security  by  

National    Bank    of    as    set    forth    in 

Schedule  A   (2). 

C.  Policies  of  Insurance,  as  follows: 

No.  in  N.  Y.  L.  Co.  surrender  value. 

No.  in  X.  Y.  Z.  Co.  surrender  value. 

D.  Unliquidated    Claims    of   every    nature,    with    their 

estimated  value,  as  follows: 

E.  Deposits  of  money  in  banking  institutions  and  else- 

where, as  follows: 

Total, 


$ 

$ 

None. 

None. 

None. 


$. 


A.   B. 


Schedule  B.   (4) 


Property  in  reversion,  remainder,  or  expectancy,  including  proprty  held  in  trust  for 
the  debtor  or  subject  to  any  power  or  right  to  dispose  of  or  to  charge. 

N.  B. —  A  particular  description  of  each  interest  must  be  entered.  If  all  or  any  of 
the  debtor's  property  has  been  conveyed  by  deed  of  assignment,  or  otherwise, 
for  the  benefit  of  creditors,  the  date  of  such  deed  should  be  stated,  the  name 
and  address  of  the  person  to  whom  the  property  was  conveyed,  the  amount 
realized  from  the  proceeds  thereof,  and  the  disposal  of  the  same,  as  far  as 
known  to  the  debtor.  This  sheet  must  be  signed  at  the  end  thereof  by  the 
debtor. 


GENEKAL  INTEREST. 


Interest  in  land. 


Personal  property, 

Property  in  money, 
stocks,  shares,  bonds, 
annuities,  etc. 

Rights  and  powers, 
legacies  and  be- 
quests. 


PARTICULAR    DESCRIPTION. 


A  beneficial  interest  under  will  of 
J.  B.  to  house  and  lot  on  V.  St. 

held  by  M.  Trust 

Co.   in  trust  for  C.  B.  for  life 

with  remainder  after  her  death 

to  A.  B.,  G.  B.  or  the  survivor. 


SUPPOSED  VALUE 
OF  MY  INTEREST. 


Total, 


PETITIONS,    SCHEDULES,    ETC. 


983 


PROPEETY  HERETOFORE  CONVEYED  FOB  BENEFIT   OF 
CREDITORS. 

AMOUNT  REALIZED 

FROM    PROCEEDS 

OF     PROPERTY 

CONVEY'ED. 

What  portion  of  debtor's  propertj^  has  been  convej^ed  by 
deed  of  assignment,  or  otherwise,  for  benefit  of  credit- 
ors ;  date  of  such  deed,  name  and  address  of  party  to 
whom  conveyed;   amount  realized  therefrom,  and  dis- 
posal of  same,  so  far  as  known  to  debtor. 

What  sum  or  sums  have  been  paid  to  counsel,  and  to 
whom,  for  services  rendered  or  to  be  rendered  in  this 

None. 

bankruptcy. 

Total, 

•p 

"J^ 

<p 

A.  B. 


Schedule  B.   (5) 

A  particular  statement  of  the  property  claimed,  as  exempted  from  the  operation  of  the 

Acts   of   Congress    relating   to    Bankruptcy,    giving:   each  item    of   property    and    its 

valuation;   and,   if   any    portion   of  it  is    real   estate,    its  location,    description,    and 
present  use. 

X.  B. —  This  sheet  must  be  signed  by  the  debtor  at  the  end  of  the  statement. 


Military    uniforms.    arm.s,    and    equipments. 

Property  claimed  to  be  exempted  by  State  laws,  its  val- 
uation;  whether  real  or  personal;  its  description  and 
])resent  use;  and  reference  given  to  the  statute  of  the 
State  creating  the  exemption,  as  follows: 

All  household  furniture,  household  stores  and  wearing 
apparel  and  family  fixtures  claimed  by  me  as  a  mar- 
ried man,  the  head  and  support  of  a  family,  under 
section Revised  Statutes  of  . 

Total, 


None. 


$■ 


A.  B. 


Schedule  B.   (6) 

Books,  Papers,  Deeds,   and  Writings  relating  to   Bankrupt's  Business  and  Estate. 

X    B  —  This  sheet  must  be  signed  at  the  end  thereof  by  the  debtor. 

The  following  is  a  true  list  of  all  books,  papers,  deeds,  and  writings  relating  to  my 
trade,  business,  dealings,  estate,  and  effects,  or  any  part  thereof,  which,  at  the 
date  of  this  petition,  are  in  my  possession  or  under  my  custody  and  control 
or  which  are  in  the  possession  or  custody  of  any  person  in  trust  for  me, 
or  for  my  use,  benefit,  or  advantage;  and  also  of  all  others  which  have 
been  heretofore,  at  any  time,  in  my  possession,  or  under  my  custody  or 
control,  and  which  are  now  held  by  the  parties  whose  names  are  hereinafter 
set   forth,  with   the  reason   for  their  custody  of  the   same. 

Book.s. 

Journal,  ledger,  cash  book,  and  bank  book. 
Deeds. 

Deed  to  lots and subdivision. 

2  deeds  for acre  tract  N.  E.  Vi  sect.  T R . 

Papers.  None. 


A.  B. 


984 


BANKRITTCY. 


OATH  TO  SCHEDULE  B. 

United  States  of  Aiiuuiea,  District  of ..  ss. 

On   this (lay  of  .  A.  D.    IS — ,  before  mo  porsoiially  camo  

,  the  jHTson  uu'iitioii'Hl  in  ami  who  siihsciihiHl  to  tlic  for('i;\)in<^  scliodule, 

and  who,  beiiijj  by  mc  first  duly  sworn,  diil  dcchire  the  said  schedule  to  be 
n  statement  of  all  his  estate,  both  real  and  ])orsonal,  in  accordance  with 
the  acis  of  Cojii:ress  relating!:  to  banknlI)tc^•. 

,   [O/ficiiil  clKirucler.] 

(1)    l.ovclanrs  l?ank.  sees.  (>i>  and  Si.     Gon.  Ord.  38;  Malioney  rs.  Ward, 
100  Fed.  Kep.  278,  3  Am.  B.  R.  770. 

Schedules  should  not  be  filed  with   judpe  or  referee  but  witl>   the  clerk. 
In  If  Sykes,  100  Fed.  i^c}).  <i(i!».. 

Summary  of  Debts  and  Assets. 

[From  the  statement  of  the  bankrupt  in  Schedules  A  and   B.] 


Schedule  A. 


Schedule  A. 
Schedule  A. 
Schedule  A. 

Schedule  A. 


Schedule  B. 
Schedule  B. 


Schedule  B. 


Schedule  B. 

Schedule  B. 
Schedule  B. 


(I) 

(2) 

(3) 

(4) 


I 
2-a 

2-b 

2-C 
2-d 

2-e 

2-f 
2-g 
2-h 

2-i 

2-k 

2-1 

2-m 

3-a 

3-b 

3-c 

3-d 

3-e 


Taxes  and  debts  due  United 
Slates    

Taxes  due  states,  counties,  dis- 
tricts, and  municipalities 

Wages    ' 

Other  debts  preferred  by  law.  ..  . 

Secured    claims    

Unsecured  claims    

Notes   and   bills    which   ought   to 
be   paid  by  other  parties  thereto. 

Accommodation  paper  

Schedule   A,    total 


notes,    and    se- 


Real  estate 

Cash  on  hand. . . 
Bills,    promissory 

curities    

Stock  in  trade 

Household  goods,  etc 

Books,  prints,  and  pictures 

Horses,  cows,  and  other  animals. 

Carriages  and  other  vehicles 

Farming  stock  and  implements.  . 
Shipping  and  shares  in  vessels.  . . 

Machinery,  tools,  etc 

Patents,     copyrights,     and     trade 

marks    

Other  personal  property 

Debts  due  on  open  accounts 

Stocks,  negotiable  bonds,  etc.... 

Policies  of  insurance 

Unliquidated  claims  

Deposits  of  money   in  banks   and 

elsewhere    .  . 
Property  in  reversion,  remainder, 

trust,  etc 

Property  claimed  to  be  excepted 
Books,  deeds,  and  papers 

Schedule  B,  total 


PETITIONS,    SCHEDULES,    ETC.  985 

jdSo.  4:. 
Partnership  Petition   (i)« 

(Official  Form  No.  2.) 

To  the  Honorable  ,  Judge  of  the  District  Court  of  the 

United  States  for  the District  of : 

The  petition  of  respectfully  represents: 

That  your  petitioners  and have  been  partners  under  the 

finn  name  of ,  having  their  principal  place  of  business  at 

,  in  the  county  of ,  and  district  and  state  of ,  for 

the  greater  portion  of  the  six  months  next  immediately  preced- 
ing the  filing  of  this  petition ;  that  the  said  partners  owe  debts 
which  they  are  unable  to  pay  in  full ;  that  your  petitioners  are 
willing  to  surrender  all  their  property  for  the  benefit  of  their 
creditors,  except  such  as  is  exempt  by  law,  and  desire  to  ob- 
tain the  benefit  of  the  acts  of  Congress  relating  to  bank- 
ruptcy. 

That  the  schedule  hereto  annexed,  marked  A.  and  verified 

by oath,  contains  a  full  and  true  statement  of  all  the  debts 

of  said  partners,  and,  as  far  as  possible,  the  names  and  places 
of  residence  of  their  creditors,  and  such  further  statements  con- 
cerning said  debts  as  are  required  by  the  provisions  of  said 
acts. 

That  the  schedule  hereto  annexed,  marked  B,  verified  by 

oath,  contains  an  accurate  inventory  of  all  the  property, 

real  and  personal,  of  said  partners,  and  such  further  state- 
ments concerning^  said  property  as  are  required  by  the  provi- 
sions of  said  acts. 

And  said  further  states  that  the  schedule  hereto  an- 
nexed, marked  C,  verified  by  his  oath,  contains  a  full  and  true 
statement  of  all  his  individual  debts,  and,  as  far  as  possible, 
the  names  and  places  of  residence  of  his  creditors,  and  such 
further  statements  concerning  said  debts  as  are  required  by  the 
provisions  of  said  acts;  and  that  the  schedule  hereto  an- 
nexed, marked  D,  verified  by  his  oath,  contains  an  accurate  in- 
ventory of  all  his  individual  property,  real  and  personal,  and 


980  BANKIUI'TCV. 

such   further  statements  concerning^  said  property  as  are  re- 
quired by  the  provisions  of  said  acts. 

And  said  further  states  that  the  schedule  hereto  an- 
nexed, marked  K,  verified  by  his  oath,  contains  a  full  and  true 
statement  of  all  his  individual  debts,  and,  as  far  as  possible, 
the  names  aiul  places  of  residence  of  his  creditors,  and  such 
further  statements  concerning  said  debts  as  are  required  by  the 
provisions  of  said  acts;  and  that  the  schedule  hereto  annexed, 
marked  F,  verified  by  his  oath,  contains  an  accurate  inventory 
of  all  his  individual  property,  real  and  personal,  and  such  fur- 
ther statements  concerning  said  property  as  are  required  liy 
the  provisions  of  said  acts. 

And  said further  states  that  the  schedule  hereto  annex- 
ed, marked  G,  verified  l)y  his  oath,  contains  a  full  and  true 
statement  of  all  his  individual  debts,  and,  as  far  as  possible,  the 
names  and  places  of  residence  of  his  creditors,  and  such  further 
statements  concerning  said  debts  as  are  required  by  the  provi- 
sions of  said  acts;  and  that  the  schedule  hereto  annexed, 
marked  H,  verified  by  his  oath,  contains  an  accurate  inventory 
of  all  his  individual  property,  real  and  personal,  and  such  fur- 
ther statements  concerning  said  property  as  are  required  by  the 
provisions  of  said  acts. 

And  said further  states  that  the  schedule  hereto  annex- 
ed, marked  J,  verified  by  his  oath,  contains  a  full  and  true  state- 
ment of  all  his  individual  debts,  and,  as  far  as  possible,  the 
names  and  places  of  residence  of  his  creditors,  and  such  further 
statements  concerning  said  debts  as  are  required  by  the  provi- 
sions of  said  acts;  and  that  the  schedule  hereto  annexed, 
marked  K,  verified  by  his  oath,  contains  an  accurate  inventory 
of  all  his  individual  property,  real  and  personal,  and  such  fur- 
ther statements  concerning  said  property  as  are  required  by  the 
provisions  of  said  acts. 

Wherefore  your  petitioners  pray  that  the  said  fii"m  -  may  be 


PETITIONS,  SCUEOLLES,   ETC. 


987 


adjudged  bv  a  tlecree  of  the  court  to  be  bankrupts  within  the 
purview  of  said  acts. 


Petitionee  s. 

,  Attorney. 

,  the  petitioning-  debtors  mentioned  and  descrilied  in  the 

foregoing  petiticju,  do  hereby  make  solemn  oath  that  the  state- 
ments contained  therein  are  true,  according  to  the  best  of  their 
knowledge,  information  and  belief. 


Petitioners. 

Suliscribed  and  sworn  to  before  me  this day  of  — — 

A.  D.  19—.  -. 

[OfHcial  cJiaractcr.\ 


[Schedules  to  be  annexed  corresponding  with  schedules  Nos. 
2  and  3.] 

Ci)  See  Loveland's  Bank,   sec  96  ct  scq.    Gen.  Ords.  5  and  7. 

(2)  If  it  is  desired  to  have  the  partners  adjudged  bankrupt — insert  the 
words  at  this  point,  as  follows:  "and  the  several  partners  constituting 
said  firm." 


No.  5. 
Creditor's  Petition,^ 

(Official  I'orm  Xo.  3.) 

To  the  Honorable ,  Judge  of  the  District  Court  of  the 

United  States  for  the District  of : 

The  petition  of .  of .  and ,  of .  and , 

of ,  respectfully  shows  : 

That  ,  of ,'-  has  for  the  greater  portion  of  six 

months  next  preceding  the  date  of  filing  this  petition,  had  his 
principal  ])lace  r)f  business    \<n-  resided  or  had  his  domicile] 

at .  in  the  county  of ,  and  state  and  district  aforesaid, 

and  owes  debts  to  the  amount  of  $1,000. 


S)8S  i!.\\  Kuri'Tcv. 

'Ihat   \oui"   polilioucrs   ;u"c   (.Tcilittus   i)i   saitl .   ha\in<^" 

]M'ovable  claims  aiiunnitinj;-  in  the  ai^j^rci^atc,  in  excess  o\  se- 
curities heUl  1)\'  iheni.  to  the  sum  nf  $5(H\  That  tlie  nature 
and  amount  ot  \dm"  petiiioucrs'  claims  are  as  tollows: 


And   vour   petitioners    further   reiircsent   that   said is 

insi^lvcnt.  ami  that  within  four  months  next  precedint;-  the  date 

(^f  this  ])etition  the  saiil committed  an  act  of  bankrui)tcy, 

in  that  he  did  heretofore,  to-wit,  on  the day  of 


\Mierefore  yinir  petitioners  pray  tliat  service  of  this  petition, 

with  a  snbpania,  may  be  made  n])on  ,  as  provided  in  the 

acts  of  Cong-ress  relating  to  bankruptcy,  and  that  he  may  be 
adjudged  by  the  court  to  be  a  bankrupt  within  the  purview  of 
said  acts. 


Petitioners. 
,  Attorney. 

United  States  of  America,  District  of ,  ss. 

— . ,  being-  three  of  the  petitioners  above  named, 


do  hereby  make  solemn  oath  that  the  statements  contained  in 
the  foregoing  petition  subscribed  by  them  are  true. 
Before  me,  ,  this  day  of ,  189 — . 


[Official  character.] 

[Schedules  to  be  annexed  (filed  l)y  bankrupt)  corresponding 
with  schedules  Nos.  2  and  3.] 

(i)   Lovcland's  Bank,  sec.  66  cf  scq.     Gen.  Ords.  5  and  7. 

(2)  In  case  the  debtor  is  an  individual  the  following  words  should  be 
inserted  at  this  point :  "is  not  a  wage  earner  or  engaged  chiefly  in 
farming  or  the  tillage  of  the  soil,  but  is  a  person  subject  to  be*  adjudged 
a  bankrupt  upon  a  creditors'  petition." 

In  case  the  debtor  is  a  corporation  the  following  words  should  be 
inserted  at  this  point:     "is  a  corporation  existing  under  the  laws  of  the 

state   of  .    engaged   principally    in   manufacturing"    (or   trading,    or 

printing,  o}-  publishing,  or  mining,  or  mercantile  pursuits,  or  as  the  fact 
may  be). 


PETITIONS,    SCHEDULES,    ETC.  989 

No.  6. 

Affidavit  by  Attorneys  to  Creditor's  Petition. 

United  States  of  America,  Southern  District  of  New  York, 
City,  County  and  State  of  New  York,  ss. 

On  this  14th  day  of  November.  1901,  before  me  personally 
appeared  Charles  M.  Leslie  and  John  Ledyard  Lincoln,  who 
severally  made  solemn  oath  that  they  are  attorneys  and  coim- 
selors-at-law  of  the  Supreme  Court  of  the  state  of  Ohio  and  of 
the  District,  Circuit  and  Circuit  Court  of  Appeals  of  the  South- 
ern District  of  Ohio,  and  that  said  John  Ledyard  Lincoln  is  a 
counselor-at-law  admitted  tq  practice  in  the  Supreme  Court  of 
the  United  States,  and  that  they  are  the  attorneys  and  agents 
of  the  said  petitioners  in  all  matters  recited  in  and  relating  to 
the  said  petition;  that  they  have  read  the  foregoing  petition 
and  know  the  contents  thereof,  and  that  the  facts  stated  therein 
are  true;  that  their  sources  of  information  and  the  grounds 
of  their  belief  are  among  other  things,  examination  of  the 
original  notes  recited  in  the  said  petition ;  examination  of  the 
books  of  the  said  The  Chequasset  Lumber  Company  now  in 
the  possession  of  the  said  receiver,  Eugene  F.  Perry,  at  66 
Broadway,  in  the  city,  county  and  state  of  New  York;  state- 
ments made  to  them  by  the  officers  of  the  said  petitioning 
banks  and  by  the  said  receiver;  that  the  reason  this  affidavit 
is  made  by  the  said  Leslie  and  Lincoln  is  that  each  of  the  said 
petitioners  is  a  corporation  organized  under  the  laws  of  the 
United  States,  having  its  only  office  and  place  of  business  in 
Cincinnati,  Ohio,  more  than  100  miles  from  the  city  of  New 
York,  and  having  no  officer  within  this  judicial  district;  and 


990  BANKRll'TCV. 

that  they  have  fuH  aullunity  from  the  said  petitioning-  banks 
and  have  been  anthorized  by  them  to  make  this  affidavit. 

Charles  M.  Leslie. 
John  Ledyard  Lincoln. 

Sworn  to  before  me  this  14th  day  of  November,  1901. 

[5"^//.]  John  A.  Valentine, 

Notary  Public,  Kings  Co. 

Certificate  filed  in  N.  Y.  County. 
United  States  of  America,  Southern  District  of  New  York, 
City,  County  and  State  of  New^  York,  ss. 

On  this  14th  day  of  November,  1901,  before  me  personally 
appeared  Henry  Melville,  who  made  solemn  oath  that  he  is  an 
attorney-at-law  duly  admitted  to  practice  in  the  District  Court 
of  the  United  States  for  the  Southern  District  of  New  York, 
and  the  attorney  of  record  of  the  foregoing-  petitioning  cred- 
itors; that  he  has  read  the  foregoing  petition  in  bankruptcy 
and  knows  the  contents  thereof,  and  that  the  facts  stated  there- 
in are  true ;  that  the  sources  of  his  information  as  to  the  truth 
of  said  facts  are  the  statements  made  to  him  by  Charles  M. 
Leslie  and  John  Ledyard  Lincoln,  attorneys  and  counselors- 
at-law,  residing  in  the  city  of  Cincinnati  and  state  of  Ohio,  at- 
torneys and  general  counsel  for  the  said  petitioners;  that  the 
said  statements  have  been  made  under  oath,  as  appears  by  the 
foregoing  affidavits  and  otherwise;  that  the  reason  this  veri- 
fication is  not  made  by  the  petitioners  is  that  each  of  tne  peti- 
tioners is  a  corporation  organized  under  the  laws  of  the  United 
States,  having  its  principal  and  only  place  of  business  in  Cin- 
cinnati, Ohics  more  than  one  hundred  miles  from  the  city  of 
New  York,  and  having  no  officer  within  this  judicial  district ; 
and  that  the  deponent  has  been  duly  authorized  to  make  this 
verification.  Henry  Melville. 

Sworn  to  before  me  this  14th  day  of  November,  1901. 

[Seal.']  John  A.  Valentine, 

Notary  Public,  Kings  Co. 

Certificate  filed  in  N.  Y.  County. 


PETITIONS,    SCHEDULES,    ETC,  991 

(i)  This  affidavit  was  held  sufficient  iii  re  Chequasset  Lumber  Co.,  7 
Am.   B.  R.  87. 

That  an  attorney  may  make  affidavit  when  familiar  with  the  facts,  see 
also  in  re  Nelson,  98  Fed.  Rep.  76;  Leidigh  Carriage  Co.  vs.  Stengel,  95 
Fed.  Rep.  637 ;  2  Am.  B.  R.  283 ;  Green  River  Deposit  Bank  vs.  Craig 
Bros.,  6  Am.   B.  R.  381. 


No.  7. 

Order  to  Show  Cause  upon  Creditors'  Petition. 

(Official  Form  No.  4.) 

In  the  DiE,trict  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


In  Bankruptcy. 


Upon  consideration  of  the  petition  of that be  de- 
clared a  bankrupt,  it  is  ordered  that  the  said  — —  do  appear 

at  this  court,  as  a  court  of  bankruptcy,  to  be  holden  at , 

in  the  district  aforesaid,  on  tho  day  of  ,  at  

o'clock  in  the  noon,  and  show  cause,  if  any  there  be, 

why  the  prayer  of  said  petition  should  not  be  granted;  and 

It  is  further  ordered  that  a  copy  of  said  petition,  together 

with  a  writ  of  subpoena,  bq  serv^ed  on  said ,  by  delivering 

the  same  to  him  personally  or  by  leaving  the  same  at  his  last 
usual  place  of  abode  in  said  district,  at  least  five  days  before 
the  day  aforesaid. 

Witness  the  honorable ,  judge  of  the  said  ooiirt,  and  the 

seal  thereof,  at ,  in  said  district,  on  the day  of , 

A.  D.  190 — .  , 

[Seal  of  the  court.]  Clerk. 


992  BANKUIPTCV. 

No.  8. 
Subpoena  to  Alleged  Bankrupf  (i). 

(Ofiicial  Form  No.  5.) 

L'nited  States  of  America, District  of .    To ,  in 

said  district,  greeting-: 

For  certain  causes  offered  1)efore  the  District  Court  of  the 

United  States  of  America  within  and  fcir  the district  of 

,  as  a  court  of  l)ankruptcy,  we  command  and  strictly  en- 
join you,  laying  all  other  matters  aside  and  notwithstanding 
any  excuse,  that  you  personally  appear  before  our  said  Dis- 
trict Court  to  be  holden  at ,  in  said  district,  on  the 

day  of ,  A.  D.  190 — ,  to  answer  to  a  petition  filed 

\yy in  our  said  court,  praying  that  you  may  be  adjudged 

a  bankrupt;  and  to  do  further  and  receive  that  w^hich  our  said 
District  Court  shall  consider  in  this  liehalf.  And  this  you  are 
in  no  wise  to  omit,  under  the  pains  and  penalties  of  what  may 
befall  thereon. 

Witness  the  honorable .  judge  of  said  court,  and  the  seal 

tliereof,  at  ,  this  day  of ,  A.  D.  190 — . 


Clerk. 


\ScaI  of  the  coiirt.^ 


(i)   Seen  Gen.  Orel.  3;  R.  S.  sees.  911  and  912;  B.  A.  1898,  sec.  180. 

Lovcland's  Bank.,  sees.  71-76.     Eq.  Rule  13. 

Sees.  18  a  and  b  of  the  Bankruptcy  Act  were  amended  by  the  act  of 
February  5,  1903,  to  read  as  follows : 

"a.  Upon  the  filing  of  a  petition  for  involuntary  bankruptcy,  service 
thereof,  with  a  writ  of  subpccna,  shall  be  made  upon  the  person  therein 
named  as  defendant  in  the  same  manner  that  service  of  such  process  is 
now  had  upon  the  commencement  of  a  suit  in  equity  in  the  courts  of  the 
United  States,  except  that  it  shall  be  returnable  within  fifteen  days,  unless 
the  judge  shall  for  cause  fix  a  longer  time;  but  in  case  personal  service 
cannot  be  made,  then  notice  shall  be  given  by  publication  in  the  same  man- 
ner and  for  the  same  time  as  provided  by  law  for  notice  by  publication  in 
suits  to  enforce  a  legal  or  equitable  lien  in  courts  of  the  United  States, 
except  that,  unless  the  judge  shall  otherwise  direct,  the  order  shall  be  pub- 
lished not  more  than  once  a  week  for  two  consecutive   weeks,   and  the 


PETITIONS,    SCHEDULES,    ETC.  993 

return  day  shall  be  ten  days  after  the  last  publication  unless  the  judge 
shall  for  cause  fix  a  longer  time." 

"  b.  The  bankrupt,  or  any  creditor,  may  appear  and  plead  to  the  petition 
within  five  days  after  the  return  day,  or  within  such  further  time  as  the 
court  may  allow." 

As  to  the  effect  of  a  voluntary  appearance,  see  in  re  Columbia  Real  Eg- 
tate  Co.,  loi  Fed.  Rep.  965. 

As  to  the  practice  in  bankruptcy  when  service  is  made  by  publication, 
see  in  re  Murray,  96  Fed.  Rep.  600,  3  Am.  B.  R.  301. 

As  to  effect  of  service  beyond  the  jurisdiction  of  the  court,  in  re  Ap- 
pel,   103  Fed.  Rep.  931,  2  N.  B.  N.  907. 


No.  9. 
Denial  of  Bankruptcy   (i). 

(Official  Form  No.  6.) 
In  the  District  Court  of  the  United  States 
For  the District  of . 


Ill  the  matter  of 


In  Bankruptcy. 


At  ,  in  said  district,  on  the  day  of ,  A.  D„ 

190 — . 

And  now  the  said appears  and  denies  that  he  has  com- 
mitted the  act  of  bankruptcy  set  forth  in  said  petition,  or  that 
he  is  insolvent,  and  avers  that  he  should  not  be  declared  bank- 
rupt for  any  cause  in  said  petition  alleged ;  and  this  he  prays 
may  be  inquired  of  by  the  court  [or,  he  demands  that  the 
same  may  be  inquired  of  l)y  a  jury]. 


Subscribed  and  sworn  to  before  n?e  this  day  of ,  A.  D, 

190—.  , 

[Official  characterf] 

(i)   B.  A.   1898,  sec.  19.     Loveland's  Bank.,  sec.  ^t,. 

The  debtor  may  set  up  any  defense  which  tends  to  prevent  an  adjudi- 
cation, in  re  Paige,  99  Fed.  Rep.  538;  Mather  vs.  Coe,  92  Fed.  Rep.  333; 
in    re   Etheridge   Furniture   Co.,   92   Fed.   Rep.   329. 


994  BANKRUPTCY. 

No.  10. 

Order  for  Jury  Trial  (i), 

(Official  Form  No.  7.) 

« 

In  the  District  Court  of  the  United  States 
For  the  District  of . 


In  the  matter  of 


-In  Bankruptcy. 


At  .  in  said  district,  on  the  — —  day  of  ,   19 — . 

Upon  the  demand  in  writing  filed  by ,  alleged  to  be  a 

bankrupt,  that  the  fact  of  the  commission  by  him  of  an  act  of 
bankruptcy,  and  the  fact  of  his  insolvency  may  be  inquired  of 
by  a  jury,  it  is.  ordered  that  said  issue  be  submitted  to  a  jury. 


Clerk. 

[Seal  of  the  court.'] 

(i)   B.  A.   1898,  sec.  19.     Loveland's  Bank.,  sec.  87. 

Day  vs.  Beck  &  Gregg  Hardware  Co.,  8  Am.  B.  R.  175 ;  Mattoon  Nat. 
Bank,  102  Fed.  Rep.  728;  4  Am.  B.  R.  515;  Leidigh  Carriage  Co.  vs. 
Stengel,  95  Fed.  Rep.  637,  2  Am.  B.  R.  283 ;  in  re  Bauman,  96  Fed.  Rep. 
946,  3  Am.  B.  R.  196. 

A  bankruptcy  proceeding  is  in  equity,  and  does  not  fall  within  the 
seventh  amendment  to  the  Constitution,  governing  the  right  of  trial  by 
jury,  which  can  be  had  in  bankruptcy  only  under  the  provisions  of  sec. 
19  of  the  Bankruptcy  Act.  Elliott  vs.  Toeppner  (Sup.  Ct.),  9  Am.  B. 
R.  50.  In  re  Christcnsen,  loi  Fed.  Rep.  243,  4  Am.  B.  R.,  99;  the 
only  issues  to  be  submitted  as  of  right  to  a  jury  are  those  of  insolvency, 
and  the  fact  of  an  act  of  bankruptcy  in  involuntary  proceedings  as  pro- 
vided in  sec.  19.  Simonson  vs.  Sinsheimer,  3  Am.  B.  R.  824  (C.  C.  A., 
6th  Cir.),  100  Fed.  Rep.  426. 

As  to  the  right  to  a  trial  by  jury,  see  in  JV.Rude,  4  Am.  B.  R.  319;  Day 
vs.  Hardware  Co.,  8  Am.  B.  R.  175. 


PETITIONS,    SCHEDULES,    ETC.  995 

No.  11. 
Answer  to  Creditor's  Petition  (i). 

The  District  Court  of  the  United  States  for  the District 

of . 

In  the  matter  of  E.  F.  &  Co.,  F.  Brothers, 

and  N.  &  Co.,  Petitioners, 

vs. 
A.  B.  &  Company,  Respondents. 

Joint  plea  of  the  defendant,  A.  B.,  C.  B.  and  D.  B.,  part- 
ners under  the  firm  name  and  style  of  A.  B.  &  Company. 

The  defendants,  A.  B.,  C.  B.  and  D.  B.,  partners  under  the 
firm  name  and  style  of  A.  B.  &  Company,  by  protestation,  not 
confessing  nor  acknowledging-  all  or  any  of  the  matters  or 
things  in  the  said  petition  of  said  petitioners  mentioned  and 
contained  to  be  true,  in  such  manner  and  form  as  the  same  are 
therein  set  forth  and  alleged,  for  plea  to  the  whole  of  said 
petition : 

These  defendants  say  that  said  petitioners  are  not,  nor  is 
either  of  them,  creditors  or  a  creditor  in  the  manner  or  form 
alleged  in  their  said  petition,  of  these  defendants  or  their 
said  firm,  and  that  the  alleged  demands  of  said  petitioners 
mentioned  and  referred  to  in  their  said  petition,  are  not  prov- 
able against  defendants  or  their  said  firm  as  in  petition  al- 
leged, nor  do  the  alleged  demands  of  said  petitioners  against 

defendants'  firm  amount  to  $ ,  and  that  the  petitioners, 

E.  F.  &  Company,  were  not  at  the  time  of  filing  said  petition 
herein,  entitled  to  demand  of  defendants'  firm  for  the  alleged 

sale  or  delivery  referred  to  in  petition,  the  sum  of  $ ,  nor 

any  other  sum  on  account  of  said  alleged  sale  or  delivery,  nor 

is  said  sum  of  $ ,  or  any  other  sum  for  the  alleged  sale 

and  delivery  of  said  goods,  due  to  sail  petitioners,  E.  F.  & 
Company.  That  the  petitioners,  F.  Bros.,  had  no  such  de- 
mand as  set  forth  in  petition,  nor  had  the  demand  amounting 


996  BANKRUPTCY. 

to  $ .  nor  was  that  sum,  or  any  other  sum,  due  from  de- 
fendants' llrni  to  said  F.  Bros,  for  said  goods,  nor  for  the 
alleged  sale  or  delivery  referred  to  in  petition  by  F.  Bros,  to 
defendants'  firm.  That  the  petitioners,  N.  &  Company,  had 
no  such  demand  as  set  forth  in  said  petition  for  any  goods, 
wares  or  merchandise  sold  or  delivered,    amounting  in  the 

aggregate  to  $ ,  or  any  other  such  sum  due,  owing  or 

unpaid  for  any  such  sale  or  delivery  of  goods. 

These  defendants  further  say  that  heretofore,  to  wit,  sev- 
eral months  before  this  proceeding  was  instituted,  to  wit,  on 

,  an  action  in  equity  was  instituted  in  the  Circuit  Court 

for  the  county  of and  state  of ,  at ,  in  and  by 

which  the  defendant,  L.  C,  as  trustee,  was  plaintiff,  and  these 
defendants  and  all  creditors  of  these  defendants  and  their 
said  firm  were  defendants,  in  which  said  L.  C.  set  forth  the 
assignment  for  the  benefit  of  creditors,  and  sued  for  a  settle- 
ment of  his  trust  as  assignee  thereunder,  and  that  in  that  set- 
tlement suit  all  of  the  petitioners  in  this  proceeding,  long  be- 
fore the  institution  of  this  proceeding,  were  parties  defendant, 
and  entered  their  appearance  and  filed  their  claims  therein, 
and  have  ever  since  such  entry  of  their  appearance  been  at  all 
times  and  are  now  parties  to  said  settlement  suit  in  said  Cir- 
cuit Court  of  county,  ,  therein  suing  and  seeking 

in  the  state  court  to  recover  their  proportion,  as  creditors  of 
defendants'  firm,  of  the  assets  of  defendants'  firm  so  assigned, 
which  proportion  would  be  the  same  proportion  that  they 
would  obtain  if  said  estate  were  distributed  in  bankruptcy  in 
this  court ;  they  have  never  dismissed  their  proceeding  in  said 
court,  but  were,  at  the  time  of  the  institution  of  this  proceed- 
ing, and  still  are,  seeking  to  recover  in  said  action  their  pro- 
portionate share  of  the  proceeds  of  said  estate  as  creditors 
thereof,  and  that  before  the  service  of  process  or  any  notice  or 
information  of  this  proceeding  the  defendant,  L.  C,  as  assig- 
nee of  these  defendants,  under  orders  of  the Circuit  Court, 

which  had  jurisdiction  of  the  estate,  the  parties  and  the  action 


PETITIONS,    SCHEDlrLES,    ETC.  997 

at  that  time,  paid  into  court  into  the  hands  of  the  receiver 
of  the  court,  and  deposited  in  court  in  said  action,  all  of  the 
funds  in  his  hands,  to  wit,  all  of  the  proceeds  of  the  estate  of 
these  defendants  so  assigned  to  him  for  the  benefit  of  creditors, 
and  all  of  said  funds  have  been  ever  since  and  now  are  in 
said  court  in  said  action  in  the  actual  control  and  custody 
of  the  court  for  distribution  therein,  and  but  for  the  pro- 
ceedings in  this  court  would  be  ready  now  for  prompt  distri- 
bution among  the  creditors  in  the  same  proportion  and  in  the 
same  manner  that  they  would  be  distributed  here,  without  the 
extra  costs  of  the  proceedings  in  this  court,  and  these  de- 
fendants rely  on  and  plead  said  other  action,  suit  and  proceed- 
ing in  the   Circuit   Court  of  county,   in  the  state  of 

,  in  bar  and  estoppel  of  petitioners'  claim  herein,  and  as 

a  good  and  valid  defense  to  said  proceeding. 

These  defendants  further  state  that  before  the  institution 
of  this  proceeding,  there  was  an  agreement  and  composition 
offered  by  defendants'  said  firm  to  their  creditors,  including  the 
petitioners  in  this  proceeding,  at  the  rate  of  fifty  cents  on  the 
dollar,  which  proposition  was  offered  by  defendants  to  peti- 
tioners and  other  creditors  and  accepted  by  petitioners,  and 
almost  all  of  the  creditors  of  defendant,  and  that  as  between 
defendants'  firm  and  petitioners,  the  original  indebtedness  and 
obligation  was  by  said  agreement  of  composition  terminated, 
and  the  right  of  petitioners  against  said  defendants'  firm  is 
no  longer  upon  the  original  accounts,  sale  or  delivery  of  goods 
and  original  indebtedness,  but  upon  the  contract  or  composi- 
tion and  compromise  agreed  upon  between  defendants'  firm  and 
said  petitioners  and  other  creditors  of  defendants'  firm. 

These  defendants  further  say  that  this  proceeding  was  not 
instituted,  nor  has  it  ever  been  prosecuted  in  good  faith  on 
behalf  of  the  petitioners  or  any  of  them  for  the  relief  afforded 
by  the  National  Bankruptcy  Law  of  1898,  entitled  "An  Act 
to  establish  a  uniform  system  of  bankruptcy  throughout  the 
United  States,"  but  was  instituted  for  sinister,  oppressive  and 


998  BANKRUPTCY. 

\icious  purposes,  this  proceeding-  being  part  of  a  plan  or 
scheme  begun  by  petitioners  in  1898  for  the  avowed  purpose 
of  forcing-  defendants  and  their  said  firm  to  pay  said  petition- 
ers more  than  other  parties  claiming  to  be  creditors  of  defend- 
ants' firm,  were  to  receive  any  more  than  the  assigned  estate 
could  pay. 

These  defendants  further  state  that  in  December,  ,  the 

defendant,  L.  C,  as  assignee  of  defendants'  firm,  filed  said 

suit  in  the Circuit  Court  of  the  state  of ,  asking  as 

aforesaid,  a  settlement  of  his  accounts  and  distribution  of  the 
proceeds  of  the  assigned  estate  among  the  creditors  of  de- 
fendants'  firm,  without  preference  as  provided  by  the  laws 

of  ,  that  the  petitioners  in  this  proceeding,  as  parties  to 

said  suit,  joined  therein  and  united  in  an  order  entered  in  that 

action,  referring  said  action  in  the Circuit  Court  to  the 

commissioner  of  said  court  as  a  Commissioner  in  Chancery 
to  make  a  settlement  of  the  accounts  to  said  L.  C,  as  assignee, 
and  a  distribution  among  the  creditors ;  that  excepting  a  few 
outstanding  accounts  of  little  or  no  value,  all  of  the  assets 
of  defendants'  said  firm  assigned  to  said  L.  C.  have  long  since 
been  converted  into  money  and  the  proceeds  paid  into  court  as 
hereinbefore  set  forth,  for  distribution;  that  said  court  is 
now,  and  has  been  for  some  time,  ready  to  distribute  said  fund 
ammong  the  creditors  in  the  same  proportion,  and  with  the 
same  respective  legal  rights  as  they  would  be  distributed  in 
this  court,  and  in  this  proceeding,  if  the  funds  should  be 
brought  into  this  court,  waiting  only  for  the  time  for  cred- 
itors to  present  their  claims  as  required  by  law,  to  pass,  which 
time  expired  — — .  That  the  proceedings  herein  were  taken 
and  the  petition  of  petitioners  herein  filed  long  after  said 
State  Court  had  taken  and  exercised  complete  jurisdiction 
and  control  of  the  defendants'  said  firm  and  their  said  estate 
assigned  to  said  L.  C,  and  of  the  said  assignment  and  all  of 
the  claims  of  all  of  the  creditors  of  defendants'  said  firm,  and 
of  all  the  estate  of  defendants'  said  firm,  and  had  all  of  the 


PETITIONS,    SCHEDULES,    ETC.  999 

transactions,  property  and  parties  under  its  jurisdiction  and 
control,  and  of  all  of  the  proceeds  of  all  of  its  property  in 
its  possession,  and  was  ready  to  distribute  the  proceeds  and 
long  after  the  assignee  had  paid  the  said  proceeds  into  court 
in  that  proceeding,  where  the  same  now  remains,  and  that 
neither  these  defendants .  nor  said  L.  C,  nor  either  of  them, 
has  or  has  ever  had  since  the  time  of  the  filing  of  petition 
of  petitioners  herein,  any  possession  or  control  of  said  es- 
tate, or  any  part  thereof,  or  of  the  proceeds  thereof,  all  of 
which  matters  and  things  these  defendants  do  aver  and  plead 
to  the  petitioners'  said  petition,  and  humbly  crave  whether 
they  shall  make  any  further  answer  to  the  said  petition. 

And  these  defendants  not  waiving  their  said  pleading,  but 
relying  thereon,  for  answer  to  the  said  bill  and  in  support 
of  said  plea  say  that  they  and  each  of  them  know  not  and  have 
not  been  informed  save  by  said  petitioners'  said  petition,  and 
cannot  set  forth  as  to  their  belief  or  otherwise ;  that  the  pe- 
titioners were  partners  as  set  forth  in  petition,  and  they  deny 
that  the  demands  of  petitioners  set  forth  in  petition  were  or 
are  provable  against  defendants'  firm  in  accordance  with  the 
provisions  of  the  Act  referred  to  in  said  petition,  or  at  all ; 
deny  that  the  demands  of  petitioners  against  defendants'  firm 

exceeded  $ ,   or  any  other  sum  above  $ ,  and  deny 

that  petitioners,  or  either  of  them,  at  the  time  of  filing  the 
l)etition  in  this  proceeding,  had  any  such  claim  or  demand  as 
set  forth  in  petition,  or  any  other  claim  or  demand  except- 
ing a  claim  upon  the  contract  and  agreement  between  peti- 
tioners and' defendants'  firm,  to  compromise  at  fifty  cents  on 
the  dollar.  They  deny  that  the  defendant,  L.  C,  had  at  the 
time  of  the  filing  the  petition  herein,  or  has  -now,  the  sum 

of  $ ,  or  any  other  sum,  realized  from  the  said  assigned 

estate  or  any  proceeds  of  the  said  assigned  estate. 

These  defendants,  for  further  answer  herein,  state  that 
they  are  advised  and  believed  that  neither  the  petitioners,  nor 
either  of  them,  nor  any  creditor  of  these  defendants,  desires 


1000  BANKRUrXCY. 

the  court  to  proceed  further  on  said  petition  in  involuntary 
bankruptcy;  that  no  creditor  has  applied  to  the  court  for  an 
adjudication  in  bankruptcy;  that  the  matter  was  not  brought 
to  the  court's  attention  by  any  creditor,  but  was  brought  to 
the  court's  attention  without  the  intervention  or  desire  or 
suggestion  of  any  creditor  by  some  one  of  the  officers  of  the 
court,  and  not  for  the  benefit  of  any  creditor. 

These  defendants  deny  all  and  all  manner  of  unlawful  com- 
bination and  confederacy  wherewith  they  are  by  said  petition 
charged,  without  this,  that  there  is  any  other  matter,  cause  or 
thing  in  said  petition  contained,  material  or  necessary  for 
these  defendants  to  make  answer  unto  and  not  herein  or  hereby 
well  and  sufficiently  answered,  confessed,  traversed  and  avowed 
or  deny,  is  true  to  the  knowledge  or  belief  of  these  defendants, 
all  of  which  matters  and  things  these  defendants  are  ready  and 
willing  to  aver,  maintain  and  prove  as  this  honorable  court 
shall  direct,  and  humbly  pray  to  be  hence  dismissed  with 
their  reasonable  costs  and  charges  in  this  behalf  most  wrong- 
fully sustained.  Y.  &  Y., 

Attorneys  for  Defendants. 
State  of ,  County  of ,  ss. 

A.  B.,  makes  solemn  oath  and  says  he  is  the  above  named 
defendant ;  so  much  of  the  foregoing  answer  as  concerns  my 
own  acts  and  deeds  is  true  to  the  best  of  my  knowledge,  and 
so  much  thereof  as  concerns  the  acts  or  deeds  of  any  other 
person  or  persons  I  believe  to  be  true.  A.  B. 

Sworn  to  before  me  this day  of . 

[Seal.']  N.  R.,  Notary  Public, 

County, , 

(l)  See  note  to  No.  9. 


PETITIONS,    SCHEDULES,    ETC.  1001 

No.  12. 

Petition  of  Administrator  of  Deceased  Partner  Asking  Leave 
to  Settle  Partnership  Affairs  (i). 

District  Court  of  the  United  States, District  of . 

In  re  A.  B.  &  Co. 
To  the  Honorable  E.  S.,  Judge  of  the  District  Court  of  the 
United  States  for  the  District  of . 

The  petition  of  the  Memphis  Trust  Company,  adminis- 
trator of  A.  B.,  deceased. 

•Petitioner  respectfully  shows  that  it  was  appointed  adminis- 
trator of  A.   B.,    deceased,    by  the   Probate   Court  of  

county,  ,  at  its  August  Term,  .     It  files  herewith 

certified  copies  of  its  letters  of  administration. 

It  shows  further  that  the  said  A.  B.  was  the  senior  member 
of  said  firm  of  A.  B.  &  Co.,  referred  to  in  the  original  petition 
herein.  It  shows  further  that  the  individual  assets,  real  and 
personal,  of  the  said  A.  B.,  deceased,  together  with  the  part- 
nership assets  of  the  said  firm  of  A.  B.  &  Co.  will,  as  it  verily 
believes,  be  more  than  sufficient  to  pay  all  of  the  individual 
debts  of  the  said  A.  B.,  and  the  firm  liabilities  of  A.  B.  & 
Co.  It  shows  further  that  before  the  petition  in  bankruptcy 
was  filed  herein  against  the  said  C.  B.  and  D.  B.,  it  had  taken 

steps  in  the  Chancery  Court  of county,  ,  to  have  the 

partnership  property  and  assets  of  said  firm  of  A.  B.  &  Co., 
administered  by  said  Chancery  Court.     On  its  application  said 

Chancery  Court  of county, ,  appointed  a  receiver  for 

said  partnership  assets  on  the day  of ,  and  said  re- 
ceiver was  in  charge  of  said  assets  when  the  petition  in  bank- 
ruptcy was  filed  in  this  cause. 

Petitioner  now  presents  this  petition  to  this  honorable  court 
for  the  Durpose  of  showing  that  as  administrator  of  said  A.  B., 
deceased,  it  does  not  consent  if  said  C.  B.  and  D.  B.  are  ad- 
judged bankru])ts.  that  partnership  pro]ierty  shall  be  admin- 
istered in  bankruptcy. 


100  J  BANKRUrTCY. 

Petitioner  shows  further  that  at  its  instance  and  on  itr 
application  said  partnership  business  is  now  being  settled 
through  said  receivership  mentioned  above  as  expeditiously  as 
its  nature  will  permit. 

Petitioner  now  asks  leave  to  file  this  petition  herein,  and 
thereby  set  up  its  right  to  settle  said  partnership  business  in 
the  manner  set  forth  above. 

Turley  &  Wright, 
Solicitors  for  Mem.  Trust  Co.,  Admr. 

(i)   Taken    from   the   record    in    Vaccaro   vs.    Security    Bank,    103    Fed. 
Rep.  436. 


No.  13. 
Order  Permitting  Creditor  to  Join  in  Creditor's  Petition. 

[Caption.'] 

Be  it  remembered  that  this  cause  came  on  for  hearing  on 

this  day  upon  the  petition  of  the  Security  Bank  of and 

other  creditors  of  the  said  A.  B.  &  Co.,  the  exhibits  to  said 
petition  and  the  proof,  etc.,  when  H.  W.,  a  citizen  of  — — , 
appeared  by  his  counsel,  and  represented  to  the  court  that  he  is 
a  creditor  of  said  A.  B.  &  Co.  (his  debt  being  evidenced  by 
the  promissory  note  of  said  firm  of  date  February  20th,  1897, 

and  due  December  20th,  1897,  and  for  the  sum  of  $ with 

interest  at  six  per  cent,  per  annum  from  date),  and  asked  that 
he  be  allowed  to  join  in  the  petition  filed  herein  for  involuntary 
bankruptcy,  and  the  court  doth  hereby  order  that  the  said  H. 
W.  be  and  he  is  hereby  allowed  to  become  a  party  of  this  pro- 
ceeding and  that  his  name  be  inserted  in  the  original  petition 

as  one  of  the  petitioning  creditors.     Done  this  day  of 

,  A.  D. . 


PETITIONS,    SCHEDULES,    ETC.  1003 

No.  14. 
Special  Warrant  to  Marshal  (i). 
(Official  Form  No.  8.) 
In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


In  Bankruptcy. 


To  the  Marshal  of  said  district  or  to  either  of  his  deputies, 
greeting : 

Whereas  a  petition  for  adjudication  of  bankruptcy  was,  on 

the day  of ,  A.  D.  19 — ,  filed  against ,  of  the 

county  of and  state  of ,  in  said  district  and  said  peti- 
tion is  still  pending ;  and  whereas  it  satisfactorily  appears  that 
said  has  committed  an  act  of  bankruptcy  [or,  has  neg- 
lected, or,  is  neglecting,  or,  is  about  to  so  neglect  his  property 
that  it  has  thereby  deteriorated,  or,  is  thereby  deteriorating,  or, 
is  about  thereby  to  deteriorate  in  value] ,  you  are  therefore  au- 
thorized and  required  to  seize  and  take  possession  of  all  the 

estate,  real  and  personal,  of  said  .  and  of  all  his  deeds, 

books  of  account  and  papers,  and  to  hold  and  keep  the  same 
safely  subject  to  the  further  order  of  the  court. 

Witness  the  honorable ,  judge  of  the  said  court  and  the 

seal  thereof,  at ,  in  said  district,  on  the of ,  A. 

D.  19 — . 


Clerk. 
[Seal  of  the  court.'] 

RETURN    BY    MARSHAL   THEREON. 

By  virtue  of  the  within  warrant,  I  have  taken  possession  of 

the  estate  of  the  within-named  ,   and  of  all  his  deeds, 

books  of  account  and  papers  which  have  come  to  my  knowledge, 

Marsha]   \or.  Deputy  Marshal.] 


1004 


BANKRUPTCY. 


FEES    AND    EXPENSES. 


1.  Service  of  wairanl 

2.  Necessary  travel,  at  the  rate  of  six  cents  a  mile  each  way 


3.     Actual  expenses  in  custody  of  property  and  other  serv- 
ices,  as   follows ■ 


[Here  state  the  particulars.] 


Marshal  \_or,  Deputy  Marshal]. 

District  of ,  A.  D.  19 — . 

Personally  appeared  before  me  the  said ,  and  made  oath 

that  the  above  expenses  returned  by  him  have  been  actually  in- 
curred and  paid  by  him,  and  are  just  and  reasonable. 


Referee  in  Bankruptcy. 

(i)   B.  A.  1898,  sec.  69  and  sec.  3^.     Loveland's  Bank.,  sec.  79. 

An  application  to  seize  property  should  not  be  joined  in  petition  for 
an  adjudication.  In  re  Kelly,  91  Fed.  Rep.  504;  Mather  vs.  Coe,  92  Fed. 
Rep.  iT,z. 


No.  15. 


Bond  of  Petitioning  Creditor    (i). 

(Official  Form  No.  9.) 

Know  all  men  by  these  presents :     That  we,  ,  as  prin- 
cipal, and  ,  as  sureties,  are  held  and  firmly  bound  unto 


-,  in  the  full  and  just  sum  of 


dollars,  to  be  paid  to 


the  said 


executors,  administrator^  or  assigns,  to  which 


payment,  well  and  truly  to  be  made,  we  bind  ourselves,  our 


PETITIONS,    SCHEDULES,    ETC.  1005 

heirs,  executors  and  administrators,  jointly  and  severally  by 
these  presents.   ^ 

Signed  and  sealed  this day  of A.  D.  189 — . 

The  condition  of  this  obligation  is  such  that  whereas  a  peti- 
tion in  bankruptcy  has  been  filed  in  the  District  Court  of  the 

United  States  for  the District  of ,  against  the  said 

,  and  the  said  has  applied  to  that  court  for  a  war- 
rant to  the  marshal  of  said  district,  directing  him  to  seize  and 

hold  the  property  of  said subject  to  the  further  orders  of 

said  District  Court. 

Now  therefore  if  such  a  warrant  shall  issue  for  the  seizure 

of  said  property  and  if  the  said shall  indemnify  the  said 

for  such  damages  as  he  shall  sustain  in  the  event  such 

seizure  shall  prove  to  have  beeen  wrongfully  obtained,  then 
the  above  obligation  to  be  void ;  otherwise  to  remain  in  full 
force  and  virtue. 

Sealed  and  delivered  in  presence  of  [Seal.'] 

■ [Seal.-] 

[Seal.] 

Approved  this  day  of ,  A.  D.  190 — . 


District  Judge, 
(i)   B.  A.  1898,  sec.  3e.     Loveland's  Bank.,  sec.  79. 


No.  16. 
Bond  to  Marshal   (i). 

(Official  Form  No.  10.) 

Know  all  men  by  these  presents :     That  we.  .  as  prin- 
cipal, and  ,  as  sureties,  are  held  and  firmly  Ijound  unto 

,  marshal  of  tlie  United  States  for  the  District  of 

■ ,  in  the  full  and  just  sum  of  dollars,  to  be  paid  to 

the   said  ,    his  executors,   administrators  or  assigns,   to 


1QQ5  BANKRUrTCY. 

Avhich  payment,  well  and  truly  to  be  made,  we  bind  ourselves, 
Dur  heirs,  cxecutoi-s  and  administrators,  jointly  and  severally, 
by  these  presents. 

Signed  and  sealed  this day  of ,  A.  D.  190 — . 

The  condition  of  this  obligation  is  such  that  whereas  a  peti- 
tion in  bankruptcy  has  been  filed  in  the  District  Court  of  the 

United  States  for  the District  of .  against  the  said 

,  and  the  said  court  has  issued  a  warrant  to  the  marshal 

of  the  United  States  for  said  district,  directing  him  to  seize  and 

hold  property  of  the  said ,  subject  to  the  further  order  of 

the  court,  and  the  said  property  has  been  seized  by  said  mar- 
shal as  directed,  and  the  said  District  Court,  upon  a  petition  of 
said ,  has  ordered  the  said  property  to  be  released  to  him. 

Now,  therefore,  if  the  said  property  shall  be  releasd  accord- 
ingly to  the  said  ,  and  the  said  ,  being  adjudged  a 

bankrupt,  shall  turn  over  said  property  or  pay  the  value  thereof 
in  money  to  the  trustee,  then  the  above  obligation  to  be  void ; 
otherwise  to  remain  in  full  force  and  virtue. 

Sealed  and  delivered  in  the  presence  of         [Scal.'\ 

[Seal.-] 

■      [Seal.] 


Approved  this  day  of  — ■ — ,  A.  D.  19- 


District  Judge, 


(i)  B.  A.  1898,  sec.  69. 


No.  17. 

Petition  to  Enjoin  Bankrupt  or  His  Agent  from  Disposing  of 

Property  of  the  Estate. 

In  the  District  Court  of  the  United  States  for  the District 

of  . 

In  the  matter  of  E.  B.,  bankrupt.    In  bankruptcy. 

Respectfully  represents  E.  M.,  trustee  of  the  bankrupt  herein, 
that  as -shown  by  the  testimony  in  this  case  the  said  bankrupt 


PETITIONS,    SCHEDULES,    ETC.  1007 

pretends  that  the  $ ,  being  the  proceeds  of  the  sale  of  the 

stock  of  goods  and  the  mortgage  upon  the  real  estate  on  Third 

Street,  in ,  is  in  the  possession  of  his  son,  F.  B. ;  that  as 

shown  by  the  record  in  this  cause  an  order  was  entered  requir- 
ing the  said  F.  B.  to  appear  before  the  referee  herein  and  testify 
concerning  the  estate  herein,  and  that  said  order  has  been  re- 
turned "not  found/' and  that  a  second  order  to  such  effect  for 
his  appearance  has  been  entered  and  the  same  is  now  in  the 
hands  of  the  officers  for  execution.  He  says  that  the  said 
F.  B.  so  conceals  his  whereabouts  that  it  is  impossible  for 
this  petitioner,  and,  as  he  is  informed,  for  the  marshal  of 
this  court  having  said  second  order  for  execution,  to  learn 
of  his  said  whereabouts;  that  petitioner  is  informed  that 
there  are  persons  offering  to  divulge  the  whereabouts  of 
the  said  F.  B.  so  that  said  order  can  be  executed,  upon  the 
payment  of  the  sum  of  $50.00. 

He  further  reports  that  as  shown  by  the  evidence  herein  the 
said  F.  B.  was  authorized  by  the  bankrupt  herein  to  receive  the 
said  fund  of  $— — ,  and  that  while  said  bankrupt  pretends  that 
he  requested  the  payment  of  said  money  by  said  F.  B.  to  said 
bankrupt  he  has  made  no  effort  to  get  said  money  and  put  it 
into  the  hands  of  this  petitioner  either  as  receiver  of  this  court 
or  as  trustee,  and  that,  notwithstanding  that  said  bankrupt  fur- 
ther pretends  that  he  and  his  son  were  proposing  to  use  said 
money  to  settle  with  the  creditors  and  start  another  business 
elsewhere;  and  petitioner  further  reports  that  notwithstanding 

the  said  F.  B.  was  present  in up  to  the  time  of  the  proceed- 

i;ag  in  bankruptcy  herein,  he  immediately  thereon  or  imme- 
diately thereafter  concealed  his  whereabouts  from  this  peti- 
tioner and  has  kept  them  so  concealed  since  that  time. 

Petitioner  further  refers  to  the  record  herein  as  to  the  order 

entered  herein  on  the day  of ,  A.  D. ,  directing 

the  said  E.  B.  to  pay  said  sum  of  money  to  this  petitioner  on  or 

before   the  day   of ,    and   though   petitioner   says 

that  he  does  not  know  whether  said  money  is  in  the  hands  of 
said  E.  B.  or  under  his  control  or  in  the  hands  of  the  said  F.  B., 


1008  BANKRUPTCY. 

or  under  his  control,  he  is  fearful  that  said  fund  will  be  dissi- 
pated, and  that  said  order  may  not  be  wholly  effectual  unless  an 
injunction  or  restraining  order  be  entered  herein  enjoining  or 
restraining  the  said  F.  B.  from  disposing  of  any  part  of  said 
funds  and  further  ordering  him  to  pay  said  fund  into  the  hands 
of  this  petitioner.  Petitioner  says  that  from  the  evidence  in 
this  case  already  taken  it  appears,  and  petitioner  believes,  that 

the  said  sum  of  $ is  a  part  of  the  estate  and  property  of  the 

bankrupt  herein ;  that  the  same  did  not  come  into  the  hands  of 
the  said  F.  B.,  if  at  all.  as  a  common  or  simple  debtor,  and  that 
he  does  not  occupy  that  relation  to  this  estate,  but  that  said 
sum  is  a  fund  belonging  to  this  estate  and  should  be  in  the 
hands  of  this  petitioner. 

The  premises  considered,  he  prays  for  instruction  as  to  the 
said  matter  as  herein  set  up  concerning  the  payment  of  the  said 
sum  of  $50.00  as  an  aid  to  ascertain  the  whereabouts  of  the 
said  F.  B. ;  he  prays  for  an  order  enjoining  and  restraining  the 
said  F.  B.  from  disposing  of  the  said  money  or  any  part  thereof 
and  further  ordering  and  directing  him  to  pay  all,  or  so  much 
thereof  as  he  may  have  in  his  hands  into  the  hands  of  this  pe- 
titioner. 

X.  &  X., 
Attorneys  for  Trustee. 

E.  M.  says  that  he  is  trustee  of  the  estate  of  the  bankrupt 
herein,  and  that  the  statements  contained  in  the  foregoing  pe- 
tition are  true,  as  he  believes.  E.  M. 

Subscribed  and  sworn  to  before  me  by  E.  M.,  this day 

of  ,  A.  D.  .  W.  W.,  Notary  Public, 

Within  and  for  County  of 

State  of . 

(i)  Taken    from  the  record   in  Mueller  vs.   Nugent,    184   U.    S.   1. 


PETITIONS,    SCHEDULES,    ETC.  1009 

No.  18. 

Motion  for  Injunction. 

In  the  District  Court  of  the  United  States, 
For  the District  of 


In  the  matter  of  A.  B.,  Bankrupt  No.  — —  in  bankruptcy. 

At ,  in  said  District,  on  the day  of A.  D. 

190 — ,  District  of  ,  ss. 

R.  X.  Esq.,  attorney  for  petitioning  creditors  [or  as  may 
be]  moves  the  court  for  a  writ  of  injunction  against  E.  F.,  G. 
H.  and  J  .K.  according  to  the  prayer  of  petition  filed  by  R.  S., 
E.  T.  and  G.  W.  in  this  matter.  R.  X. 

Attorney  for  [as  may  be.] 


No.  19. 
Temporary  Restraining  Order. 

[Caption.] 

And  now,  this day  of 190 — ,  on  motion  of  said 

attorney,  it  appearing  to  the  court  that  notice  of  this  motion 
has  been  duly  given  to  the  proper  parties,  viz.,  E.  F.,  G.  H. 
and  J.  K.  and  that  there  is  danger  of  irreparable  injury  to  the 
creditors  of  the  said  debtor,  unless  the  act  sought  to  be  en- 
joined is  at  once  restrained,  it  is  ordered  that  the  above  motion 

be  heard  at  a  session  of  said  court,  to  be  held  at ,  on  the 

day  of A.  D.  190 — ,  at  10  a.  m. ;  and  it  is  further 

ordered  that,  until  the  decision  of  this  court  upon  the  said  mo- 
tion, the  said  parties  against  whom  an  injunction  is  prayed  be 
restrained,  and  they  are  hereby  commanded,  under  such  pen- 
alties as  are  inflicted  by  the  laws  of  the  United  States,  to  ab- 
stain from  any  and  all  interference,  by  execution,  levy,  sale,  or 
in  any  other  manner  whatever,  with  the  property  or  estate  of 
the  above  named  debtor. 

(i)  B.  A.  1898,  sec.  2,  clause  15;  sec.  718,  R.  S. 


1010  BANKRUPTCY. 

No.   20. 
Petition  to  Stay  Pending  Suit.^ 

In  the  Disiriot  Court  of  the  I'mitoil  States 
For  tli(^ l^istriet  of .. 

Ill  IV  A  K.,  I 
Banknii)t    \ 

Your  petitioner,  A  ]\r,  rospoctinlly  shows  tliat  A  B  was  duly 

juljndieated  a  banlvrnpt  herein   on  the  day  of  19 — 

upon   a   petition   tiled   the  day   of  ,   19 — ,   and   your 

petitioner  A  M  was  on  the  day  of  appointed  and 

dnly  qnalified  as  trustee  of  the  estate  of  the  said  A  B  in  bank- 
niptcy.  and  is  now  aetina:  as  tlie  said  trustee. 

That  among  the  debts  scheduled  by  said  bankrupt  proeiu'dings 

is  one  for dollars  {^ ),  due  C  D  and  that  sueli  debt 

is  of  such  a  nature  as  to  be  released  by  a  discharge  in  bankruptcy. 

That  at  the  time  of  the  filing  of  the  petition,  on  which  said 

adjudication  was  made  a  suit  was  ]iending  in  tlie  ^ court  of 

entitled  C  D  vs.  A  B,  founded  upon  the  debt  aforesaid 

from  which  a  discharge  in  bankruptcy  would  be  a  release,  and 
that  the  suit  is  still  pending  therein,  and  that  if  such  suit  is  not 
stayed,  great  injury  will  be  done  your  petitioner  and  the  estate 
of  A  B  to  be  administered  in  bankruptcy  herein. 

Wherefore  your  petitioner  prays  that  further  proceedings  in 
said  suit  may  be  stayed  pursu»ant  to  the  bankruptcy  laws  of  the 
United  States  in  such  cases  made  and  provided,  and  that  an 
injunction  may  be  issued  out  of  this  Honorable  Court  directed 
to  the  said  C  D,  restraining  him,  his  agents,  servants,  attorneys 
and  counselors  from  further  prosecuting  said  suit  in  said  court 
and  for  such  other  and  further  relief  as  to  the  court  may  seem 
just.  A.  M., 

Trustee   Petitioner. 

State  of I  gg 

County  of \  ' 

I,  A  M,  the  petitioner  mentioned  in  the  foregoing  petition,  do 
hereby  make  solemn  oath  that  the  statements  of  fact  contained 
therein  are  true  to  the  best  of  my  knowledge,  information  and 
belief.  A.  M. 

Subscribed  and  sworn  to  before  me  this dav  of 19 — . 

J.  N. 
Notary  Public  in  and  for  said  County  and  State. 

1  This  petition  may  be  used  with  slight  changes  for  stay  prior  to  an 
ad.iudication,  The  bankrupt  or  tlie  petitioning  creditors  may  ai)ply  for  a 
stay  if  no  trustee  has  been  appointed. 

See  also  Loveland'sBank.,  sec.  32. 


PETITIOKS,  SCHEDULES,   EOT.  1011 

No.   21. 

Injunction  to  Stay  Suit.   (1) 

The  United  States  of  America,  ) 

District  of >  ss. 

Division  \ 

The  President  of  the  United  States  of  America,  to  R.  S.  and 
S.  T.,  greeting: 

AVhereas,  a  petition  lias  been  filed  on  the  bankruptcy  side  of 

the  District  Court  of  the  United  States  for Division  of  the 

District  of  ,  praying  for  an  injunction  to  restrain  the 

prosecution  of  a   certain  suit  pending  in  the  court  in  the 

county  of  state  of  in  which  you  are  plaintiffs  and 

A.  B.  banlvrupt  is  defendant,  and  has  obtained  an  allowance 
for  an  injunction,  as  prayed  for  in  said  petition,  from  the 
District  Court  of  the  United  States  for  the District  of . 

Now,  therefore,  we,  having  regard  to  the  matters  in  said  peti- 
tion contained,  do  hereby  command  and  strictly  enjoin  you,  tlie 
said  R.  S.  and  S.  T.,  or  either  of  you,  and  each  of  your  agents, 
servants,  attorneys  or  counsellors,  from  further  prosecuting  said 
suit  in  said  court,  and  from  taking  any  further  steps  or  proceed- 
ing in  said  action  or  suit  now  pending,  as  aforesaid,  which  com- 
mands and  injunction  you  are  respectively  re(|uired  to  observe 

and  obey  until  twelve  months  after  the day  of  ,  the 

date  the  said  A.  B.  was  adjudged  a  bankrupt,  or  if  within  that 
time  the  said  A.  B.  applies  for  a  discharge,  then  until  the 
question  of  such  discharge  is  determined,  or  until  our  said  Dis- 
trict Court  shall  make  further  order  in  the  premises. 

Hereof  fail  not,  under  the  penalty  of  the  law  thence  ensuing. 

Witness,  the  Honorable  G.  R.,  District  Judge  of  the  United 

States  for  the District  of  ,  this i!ay  of A.  D., 

10 — ,  and  in  the  year  of  the  independence  of  the  United 

States  of  America. 

li.  K., 

Clerk  of  s-i id  Court. 
[Seal.] 

(1)  See  Loveland's  Bauk.,  sec.  23. 


1012  BANKRUPTCY. 

No.  22. 

Order    Denying   Preliminary   Injunction   Against    Execution 

Creditors. 

[Captio)i.] 

Ordered  that  the  application  of  the  trustee  for  a  preliminary 
injunction  against  the  E.  F.  Company  and  C.  &  D.,  re- 
straining them  from  proceeding  with  their  executions  against 

the  bankrupt's  wife,  be  denied  and  the  petition  filed  ,  in 

that  behalf  be  dismissed,  also  that  the  sheriff  be  directed  to  pay 
the  money  in  his  hands  to  the  plaintiffs  in  the  executions,  as  if 
the  proceedings  here  had  not  been  taken.  But  this  order  is 
without  prejudice  to  the  trustee  to  proceed  at  law  or  in  equity 
in  any  court  of  competent  jurisdiction  to  recover  the  money 
from  the  execution  creditors  aforesaid,  as  he  may  be  ad- 
vised. 

The  complainant  herein  will  pay  the  costs  of  this  cause,  for 
which  execution  is  hereby  awarded  against  him,  and  K.  D., 
surety  on  his  cost  bond  herein. 


No.  23. 
Petition  for  the  Appointment  of  a  Receiver. 

[Caption.] 

Respectfully  show,  American  Cutlery  Co.,  A.  M.,  engaged  in 
business  under  the  name  and  style  of  W.  &  Co.  H.  L.,  and  R, 

Foundry  Co.,  that  heretofore,  to  wit,  on  the day  of , 

,  your  petitioners  filed  an  involuntary  petition  in  bankrupt- 


cy against  the  A.  B.  Co.,  to  which  petition  reference  is  here 
made  for  the  specific  allegations  thereof.  That  the  estate  of 
said  The  A.  B.  Co.,  consisting  of  goods,  wares  and  merchan- 
dise, accounts,  etc.,  have  been  set  over,  transferred  and  deliv- 
ered to  the  assignee,  C.  W.,  with  general  authority  to  sell  and 
dispose  of  the  same,  and  that  furthermore  certain  creditors  of 


PETITIONS,    SCHEDULES,    ETC,  1013 

said  company  are  seeking  the  appointment  of  a  receiver  to  take 
charge  of  said  property,   under  the  orders  of  the  Chancery 

Court  of County, ;  that  said  property  is  in  danger  of 

being  disposed  of  in  some  way  not  to  the  best  advantage  of 
your  petitioners,  and  that  large  costs  are  being  incurred,  which 
are  unnecessary  and  improper,  and  that  therefore  there  may  be 
considerable  loss  to  the  estate. 

Wherefore,  your  petitioners  pray  that  a  temporary  receiver 
to  take  charge  of  said  estate,  until  a  trustee  can  be  elected,  be 
at  once  appointed  by  your  honor,  and  be  empowered  to  take 
charge  of  and  impound  all  of  the  property  of  said  The  A.  B. 
Co.  and  hold  the  same  subject  to  the  further  orders  of  this 
court. 

American    Cutlery   Co., 

W.  &  Co., 

H.  L., 

R.  Fdy.  Co., 

By  R.  X., 
Their  Attorney. 


No.  24. 
Order  Refusing  to  Appoint  a  Receiver. 

[Caption.] 

And   on   the  day   of  ,    came   the    parties,    by 

their  attorneys.  The  court  being  now  fully  advised  of  the  pe- 
titioners' motion  for  the  appointment  of  a  receiver  herein,  it 
is  therefore  considered  by  the  court  that  the  said  motion  be,  and 
the  same  is  hereby,  overruled. 


1014  BANKRUPTCY. 

No.  25. 
Order  Appointing  a  Receiver  in  Bankruptcy  (i). 

The  District  Court  of  the  Uuited  States,   )    t    ,      , 

.  [    in  bankruptcy. 
District  of .                               ) 

111  the  matter  of  the  petition  of  A.  B.  &  Company  and  others 
to  have  The  F.  Company  declared  bankrupt. 

This  cause  coming  on  to  be  heard  upon  the  petition  of  A.  B. 
&  Company  a  creditor,  to  have  a  receiver  appointed  for  said 
alleged  bankrupt  The  F.  Company,  and  due  notice  having 
been  served  of  this  application,  and  it  appearing  to  the  court 
that  it  is  absolutely  necessary  for  the  preservation  of  the  es- 
tate of  said  alleged  bankrupt  that  a  receiver  be  forthwith  ap- 
pointed, to  take  charge  of,  hold,  manage  and  conduct  the  es- 
tate, property  and  assets  of  said  alleged  bankrupt ; 

It  is  therefore  ordered,  adjudged  and  decreed  that  W.  R.  be 
and  he  is  hereby  appointed  receiver  of  all  the  assets  and  prop- 
erty of  every  kind  and  character  of  and  belonging  to  the  said 
F.  Company,  and  said  receiver  is  hereby  clothed  with  all  the 
power  and  authority  of  receivers  in  bankruptcy  in  like  cases. 

It  is  further  ordered  that  said  receiver  within  three  days 
from  this  date,  file  a  bond  as  such  receiver,  in  the  usual  form, 

in  the  penal  sum  of  $ with  surety  to  be  approved  by  tlie 

clerk  of  this  court. 

It  is  further  ordered  that  said  receiver  continue  and  con- 
duct the  business  of  said  alleged  bankrupt  until  the  further  or- 
der of  this  court,  and  said  receiver  is  hereby  authorized  and 
directed  to  employ  any  and  all  necessary  help,  including  coun- 
sel, in  the  administration  of  his  trust,  therefore  personally  came 
the  said  W.  R.  and  qualified  as  such  receiver. 

(i)  The  authority  for  the  appointment  of  receivers  in  bankruptcy  is 
purely  statutory.  For  the  powers  of  a  receiver,  see  Booneville  Nat. 
Bank  vs.  Blakey,  107  Fed.  Rep.  8gr,  6  Am.  B.  R.  1.3.  He  may  be  author- 
ized  to   conduct   the   bankrupt's    bu.siness    for    a    limited    period.      Bank- 


PETITIONS,    SCHEDULES,    ETC.'  1015 

ruptcy  Act  1898,  sec.  21,  clause  5.  A  receiver  should  be  appointed  by  the 
judge,  but  in  his  absence  the  referee  may  make  the  appointment.  In  re 
Kelly  Dry  Goods  Co.,  102  Fed.  Rep.  747,  4  Am.  B.  R.  528 ;  in  re  Florcken, 
107  Fed.  Rep.  241. 

Sec.  2,  clause  5,  of  the  Bankruptcy  Act  was  amended  by  the  Act  of  Feb- 
ruary 5,  1903,  to  read  as  follows : 

"(5)  Authorize  the  business  of  bankrupts  to  be  conducted  for  limited 
periods  by  receivers,  the  marshals,  or  trustees,  if  necessary  in  the  best 
interests  of  the  estates,  and  allow  such  officers  additional  compensation 
for  such  services,  but  not  at  a  greater  rate  than  in  this  act  allowed 
trustees  for  similar  services." 


No.  26. 
Order  to  Put  Receiver  in  Possession. 

[^Caption.'] 

It  appearing  to  the  referee  from  the  petition  of  J.  M.,  re- 
ceiver,  filed  herein  on  the  day  of  ,   that  he,   the 

said  J.  M.,  as  receiver,  acting  under  an  order  of  this  referee, 

acting  in  the  absence  of  the  judge  of  this  court  from  the 

Division  of  the  District  of ,  lawfully  proceeded  to 

take  charge  of  all  of  the  properties  of  the  defendant,  A.  B.  Co., 
in  the  possession  of  C.  W.,  assignee,  under  authority  and  power 
contained  in  said  order  of  appointment,  and  it  further  appear- 
ing to  the  referee  that  the  said  C.  W.  has  refused  to  surrender 
the  possession  thereof  to  the  said  J.  M.,  receiver,  who  is  an  of- 
ficer of  this  court  under  appointment  of  date  ,  and  that 

the  said  C.  W.  has  openly,  defiantly  and  in  disobedience  of  an 
order  of  this  court  refused  to  set  over  and  surrender  to  the  said 
J.  M.  the  moneys  and  other  properties  belonging  to  the  defend- 
ant company  and  in  his  possession,  and  unlawfully  withholds 
the  same  from  the  said  receiver,  it  is,  therefore,  ordered  that 

the  marshal  of  the  United  States  for  the Division  of  the 

District  of ,  proceed  at  once  to  take  charge  of  and 

seize  all  of  the  properties  of  the  defendant.  The  A.  B.  Co.,  of 
whatsoever  kind  and  description  in  the  possession  of  C.  W.,  as- 
signee, or  his  agents,  or  the  agents  or  employes  of  the  said  A. 


1016  BANKRUPTCY. 

B.  Company,  and  put  the  said  J.  M.,  receiver,  in  lawful  and 
peaceable  possession  thereof,  antl  the  said  marshal  will  carry 
into  effect  this  order  and  report  his  action  to  this  referee.    This 

day  of . 

R.  D. 
Referee  in  Bankruptcy. 


No.  27. 
Marshal's  Return  on  Above  Order. 

United   States  of  America, 

District  of  '-,  ss. 

Came  to  hand  this  the  day  of  ,   and  exec^iied 

as  therein  commanded,  by  making  known  the  contents  of  said 
writ,  and  receiving  from  the  said  C.  W.,  assignee,  the  front 
door  keys  of  the  four  story  brick  building,  No.  401  Main  St., 
and  all  contents  therein  of  this  date.  Also  front  door  keys  to 
the  four  story  brick  building.  No.  257  Main  St.^  and  all  con- 
tents of  said  building  of  this  date,  and  all  keys  and  combina- 
tions to  one  large  iron  safe  in  building  No.  401  Main  St., . 

Also  three  checks  amounting  to  sixteen  and  40-100  dollars  and 
cash  $9.06  (nhiQ  and  06-iooJ  for  which  I  gave  the  said  C.  W. 
a  receipt,  and  for  which  a  receipt  was  taken  from  the  said  J. 
M.,  receiver.  Formal  demand  was  also  made  upon  the  said  C. 
W.,  assignee,  for  any  and  all  cash  belonging  to  the  said  A.  B. 

Co.  in  his  possession  as  assignee  in  any  of  the  banks  of , 

which  demand  was  refused  by  the  said  C.  W. 

V.  F. 
United  States  Marshal. 


PETITIONS,    SCHEDULES,    ETC.  1017 

No.  28. 
Adjudication  that  Debtor  is  not  Bankrupt  (i). 

(Official  Form  No.  ii.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


In  Bankruptcy. 


At ,  in  said  district,  on day  of ,  A.  D.  19 — , 

before  the  honorable ,  judge  of  the District  of . 

This  cause  came  on  to  be  heard  at ,  in  said  court,  upon 

the  petition  of that  be  adjudged  a  bankrupt  with- 
in the  true  intent  and  meaning  of  the  acts  of  Congress  relating 
to  bankruptcy,  and  \^Jici'e  state  the  proceedings,  whether  there 
zvas  no  opposition,  or,  if  opposed,  state  zchat  proceedings  were 
had^. 

And  thereupon,  and  upon  consideration  of  the  proofs  in 
said  cause  [and  the  arguments  of  counsel  thereon,  if  anyl,  ii 
was  found  that  the  facts  set  forth  in  said  petition  were  not 

proved ;  and  it  is  thei  efore  adjudged  that  said was  not  a 

bankrupt,  and  that  said  petition  be  dismissed  with  costs. 

Witness  the  honorable ,  judge  of  said  court,  and  the  seal 

thereof,  at ,  in  said  district,  on  the day  of ,  A. 

D.  19—.  , 

^  Clerk. 

[Seal  of  the  court. '\ 

(i)   B.  A.    1898,  sec.   iSd  and   e.     Loveland's   Bank.,  sec.  88. 

An  order  of  adjudication  should  not  be  made  until  the  expiration  of 
the  time  for  creditors  to  intervene  and  oppose  the  petition,  although 
the  bankrupt  appears  and  files  a  written  admission  of  the  acts  of  bank- 
ruptcy and  waives  service.  In  re  Humbert  Co.,  100  Fed.  Rep.  439 :  hi 
re  Columbia  Real  Estate  Co.,  loi  Fed.  Rep.  965.  Day  vs.  Beck  &  Gregg 
Hardware  Co.,  8  Am.  B.  R.  175. 


101 1^  BANKRUPTCY. 

No.  29. 
Adjudication  of  Bankruptcy  (i), 
(Official  Form  No.  12.) 

In  the  District  Cotu't  of  the  United  States 
For  the District  of . 


In  the  matter  of 


■  In  Bankruptcy. 


Bankrupt . 

At  ,  in  said  district,  on  the  — ■--     day  ot  ,  A.  D. 

19 .  before  the  honorable ,  judge  01  said  court  in  bank- 
ruptcy, the  petition  of that be  adjudged  a  bankrupt, 

within  the  true  intent  and  meaning  of  the  acts  of  Congress  re- 
lating to  bankruptcy,  having  been  heard  and  duly  considered, 
the  said  is  hereby  declared  and  adjudged  bankrupt  ac- 
cordingly. 

Witness  the  honorable ,  judge  of  said  court,  and  the  seal 

thereof,  at  in  said  district,  on  the day  of ,  A. 

D.  19—. 

Clerk. 

[Seal  of  the  court.'] 

(i)  B.  A.  1898,  sec.  iM  and  c     Loveland's  Bank,  sec.  88. 

An  order  of  adjudication  should  not  be  made  until  the  expiration  of 
the  time  for  creditors  to  intervene  and  oppose  the  petition,  although 
the  bankrupt  appears  and  files  a  written  admission  of  the  acts  of  bank- 
ruptcy and  waives  service.  In  re  Humbert  Co.,  lOO  Fed.  Rep.  439;  in 
re  Columbia  Real  Estate  Co.,  loi  Fed.  Rep.  965-  Day  vs.  Beck  &  and 
Gregg  Hardware  Co.,  8  Am.  B.  R.  175. 

A  secured  or  general  creditor  or  a  person  who  is  not  interested  m 
an  adjudication  will  not  be  entitled  to  make  a  motion  to  set  it  aside. 
In  re  Columbia  Real  Estate  Co.,  loi  Fed.  Rep.  965. 


■  PKTITIONS,  SCIIKDULKS,  ETC.  1019 

No.  30. 
Order  of  Adjudication  and  Designating  Newspaper.^ 

In  the  District  Court  of  the  United  States 

District  of 

In  the  matter  of  A.  B.,  bankrupt.  |  ^^  j^^^^ 

No.  J 

At ,  in  said  district,  on  the day  of ,  190 — ,  be- 
fore the  said  Court  in  Bankruptcy,  the  petition  of  A.  B.  that 
he  be  adjudged  bankrupt  within  the  true  intent  and  meaning 
of  the  acts  of  Congress  relating  to  bankruptcy,  having  been 
heard  and  duly  considered,  the  said  A.  B.  is  hereby  declared 
and  adjudged  bankrupt  accordingly. 

It  is  further  ordered  that  all  notices  required  to  be  published 
in  the  above  entitled  matter,  and  all  orders  which  the  court 

may  direct  to  be  published,  be  inserted  in' a  newspaper 

published  in  the County  of ,  State  of ,  within 

the  territorial  district  of  this  court,  and  in  the  County  within 
which  said  bankrupt  resides. 

Dated, 

District  Judge. 

(l)  The  above  form  is  used  in  some  districts.  In  others  a  general 
designation  of  newspapers  for  each  county  is  made  which  by  its  terms  is 
appHcable  to  all  subsequent  cases. 


1020  BANKRUrTCY. 

No.  31. 

Order  of  Reference  (i). 

(Official  Form  No.  14.) 

Ill  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


^In  Bankruptcy. 


Bankrupt. 


Whereas.  ,  of ,  in  the  county  of ,  and  district 

aforesaid,  on  the  -^ —  day  of ,  A.  D.  19.  .,  was  duly  ad- 
judged a  bankrupt  upon  a  petition  filed  in  this  court  by  [or, 

against]  him  on  the day  of ,  A.  D.  19 — ,  according 

to  the  provisions  of  the  acts  of  Congress  relating  to  bankrupt- 
cy. 

It  is  thereupon  ordered  that  said  matter  be  referred  to , 

one  of  the  referees  in  bankruptcy  of  this  court,  to  take  such 
further  proceedings  therein  as  are  required  by  said  acts;  and 

that  the  said  shall  attend  before   said   referee  on  the 

day  of  at  ,  and  thenceforth  shall  submit  to 

such  orders  as  may  be  made  by  said  referee  or  by  this  court  re- 
lating to  said bankruptcy. 

Witness  the  honorable ,  judge  of  the  said  court,  and  the 

seal  thereof,  at ,  in  said  district,  on  the day  of , 

A.  D.  190 — .  , 

Clerk. 
[Seal  of  the  court.'] 

(i)   B.  A.   1898,  sec.   i8d  and  c.     In  re  Bellamy,  No.  1268,  Fed.  Cas.,  s. 
c.  I  Ben.  474 ;  Gen.  Ord.  12.     Loveland's  Bank   sec.  90. 


PETITIONS,    SCHEDULES,    ETC.  1021 

No.  32. 
Order  of  Reference  in  Judge's  Absence  (i). 

(Official  Form  No.  15.) 

In.  the  District  Court  of  the  Unijed  States 
For  the District  of . 


In  the  matter  of 


In  Bankruptcy. 


Whereas,  on  the day  of ,  A.  D.  19—,  a  petition 

was -filed  to  have  ,  of ,  in  the  county  of  ,  and 

district  aforesaid,  adjudged  a  bankrupt  according  to  the  pro- 
visions of  the  acts  of  Congress  relating  to  bankruptcy;  and 
whereas,  the  judge  of  said  court  was  absent  from  said  district 
at  the  time  of  filing  said  petition  [or,  in  case  of  involuntary 
bankruptcy,  on  the  next  day  after  the  last  day  on  which  plead- 
ings might  have  been  filed,  and  none  have  been  filed  by  the 
bankrupt  or  any  of  his  creditors] ,  it  is  thereupon  ordered  that 
the  said  mater  be  referred  to ,  one  of  the  referees  in  bank- 
ruptcy of  this  court,  to  consider  said  petition  and  take  such 
proceedings  therein  as  are  required  by  said  acts ;  and  that  the 

said shall  attend  before  said  referee  on  the day  of 

,  A.  D.  19 — ,  at . 

Witness  my  hand  and  the  seal  of  the  said  court,  at ,  in 

said  district,  on  the day  of -,  A.  D.  19 — . 


Clerk. 
[Seal  of  the  court.'] 

(l)   B.  A.  1898,  sec.  iS/"  and  g;  Gen.  Ord.  12. 


1022  BANKRUPTCY. 

No.  33. 
Referee's  Oath  of  Office. 

(Official  Form  No.  i6.) 

I,  .  do  solemnly  swear  that  I  will  administer  justice 

without  respect  to  persons,  and  do  equal  right  to  the  poor  and 
to  the  rich,  and  that  I  will  faithfully  and  impartially  discharge 
and  perform  all  the  duties  incumbent  on  me  as  referee  in  bank- 
ruptcy, according  to  the  best  of  my  abilities  and  understand- 
ing-, agreeably  to  the  constitution  and  laws  of  the  United 
States.     So  help  me  God. 


Subscribed  and  sworn  to  before  me  this day  of 

A.  D.  190 — ,  


District  Judge, 
(i)  B.  A.  1898,  sec.  36. 


No.  34. 
Bond  of  Referee  (i). 

(Official  Form  No,  17.) 

Know  all  men  by  these  presents :    That  we, ,  of ,  as 

principal,  and  ,  of ,  and  ,  of ,  as  sureties, 

are  held  and  firmly  bound  to  the  United  States  of  America  in 

the  sum  of dollars,  lawful  money  of  the  United  States,  to 

be  paid  to  the  said  United  States,  for  the  payment  of  which, 
well  and  truly  to  be  made,  we  bind  ourselves,  our  heirs,  execu- 
tors and  administrators,  jointly  and  severally,  by  these  pres- 
ents. 

Signed  and  sealed  this day  of ,  A.  D.  ig — . 

The  condition  of  this  obligation  is  such  that  whereas  the  said 

has  been,  on  the day  of ,  A.  D.  19 — ,  appointed 

by  the  honorable  ,  judge  of  the  District  Court  of  the 


PETITIONS,    SCHEDULES,    ETC.  1023 

\/nited  States  for  the District  of ,  a  referee  in  bank- 
ruptcy in  and  for  the  county  of  ,  in  said  district,  under 

the  acts  of  Congress  relating  to  bankruptcy. 

Now,  therefore,  if  the  said  shall  well  and  faithfully 

discharge  and  perform  all  the  duties  pertaining  to  the  said  of- 
fice of  referee  in  bankruptcy,  then  this  obligation  to  be  void ; 
otherwise  to  remain  in  full  force  and  virtue. 

Signed  and  sealed  in  the  presence  of  \_Seal.'] 

lScal.'\ 

[Seal.'] 

Approved  this day  of ,  A,  D.  19 — . 


District  Judge, 
u)  B  A.  1898,  sec.  50. 


No.  34a. 
Petition  by  Trustee  to  Recover  a  Preference. 

(Style  of  Court.) 

H.  W..  Trustee  of  the  Es- 
tate   of    A.     B.,     Bankrupt, 

Plaintiff, 
vs. 

The  C.  D.  Co., 

Defendant. 


y 


Plaintiff  states  that  on  the  — day  of :,  19 — ,  a  peti- 
tion  in  bankruptcy  was  filed  against  A.   B.,   in  the   District 

Court  of  the  United  States  for  the Division  of  the 

District  of ,  and  that  thereafter  the  said  A.  B.  was  duly 

adjudicated  bankrupt,  and  that  thereafter  plaintill  was  duly 
elected  trustee  of  the  estate  of  said  bankrupt,  and  has  dulv 
qualified  as  such.  That  the  defendant  is  and  was  at  the  time 
hereinafter  mentioned,  a  corporation  duly  organized  and  ex- 
isting under  the  laws  of  the State  of . 

For  its  cause  of  action  plaintiff  states,  that  within  four 
months  prior  to  the  said  petition  in  bankruptcy  being  filed, 


1024  BANKRUPTCY. 

naniolv.  on  or  al)oul   llic day  of ,   19 — .  the  said 

A.  r..'\vas  insolvent  and  was  indebted  to  this  defendant  in  the 

sum  of  $ ,  and  in  payment  of  said  indehtechiess  transferred 

to  this  defendant  merchanchse  consisting-  of of  the 

reasonable  value  of  i? .     That  the  eitect  of  the  transfer  of 

said  property  was  that  this  defendant  obtained  a  greater  per- 
centage of  its  debt  than  any  other  creditor  of  said  bankrupt 
of  the  same  class.  That  defendant  and  its  agents  had  reason- 
able grounds  to  believe  at  said  time  that  it  was  intended  by 
such  transfer  of  property  to  give  a  preference  to  this  defend- 
ant, within  the  meaning  of  the  Acts  of  Congress  relating  to 
bankruptcy.  That  after  this  plaintiff  had  been  elected  trustee 
and  had  qualified,  he  notified  said  defendant  that  he  avoided 
said  transfer  of  property  as  a  preference  and  he  demanded  of 
said  defendant  the  return  of  said  property,  but  that  defendant 
refused  and  still  refuses  to  return  the  same." 

W'herefore  plaintiff  prays  judgment  in  the  sum  of  $ 

and  his  costs. 

H.  W., 
Trustee  in  Bankruptcy. 
[Vcrificatiou.] 

(i)  Taken  from  Pace  v.  Roberts  et  al  Shoe  Co.,  103  Mo.  App.,  662,  665. 

If  the  petition  is  filed  in  a  circuit  court  of  the  United  States  it  should 
aver  the  amount  in  controversy  and  the  citizenship  of  the  bankrupt  and 
the  defendant.     Bush  v.  Elh'ott.  202  U.  S..  477. 

(2)   No  previous  demand  is  necessary.     Kaufman  v.  Treadway,  195 

U.  S.,  271. 


No.  34b. 
Intervening  Petition  of  Vendee  under  Conditional   Sale/ 

In  the  District  Court  of  the  United  States,  District 


of . 

In  the  Matter  of  the  A.  B.   )   Tn  Bankruptcy. 

Company.  . )  No. 

Now  comes  the  Y.  Manufacturing  Company,  a  corporation 
duly  organized  under  the  laws  of  the  state  of ,  and  a  citi- 
zen of  ^^ ,  of  such  state,  and  leave  having  been  first  obtained 

to  intervene  in  this  cause,  presents  this  its  petition  to  this  Hon- 
orable Court  and  says: 


PETITIONS,  SCHEDULES,  ETC  1025 

That  your  petitioner  made  a  contract  of  sale  with  The  A.  B. 
Company,  a  corporation  organized  and  existing  under  the  laws 
of  the  State  of  ,  or  about  September  30th,  19 — ,  coun- 
tersigned October  27th,  19 — ,  by  your  petitioner.  That  a  copy 
of  this  contract  marked  Exhibit  "A"  is  hereto  attached  and 
made  a  part  hereof.  That  by  the  terms  of  this  contract  your 
petitioner  was  to  erect  upon  the  premises  indicated  by  The 
A.  B.  Company  a  certain  ice-making  and  refrigerating  plant 
fully  described  in  the  contract  annexed.     That  the  price  to  be 

paid  therefor  was dollars,  and  that  the  title  to,  and  right 

of  property  in,  and  ownership  of  said  plant  and  machinery 
so  furnished  was  to  remain  in  your  petitioner  until  the  same 
was  fully  paid  for  in  cash.  That  said  plant  and  machinery 
was  erected  by  your  petitioner  as  agreed.  That  only  twenty- 
five  per  cent,  of  the  purchase  price  has  ever  been  paid.  That 
the  remaining , seventy-five  per  cent,  of  said  contract  price  is 
due  and  unpaid,  notwithstanding  demand  having  been  made 
therefor.  That  by  reason  of  such  defaults  the  right  has  ac- 
crued to  your  petitioner  under  said  contract  to  enter  upon  the 
premises  of  The  A.  B.  Company  and  remove  and  repossess 
itself  of  said  plant  and  machinery. 

That  on  or  about  the  11th  day  of  December,  19 — ,  this  hon- 
orable court  adjudged  The  A.  B.  Company  a  bankrupt, 
whereupon  the  said  plant  and  machinery  passed  into  the  pos- 
session and  control  of  this  honorable  court. 

Wherefore  your  petitioner  prays  this  honorable  court  for  an 
order  directing  such  officer  of  this  honorable  court  as  shall  at 
the  time  of  making  such  order  be  in  possession  thereof,  to 
permit  your  petitioner  to  enter  on  the  premises  of  said  bank- 
rupt and  to  afford  your  petitioner  every  facility  to  remove  said 
bankrupt  and  machinery. 

And  your  petitioner  prays  for  all  other  and  further  relief 
to  which  it  may  be  entitled. 

The  Y.  Manufacturing  Company., 

By  S.  Y.,  Pres. 
[Vcrificatioji.] 

(i)  This  form  is  taken  from  the  record  in  York  Mfg.  Co.  v.  Cassell, 
201  U.  S.,  344,  50  L.  Rrl.,  782,  15  Am.  B.  R.,  630. 

For  another  form  sec  In  re  Hem  street,  8  .\m.  B.  R.,  763. 


1026  BANKRUPTCY. 


PROCEEDINGS  BEFORE  REFEREE. 

No.  35. 
Notice  of  First  Meeting  of  Creditors  (i). 

(Official  Form  No.  i8.) 

In  the  District  Court  of  the  United  States 

For  the District  of .    In  Bankruptcy. 


In  the  matter  of 


Bankrupt. 


.  In  Bankruptcy. 


To  the  creditors  of ,  of ,  in  the  county  of and 

district  aforesaid,  a  bankrupt : 

Notice  is  hereby  given  that  on  the day  of ,  A.  D. 

1 8 — ,  the  said was  duly  adjudicated  bankrupt;  and  that 

the  first  meeting  of  his  creditors  will  be  held  at ,  in , 

on  the day  of ,  A.  D.  19 — ,  at o'clock  in  the 

noon,  at  which  time  the  said  creditors  may  attend,  prove 

tlieir  claims,  appoint  a  trustee,  examine  the  bankrupt  and  trans- 
act such  other  business  as  may  properly  come  before  said  meet- 
ing. 


Referee  in  Bankruptcy. 
,  19—. 

(i)  B.  A.  1898,  sees.  55  and  58^  and  c;  Gen.  Ord.  12. 
How  to  conduct  the  first  meeting  of  creditors  see  in  re  Eagles,  99  Fed 
Rep.  695,  3  Am.  B.  R.  732,- 


PROCEEL>IN'aS  BEFORE  A  REFEEEE.  1027 

No.   36. 

Affidavit  in  Proof  of  Publication  of  Notice  of  the  First  Cred- 
itors' Meeting. 

The  District  Court  of  the  United  States 

District  of Division — In  bankruptcy. 

State  of , 


County  of ,  ss. 

Personally  appeared  before  me,  a  notary  public,  in  and  for 
said  County,  E.  S.,  for  the  publisher  of  The  Court  Index,  who, 
being  duly  sworn,  says  that  the  annexed  advertisement  was 
published times,  on  the ,  190 — ,  and  that  said  publi- 
cation was  made  in  The  Court  Index,  a  newspaper  printed  and 
of  general  circulation  in  said  county,  and  the  paper  duly  desig- 
nated by  the  District  Court  of  the  United  States  for Dis- 
trict of , Division,  sitting  as  a  Court  of  Bankruptcy, 

for  the  publication   of  all  notices   required  to  be   published 

within  the  District  of County,  under  the  act  of  Congress, 

approved  July  i,  1898,  entitled  "An  Act  to  Establish  a  Uni- 
form System  of  Bankruptcy  Throughout  the  United  States." 

E.  S. 

Sworn  to  before  me,  and  signed  in  my  presence,  this ■ 

day  of ,  190 — . 

J.N. 
Notary  Public,  within  and  for 

County,  . 

,  190 — . 

I  hereby  certify  that  this  day  I  mailed  a  copy  of  the  notice 
above  set  forth  to  each  of  the  creditors  named  in  the  schedules 
filed  herein.  A.  M., 

Referee  in  Bankrujitcy. 


1028  BANKRUPTCY. 

No.  37. 
Appointment,  Oath,  and  Report  of  Appraisers  (i). 

(Official  Form  No.  13.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


It  is  ordered  that ,  of ,  of ,  and 


of ,  three  disinterested  persons,  be,  and  they  are  hereby, 

appointed  appraisers  to  appraise  the  real  and  personal  prop- 
erty belonging  to  the  estate  of  the  said  bankrupt  set  out  in  the 
schedules  now  on  file  in  this  court,  and  rep£)rt  their  ap- 
praisal to  the  court,  said  appraisal  to  be  made  as  soon  as  may 
be,  and  the  appraisers  to  be  duly  sworn. 

Witness  my  hand  this  day  of  ,  A.  D.  19 — . 


Referee  in  Bankruptcy. 
District  of ,  ss. 


Personally  appeared  the  within-named  and  severally 

made  oath  that  they  will  fully  and  fairly  appraise  the  aforesaid 
real  and  personal  property  according  to  their  best  skill  and 
judgment.  , 


Subscribed  and  sworn  to  before  me  this day  of 

A.  D.  19—.  — 


[Official  character.'] 

We.  the  undersigned,  having  been  notified  that  we  were  ap- 
pointed to  estimate  and  appraise  the  real  and  personal  property 
aforesaid,  have  attended  to  the  duties  assigned  us,  and  after  a 


PROCEEDINGS  BEFORE  REFEREE, 


1029 


strict  examination  and  careful  inquiry,  wc  do  estimate  and 
appraise  the  same  as  follows: 


Dollars. 


In  witness  whereof  we  hereunto  set  our  hands,  at 
—  day  of ,  A.  D.  19 — .  — 


(i)   B.  A.  1898,  sec.  yoh. 


Cents. 


this 


No.  38. 
List  of  Debts  Proved  at  First  Meeting. 
(Official  Form  No.  19.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At 


in  said  district,  on  the 


day  of 


-,  A.  D. 


19 — ,  before ,  referee  in  bankruptcy. 

The  following  is  a  list  of  creditors  who  have  this  day  proved 
their  debts : 


1030 


BANKRUPTCY. 


Names  of  creditors. 

Residence. 

Debts  proved. 

Dolls. 

Cts. 

Referee  in  Bankruptcy. 


No.  39. 


General   Letter   of   Attorney   in   Fact   when   Creditor   is   not 
Represented  by  Attorney  at  Law  (i). 

(Official  Form  No.  20.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


To 


L 


-,  of 


in  the  county  of 


and  state  of 


do  hereby  authorize  you,  or  any  one  of  you,  to  attend  the  meet- 
ing or  meetings  of  creditors  of  the  bankrupt  aforesaid  at  a 
court  of  bankruptcy,  wherever  advertised  or  directed  to  be 
holden,  on  the  day  and  at  the  hour  appointed  and  notified  by 
said  court  in  said  matter,  or  at  such  other  place  and  time  as 
may  be  appointed  by  the  court  for  holding  such  meeting  or 
meetings,  or  at  which  such  meeting  or  meetings,  or  any  ad- 
journment or  adjournments  thereof  may  be  held,  and  then  and 


PROCEEDINGS  BEFORE  REFEREE.  1031 

there  from  time  to  time,  and  as  often  as  there  may  be  oc- 
casion, for  me  and  my  name  to  vote  for  or  against  any  pro- 
posal or  resolution  that  may  be  then  submitted  under  the  acts 
of  Congress  relating  to  bankruptcy;  and  in  the  choice  of  trus- 
tee or  trustees  of  the  estate  of  the  said  bankrupt,  and  for  me 
to  assent  to  such  appointment  of  trustee;  and  with  like  pow- 
ers to  attend  and  vote  at  any  other  meeting  or  meetings  of  cred- 
itors, or  sitting  or  sittings  of  the  court,  which  may  be  held 
therein  for  any  of  the  purposes  aforesaid ;  also  to  accept  any 
composition  proposed  by  said  bankrupt  in  satisfaction  of  his 
debts,  and  to  receive  payment  of  dividends  and  of  money  due 
me  under  any  composition,  and  for  any  other  purpose  in  my 
interest  whatsoever,  with  full  power  of  substitution. 

In  witness  whereof  I  have  hereunto  signed  my  name  and 

affixed  my  seal  the  day  of  ,  A.  D.   19 — . 

[Seal.-] 

Signed,  sealed  and  delivered  in  presence  of 


Acknowledged  before  me  this  day  of  .   A.   D. 

19 — .  , 

\_Official  character.^ 

(r)  When  executed  on  behalf  of  a  partnership  or  of  a  corporation  the 
person  executing  the  instrument  must  make  oath  that  he  is  a  member 
of  the  partnership,  or  a  duly  authorized  officer  of  the  corporation  on 
whose  behalf  he  acts.     Gen.  Ord.  21,  par.  5. 

An  attorney  at  law  cannot  vote  at  a  creditors'  meeting  without  pro- 
ducing a  letter  of  attorney,  duly  appointing  him  an  attorney  in  fact. 
In  re  Sugenheimer,  91  Fed.  Rep.  744;  in  re  Blankfein,  97  Fed.  Rep.  191, 


1032  BANKRUPTCY. 

No.  40. 
Special  Letter  of  Attorney  in  Fact. 

(Official  Form  No.  21,) 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


To 


I  hereby  authorize  you,  or  any  one  of  you,  to  attend  the  meet- 
ing: of  creditors  in  this  matter,  advertised  or  directed  to  be  hold- 
en  at ,  on  the day  of ,  before ,  or  any  ad- 
journment thereof,  and  then  and  there for and  in 

name  to  vote  for  or  against  any  proposal  or  resolution 

that  may  be  lawfully  made  or  passed  at  such  meeting  or  ad- 
journed meeting,  and  in  the  choice  of  trustee  or  trustees  of  the 
estate  of  the  said  bankrupt. 

*  In  witness  whereof  I  have  hereunto  signed  my  name  and  af- 
fixed my  seal  the day  of ,  A.  D.  19 — . 

[Seal.] 

Signed,  sealed  and  delivered  in  presence  of 


Acknowledged  before  me  this day  of ,  A.  D.  19 — . 


[Official  character.] 
See  note  to  Form  No.  39. 


PROCEEDINGS  BEFORE  REFEREE. 


1033 


No.  41. 

Appointment  of  Trustee  by  Creditors.    (!)• 
(Official  Form  No.  22.) 

In  the  District  Court  of  the  United  States 
For  the District  of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At 


-,  in  said  district,  on  the 


day  of 


-,  A.  D. 


19 — ,  before ,  referee  in  bankruptcy. 

This  being  the  day  appointed  by  the  court  for  the  first  meet- 
ing of  creditors  in  the  above  bankruptcy,  and  of  which  due 
notice  has  been  given  in  the  [here  insert  the  names  of  the  nezvs- 
papers  in  zvhich  notice  zvas  published'],  we,  whose  names  are 
hereunder  written,  being  the  majority  in  number  and  in  amount 
of  claims  of  the  creditors  of  the  said  bankrupt,  whose  claims 
have  been  allowed,  and  who  are  present  at  this  meeting,  do 

hereby  appoint ,  of ,  in  the  county  of and  state 

of ,  to  be  the  trustee of  the  said  bankrupt's  estate  and 


effects. 

Signatures  of  creditors. 

Residences  of  the  same. 

Amount  of  debt. 

Dolls. 

Cts. 

Ordered  that  the  above  appointmenf  of  trustee —  be  and  the 
same  is  hereby  approved 


Referee  in  Bankruptcy. 

(i)   B.  A.  1898,  sec.  44  and  sec.  50r.     No  official  or  general  trustee  can 
be  appointed  by  the  court.     Gen.  Ord.  14. 

A   trustee   is   elected   by   the    majority   of   the   creditors   present    at   the 


1034  BANKRUPTCY, 

meeting  and   not  of   those   who   have   proved   claims  against   the   estate. 
lit  re  Honschel.  113  Fed.  Rep.  443,  7  Am.  B.  R.  662. 

If  iho  creditors  fail  to  appoint,  ihe  referee  may  do  so,  but  if  the  ref- 
eree refuses  to  confirm  the  trustee  elected  by  creditors,  he  cannot  appoint 
but  should  call  another  meeting  for  the  purpose  of  a  new  election.  In  re 
Lewensohn,  3  Am.  B.  R.  299,  98  Fed.  Rep.  576;  in  re  Mackellar,  116  Fed. 
Rep.  547. 


No.  42. 
Appointment  of  Trustee  by  Referee,  (i). 

(Official  Form  No.  23.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At  ,  in  said  district,  on  the  day  ol  ,  A.  D, 

19 — ,  before  ,   referee   in  bankruptcy. 

This  being-  the  day  appointed  by  the  court  for  the  first  meet- 
ing of  creditors  under  the  said  bankruptcy  and  of  which  due 
notice  has  been  given  in  the  [^liere  insert  the  names  of  the  nezvs- 
papcrs  in  zvhich  notice  was  published'],  I,  the  undersigned  ref- 
eree of  the  said  court  in  bankruptcy,  sat  at  the  time  and  place 
above  mentioned,  pursuant  to  such  notice,  to  take  the  proof  of 
debts  and  for  the  choice  of  trustee  under  the  said  bankruptcy ; 
and  I  do  hereby  certify  that  the  creditors  whose  claims  had 
been  allowed  and  were  present,  or  duly  represented,  failed  to 
make  choice  of  a  trustee  of  said  bankrupt's  estate,  and  there- 
fore I  do  hereby  appoint ,  of .  in  the  county  of 

and  state  of ,  as  trustee  of  the  same. 


Referee  in  Bankruptcy. 


PROCEEDINGS  BEFORE  REFEREE. 


1035 


(l)  B.  A.  1898,  sec.  44.  No  general  or  official  trustee  can  be  appointed 
to  act  in  cases  generally.     Gen.  Ord.   14. 

A  referee  cannot  appoint  a  trustee  simply  because  he  declines  to  ap- 
prove one  elected  by  the  creditors.  He  must  call  another  meeting  for 
an  election.  In  re  Lewensohn,  3  Am.  B.  R.  299,  98  Fed.  Rep.  576;  in 
re  Mackellar,  116  Fed.  Rep.  547. 


No.  43. 

Notice  to  Trustee  of  His  Appointment   (i). 

(Official  Form  No.  24.) 


In  the  District  Court  of  the  United  States 

District  of . 


J.   Ul     LllC   ■ 

In 

the  matter  of 

Bankrupt. 

To 

,of 

In  Bankruptcy. 


,  in  the  county  of 


and  district  afore- 


said : 


Thereby  notify  you  that  you  were  duly  appointed  trustee  [^or, 
one  of  the  trustees]  of  the  estate  of  the  above-named  bank- 
rupt at  the  first  meeting  of  the  creditors,  on  the day  of 

A.  D.  19 — ,  and  I  have  approved  said  appointment.  The 


penal  sum  of  your  bond  as  such  trustee  has  been  fixed  at 
dollars.     You  are  required  to  notify  me  forthwith  of  your  ac- 
ceptance or  rejection  of  the  trust. 

Dated  at ,  the day  of ,  A.  D.  19—. 


Referee  in  Bankruptcy. 

(l)   Gen.   Ord.   iC.     The  creditors  fix   the   amount  of   the   bond.     B.  A. 
1898,  sec.  50c. 


1036  .  BANKRUPTCY. 

No.  44. 
Bond  of  Trustee,    (i). 

(Official  Form  No.  25.) 

Know  all  men  by  these  presents :  That  we, ,  of 

,  as  principal,  and ,  of ,  and ,  of 

as  sureties,  are  held  and  firmly  bound  unto  the  United 


States  of  America  in  the  sum  of dollars,  in  lawful  money 

of  the  United  States,  to  be  paid  to  the  said  United  States,  for 
which  payment,  well  and  truly  to  be  made,  we  bind  ourselves 
and  our  heirs,  executors  and  administrators,  jointly  and  sev- 
erally by  these  presents. 

Signed  and  sealed  this day  of ,  A.  D.  190 — . 

The  condition  of  this  obligation  is  such,  that  whereas  tke 

above-named was,  on  the day  of ,  A.  D. 

190 — ,  appointed  trustee  in  the  case  pending  in  bankruptcy 

in  said  court,  wherein is  the  bankrupt,  and  he,  the 

said ,  has  accepted  said  trust  with  all  the  duties 

and  obligations  pertaining  thereunto : 

Now,  therefore,  if  the  said ,  trustee  as  aforesaid, 

shall  obey  such  orders  as  said  court  may  make  in  relation  to 
said  trust,  and  shall  faithfully  and  truly  account  for  all  the 
moneys,  assets  and  effects  of  the  estate  of  said  bankrupt  which 
shall  come  into  his  hands  and  possession,  and  shall  in  all  re- 
spects faithfully  perform  all  his  official  duties  as  said  trustee, 
then  this  obligation  to  be  void;  otherwise,  to  remain  in  full 
force  and  virtue. 

Signed  and  sealed  in 
presence  of 

[Seal.'] 

[Seal.'] 

[Seal.] 

(i)  B.  A.  iRg8,  sees.  50b  and  c. 


PROCEEDINGS  BEFORE  REFEREE.  1037 

No.  45. 

Order  Approving  Trustee's  Bond. 

(Official  Form  No.  26.) 

At  a  court  of  bankruptcy,  held  in  and  for  the District 

of ,  at , ,  this day  of ,  190. — . 

Before .   referee  in  bankruptcy,  in  the  District 

Court  of  the  United  States  for  the District  of . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


It  appearing  to  the  court ,  of  ,  and  in  said 

district,  has  been  duly  appointed  trustee  of  the  estate  of  the 
above-named  bankrupt,  and  has  given  a  bond  with  sureties  for 
faithful  performance  of  his  official  duties,  in  the  amount  fixed 
by  the  creditors  [or,  by  order  of  the  court],  to  wit,  in  the  sum 

of dollars,  it  is  ordered  that  the  said  bond  be  and  the  same 

is  hereby  approved.  , 

Referee  in  Bankruptcy. 


No.  1156. 

Order  that  no  Trustee  be  Appointed,      (i). 

(Official  Form  No.  27.) 

In  the  District  Court  of  the  United  States  for  the Dis- 
trict of . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


It  appearing  that  the  schedule  of  the  bankrupt  discloses  no 


1038  BANKRUPTCY. 

assets,  and  that  no  creditor  has  appeared  at  the  first  meeting, 
and  that  the  appointment  of  a  trustee  of  the  bankrupt's  estate 
is  not  now  desirable,  it  is  hereby  ordered  that,  until  further 
order  of  the  court,  no  trustee  be  appointed  and  no  other  meet- 
ing of  the  creditors  be  called. 


Referee  in  Bankruptcy, 
(i)  Gen.    Old.    15. 


No.  47. 
Order  for  Examination  of  Bankrupt,     (i). 

(Official  Form  No.  28.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At ,  on  the day  of ,  A.  D.  19 — . 

Upon  the  application  of ,  trustee  of  said  bankrupt  \_or, 

creditor  of  said  bankrupt],  it  is  ordered  that  said  bankrupt  at- 
tend before  ,  one  of  the  referees  in  bankruptcy  of  this 

court,  at ,  on  the day  of ,  at  —  o'clock  in  the 

noon,  to  submit  to  examination  under  the  Acts  of  Con- 
gress relating  to  bankruptcy,  and  that  a  copy  of  this  order  be 
delivered  to  him,  the  said  bankrupt,  forthwith. 


Referee  in  Bankruptcy. 

'(l)  B.  A.  1898,  sec.  7,  clause  9;  sec.  21,  and  sec.  38,  clause  2.     Gen. 
Ord.  22.     See   also  note  to  No.   48. 


PROCEEDINGS    BEFORE    REFEREE.  10v39 

No.  48. 
Examination  of  Bankrupt  or  Witness.       (i). 

(Official  Form  No.  29.) 

In  the  District  Court  of  the  United  States  for  the Dis- 
trict of . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At  ,  in  said  district,  on  the  day  of  ,  A.  D. 

19 — ,  before ,  one  of  the  referees  in  bankruptcy  of  said 

court. 

,  of  ,  in  the  county  of  ,  and  state  of  , 

being  duly  sworn  and  examined  at  the  time  and  place  above 
mentioned,  upon  his  oath  says  [here  insert  substance  of  exam- 
ination of  party^.  , 

Referee  in  Bankruptcy. 

(i)  Loveland's  Bank.,  sec.  204,  B.  A.   1898,  sec.  2t.     Gen.  Ord.  22. 

Sec.  2ia  of  the  Bankruptcy  Act  is  amended  by  act  of  Feb.  5,  1903,  to  read : 

"  u.  A  court  of  bankruptcy  may,  upon  application  of  any  officer,  bank- 
rupt, or  creditor,  by  order  require  any  designated  person,  including  the 
bankrupt  and  his  wife,  to  appear  in  court  or  before  a  referee  or  the  judge 
of  any  state  court,  to  be  examined  concerning  the  acts,  conduct,  or 
property  of  a  bankrupt  whose  estate  is  in  process  of  administration  under 
this  act ;  provided,  that  the  wife  may  be  examined  only  touching  business 
transacted  by  her  or  to  which  she  is  a  party,  and  to  determine  the  fact 
whether  she  has  transacted  or  been  a  party  to  any  business  of  the  bank- 
rupt." 

A  large  latitude  of  inquiry  is  allowed  in  the  examination  of  the  bank- 
rupt and  other  persons  closely  connected  with  him  in  his  business  deal- 
ings for  the  purpose  of  discovering  the  assets  and  unearthing  frauds 
and  upon  any  reasonable  surmise  that  they  have  the  assets  of  the  debtor. 
In  re  Horgan  (C.  C.  A.,  2nd  Cir.),  98  Fed.  Rep.  414.  3  Am.  B.  R.  253; 
in  re  Bard,  108  Fed.  Rep.  208;  in  re  Foerst,  93  Fed.  Rep.  190,  i  Am.  B. 
R.  259;  in  re  Carley,  106  Fed.  Rep.  862,  5  Am.  B.  R.  554;  Peoples' 
Bank  vs.   Brown    (C.  C  A.    3rd   Cir.)    112  Fed.   Rep.  652;  7  Am.   B.   R. 


1040  BANKRUPTCY. 

475;  ''«  If  Cliflfe.  97  Fed.  Rep.  540,  j,  Am.  B.  R.  257.  A  trustee  in  in- 
solvency niuler  a  state  law  may  be  examined.  In  re  Purscll,  114  Fed. 
Rep.  371.  8  Am.  B.  R.  96. 

It  is  not  necessary  that  there  be  a  formal  application  for  an  examina- 
tion sliowing  tile  particular  questions  proposed  to  be  asked  or  the  par- 
ticular facts  as  to  which  the  examination  is  to  be  made.  In  re  Howard, 
95  Fed.  Rep.  415,  2  Am.   B.  R.   582. 

Testimony  taken  upon  the  examination  of  the  bankrupt  is  taken  in 
the  whole  pending  proceeding  and  may  be  introduced  and  read  upon 
the  hearing  of  a  petition  for  a  discharge.  In  re  Wilcox  (C.  C.  A.,  2nd 
Cir.),  109  Fed.  Rep.  628,  6  Am.  B.  R.  362;  in  re  Cooke,  109  Fed.  Rep.  631, 
5  Am.  B.  R.  434;  in  re  Bard,  108  Fed.  Rep.  208.  But  where  a  claimant 
was  not  in  fact  a  party  and  could  not  exercise  the  right  of  cross  exam- 
ination at  the  time  the  witnesses  were  examined,  the  witnesses,  includ- 
ing the  bankrupt,  must  be  recalled  unless  the  party  consents  to  the  use 
of  the  testimony  as  it  appears  in  the  proceedings.  In  re  Kellar,  6  Am. 
B.  R.  334- 

It  has  been  held  that  a  bankrupt  or  other  witness  is  not  entitled  as 
a  matter  of  right  to  be  attended  and  cross-examined  by  his  own  attor- 
ney, hi  re  Cobb,  7  Am.  B.  R.  104;  ifi  re  Howard,  95  Fed.  Rep-  415,  2  Am. 
B.  R.  582. 


No.  49. 

Summons  to  Witness  (i). 
(Official  Form  No.  30.) 


To : 

Whereas,  ,  of ,  in  the  county  of ,  and  state  of 

,  has  been  duly  adjudged  bankrupt,  and  the  proceeding 

in  bankruptcy  is  pending  in  the  District  Court  of  the  United 
States  for  the district  of , 

These  are  to  require  you,  to  whom  this  summons  is  directed, 

personally  to  be  and  appear  before ,  one  of  the  referees  in 

bankruptcy  of  the  said  court,  at  ,  on  the  day  of 

at o'clock  in  the noon,  then  and  there  to  be  examined 

in  relation  to  said  bankruptcy. 

Witness  the  Hon.  ,  judge  of  said  court,  and  the  seal 

thereof  at ,  this day  of ,  A,  D.  19 — . 

'j 
Clerk, 


PROCEEDINGS    BEFORE    REFEREE. 
RETURN    OF    SUMMONS    TO    WITNESS. 


1041 


In  the  District  Court  of  the  United  States  for  the Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


On  this  day  of  ,  A.  D.   19—,  before  me  came 

_,  of ,  in  the  county  of  ,  and  state  of ,  and 


makes  oath,  and  says  that  he  did,   on  ,  the  day 

of  ,   A.   D.    19 — ,    personally'  serve  ,    of  ,    in 

the  county  of ,  and  state  of .  with  a  true  copy  of  the 

summons  hereto  annexed,  by  delivering  the  same  to  him ;  and 
he  further  makes  oath,  and  says  that  he  is  not  interested  in  the 
proceeding  in  bankruptcy  named  in  said  summons. 

Subscribed  and  sworn  to  before  me  this day  of , 

A.  D.   19—. 


(i)  Gen.  Ord.  3.     R.  S.  sec.  911,  ct  seq. 


No.  50. 

Minutes  of  Creditors'  Meeting   (i). 

The  District  Court  of  the  United  States 
For  the District  of 

In  the  matter  of  N.  W.,  bankrupt. 

Before  A.  M.,  referee,  on  the day  of ,  19 — ,  at  — ■ 

o'clock.     Present:     The  referee,  bankrupt  and  various  attor- 
neys for  creditors,  and  also  creditors. 

The  motion  of  the  B.  Mfg.  Co.,  filed  on  the day  of • 


IQ42  BANKRUPTCY. 

IQ ,  coming  on  for  hearing,  I  heard  evidence  in  relation  to  the 

same,  and  ordered  as  follows,  viz. : 

I  ordered  and  directed  the  trustee  to  pay  over  to  W.  K.,  at- 
torney for  the  B.  Mfg.  Co.,  the  sum  of  $ being  $ less 

ten  per  cent,  the  amount  of  merchandise  belonging  to  said  com- 
pany and  held  on  consignment  by  the  bankrupt  and  since  sold 
by  the  receiver  herein  and  realizing  said  sum ;  I  finding  the  said 
amount  to  belong  to  the  said  company,  I  also  ordered  and  di- 
rected the  trustee  to  turn  over  to  said  company  all  the  

now  on  hand,  or  that  may  hereafter  come  to  the  trustee's  hands, 
the  same  being  the  property  of  said  company  and  never  sold 
by  them.     I  also  found  that  the  said  company  has  a  claim  as 

per  schedule,  for  $ goods  sold  up  to  the day  of , 

ig — ,  the  same  being  a  general  claim.     I  also  found  that  the 

said  company  has  an  additional  claim  for  the  sum  of  $ 

goods  sold  from  the day  of ,  19—,  up  to  the  date  of 

assignment,  the  same  being  a  general  claim. 

The  attorney  for  the  C.  B.  Association,  mortgagee  consent- 
ino-  I  directed  the  trustee  to  commence  proceedings  for  the  sale 
of  real  estate  under  mortgage  in  the  District  Court  of  the 
United  States,  said  mortgagee  agreeing  to  enter  its  appearance 
and  consent  to  jurisdiction.  And  I  directed  the  same  proceed- 
ings to  be  brought  in  relation  to  the  other  mortgaged  real  es- 
tate, in  the  event  similar  consent  of  mortgagee  can  be  se- 
cured. 

The  bill  of  the  heirs  of  G.  W.  for  rent  from  the day  of 

,  19 — ,  to  the day  of 19 — ,  amounting  to  $ — — 

being  presented  as  a  claim  entitled  to  preference  on  the  ground 
of  expense  incurred  by  the  assignee  and  trustee,  and  it  appear- 
ing that  possession  w^as  not  taken  until  the day  of , 

ig_^  I  accordingly  reduced  said  claim  to  $ ,  which  sum- 1 

directed  the  trustee  to  pay  as  a  preferred  claim. 

The  matter  of  disposition  of  the  assigned  bankrupt's  stock 
of  merchandise,  etc.,  being  heard,  on  motion  of  the  creditors 
the  trustee  herein  w^as  directed  to  sell  the  same  at  private  sale 
at  not  less  than per  cent,  of  the  appraised  value,  and  was 


PROCEEDINGS  BEFORE  REFEREE.  1043 

also  authorized  to  employ  a  man  to  assist  in  said  work  at  not 
exceeding  $ a  week. 

The  bankrupt  stated  that  his  wife  withdraws  all  claims  here- 
in, and  that  she  would  not  file  any  claim  herein. 

The  application  of  F.  Q^,  for  the  payment  of  the  proceeds 

of bales  out  of bales  of ,  sent  to  the  bankrupt  on 

consignment,  was  heard,  and  it  appearing  that  said  goods  were 

on  consignment  and  that  bales  have  been  sold  bv  the 

trustee  herein  as  receiver  herein,  for  the  sum  of  $ ,  it  is  or- 
dered that  said  sum  less per  cent,  the  usual  commission, 

to  wit  the  sum  of  $ be  paid  to  said  F.  O.  as  a  preferred 

claim  herein. 

It  also  appearing  that  the  trustee  herein  has  in  his  possession 

bales  of  spoiled  sent  by  F.  O.  to  the  bankrupt  on 

consignment,  and  which  property  was  not  appraised  herein  or 
included  in  the  appraisement.  I  ordered  that  the  trustee  deliver 
said  property  to  the  said  F.  O. 

The  application  of  the  appraisers  for  $ compensation 

each,  was  rejected  by  me  as  excessive  charges,  and  on  motion 
of  the  creditors  and  with  their  consent,  I  directed  the  trustee  to 
pay  to  each  of  the  appraisers  herein  the  sum  of  v$ . 

In  relation  to  the  disix)sition  of  the  bank  stock  and  the  B. 
Brewing  Co.  bonds,  the  trustee  was  directed  to  get  offers  for 
the  purchase  of  the  same,  and  report  to  the  referee. 

In  relation  to  policy  No. N.  Y.  L.  Insurance  Company, 

the  trustee  was  directed  to  inquire  into  its  value  of  the  com- 
pany, and  report  to  the  referee. 

The  trustee  was  ordered  to  collect  from  E.  T.,  assignee,  the 
sum  of  $ ,  collected  by  the  said  assignee. 

The  trustee  was  directed  to  pay  all  tax  bills  and  delinquent 
taxes  on  real  or  personal  property. 

The  trustee  was  directed  to  sell  the  real  estate  at ,  for 

not  less  than per  cent,  of  its  appraised  value. 

The  bankrupt  was  examined  and  further  examination  con- 
tinued until day  of ,  19 — ,  at  —  o'clock,  and  the  trus- 
tees authorized  to  employ  an  accountant  to  furnish  to  the  court 


1044  BANKRUPTCY. 

ami  creditors  information  of  payments  made  by  the  bankrupt 
within  the  past  four  months  preceding  his  assignment. 

(i)   Taken   from  the  record  /;/  re  Nicholas  Wolff,  pending  in  the  Dis- 
trict Court  of  the  United  States   for  the  Southern  District  of  Ohio. 


No.  51. 
Order  that  Bankrupt  Deliver  Assets  to  Trustee  (i). 

[Caption.] 

This  cause  having  been  referred  to  the  undersigned  A.  M., 
as  referee,  after  an  examination  of  said  bankrupt  and  evidence 
having  been  fully  had  before  said  referee  in  accordance  with  the 
statutes  in  such  cases  made  and  provided,  the  evidence  having 
been  submitted  upon  argument,  the  undersigned  referee  does 
hereby  make  the  following  order  on  said  A.  B.,  bankrupt : 

First.  That  said  bankrupt  A.  B.,  within  twenty  days  from 
and  after  the  service  of  a  copy  of  this  order  having  been  made, 

pay  to  B.  M.  Esq.,  trustee,  the  sum  of  $ ,  and  deliver  to  said 

trustee.    United    States    three    per    cent,    coupon    bonds    of 
the  face  value  of  $ ,  or  $ in  money. 

Second.  That  in  the  event  of  the  said  A.  B.  failing  or  neg- 
lecting to  obey  this  order  to  pay  to  the  said  trustee  the  above 
amount  and  deliver  said  bonds  or  money,  the  said  B.  M.,  as 
such  trustee,  is  hereby  ordered  and  directed  to  institute  pro- 
ceedings against  the  above  named  A.  B.  in  accordance  with  the 
provisions  of  Section  29  of  the  Bankrupt  Act  of  1898,  and 

It  is  further  ordered  that  a  copy  of  this  order  be  served  per- 
sonally upon  the  said  A.  B.,  the  said  bankrupt,  and  by  mail 
upon  R.  X.  Esq.,  attorney  for  the  bankrupt,  and  on  B.  M.  Esq., 
said  trustee. 

Dated  at this day  of .  A.  M., 

Referee. 

(i)  For  proceedings  if  bankrupt  fails  to  obey  this  order,  see  Nos. 
115.    et  seq. 


PROCEEDINGS  BEFORE  REFEREE.  1045 

No.  52. 
Order  that  Trustee  Apply  to  be  Made  Party  to  Suit  in  State 

Court. 

ICaption.l 

At  ,  in  said  district,  on  the  day  of  ,  A.  D. 

,  before  A.  M.,  Referee  in  Bankruptcy. 

On  motion  of  tlie  S.  Trust  Company,  trustee  herein,  it  is 
ordered  that  said  trustee  lile  a  petition  to  be  made  a  party  to 

the  suit  pending-  in  the Circuit  Court,  styled  L.  S.,  etc., 

against  D.  G.,  etc.,  and  said  trustee  is  further  directed  in  said 

petition  to  pray  the  Honorable Circuit  Court  to  turn  over 

to  it,  the  S.  Trust  Company,  trustee  in  bankruptcy,  the  fund 

in  said Circuit  Court,  in  the  cause  aforesaid. 

A.  M., 
Referee  in  Bankruptcy. 

No.  53. 
Order  of  State  Court  to  Pay  Over  to  Trustee  in  Bankruptcy 

Fund  in  Court. 

State  of  . 

Circuit  Court,  Common  Pleas  Division. 
L.  C.  assignee  of  C.  D.  &  Co.,  Plaintiff, 

vs. 
D.  G.  etc..  Defendants. 

Motion  and 
Order. 
This  day  came  the  A.  B.  Trust  Company,  Trustee  in  Bank- 
ruptcy of  C.  D.  &  Co.,  D.  G.  and  C.  D.,  by  R.  Y.,  its  attorney, 
and  presented  to  the  court  its  petition  presented  to  the  court 

June  ,  and  heretofore  filed  herein  claiming  the  fund  in 

court  herein,  together  with  the  exhibits  referred  to  therein  and 
the  notice  therewith  served  on  the  plaintiff,  L.  C,  assignee  of 
C.  D.  &  Co.,  and  on  M.  A.  of  the  firm  of  M.  A.,  D.  A.  and  J. 
G.,  attorneys  for  said  plaintiff,  and  also  presented  a  copy  of  said 
letter  to  said  L.  C,  assignee,  and  his  said  attorneys,  showing 
that  the  motion  would  be  presented  at  this  time  and  hour,  viz., 


1046  BANKRUPTCY. 

on  the day  of at  lo  o'clock  a.  m,  and  answer  of  M. 

A.,  D.  A.  &  J.  G.,  attorneys  thereto,  and  thereupon  said  pe- 
titioner, by  R.  Y.,  attorney,  moved  the  court  that  the  said  peti- 
tioner, the  A.  B.  Trust  Company,  Trustee  in  Bankruptcy  of 
said  bankrupts,  C.  D.  &  Co.,  D.  G.  and  C.  D.,  be  made  a  party 
defendant  to  this  action,  and  thereupon  said  trustee  moved  the 
court  that  said  petition  be  taken  as  the  an-swer  and  petition  of 
the  said  A.  B.  Trust  Company,  as  such  trustee,  claiming  the 
fund  in  court  herein,  which  is  so  ordered  by  the  court,  and 
thereupon  the  said  A.  B.  Trust  Company,  Trustee  in  Bankrupt- 
cy of  said  C.  D.  &  Company,  D.  G.  and  C.  D.,  moved  the  court 
for  leave  to  withdraw  from  the  fund  in  court  herein  the  sum  of 

$ ,  and  thereupon,  the  court  being  sufficiently  advised,  it  is 

ordered  by  the  court  that  the  said  petitioner,  the  A.  B.  Trust 
Company,  Trustee  in  Bankruptcy,  of  said  C.  D.  &  Co.,  D.  G. 
and  C.  D.,  be,  and  is,  allowed  to  withdraw  this  day  from  the 

fund  in  court  the  sum  of  $ . 

E.  R, 

Judge  of  the Circuit  Court, 

Common  Pleas  Division. 


No.  54. 
Proof  of  Unsecured  Debt  (i). 

(Official  Form  No.  31.) 

In  the  District  Court  of  the  United  States 
For  the District  of . 

In  the  matter  of  A.  B.,  bankrupt. 

At ,  in  said  district  of ,  on  the day  of , 

A.  D.  190 — ,  came  E.  F.,  of ,  in  the  county  of ,  in 

said  district  of ,  and  made  oath,  and  says  that  A.  B.,  the 

person  by  [or,  against]  whom  a  petition  for  adjudication  of 
bankruptcy  has  been  filed,  was  at  and  before  the  filing  of  said 
petition,  and  still  is,  justly  and  truly  indebted  to  said  deponent 
in  the  sum  of dollars ;  that  the  consideration  of  said  debt 


PROCEEDINGS  BEFORE  REFEREE.  1047 

is  as  follows :  Goods  sold  and  delivered  at  the  dates  and  for 
the  agreed  prices  set  forth  in  the  statement  of  account  hereto 
attached  and  made  part  hereof  as  Exhibit  "  A  ";  that  no  part 
of  said  debt  has  been  paid  [except ]  ;  that  there  are  no  set- 
offs or  counterclaims  to  the  same  [except  — — ]  ;  and  that  de- 
ponent has  not,  nor  has  any  person  by  his  order,  or  to  his 
knowledge  or  belief,  for  his  use,  had  or  received  any  manner 
of  security  for  said  debt  whatever.  E.  F., 

Creditor. 

Subscribed  and  sworn  to  before  me  this day  of , 

A.  D.  19—.  J-  M., 

[Official  character.'] 

(i)   Gen.  Ord.  21.     Loveland's  Bank.,  sees.   109-141. 

If  the  debt  to  be  proven  is  an  open  account,  maturing  on  a  single 
date,  the  following  statement  should  be  added,  to  wit: 

"  Said  debt  became    {or,   will  become]    due   on  the  day  of  , 

ig_^  and  no  note  has  been  received  for  such  account  nor  any  judgment 
rendered   thereon." 

If  it  consists  of  items  maturing  at  different  dates,  the  following  ad- 
dition  to   said   form   is   suggested: 

"  The  average  due  date  of  the   different  items  of  said  account   is  the 

day  of  ,  19 — .  and  no  note  has  been  received  for  such  account 

nor  any  judgment  rendered  thereon." 

If  proof  is  being  made  by  the  assignee  of  a  claim  transferred  before 
proof,  it  must  be  supported  by  a  deposition  of  the  owner  at  the  time  of 
the  commencement  of  the  proceedings,  setting  forth  the  true  considera- 
tion of  the  debt,  and  that  it  is  entirely  unsecured  {or,  if  secured,  the 
amount  and  character   of   securities]. 

The  consideration  must  be  stated.  In  re  Scott,  93  Fed.  Rep.  418;  in  re 
Stevens,   107  Fed.  Rep.  243. 

Debts  which  are  provable  against  the  estate  of  a  bankrupt  are  stated 
in  sec.  63  of  the  Bankrupt  Act  of  1898.  It  has  been  held  that  sec.  63^ 
of  the  Bankrupt  Act  does  not  authorize  the  liquidation  and  proof  of 
claims  except  when  they  may  be  included  in  one  of  the  five  classes  in 
par.  a  in  that  section.     In  re  Hirschman,  104  Fed.  Rep.  69,  4  Am.  B.  R. 

715- 

Referee  is  entitled  to  25c  for  every  proof  of  claim  filed  for  allowance 
to  be  paid  from  the  estate,  if  any,  as  a  part  of  the  costs  of  administration. 
Act  of  February  5,  1903,  Sec.  9. 

The  following  claims  have  been  held  not  to  be  provable  against  the 
estate  of  the  bankrupt : 


1Q48  BANKRUPTCY. 

A  debt  not  in  existence  at  the  time  of  the  fihng  of  the  petition, 
althongh  arising  before  the  adjudication.  In  re  Burka,  104  Fed.  Rep. 
326,  5  Am.  B.  R.   12. 

Claims  arising  ex  delicto  are  only  provable  when  recovery  may  be 
had  i'.v  coiitiactii.  In  re  liirschman,  104  Fed.  Rep.  09,  4  Am.  B,  R.  715; 
Beers  vs.  Hanlin,  99  Fed.  Rep.  695,  3  Am.   \i.  R.  745- 

Or  alimony;  Audubon  fs.  Shufeldt,    181  U.  S.  575- 

Or  a  fine  in  a  criminal  case.  In  re  Moore,  in  Fed.  Rep.  145,  6  Am. 
B.  590.     But  see  in  re  Alderson,  98  Fed.  Rep.  588,  3  Am.  B.  R.  544. 

Or  rent  to  accrue  in  the  future  against  the  estate  either  as  a  li- 
quidated or  unliquidated  claim.  Arnstein,  loi  Fed.  Rep.  706;  in  re  Jef- 
ferson, 93  Fed.  Rep.  948;  in  re  Mahler,  105  Fed.  Rep.  428;  Bray  ct  al. 
vs.  Cobb,  100  Fed.  Rep.  270;  Atkins  vs.  Wilcox  (C.  C.  A.,  5th  Ct.),  105 
Fed.  Rep.  598;  in  re  Ells,  98  Fed.  Rep.  968. 

Or  contingent  claims.  In  re  Roscnzwcig,  118  Fed.  Rep.  112; 
in  re  Swift  (C.  C.  A.,  ist  Cir.),  112  Fed.  Rep.  315,  7  Am.  B.  R.  374! 
Coding  vs.  Rosenthal,  Sup.  Ct.  Mass.  61   N.  E.  Rep.  222. 

A  contract  of  endorsement  is  provable.  In  re  Gerson  (C.  C.  A.,  3rd 
Cir.),  6  Am.   B.   R.   11,   107   Fed.   Rep.  897. 

It  has  been  held  that  where  a  company  which  was  furnishing  its  cus- 
tomers ice  at  so  much  per  ton,  payable  weekly,  under  contracts  cover- 
ing a  period  of  several  years,  broke  such  contracts  and  became  unable 
to  continue  them  in  the  future,  the  claims  of  the  customers  for  damages 
sustained  by  reason  of  the  company's  inability  to  fulfil  the  executory  por- 
tions of  the  contracts  were  "  provable  claiins  "  in  involuntary  bankruptcy 
proceedings  against  the  company.     In  re  Stern,  116  Fed.  Rep.  604. 


No.  55. 
Proof  of  Secured  Debt  (i). 

(Official  Form  No.  32.) 

In  the  District  Court  of  the  United  States  for  the Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At ,  in  said  district  of ,  on  the day  of , 

A.  D.  19—,  came  ,  of  ,  in  the  county  of  ,  in 


PROCEEDINGS  BEFORE  REFEREE.  1049 

said  district  of ,  and  made  oath,  and  says  that ,  the 

person  by  \_or,  against]  whom  a  petition  for  adjudication  of 
bankruptcy  has  been  filed,  was  at  and  before  the  fiHng  of  said 
petition,  and  still  is.  justly  and  truly  indebted  to  said  depo- 
nent in  the  sum  of  dollars ;  that  the  consideration  of 

said  debt  is  as  follows : ; 

that  no  part  of  said  debt  has  been  paid  [except ]  ; 

that  there  are  no  set-offs  or  counterclaims  to  the  same  [except 

]  ;  and  that  the  only  securities  held  by 

this  deponent  for  said  debt  are  the  following : 


Creditor. 

Subscribed  and  sworn  to  before  me  this day  of , 

A.  D.  .  , 

[OMcial  character. 1 

(i)    See  note  to  Form  No.  54. 

Where  a  creditor  in  proving  his  debt  fails  to  mention  his  security  he 
will,  as  a  general  rule  be  deemed  to  elect  to  prove  as  an  unsecured  cred- 
itor, and  to  have  surrendered  his  securitv.  The  courts,  however,  have 
permitted  such  a  creditor  to  amend  to  change  it  from  unsecured  to  se- 
cured. In  re  Scott,  93  Fed.  Rep.  418;  iii  re  Stevens,  107  Fed.  Rep.  243; 
in  re  Meyers,  99  Fed.  Rep.  691 ;  in  re  Wilder,  loi  Fed.  Rep.  104 ;  in  re 
Falls  City  Shirt  Co.,  98  Fed.  Rep.  592,  3  Am.  B.  R.  427. 

In  re  Cathcart  (Southern  District  of  Ohio),  mechanic's  lien  holders 
proved  their  claims  as  unsecured  creditors  and  voted  for  and  elected  a 
trustee  who  reduced  the  estate  to  money.  Thereafter  these  lien  holders 
proved  their  liens  and  were  permitted  to  amend  their  proof  of  claims 
and  assert  their  security  and  were  awarded  priority  over  mortgagees 
under  a  mortgage  subordinated  to  the  mechanic's  liens.  Judge  Thomp- 
son affirmed  this  ruling  of  the  referee  August  21st,  1902.  (Case  not  re- 
ported.) 


1050  BANKRUPTCY. 

No.  56. 
Proof  of  Debt  Due  Corporation,    (i). 

(Official  Form  No.  33.) 

In  the  District  Court  oi  the  United  States  for  the Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At ,  in  said  district  of ,  on  the day  of , 

A.   D.    19 — ,   came  ,   of  ,   in  the  county  of  , 

and  state  of ,  and  made  oath,  and  says  that  he  is of 

the ,  a  corporation  incorporated  by  and  under  the  laws  of 

the  state  of  ,  and  carrying  on  business  at  ,  in  the 

county  of ,  and  state  of ,  and  that  he  is  duly  author- 
ized to  make   this  proof,   and  says  that  the   said  ,   the 

person  by  [or,  against]  whom  a  petition  for  adjudication  of 
bankruptcy  has  been  filed,  was  at  and  before  the  fihng  of  said 
petition,  and  still  is,  justly  and  truly  indebted  to  said  corpo- 
ration in  the  sum  of dollars;  that  the  consideration  of 

said  debt  is  as  follows : 


that  no  part  of  said  debt  has  been  paid  ]  except- 


]  ;  that  there  are  no  set-offs 


or  counterclaims  to  the  same  ]  except 


]  ;  and  that  said  corporation  has 

not.  nor  has  any  person  by  its  order,  or  to  the  knowledge  or 
belief  of  said  deponent,  for  its  use,  had  or  received  any  man- 
ner of  security  for  said  debt  whatever.  , 

of  said  Corporation. 


Subscribed  and  sworn  to  before  me  this day  of 

A.  D.   19—.  


[Official  character.'] 

(i)   The  proof  should  b^  made  by  the  treasurer,  Gen.  Ord.  21.     See  also 
note  to  Form  No.  54. 


PROCEEDINGS  BEFORE  REFEREE.  1051 

No.  57. 
Proof  of  Debt  by  Partnership,    (i). 

(Official  Form  No.  34.) 

In  the  District  Court  of  the  United  States  for  the  — — ^  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At ,  in  said  district  of ,  on  the day  of — , 

A.   D.    19 — ,   came  ,   of  .   in   the  county   of  , 

in  said  district  of  ,  and  made  oath,  and  says  that  he  is 

one   of   the   firm   of   ,    consisting   of   himself   and    • 

,  of ,  in  the  county  of ,  and  state  of ;  that 

the  said  ,  the  person  by   [or,  against]   whom  a  petition 

for  adjudication  of  bankruptcy  has  been   filed,   was  at  and 
before  the  filing  of  said  petition,  and  still  is.  justly  and  truly 

indebted   to   this   deponent's   said   firm   in   the   sum   of  

dollars ;  that   the   consideration  of  said   debt   is   as    follows : 


that  no  part  of  said  debt  has  been  paid  [except ]  ; 

that  there  are  no  set-offs  or  counterclaims  to  the  same  [except 

]  ;  and  this  deponent  has  not,  nor  has  his 

said  firm,  nor  has  any  person  by  their  order,  or  to  this  de- 
ponent's knowledge  or  belief,  for  their  use.  had  or  received 
any  manner  of  security  for  said  debt  whatever. 


Creditor. 

Subscribed  and  sworn  to  before  me  this day  of 

A.   D.   19 — .  — — , 

\_Official  character.'] 

(i)   See  note  to  Form  No.  64. 


1052  BANKRUPTCY. 

No.  58. 
Proof  of  Debt  by  Agent  or  Attorney,    (i). 

(Official  Form  No.  35.) 

Ill  the  District  Court  of  the  United  States  for  the Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


Ill  I'ankrtiptcy. 


At ,  in  said  district  of ,  on  the day  of , 

A.   D.    19 — ,   came  ,   of  ,   in   the   county  of  , 

and  state  of ,  attorney  [or,  authorized  agent],  of ,  in 

the  county  of  ,  and  state  of  ,  and  made  oath,  and 

says  that  ,  the  person  by  [or,  against]  whom  a  peti- 
tion for  adjudication  of  bankruptcy  has  been  filed,  was  at  and 
before  the  filing  of  said  petition,  and  still  is,  justly  and  truly 

indebted  to  the  said ,  in  the  sum  of  dollars;  that 

the  consideration  of  said  debt  is  as  follows : 


]; 


that  no  part  of  said  debt  has  been  paid  [except 

and  that  this  deponent  has  not,  nor  has  any  person  by  his 
order,  or  to  this  deponent's  knowledge  or  belief,  for  his  use, 
had  or  received  any  manner  of  security  for  said  debt  what- 
ever. And  tliis  deponent  further  says  that  this  deposition 
can  not  be  made  by  the  claimant  in  person  because 

. . _ — . — . — —^ —  > 

and  that  he  is  duly  authorized  by  his  principal  to  make  this 

affidavit,  and  that  it  is  within  his  knowledge  that  the  afore- 
said debt  was  incurred  as  and  for  the  consideration  above 
stated,  and  that  such  debt,  to  the  best  of  his  knowledge  and 
belief,   still  remains  unpaid  and  unsatisfied. 


PROCEEDINGS  BEFORE  REFEREE.  1053 

Subscribed  and  sworn  to  before  me  this day  of , 

A.  D.   19—. 


[Official  character. '\ 

(i)   See  note  to  Form  No.  54. 


No.  59. 
Proof  of  Secured  Debt  by  Agent,    (i). 

(Official  Form  No.  36.) 

In  the  District  Court  of  the  United  States  for  the Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At ,  in  said  district  of ,  on  the day  of , 

A.   D.    19 — ,   came  ,   of  .   in  the  county  of  , 

and  state  of ,  attorney  [or,  authorized  agent],  of ,  ui 

the  county  of  — ■ — ,  and  state  of  ,  and  made  oath,  and 

says  that  ,  the  person  by  [or,  against]  whom  a  peti- 
tion for  adjudication  of  bankruptcy  has  been  filed,  was  at  and 
before  the  filing  of  said  petition,  and  still  is.  justly  and  truly 

indebted  to  the  said  ,  in  the  sum  of  dollars;  that 

the  consideration  of  said  debt  is  as  follows : 


] 


that  no  part  of  said  debt  has  been  paid  [except 

that  there  are  no  set-offs  or  counterclaims  to  the  same  [except 

^ . ] 

and  that  the  only  securities  held  by  said  for  said  debt 

are  the  following 


1054  BANKRUPTCY. 

and  this  deponent  further  says  that  this  deposition  can  not  be 
inatlo  In'  the  claimant    in   jicrson  iKX'ause — 


—  » 


and  that  he  is  duly  authorized  by  his  principal  to  make  this 
deposition,  and  that  it  is  within  his  knowledge  that  the  afore- 
said debt   was  incurred  as  and   for  the  consideration  above 

stated.  . 

Subscribed  and  sworn  to  before  me  this day  of , 

A.   D    19 — .  , 


[Oificial  character.'] 

(i)   See  note  to  Form  No.  54. 


No.  60. 
Affidavit  of  Lost  Bill  or  Note, 

(Official  Form  No.  37.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


On  this day  of ,  A.  D.  19 — ,  at ,  came 


,  of ,  in  the  county  of  ,  and  state  of ,  and 

makes  oath,  and  says  that  the  bill  of  exchange  [or,  note],  the 
particulars  whereof  are  underwritten,  has  been  lost  under  the 
following  circumstances,  to  wit : 


and  that   he,   this    deponent,    has   not   been   able   to   find   the 
same;  and  this  deponent  further  says  that  he  has  not,  nor 


PROCEEDINGS  BEFORE  REFEREE. 


1055 


has  the  said  ,  or  any  person  or  persons,  to  their  use,  to 

this  deponent's  knowledge  or  beUef,  negotiated  the  said 
bin  [or,  note],  nor  in  any  manner  parted  with  or  assigned  the 
legal  or  beneficial  interest  therein,  or  any  part  thereof;  and 
that  he,  this  deponent,  is  the  person  now  legally  and  beneficially 
interested  in  the  same. 

Bill  or  note  above  referred  to. 


Date. 


Drawer  or  maker. 


Acceptor. 


Sum. 


Subscribed  and  sworn  to  before  me  this  day  of 

A.  D.  19—. 

[Official  character.^ 


No.  61. 

Order  Allowing  Claim. 

[Caption.'] 

This  cause  coming  on  to  be  heard  upon  the  motion  of  the 
German  Bank  for  allowance  of  its  claim  together  with  a  lien 
by  virtue  of  a  mortgage,  and  after  hearing  counsel  for  the  said 
bank  and  also  counsel  for  the  trustee  and  counsel  for  objecting 
creditors,  it  is  now  ordered  that  the  claim  of  the  said  bank 

be  and  the  same  is  hereby  allowed  for  the  sum  of  $ as  a 

general  claim  without  security  or  preference,  this  being  the 
amount  of  the  claim  with  interest  to  the  date  of  the  adjudication 
in  bankruptcy.  A.  M., 

Referee  in  Bankruptcy. 


1056  •  BANKRUPTCY. 

No.  62. 
Order  Allowing  Claims. 

[Caplion.] 

At  .  in  said  district,  on  the  day  of  ,  A.  D. 

-.  before  A.  M.,  referee  in  bankruptcy. 


This  cause  coming  on  to  be  heard  ui'on  the  ehiims  of  E.  F., 
First  National  Bank  and  'I'hird  National  Bank,  and  after  liear- 
ing  counsel  for  the  parties  and  for  creditors  objecting  to  said 
claims,  it  is  now  ordered  that  the  claim  of  E.  F.  be,  and  the 

same  is  hereby  allowed  for  the  sum  of  $ ,  as  a  general 

and  unsecured  claim;  said  sum  being  the  balance  due  upon 
said  debt,  with  interest  to  the  date  of  adjudication;  It  is  fur- 
ther ordered  that  the  claim  of  the  First  National  Bank  be, 

and  the  same  is  hereby  allowed  for  the  smri  of  $ as  a 

general  or  unsecured  claim,  said  sum  being  made  up  of  the 

unpaid  principal  of  said  sum,  to  wit,  $ ,  with  interest  to 

the  date  of  adjudication.  It  is  further  ordered  that  the 
claim  of  the  Third  National  Bank  be,  and  the  same  is  hereby 
allowed  as  a  mortgage  claim  to  the  extent  of  $ ,  with  in- 
terest thereon  from  the day  of ,  that  being  the  day 

demand  by  filing  claims  was  made,  until   the  same  shall  be 

paid,  but  this  lien  shall  be  subordinate  to  the  mortgage  of  the 

'  S.  Trust  Company;  and  further  the  balance  of  the  claim  of 

the  Third  National  Bank  is  allowed   for  the  sum  of  $ 

as  a  general  or  unsecured  claim. 

The  question  of  priority  between  the  Third  National  Bank 
and  parties  holding  claims  for  labor  performed  and  materials 
and  supplies  furnished  is  reserved.  A.  M., 

Referee  in  Bankruptcy. 


No.  63. 

Order  Disallowing  Claim. 
[Caption.] 

At  ,  in  said  district,  on  the day  of ,  A.  D. 

— ,  before  A.  M.,  Referee  in  Bankruptcy. 
The  claim  of  the  E.   F.  Company  having  been  presented 


PROCEEDINGS  BEFORE  REFEREE.  1057 

for  allowance  and  objection  thereto  having  been  made  by  the 
trustee,  now  after  hearing  counsel  in  favor  of  and  in  opposition 
thereto,  the  said  objection  is  sustained,  and  it  is  ordered  that 
the  said  claim  be,  and  the  same  hereby  is,  disallowed. 

A.  M., 
Referee  in  Bankruptcy. 


No.  64. 

Order  Allowing  Attorney  Fee   (i). 

[Caption.] 

At  ,  in  said  district,  on  the  day  of  ,  A.  D. 

— ,  before  A.  M.,  Referee  in  Bankruptcy : 


The  petition  of  the  trustee  for  an  allowance  to  R.  X., 
Esq.,  for  services  rendered  by  him  in  securing  the  transfer 
of  the  fund  from  the  state  court  to  the  trustee  in  bankruptcy 
coming  on  to  be  heard  after  notice  to  all  counsel  of  record, 
and  after  hearing  such  counsel  it  is  ordered  that  the  said 
R.  X.,  Esq.,  be,  and  he  is,  hereby  allowed  the  sum  of  $500.00 
for  the  services  aforesaid,  and  the  trustee  is  directed  to  pay 
said  sum  to  him  at  once.  A.  M., 

Referee  in  Bankruptcy. 

(l)  A  referee  may  allow  a  reasonable  attorney's  fee  as  a  part  of  the 
costs  of  administering  an  estate.  In  re  Stotts,  93  Fed.  Rep.  438;  in  re 
Tebo,  loi   Fed.   Rep.  419;  in   re  Dreeben,  loi   Fed.   no. 

Reasonable  fees  have  been  allowed  the  attorney  for  the  bankrupt  in 
voluntary  cases.  Fifty  dollars  was  allowed  in  re  Beck,  92  Fed.  Rep.  889; 
fifty  dollars  in  re  Kross,  96  Fed.  Rep.  816,  being  thirty  dollars  for  serv- 
ices prior  to  the  application  for  discharge,  and  twenty  dollars  for  prose- 
cuting said  application ;  two  hundred  dollars^  in  re  Burrus,  97  Fed.  Rep. 
926;  fifty  dollars  in  re  Salaberry,  107  Fed.  Rep.  95;  fifty  dollars  in  re 
Smith,  108  Fed.  Rep.  39.  Where  a  referee  is  not  satisfied  with  the 
services  rendered  the  bankrupt,  he  may  suspend  claim  for  a  time  owing 
to  the  absence  of  the  bankrupt,  but  must  make  an  allowance  on  such 
evidence  as  he  may  have  within  a  reasonable  time.  In  re  Dreeben,  loi 
Fed.  Rep.  no.  A  voluntary  bankrupt  cannot  recover  fees  paid  an  at- 
torney in  preparing  a  petition  and  schedules  or  the  deposit  fee  of  twen- 
ty-five  dollars.     In   "-e  Matthews,  97  Fed.   Rep.  772.     A   fee  for  the   at- 


loss  BANKRUPTCY. 

torne\'  for  tlie  trustee  in  voluntary  proceedings  has  been  allowed,  in  re 
Stotts,  93  Fed.  Rep.  438;  but  see  in  re  Smith.  108  Fed.  Rep.  39,  and 
a  fee  has  been  refused  where  bankrupt's  attorney  received  from  the 
bankrupt's  brother  a  larger  lee  than  he  wt)uld  ordinarily  be  allowed  by 
the  court  out  of  the  estate.     In  re  O'Connell,  98  Fed.  Rep.  83. 

The   attorney   for    the   creditors    in    involuntary   proceedings   has   been 
allowed  a   fee   for  services  which  varied  according  to  the   services  ren- 
dered.    One  hundred  dollars  was  allowed  in  re  Harrison  Mercantile  Co., 
95  Fed.  Rep.  123;  seventy-five  dollars  in  re  Woodard,  95  Fed.  Rep.  955; 
two  thousand  dollars  in   re   Curtis,    100  Fed.   Rep.   784;   fifteen    hundred 
dollars  in  re  Rude,  loi  Fed.  Rep.  80s ;  seventy-five  dollars  in  re  Silver- 
man, 97  Fed.  Rep.  325,  and  twenty-five  dollars  in  re  Carolina  Cooperage 
Co.,  96   Fed.   Rep.   950.      Bankrupt's   attorney   in   involuntary   proceedings 
has  been  allowed  a  fee  of  twenty-five  dollars  per  day  for  attending  ex- 
aminations, in   re  Mayer,  loi   Fed.   Red.  695,  but  was  refused  compensa- 
tion   for   services   defending   the   bankrupt   against   charges   of   fraud   and 
concealment    of    assets    or    other    matters    involving    the    bankrupt's    per- 
sonal   liability,    civil    or   criminal,    including    a    promised    retainer,    in    re 
Mayer,    loi    Fed.    Rep.   695.      The   attorney   for   a   trustee   when    such    is 
deemed  necessary  is  entitled  to  compensation.     In   re  Little  River  Lum 
ber  Co.,  loi    Fed.  Rep.  558.     A  trustee  \\ho  was  an  attorney  at  law  has 
been    allowed    compensation    for    his    professional    services    such    as    he 
would    have   been   obliged   to  pay  had   he   employed   other   counsel,   in  re 
Mitchell,  I  Am.   B.  R.  687;  to  the  same  effect  in  re  Welge,  i   Fed.  Rep. 
216,  contra  in  re  Muldaur  No.  9905  Fed.  Cas.,  S.  C.  2  Ben.  65.     The  at- 
torney   for    a   trustee   is   not   entitled   to   a    fee    for   professional    services 
for   attending   examinations   where   his   services   were   rendered   in   behalf 
of   creditors   who   were   his   real   clients,   in   re    Rozinsky,    loi    Fed.    Rep. 
229,  or  in  general  where  when  the  attorney  for  the  trustee  is  also  attor- 
ney for  the  creditors;    in    re  Carolina   Cooperage   Co.,  96  Fed.   Rep.  950. 
A  fee  of  seven  hundred  dollars  has  been  allowed  counsel   for  a  receiver, 
in  re  Gerson,  2  N.  B.  N.  &  R.  497  ;  but  see  in  re  Kelly  Dry   Goods  Co., 
102   Fed.   Rep.   747,  4   Am.    B.   R.   528.     Attorneys    for    creditors   are   not 
entitled   to    fees    for    attending   creditors'    meetings    or   procuring   bidders 
for   property   at   a    sale,    in    re    Harrison    Mercantile    Co.,    95    Fed.    Rep. 
123 ;   in  re  Rozinsky,   loi   Fed.   Rep.  229.     The  court   will    not   enforce  a 
provision  in   a  mortgage  for  the  payment   "  of  an  attorney's   fee  of  ten 
per  cent,  of  the  amount  of  the  debt,"  in  re  Roche,  loi  Fed.  Rep.  956. 

Attorney's  fees  are  costs  of  administration  under  the  Bankrupt  Act, 
sec.  6^b,  and  are  entitled  to  have  priority.  The  amount  may  be  fixed  by 
the  judge  or  referee  without  notice  to  creditors,  in  re  Stotts,  93  Fed. 
Rep.  438.  The  amount  rests  in  the  discretion  of  the  court,  m  re  Beck, 
92  Fed.  Rep.  889;  in  re  Burrus,  97  Fed.  Rep.  926;  in  re  Curtis  (C.  C.  A. 
7th  Cir.).  100  Fed.  Rep.  784,  4  Am.  B.  R.  17;  in  re  Tebo,  loi  Fed.  419; 
in  re  Mayer,  loi  Fed.  Rep.  695,  but  this  discretion  may  be  reviewed  on 
appeal,  in  re  Roche  (C.  C.  A.,  5th  Cir.),   loi    Fed.   Rep.  958,  4  Am.  B.  R. 


PROCEEDINGS  BEFORE  REFEREE.  1059 

369;  in  re  Curtis  (C.  C.  A.,  7lh  Cir),  100  Fed.  Rep.  784,  4  Am.  B.  R.  17. 
A  court  of  bankruptcy  cannot  ordinarily  tax  as  costs  attorneys  fees 
upon  the  dismissal  of  a  petition  in  involuntary  bankruptcy,  in  re  Ghi- 
lione,  93  Fed.  Rep.  186.  When,  however,  an  application  to  seize  and 
hold  the  property  of  the  bankrupt  pending  the  hearing  has  been  granted 
and  the  petition  afterwards  dismissed,  the  court  may  allow  attorneys 
fees  as  costs  of  the  proceedings,  in  re  Abraham   (C.  C.  A.,  5th  Cir.),  93 

Fed.   Rep.   767    (785)- 

A  court  of  bankruptcy  has  refused  to  dismiss  a  voluntary  petition  un- 
til the  attorney  for  the  trustee  had  been  paid.  In  re  Salaberry,  107  Fed. 
Rep.  95- 


No.  65. 
Order   Allowing   Attorney's   Fees    (Another    Form)    (i). 

[Caption.'] 

This  cause  coming  on  to  be  heard  upon  the  report  of  A. 
M.,  referee,  upon  application  for  the  allowance  of  attorney's 
fees,  the  court  upon  consideration  thereof  does  allow  F.  Y., 
R.  Y.  and  R.  S.,  attorneys  for  creditors,  a  joint  fee  in  the 

sum  of  $ ,  but  the  court  refuses  to  allow  a  fee  to  R.  X., 

counsel  for  the  bankrupt. 

(i)    See  rote  to  No.    G4. 


No.  QQ- 
Petition  to  Expunge  Claim  (i). 

District  Court  of  the  United  States  for  the  District  of 

,  Division. 


In  the  matter  of  F.  H.,  doing  business 

as  F.  H.  &  Son,  Bankrupt. 

No.  . 

In  Bankruptcy. 

Respectfully  represents  B.  S.,  trustee  of  the  estate  of  said 
bankrupt,  that  the  D.  M.  Grocery  Co.,  which  has  this  day 
filed  its  certain  claim  herein  for  allowance  and  which  said 
claim  has  been  allowed,  has  received  preferences  within  the 
four  months  next  immediately  preceding  the  date  of  the  filing 


1060  BANKRUPTCY. 

of  the  petition  herein  and  have  not  surrendered  the  prefer- 
ences so  received. 

Wherefore,  he  prays  that  said  claim  may  l)e  disallowed  and 
expunged  from  the  list  of  claims  against  the  estate  of  said 
bankrupt.  B.  S., 


Trustee. 


(i)  Bank.  Ord.  21,  par.  6. 


No.  67. 
Waiver  of  Notice  (i). 

The  District  Court  of  the  United  States 

For  the District  of Division. 

In  the  matter  of  F.  H.,  doing  business  as  F.  H.  &  Son,  bank- 
rupt. 

No.  

In  Bankruptcy. 

The  D.  M.  Grocery  Company  hereby  waives  the  issuance 
and  service  of  notice  upon  it  as  to  the  petition  of  the  trustee 
heretofore  filed  herein  asking  that  its  claim  heretofore  al- 
lowed herein  be  disallowed  and  expunged  from  the  list  of 
claims  against  said  estate  and  consents  that  said  petition  of 

said  trustee  may  be  heard  on  the  day  of  ,  at  1 1 

o'clock  a.  m.  The  D.  M.  Grocery  Co. 

(i)   If  notice  is  not  waived,  formal  »otice  should  be  given  by  mail  t(? 
creditor.     Bank.  Ord.  21,  par.  6. 


PROCEEDINGS  BEFORE  REFEREE.  1061 

No.  68. 

Order  that  Certain  Creditors  Surrender   Preferences  Before 
Allowed  to  Prove  Claims. 

Order  that  certain  creditors   surrender  preferences   before 
allowed  to  prove  claims. 

The  District  Court  of  the  United  States 
For  the  District  of  . 

In  the  matter  of 

F.  H., 
Bankrupt. 

This  cause  coming  on  for  hearing-  at  an  adjourned  meet- 
ing of  creditors  held  pursuant  to  adjournment  on  the  

day  of  19 — ,  and  the  court  having  heard  all  the  evi- 
dence ofifered  upon  the  matter  of  the  objection  of  creditors 
to  the  claims  of  creditors  who  have  received  payments  upon 
their  claims  since  the  day  of  ,  19 — ,  which  mo- 
tion   of    creditors    was    filed    herein    on    the    day    of 

,    19 — .    and    the   court   being    fully   advised,    does    find 

that  the  defendant  was  insolvent  on  the  day  of  ■ 


19 — ,  that  tue  creditors  hereinafter  named  received  the  pay- 
ments hereinafter  named  upon  their  claims,   since   the  


day  of  19 — ,  and  since  the  defendant  became  insolvent 

and  within  four  months  preceding  the  date  of  the  assignment 
herein  and  the  filing  of  the  petition  in  bankruptcy  herein  by 
the  plaintiff. 

It  is  therefore  considered,  ordered  and  adjudged  by  the 
court  that  unless  the  creditors  hereinafter  named  pay  to  the 
trustee  herein  the  amounts  so  received  by  said  creditors  re- 
spectively   since    the  day    of  19 — ,    and    which 

amounts  are  set  opposite  their  names,  the  claims  of  each  of 
said  creditors  be,  and  the  same  are  hereby  rejected  and  dis- 
allowed.    Said  payments  to  said  trustee  herein  shall  be  made 


1062  BANKRUPTCY. 

by  said  creditors,  respectively,  on  or  before  the  day  of 


-  19—. 

D.  &  F..  $- 

L  .  T.  Co.,  $- 

A.  P.  &  S.  Co,                                         $- 


A.  M., 
Referee  in  Bankruptcy. 

(i)  Taken  from  the  record  in  re  Hess  Spring  &  Axle  Co.  vs.  Eagle 
Carriage  Co.,  pending  in  the  District  Court  of  the  United  States  for  the 
Southern  District   of  Ohio. 

The  claims  of  creditors  who  have  received  preferences,  voidable  under 
Sec.  60,  subdivision  h.  or  to  whom  conveyances,  transfers,  assignments, 
or  incumbrances,  void  or  voidable  under  Sec.  67,  subdivision  c,  have  been 
made  or  given,  shall  not  be  allowed  unless  such  creditors  shall  surrender 
such  preferences,  conveyances,  transfers,  assignments,  or  incumbrai7<;es. 
Sec.  S9g  of  Bankruptcy  Act,  as  amended  by  act  of  Feb.  5,  1903. 


No.  69. 
Order  Disallowing  and   Expunging  List  of  Claims   (i). 

The  District  Court  of  the  United  States 
For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

At ,  in  the District  of ,  on  the day  of 

19-. 

In  accordance  with  the  order  heretofore  made  and  upon 
the  evidence  submitted  to  the  court  upon  the  following-  claims 
against  the  estate  of  said  bankrupt,  and  it  appearing  that  said 
claimants  have  failed  to  make  repayments  as  heretofore  or- 
dered ; 

It  is  now  ordered  that  the  following  claims  herein  be  dis- 


PROCEEDINGS  BEFORE  REFEREE.  1063 

allowed  and  expunged  from  the  list  of  claims  .upon  the  trus- 
tee's record  in  said  case,  viz: 

N.  H.   Co.,  $ 

M.  Pub.  Co.,  $ 

C.  Bending  Wks.,  ^  $ 


A.  M., 
Referee  in  Bankruptcy. 

(i)   Taken   from  the   record  in  re  Eagle   Carriage  Co.,  pending  in   the 
District  Court  of  the  United  States  for  the  Southern  District  of  Ohio. 


No.  70. 
Order  Reducing  Claim  (i). 

(Glacial  Form  No.  38.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 

In  Bankruptcy. 

Bankrupt. 


At ,  in  said  district,  on  the  day  of ,  A.  D. 

19—. 

Upon  the  evidence  submitted  to  this  court  upon  the  clami 
of against  said  estate  [and,  //  the  fact  he  so,  upon  hear- 
ing counsel  thereon],  it  is  ordered  that  the  amount  of  said 

claim  be  reduced  from  the  sum  of  ,  as  set  forth  in  the 

affidavit  in  proof  of  claim  filed  by  said  creditor  in  said  case, 

to  the  sum  of ,  and  that  the  latter-named  sum  be  entered 

upon  the  books  of  the  trustee  as  the  true  sum  upon  which  a 
dividend  shall  be  computed  \if  with  interest,  with  interest 
thereon  from  the  — —  day  of ,  A.  D.  19 — .] 


Referee  in  Bankruptcy. 


1064 


BANKRUPTCY. 


(i)  B.  A.  1898,  sec.  57/0.    Gen.  Ord.  21,  par.  6.    Loveland's  Bankruptcy, 

sec.  139. 

If  a  parly  in  iiitorcsl  ohjccts  to  the  allowance  of  said  claim  he  must 
assume  iho  buinkn  of  proof.  /;;  r<-  Sumner,  loi  Fed.  Rep.  224,  4  Am. 
B.  R.  123,  2  N.  B.  N.  681,  but  see  /;;  r,-  Wooten,  118  Fed.  Rep.  670. 
Witnesses  may  be  examined  orally  or  by  deposition  and  the  hearing 
may  be  postponed  for  the  purpose  of  obtaining  evidence  in  relation  to 
the  claim:  in  rr  Sumner,  101  Fed.  Rep.  224,  4  Am.  B.  R.  123,  2  N.  B.  N. 
681:  in  re  Dreeben,  loi  Fed.  Rep.  no,  4  Am.  B.  R.  146.  Where  a  re- 
spondent denied  the  alleged  indebtedness  to  a  petitioning  creditor  and 
evidence  is  offered  and  the  court  finds  the  allegations  of  the  petition  trui» 
and  makes  an  adjudication  the  same  question  cannot  be  tried  upon  the 
petitioning  creditor  making  proof  of  his  claim;  in  re  Ulfelder  Clothing 
Co.,  98  Fed.  Rep.  409,  3  Am.  B.  R.  425. 

The  allowance  or  disallowance  of  a  claim  is  largely  in  the  discretion 
of  the  referee  and  his  decision  on  the  question  of  fact  will  not  be  re- 
versed by  a  judge  unless  manifestly  contrary  to  the  weight  of  the  evi- 
dence; in  re  Rider,  96  Fed.  Rep.  811,  3  Am.  B.  R.  192,  3  N.  B.  N.  187. 

Where  no  trustee  has  been  appointed  the  bankrupt  may  move  for  a  re- 
examination and  expunction  of  a  claim  proved  and  allowed  against 
his  estate;  in  re  Ankeny,  100  Fed.  Rep.  614,  4  Am.  B.  R.  472.  Consult 
also   note  to   next   form  post 


No.  71. 
Order  Expunging  Claim  (i). 

(  Official  Form  No.  39). 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At  ,  in  said  district,  on  the  day  of ,  A.  D. 

19—. 

Upon  the  evidence  submitted  to  the  court  upon  the  claim 
of ag-ainst  said  estate  [and,  //  ^^'^  Z^*^^  ^^  '^^'  i-^pon  hear- 
ing- counsel  thereon],  it  is  ordered  that  said  claim  be  disal- 


PROCEEDINGS  BEFORE  REFEREE.  1065 

lowed  and  expunged  from  the  list  of  claims  upon  the  trustee's 

record  in  said  case.  , 

Referee  in  Bankruptcy. 

(i)   B.  A.  i8g8,  sec.  57A'.     Gen.  Ord.  21,  par.  6. 

It  has  been  held  that  the  provisions  relating  to  the  examination  of 
claims  does  not  apply  to  claims  for  expenses  of  administration,  such  as 
charges  and  expenses  of  a  receiver.  In  re  Reliance  Storage  &  Ware- 
house Co.,  100  Fed.  Rep.  619,  4  Am.  B.  R.  49.  3  N.  B.  N.  328. 

The  burden  of  proof  is  upon  the  creditor  asking  the  re-examination 
to  establish  the  facts  which  he  alleges.  In  re  Howard,  100  Fed.  Rep.  630, 
4  Am.  B.  R.  69. 

An  objection  to  a  petition  for  re-examination  on  the  ground  that  it 
lacks  particularity  should  be  raised  by  a  motion  to  make  more  definite 
and  certain.  In  re  Ankeny,  100  Fed.  Rep.  614,  4  Am,  B.  R.  472,  2  N.  B. 
N.  148. 

An  inequitable  claim  has  been  expunged.  In  re  Knox,  98  Fed.  Rep. 
585,  3  Am.  B.  R.  371.  See  also  in  re  Flick,  105  Fed.  Rep.  503,  5  Am.  B. 
R.  465,  3  N.  B.  N.  71.  So  also  a  claim  barred  by  the  statute  of  limita- 
tions,   hi  re  Lipman,  94  Fed.  Rep.  353,  2  Am.  B.  R.  46. 


No.  72. 
Petition  and  Order  for  Sale  by  Auction  of  Real  Estate  (i). 

(Official  Form  No,  42.) 

In  the  District  Court  of  tlie  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


Respectfully  represents  ,  trustee  of  the  estate  of  said 

bankrupt,  that  it  would  be  for  the  benefit  of  said  estate  that 
a  certain  portion  of  the  real  estate  of  said  bankrupt,  to  wit : 
[here  describe  it  and  its  estimated  valued  should  be  sold  by 


1066  BANKRUPTCY. 

auction,   in  lots  or  parcels,   and  upon  terms  and  conditions 

as  follows : 

Wherefore  he  prays  that  he  may  he  authorized  to  make  sale 
by  auction  of  said  real  estate  a?  aforesaid. 
Dated  this day  of ,  A.  D.  19—. 


Trustee. 

The  foregoing  petition  having  been  duly  filed,  and  having 
come  (in  for  a  hearing  before  me,  of  which  hearing  ten  days' 
notice  was  given  by  mail  to  creditors  of  said  bankrupt,  now, 
after    due    hearing,    no    adverse    interest    being    represented 

thereat   [or,  after  hearing in  favor  of  said  petition  and 

in  opposition  thereto],  it  is  ordered  that  the  said  trustee 

be  authorized  to  sell  the  portion  of  the  bankrupt's  real  estate 
specified  in  the  foregoing  petition  by  auction,  keeping  an 
accurate  account  of  each  lot  or  parcel  sold  and  the  price 
received  therefor  and  to  whom  sold;  which  said  account  he 
shall  file  at  once  with  the  referee. 

Witness  my  hand  this day  of ,  A.  D.  19 — . 

Referee  in  Bankruptcy. 

(i)   B.  A.  1898,  sec.  49,  clause  i,  and  sec.  2,  clause  7;  Gen.  Ord.  18. 

The  court  may  order  a  sale  of  real  estate  either  subject  to  or  free  of 
liens  when  the  interest  of  the  general  creditors  would  be  advanced  by 
such  a  sale.  In  re  Worland,  92  Fed.  Rep.  893,  i  Am.  B.  R.  450;  in  re 
Styer.  98  Fed.  Rep.  290,  3  Am.  B.  R.  924;  in  re  Shaeffer,  5  Am.  B.  R. 
248;  in  re  Sanborn,  3  Am.  B.  R.  54. 

A  sale  subject  to  encumbrances  includes  lien  for  municipal  claims,  and 
where  twelve  parcels  of  real  estate  sold  for  a  lump  sum  —  municipal 
lien  on  two,  cannot  be  paid  out  of  proceeds  of  sale.  In  re  Gerry,  7  Am. 
B.  R.  461. 

It  has  been  held  that  a  wife,  who  was  also  a  creditor  and  claimant  of 
an  interest  in  the  real  estate,  cannot  redeem  from  a  sale  by  the  trustee 
under  an  order  of  the  referee.  In  re  Novak,  7  Am.  B.  R.  267.  The 
trustee  has  a  right  to  redeem  property  sold  under  a  decree  of  foreclosure. 
In  re  Novak,  7  Am.  B.  R.  27. 

Sums  to  be  paid  upon  secured  claims  or  other  claims  entitled  to  pri- 
ority or  payment  were  not  "  dividends  "  upon  which  the  trustee  or  referee 
may  receive  a  commission.     In  re  Utt   (C.  C.  A.,  7  Cir.),  105  Fed.  Rep. 


PROCEEDINGS  BEFORE  REFEREE.  1067 

754,  5  Am.  B.  R.  387;  in  re  Fielding,  96  Fed.  Rep.  800,  3  Am.  B.  R.  135; 
in  re  Mammoth  Pine  Lumber  Co.,  116  Fed.  Rep.  731;  in  re  Epstein, 
109  Fed.  Rep.  878,  6  Am.  B.  R.  191.  But  they  are  now  under  sec.  9  of  the 
Act  of  February  5,  1903,  amending  sec.  40a  of  Act  of  1898. 


No.  73. 

Petition  and  Order  for  Redemption  of  Property  from  Lien  (i). 

(Official  Form  No.  43.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


Respectfully    represents    ,    trustee    of    the    estate    of 

said  bankrupt,  that  a  certain  portion  of  said  bankrupt's  estate, 
to  wit:  \Jiere  describe  the  estate  or  property  and  its  estimated 
valued  is  subject  to  a  mortgage  [describe  the  iiiortgage~\,  or  to 
a  conditional  contract  ^describing  it~\,  or  to  a  lien  [describe  the 
origin  and  nature  of  the  lien'],  [or,  if  the  property  be  personal 
property,  has  been  pledged  or  deposited  and  is  subject  to  a 
lien]  for  [describe  the  nature  of  tlie  lien'],  and  that  it  would 
be  for  the  benefit  of  the  estate  that  said  property  should  be 
redeemed  and  discharged  from  the  lien  thereon.  Wherefore 
he  prays  that  he  may  l)e  empowered  to  pay  out  of  the  assets 

of  said  estate  in  his  hands  the  sum  of .  being  the  amount 

of  said  lien,  in  order  to  redeem  said  property  therefrom. 

Dated  this day  of ,  A.  D.   19 — . 


Trustee. 
The  foregoing  petition  having  been  duly  filed  and  having 
come  on  for  a  hearing  before  me,  of  w'hich  hearing  ten  days' 


1068  BANKRITTCY. 

notice  was  given  by  mail  lo  creditors  of  said  bankrupt,  now, 
after  due  hearing-,  no  adverse  interest  being  represented  there- 
at [or,  after  hearing in  favor  of  said  petition  and  — ■ —  in 

opposition  thereto] .  it  is  ordered  that  the  said  trustee  be  au- 
thorized  to   i)ay  out  of  the  assets  of  the  bantcrupt's   estate 

specified  in  the  foregoing  petition  the  sum  of ,  being  the 

anil  unit  of  the  Hen.  in  order  to  redeem  the  property  therefrom. 
Witness  my  hand  this day  of ,  A.  D,  19 — , 


Referee  in  Bankruptcy, 
(i)    See  note  to  Form  No.  73. 


No.  74. 
Petition  to  Sell  Real  Estate  Free  from  Liens  (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

To  the  Honorable 

Judge  of  the  District  Court  of  the  United  States, 

For  the  District  of  


The  plaintiff  C.  C,  respectfully  represents  to  the  court  that 

upon  the day  of ,  19 — ,  P.  R.  and  others  instituted 

a  proceeding,  No.  in  this  court,  to  have  F.  H.  declared 

an  involuntary  bankrupt;  that  on  the day  of .  19 — , 

the  defendant,  F.  H.,  was  adjudicated  a  bankrupt  in  said 
cause;  that  on  the  day  of  ,  19 — ,  the  plain- 
tiff. C.  C.  was  elected  trustee  in  bankruptcy,  and  im- 
mediately accepted  the  trust  and  qualified. 

Plaintiff  further  represents  to  the  court  that  at  the  time  F. 


PROCEEDINGS  BEFORE  REFEREE.  1069 

H,  was  adjudicated  a  bankrupt  he  was  possessed  of  the  fol- 
lowing real  estate  situated  in county,  ,  to  wit : 

[Folloiv  with   dcscripiion   of  real  estatc.'\ 

That  the  title  to  said  property  by  operation  of  law  is  now 
vested  in  this  plaintiff  as  trustee  in  bankruptcy. 

That  on  the day  of ,  19^,  after  due  notice  to  all 

parties  interested,  this  plaintiff,  as  Trustee  in  Bankruptcy,  of 
F.  D.,  was  authorized  and  directed  to  bring  an  action  to  sell 
the  real  estate  of  said  F.  H.  free  from  all  liens  and  claims 
whatsoever;  that  after  the  appointment  and  qualification  of 
the  plaintiff  as  trustee  he  had  the  aforesaid  real  estate  ap- 
praised, and  that  the  appraisement  of  Lot  No.  ,  firstly 

described  above,  was  returned  at  $ ;  that  of  Lot  No. • 

secondly   described   above,    was   returned   at   $ ;   that   of 

Lot  No.  ,  thirdly  described  above,  was  returned  at  $ . 

Plaintiff  further  represents  to  the  court  that  the  U,  Savings 

Bank,  a  corporation  under  the  laws  of .  claims  to  hold  a 

mortgage  upon  all  the  aforesaid  lots ;  that  the  W.  G.  Bank, 

a  corporation  under  the  laws  of  ,   claims  to   hold  two 

mortgages  upon  Lot firstly  described  above ;  that  O.  E.  H. 

claims  to  have  some  interest  in  said  Lot  No.  first  de- 
scribed above,  by  way  of  mortgage;  that  the  defendant  O.  E. 
H.,  wife  of  the  said  F,  H.,  claims  an  inchoate  right  of  dower 
in  said  premises. 

That  plaintiff  further  represents  that,  in  order  to  properly 
administer  the  estate  of  the  bankrupt,  F.  H.,  it  is  necessary 
to  sell  the  above  described  real  estate  free  from  all  liens  and 
other  claims,  and  to  marshal  liens ;  that  all  the  defendants  have 
consented  in  writing  that  this  proceeding  should  be  brought 
in  the  District  Court  of  the  United  States  for  the Dis- 
trict of . 

Wherefore,  the  plaintiff  C.  C,  Trustee  in  Bankruptcy,  prays 
that  subpoenas  may  issue  to  F,  H.,  O.  E.  H.,  the  U.  Savings 
Bank  and  the  W.  G.  Bank  commanding  them  to  set  up  by  an- 
swer what  claim,  if  any,   each  has  in  said  premises  herein- 


1070  BANKRUPTCY. 

before  described ;  that  an  order  may  issue  to  the  plaintiff  here- 
in as  Trustee  in  Bankruptcy  of  F.  H..  to  sell  the  above  de- 
scribed ]-)reniises  at  such  lime  and  upon  such  terms  as  the 
court  mav  direct  free  fnMU  the  liens  and  claims  of  these  de- 
fendants, and  free  from  the  dower  interest  of  the  said  O.  E. 
H. ;  and  that  the  funds  arising-  from  said  sale  be  paid  into 
court  for  further  order;  that  the  liens  of  the  defendants  be 
marshalled,  ano  for  all  relief  that  may  be  necessary  and 
proper  in  the  premises.  C.  C, 

Trustee  in  Bankruptcy  of  F.  H. 

R.  X.  &  v., 

Attorneys  for  Trustee. 

(Affidcn'it). 

(i)   Taken  from  the  record  in  re  Nicholas  Wolff,  pending  the  District 
Court  of  the  United  States  for    the  Southern  District  of  Ohio. 


No.  75. 

Decree  for  Sale  Free  from  Liens   (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

This  dav  this  cause  came  on  to  be  heard  upon  the  petition 
of  plaintiff,  C.  C,  trustee,  and  the  answers  and  cross-peti- 
tions of  O.  E.  H.,  the  U.  Savings  Bank,  a  corporation  under 

the  laws  of  ,  the  W.  G.  Bank,  a  corporation  under  the 

laws  of  ,  defendants,  and  the  court  finds  that  it  is  nec- 
essary for  the  proper  administration  of  the  trust  of  the  plain- 
tiff, C.  C.  Trustee  in  Bankruptcy  of  F.  H.,  that  the  real 
estate  described  in  his  petition  should  be  sold  at  ptiblic  sale 
free  from  the  claims  of  the  defendants  herein;  and  it  fur- 


PROCEEDINGS  BEFORE  REFEREE.  1071 

ther  appearing  to  the  court  that  the  property  has  already  been 
appraised  by  appraisers  appointed  by  the  referee  it  is  ordered 
that  such  appraisement  be  considered  an  appraisement  for  the 
purposes  of  this  sale. 

It  is  therefore  ordered,  adjudged  and  decreed  that  an  or- 
der for  sale  of  the  various  four  parcels  of  real  estate  de- 
scribed in  the  petition,  issue  to  C.  C.  Trustee  in  Bankruptcy, 
authorizing  and  directing  him  to  sell  all  such  property  either 
separately  or  collectively  as  to  him  may  seem  for  the  best  in- 
terests of  the  estate,  as  upon  execution  of  property  sold  by 
the  marshal ;  that  he  advertise  and  sell  such  parcels  either  sep- 
arately or  collectively  on  the  premises  for  not  less  than  

of  their  respective  appraised  values ;  that  he  may  sell  for  cash 
or  cash,  balance  in and  years,  deferred  pay- 
ments to  be  secured  by  mortgage  on  the  premises  with  inter- 
est at  six  per  cent,  per  annum ;  and  for  good  cause  shown,  ad- 
vertisement in  a  German  newspaper  is  dispensed  with. 

The  trustee  is  further  ordered  to  make  due  return  of  the 
order  of  sale  issued  herein,  and  to  bring  the  proceeds  of  such 
sale  into  court  for  further  order  herein. 

And  on  motion  of  the  plaintiff,  and  for  good  cause  shown, 
the  trustee  is  authorized  to  employ  an  auctioneer  to  conduct 
the  sale  who  shall  receive  as  compensation  a  sum  not  to  ex- 
ceed    per  cent,  of  the  proceeds  of  the  sale,  and  he  may 

expend  the  sum  of  $ for  extra  advertising,  which  com- 
pensation and  sum  shall  l^e  taxed  as  part  of  the  costs  herein. 

It  is  further  ordered  that  the  sale  of  said  premises  free  and 
clear  of  the  dower  interest  of  the  defendant  O.  E.  H.,  shall 
be  without  prejudice  to  her  right  to  have  the  value  of  said 
dower  interest  ascertained  upon  the  coming  in  of  the  rejx^rt  of 
any  sale  made  hereunder,  and  that  when  the  value  of  said 
dower  interest  is  ascertained,  that  the  same  be  paid  to  her  out 
of  the  proceeds  of  said  sale,  but  without  prejudice  to  the 
rights,  if  any,  of  the  defendants,  the  U.  Savings  Bank  and 
the  \V.  G.    Bank,  under  their  mortgages  set  up  in  their  re- 


1072  BANKRUPTCY, 

spective  answers  and  cross-petitions  filed  herein,  in  the  value 
of  said  dower  interests. 

(i)  Taken  from  the  record  in  re  Nicholas  Wolff,  pending  in  the  Dis- 
trict Court  of  the  United  States  for  the  Southern  District  of  Ohio. 

A  court  of  bankruptcy  has  power  to  decree  a  sale  free  from  liens. 
Chaunccy  vs.  Dyke  Bros.    (C.   C.  A.)    119  Fed.   Rep.   i. 

It  is  in  the  province  of  the  referee  to  direct  the  manner  of  sale  free 
and  clear  of  incumbrances,  and  he  may  preserve  and  transfer  bona  fide 
liens  to  the  fund  arising  from  the  same.  Trust  Co.  vs.  Benbow,  3  Am. 
Bankr.  R.  9,  96  Fed.  514;  in  re  Cobb,  3  Am.  Bankr.  R.  129,  96  Fed.  821. 
in  re  Pittelkow,  i  Am.  Bankr.  R.  472,  92  Fed.  901  ;  in  re  Matthews,  6  Am. 
Bankr.  R.  96,  109  Fed.  603;  in  re  Kellogg,  7  Am.  Bankr.  R.  623,  113 
Fed.    120. 


No.  76. 

Final  Entry  of  Distribution  on  Sale  of  Real  Estate  Free  from 

Liens   (i). 

The  District  Court  of  the  United  States 

For  the  — —  District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

This  day  came  the  parties  hereto,  and  this  cause  having  been 
referred  to  A.  M.,  as  Special  Master  and  said  Special  Mas- 
ter having  heard  the  testimony  and  determined  the  ques- 
tions submitted  to  him  in  accordance  with  this  decree,  and 
the  parties  hereto  being  satisfied  with  said  determination  and 
desiring  to  avoid  the  additional  expense  of  a  report  by  said 
Special  Master,  by  consent  of  court,  a  report  of  the  said  Spec- 
ial Master  herein  is  hereby  waived. 

And  the  court  now  coming  on  to  distribute  the  proceeds  of 
the  sales  herein,  remaining  in  the  hands  of  C.  C,  trustee  here- 
in, amounting  to  the  sum  of  $ does  find,  and  the  parties 

hereto  consent  thereto,  as  follows,  viz : 

The  court  does  find  that  the  defendant,  the  W.  G.  Bank  has 


PROCEEDINGS  BEFORE  REFEREE.  1073 

the  first  and  best   lien  upon  the   proceeds   arising   from   the 

sale  of  Lot   No.   and   the   defendant,   the  U.    Savings 

Bank  has  the  first  and  best  lien  upon   the  proceeds  arising 

from  the  sale  of  Lots  No. and  No. herein ;  that  the 

defendant  O.  E.  H.,  wife  of  the  defendant  F.  H.,  is  not  en- 
titled to  any  dower  in  the  proceeds  arising  frOm  sales  of  any 
of  the  lots  herein. 

The  court  does  find  that  there  are  unpaid  street  assess- 
ments due  the  city  of upon  Lot  No.  amounting  to 

the  sum  of  $ which  should  be  paid  out  of  the  proceeds  of 

the  sale  of  said  Lot  No.  before  any  payment  is  made  to 

the  said  W.  G.  Bank. 

The  court  does  find  that  there  are  unpaid  street  assessments 

due  the  city  of upon  Lots  No. ,  and  No. herein 

amounting  to  the  sum  of  $ ,  which  should  be  paid  out  of 

the  proceeds  of  the  sales  of  said  lots,  before  any  payment  is 
made  to  the  said  U.  Savings  Bank. 

The  court  does  find  that  there  should  be  paid  by  the  parties 
hereto  as  compensation  for  the  services  of  the  Special  Mas- 
ter herein,   including  the  payment  of  stenographer's  services 

by  said  Special  Master,  and  also  the  sum  of  $ due  the 

clerk  of  this  court  for  entering  this  decree,  by  said  Special 

Master,  the  aggregate  sum  of  $ for  his  services  herein, 

and  which  sum  should  be  borne  by  the  parties  hereto  in  pro- 
portion to  their  respective  claims  herein,  to  wit :  $ there- 
of by  the  W.  G.  Bank,  and  $ by  the  U.  Savings  Bank. 

The  court  does  find  that  the  proceeds  of  the  sale  of  said  Lot 

No.  amounted  to  $ ,  from  which  after  deducting  the 

sum  of  $ the  proportionate  part  of  costs  and  expenses  al- 
ready paid  herein,  there  is  left  the  sum  of  $ and  from 

which  after  deducting  the  sum  of  $ for  street  assessments 

and  $ for  Special  Master  herein,  there  is  left  the  sum  of 

$ ,  which  should  ])e  ])ai(l  oxer  and  distributed  to  the  de- 
fendants, the  W.  G.  Bank  upon  the  notes  set  up  by  it  in  its 
answer  and  cross-])etition  herein. 

The  court  does  find  that  the  proceeds  of  the  sale  of  Lots  No. 


10~4  BANKRUPTCY. 

,  and  No.  ainouiiletl  to  $ ,  from  which  after  de- 


ducting the  sum  of  $ ,  ihe  proportionate  part  of  costs  and 

expenses  ah-eady  paid  herein,  there  is  left  the  sum  of  $ 

and  from  whicli  after  deducting  the  sum  of  $ ,for  street 

assessments  and  $ for  the  Special  Master  herein,  there 

is  left  the  sum  of  $ ,  which  should  be  paid  over  and  dis- 
tributed to  the  defendant,  the  U.  Savings  Bank,  upon  the  note 
set  up  by  it  in  its  answer  and  cross-petition  herein. 

It  is  therefore  considered,  ordered  and  adjudged  l)y  the 
court,  with  the  consent  of  parties  hereto,  that  the  said  sum 

of  $ in   the   hands   of  the  trustee   herein,    be,    and   the 

same  is  hereb}'  distributed  and  said  trustee  is  hereby  ordered 
and  directed  to  pay  the  same  as  follows ;  to  wit : 

First.  To  A.  M.,  for  his  services  as  Special  Master  herein, 

including  stenographer's  costs  and  $ to  the  clerk  of  this 

court,  the  sum  of  $ . 

Second.  To  J-  K.,  Treasurer  of  the  city  of in  full  of 

unpaid  street  assessments  on  the  lots  sold  herein,  said  sum  of 
$ and  $ amounting  in  all  to  $ . 

Third.  To  the  W.  G.  Bank  upon  the  notes  set  up  in  its  an- 
swer and  cross-petition  herein  the  sum  of  $ . 

Fourth.  To  the  U.  Savings  Bank  upon  the  note  set  up 
in  its  answer  and  cross-petition  herein  the  sum  of  .$ . 

(i)  Taken  from  the  record  in  re  Nicholas  Wolff,  pending  in  the  Dis- 
trict Court  of  the  United  States  for  the  Southern  District  of  Ohio. 


PROCEEDINGS  BEFORE  REFEREE.  1075 

No.  77. 
Petition  and  Order  for  Sale  Subject  to  Lien,     (i)- 

(Official   Form   No.   44.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


Respectfully  represents  ,  trustee  of  the  estate  of  said 

bankrupt,  that  a  certain  portion  of  said  bankrupt's  estate, 
to  wit  [here  describe  the  estate  or  property  and  its  estimated 
value]  is  subject  to  a  mortgage  [describe  mortgage],  or  to  a 
conditional  contract  [describe  it],  or  to  a  Hen  [describe  the 
origin  and  nature  of  the  lien],  or  [//  the  property  be  personal 
property]  has  been  pledged  or  deposited  and  is  subject  to  a 
lien  for  [describe  the  nature  of  the  lien],  and  that  it  would  be 
for  the  benefit  of  the  said  estate  that  said  property  should  lie 
sold,  subject  to  said  mortgage,  lien  or  other  incumbrance. 
Wherefore  he  prays  that  he  may  be  authorized  to  make  sale 
of  said  property,  subject  to  the  incumbrance  thereon. 

Dated  this day  of ,  A.  D.  190 — . 


Trustee. 
The  foregoing  petition  having  been  duly  filed  and  having 
come  on  for  hearing  before  me,  of  which  hearing  ten  days' 
notice  was  given  by  mail  to  creditors  of  said  bankrupt,  now, 
after  due  hearing,  no  adverse  interest  being  represented  there- 
at [or,  after  hearing in  favor  of  said  petition  and  • 

in  opix)sition  thereto],  it  is  ordered  that  the  said  trustee  be 
authorized  to  sell  the  portion  of  the  bankrupt's  estate  specified 
in  the  foregoing  petition,  by  auction  [or,  at  private  sale],  keep- 


1076  BANKRUPTCY. 

ing  an  accurate  account  of  the  property  sold  and  the  price 
received  therefor  and  to  whom  sold ;  which  said  account  he 
shall  hie  at  once  with  the  referee. 

Witness  my  hand  this day  of ,  A.  D.  19 — . 


Referee  in  Bankruptcy, 
(i)  See  note  to  Form  No.  72. 


No.  78. 

General  Notice  of  Petition  to  Sell  Real  Estate. 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of    1         ^ 


In  Bankruptcy. 


A.  B., 
Bankrupt. 
To  the  Creditors  of  A.  B.,  Bankrupt: 

You  are  hereby  notified  that  on  Wednesday,  ,  at  2 

o'clock  p.  m.,  at  my  office,  southwest  corner  of  Third  and 

Walnut  streets,  ,  I  wil  hear  the  petition  hereto  annexed 

and  make  such  order  as  may  seem  proper  and  for  the  bej;t 
interests  of  the  estate  of  bankrupt.  Your  attendance  at  said 
meeting-  is  requested.  A.  M., 

Referee  in  Bankruptcy. 

Dated  at . 


PROCEEDINGS  BEFORE  REFEREE.  1077 

No.  79. 

Trustee's  Petition  to  Sell  Portion  of  Bankrupt's  Estate,  Sub 
ject  to  Incumbrances    (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

Respectfully  represents  C.  C,  trustee  of  the  estate  of  said 
bankrupt,  that  a  certain  portion  of  said  bankrupt's  estate,  to 

wit:     Lot  No.  in  E.  J.  M.'s  first  subdivision  of  , 

is  subject  to  a  mortgage  to  the  C.  B.  Loan  &  Savings  Com- 
pany of ,  in  the  sum  of  $ and  is  also  subject  to  the 

dower  right  of  O.  E.  H.,  wife  of  bankrupt,  and  taxes  and 
assessments,  and  that  it  would  be  for  the  benefit  of  said  estate 
that  said  real  estate  should  be  sold,  subject  to  the  said  mort- 
gage and  dower. 

Wherefore  he  prays  that  he  may  be  authorized  to  make  sale 
of  said  real  estate  subject  to  the  incumbrances  thereon. 

Dated  this  day  of 19 — . 

C.  C, 
Trustee  in  Bankruptcy. 

(i)   Taken  from  the  record  in  re  Frederick  J.  Bradshaw,  pending  in  the 
District  Court  of  the  United   States  for  the  Southern  District  of  Ohio. 


No.  80. 

Order  Authorizing  Trustee  to  Sell  Portion  of  Bankrupt's  Es- 
tate, Subject  to  Incumbrances,     (i). 

The  District  Court  of  the  United  ^States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

This  cause  coming  on  for  hearing  on  the  petition  of  the 
trustee  to  sell  the  real  estate  of  bankrunt,  subject  to  liens,  and 


^078  BANKRUPTCY. 

said  petition  having  been  filed  on  the day  of ,  19 — . 

and  having  come  on  for  hearing  before  nie  this  day,  of  which 

hearing  more  than  days  notice  was  given  by  mail   to 

creditors  of  said  bankrnpt,  now,  after  due  hearing,  no  adverse 
interest  being  represented  thereat,  it  is  ordered  that  the  trus- 
tee herein  be  authorized  to  sell  the  portion  of  bankrupt's  es- 
tate referred  to  in  his  petition,  subject  to  the  liens,  etc.,  there- 
on, at  private  sale.    The  trustee  is  directed  to  advertise  on  the 

■ day  of ,  19 — ,  in  the  C Index,  for  bids  to  be 

sent  to  the  trustee  up  to o'clock  on  the day  of , 


19 — .     Said  trustee  is  directed  to  report  said  bids  at  a  hearing 

before  the  undersigned  referee  on  the day  of ,  19 — , 

at  which  time  an  adjourned  meeting  will  be  held  for  the  pur- 
pose of  accepting  or  rejecting  the  highest  and  best  bid  so 
received.  Said  bids  shall  be  for  cash,  on  confirmation  by  the 
court.  A.  M., 

Referee  in  Bankruptcy. 

(i)   Taken  from  the  record  in  re  Frederick  J.  Bradshaw,  pending  in  the 
District  Court  of  the  United  States  for  the  Southern  District  of  Ohio. 


No.  81. 

Notice  of  Trustee's  Sale   Subject  to  Liens. 

The  District  Court  of  the  United  States 

For  the District  of 

■ Division  No.  


In  re  Bankruptcy  of  F.  H. 

In  pursuance  of  an  order  to  me  directed,  I  will  receive  at 

my  office,  southwest  corner  of  Third  and  Walnut  streets, , 

up  to  2  o'clock  p.  m.,  on ,  bids  for  the  purchase  of  the 

bankrupt's  real  estate,  known  as  No.  K.  avenue,  , 

and  being  Lot  in  E.  J.  M.'s  first  subdivision  of  , 

subject  to  a  mortgage  to  the  C.  B.  Loan  and  Savings  Com- 
pany of ,  in  the  sum  of  about ,  and  also  subject  to 

the  dower  right  of  O.  E.  H.,  wife  of  bankrupt,  and  to  taxes 


PROCEEDINGS  BEFORE  REFEREE.  1079 

and  assessments.  Terms  of  sale  to  be  cash  on  confirmation 
by  the  court.  All  bids  will  be  reported  by  me  at  an  ad- 
journed meeting  of  creditors  held  before  A.  M..  Referee  in 
Bankruptcy,    southwest    corner    Third    and    Walnut    streets, 

,  on ,  at  2  o'clock  p.  m..  for  the  action  of  said  referee. 

C.  C, 
Trustee  in  Bankruptcy. 


No.  82. 

Report  of  Trustee  of  Sale  Subject  to  Incumbrances  (i). 

The  District  Court  of  the  United  States 
For  the District  of  

In  the  matter  of 

F.  H., 
Bankrupt. 
To  A.  M.,  Esq.. 

Referee  in  Bankruptcy. 
Dear  Sir : 

The  undersigned  trustee  herein  begs  to  report  that  in  ac- 
cordance with  the  order  of  court,  he  advertised  for  bids  for 

the  purchase  of  the  bankrupt's  real  estate,  known  as  No.  

K.  avenue and  being  Lot  No. in  E.  J.  M.'s  first  sub- 
division of ,  subject  to  the  mortgage  of  the  C.  B.  Loan 

&  Savings  Company  of ,'  and  also  subject  to  the  dower 

right  of  O.  E.  IT.,  wife  of  bankrupt,  and  to  taxes  and  assess- 
ments.    Publication  of  notice  was  made  in  tlie  C.  I.  on  the 

day  of  — — ,  19 — ,  and  copies  of  said  publication  were 

also  mailed  to  all  creditors,  proof  of  publication  of  notice  in 
the  C.  1.  is  hereto  attached  and  also  copy  of  notice  sent  to  all 
creditors. 

The  undersigned  trustee  reports  that  he  has  received  the  bid 

hereto  attached  of  O.  E.  H.,  offering  to  pay  the  sum  of  $ 

for  said   real  estate,   subject  to  said  liens,  etc.     The  under- 


]Q<;()  BANKRUPTCY. 

sig-ned  trustee  reports  that  said  bid  was  the  only  bid  re- 
ceived by  him  and  he  recommends  the  acceptance  of  said 
bid  and  asks  for  sucli  order  as  the  court  may  see  proper  to 
make  in  the  premises.  C.  C, 

Trustee  in  Bankruptcy. 

day  of ,  19 — . 

(i)  Taken  from  the  record  in  re  Frederick  J.  Bradshaw,  pending  in  the 
District   Court  of  the  United  States  for  the  Southern  District  of  Ohio. 


No.  83. 
Petition  and  Order  for  Private  Sale.    (i). 

(Official  Form  No.  45.) 

In  tlie  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


Respectfully  represents ,  duly  appointed  trustee  of  the 

estate  of  the  aforesaid  bankrupt. 

That  for  the  following  reasons,  to  wit: '- 


it  is  desirable  and  for  the  best  interest  of  the  estate  to  sell 
at  private  sale  a  certain  portion  of  the  said  estate,  to  wit: 


Wherefore  he  prays  that  he  may  be  authorized  to  sell  the 
said  property  at  private  sale. 

Dated  this day  of ,  A.  D.  19 — . 

Trustee. 


PROCEEDINGS  BEFORE  REFEREE.  1081 

The  foregoing  petition  having  been  duly  filed  and  having 
come  on  for  a  hearing  before  me,  of  which  hearing  ten  days' 
notice  was  given  by  mail  to  creditors  of  said  bankrupt,  now, 
after  due  hearing,  no  adverse  interest  being  represented  there- 
at [or,  after  hearing in  favor  of  said  petition  and  

in  opposition  thereto],  it  is  ordered  that  the  said  trustee  be 
authorized  to  sell  the  portion  of  the  bankrupt's  estate  specified 
in  the  foregoing  petition,  at  private  sale,  keeping  an  accurate 
account  of  each  article  sold  and  the  price  received  therefor  and 
to  whom  sold ;  which  said  account  he  shall  file  at  once  with  the 
referee. 

\\'itness  my  hand  this day  of ,  A.  D.  19 — . 

Referee  in  Bankruptcy. 

(i)   See    note    to    Form    No.    72. 


No.  84. 
Petition  and  Order  for  Sale  of  Perishable  Property   (i). 
(Official  Form  Xo.  46.) 
In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt 


In  Bankruptcy. 


Respectfully  represents ,  the  said  bankrupt  \nr,  r.  cred- 
itor, or,  tlie  receiver,  or,  the  trustee  of  the  said  bankrupt's 
estate]. 

That  a  part  of  the  said  estate,  to  wit : 


now  in  ,  is  perishable,  and  that  there  will  be  loss  if  the 

same  is  not  sold  immediately. 


10^2  BANKRUPTCY. 

\\  horefore  he  prays  the  court   to  order  that  the  same  be 
sold  immediately  as  aforesaid. 

Dated  this  day  of ,  A.  1).  189—. 


The  foregoing  petition  haxing  been  duly  filed  and  having 
come  on  for  a  hearing  before  me,  of  which  hearing  ten  days' 
notice  was  given  by  mail  to  the  creditors  of  the  said  bankrupt 
[or,  without  notice  t©  the  creditors],  now,  after  due  hearing, 
no  adverse  interest  being  represented  thereat  [or,  after  hear- 
ing   in  favor  of  said  petition,  and in  opposition  there- 
to], I  find  that  the  facts  are  as  above  stated  and  that  the  same 
is  required  in  tlie  interest  of  the  estate,  and  it  is  therefore 
ordered  that  the  same  be  sold  forthwith  and  the  proceeds 
thereof  deposited  in  court. 

Witness  my  hand  this day  of ,  A.  D.  189 — . 


Referee  in  Bankruptcy. 

(i)  Gen.  Ord.  18,  par.  3. 

An  order  of  sale  ought  not  to  be  made  until  after  an  adjudication  of 
bankruptcy,  unless  the  property  is  of  such  a  nature  that  immediate  sale 
is  necessary  to  preserve  its  value.  In  re  Kelley  Dry  Goods  Co.,  102  Fed. 
Rep.  747,  4  Am.  B.  R.  528. 

In  re  Beutel's  Sons,  7  Am.  B.  R.  768,  stock  of  hardware  v/as  held 
not  to  be  "perishable  property." 


No.  85. 

Order  for  Sale  of  Uncollected  Accounts  (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

For  good  cause  shown,  and  in  pursuance  of  direction  of 
creditors  the  trustee  herein  is  hereby  ordered  and  directed  to 
advertise  for  bids  for  uncollected  accounts  remaining  in  the 
hands  of  the  trustee  herein  and  uncollected.     Said  advertise- 


PROCEEDINGS  BEFORE  REFEREE.  1083 

ment  shall  give  ten  days'  notice  of  the  time  and  place  when 
the  trustee  will  receive  bids,  and  such  notice  shall  be  adver- 
tised once  in  the  Enquirer  and  once  in  the  Trib- 
une. Said  bids  shall  be  for  cash,  upon  the  confirmation  of  bid 
by  the  court.  Said  trustee  is  directed  to  return  his  report  of 
bids  without  unnecessary  delay. 

(i)   Taken   from  the  record  in   re  Eagle  Carriage   Co..  pending  in  the 
District  Court  of  the  United  States  for  the  Southern  District  of  Ohio. 


No.  86. 
Notice  of  Sale  of  Uncollected  Accounts  (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

In  pursuance  of  an  order  directed  to  me  on  the  matter  of 

the  bankruptcy  of  F.  H.,  No.  ,  in  the  District  Court  of 

the  United  States  for  the District  of .  I  will  receive 

bids  for  the  purchase  of  all  the  uncollected  accounts  of  the 
said  F.  H.,  remaining  in  my  hands  as  trustee,  at  my  office 

Room Building ,  up  to  the day  of ,  19 — , 

at o'clock. 

Terms  of  sale,  cash  on  day  of  sale,  subject  to  confirmation 
by  the  court.  The  right  is  reserved  in  the  court  to  reject  any 
or  all  bids.  A  list  of  such  uncollected  accounts  can  be  seen  at 
my  office  on  application  to  the  undersigned.  C.  C, 

Trustee  in  Bankruptcy. 

day  of ,  19 — . 

(1)  Taken   from   the  rec-ord  in  re   Eagle  Carriage  Co.,  ponding  ia  the 
District  Court  of  the  United  States  for  tlie  Southern  District  of  Ohio. 


1084  BANKRUPTCY. 

No.  87. 

Notice  of  Sale  of  Bank  Stock   (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

Notice  is  hereby  given  ])r.rsuant  to  an  order  made  in  the 

matter  of  the  bankruptcy  of  F.  H.,  No.  in  the  District 

Court  of  the  United  States  for  the District  of ,  we 

will  on  behalf  of  the  Trustee  in  Bankruptcy  of  said  F.  H.,  and 
of  all  others  concerned,  ofTer  at  public  sale  to  the  highest  and 

best  bidder  on  the day  of ,   19 — ,  at  o'clock, 

at  the  Stock  Exchange,  No.  street,  shares 

of  the  capital  stock  of  the  W.  G.  Bank  of ,  each  of  said 

shares  being  of  the  par  value  of  $ .     Terms  of  sale  casli 

on  confirmation  of  sale  by  the  court. 

I.  B.  &  Company. 

day  of 19 — . 

(i)   Taken  from  the  record  in  re  Nicholas  Wolff,  pending  in  the  Dis; 
trict  Court  of  the  United   States  for  the  Southern  District  of  Ohio. 


No.  88. 

Report  of  Sale  of  Bank  Stock  (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 
To  the  Referee  in  the  Said  Above  Cause: 

The  undersigned  auctioneers  herein,  beg  to  report  that  in 
pursuance  of  the  order  of  court  they  sold  on  the day  of 


PROCEEDINGS  BEFORE  REFEREE.  1085 

,  19 — ,  at  the  Stock  Exchange  in shares  of  stock  of 

the  W.  C.  Bank,  each  share  of  the  par  value  of  $ to  C.  M., 

at  $ ,  making-  a  total  for  said shares  of  $ .     We 

attach  hereto  copy  of  advertisement  and  bill  for  the  same.  The 

costs  of  said  sale  have  been  $ ,  for  advertising,  and  $ 

for  our  commission.     The  balance  amounting  to  $ will 

be  paid  over  to  C.  C,  trustee,  on  confirmation  of  said  sale. 
We  respectfully  ask  that  the  sale  be  confirmed. 

I.  B.  &  Company, 
(i)   Taken  from  the  record  in  re  Nicholas  Wolff,  pending  in  the  Dis- 
trict  Court   of  the  United   States  for  the   Southern  District  of  Ohio. 


No.  89. 
Report  of  Trustee's  Sale  of  Unmanufactured  Stock  (i). 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

Pursuant  to  an  order  to  me  directed  as  Trustee  in  Bank- 
ruptcy of  F.   H.,  bankrupt.  No.  District  Court  of  the 

United  States,  — ■ —  District  of ,  I  will  on  the day 

of  ,    19 — ,    at  o'clock,   on   the   premises   on  

street, ,  offer  at  public  sale  all  the  goods,  chattels  and  per- 
sonal property  of  said  bankrupt  [^except  hook  accounts  and 
cash  on  hand^,  consisting  of  unmanufactured  stock  used  in 

the  manufacture  of ,  as  per  inventory  on  file  with  A.  M., 

Referee  in  Bankruptcy,  and  a  copy  of  which  can  be  seen  at  my 

office  No.  ,  street,  .     Terms  of  sale  to  be  cash  upon 

the  confirmation  by  the  court.  Said  property  to  be  sold  as  an 
entirety.    The  highest  and  best  bid  to  be  returned  to  said  coml 

for  confirmation  or  other  action  on  the  day  of , 

19 — .  C.  C, 

Trustee  in  Bankruptcy. 

d)   Taken   from  the  record  in   re  Eagle  Carriage   Co.,  pending  in  the 
District  Court  of  the  United  States  for  the  Southern  District  of  Ohio. 


1086  BANKRUPTCY. 

No.  90. 

Notice  of  Petition  and  Sale  of  Chattels  (i). 

The  District  Court  of  the  United  States 

The District  of . 

Division. 

In  the  matter  of 

A.  B., 
In  Bankruptcy. 

This  day  the  trustee  filed  his  petition  for  authority  to  sell 
the  stock  of  goods  of  the  bankrupt  in  lots  at  public  auction  to 
the  highest  bidder  without  reserve ;  said  petition  will  come  on 
for  hearing  at  the  office  of  the  undersigned  1603  Union  Trust 

Building, ,  on ,  at o'clock  — m.,  and  if  not  then 

otherwise  ordered  said  sale  will  be  ordered  and  held ,  as 

advertised.  M.  W., 

Referee. 

Dated  at . 

(i)  The  above  form  of  notice  has  been  used  when  it  was  advisable  to 
save  time,  and  the  necessity  of  giving  a  second  notice  of  sale  for  ten 
days  after  sale  is  ordered. 


No.  91. 
Trustee's  Report  of  Exempted  Property  (i). 

(Official  Form  No.  47.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At ,  on  the day  of ,  19 — . 

The  following  is  a  schedule  of  property  designated  and  set 


PROCEEDINGS  BEFORE  REFEREE. 


1087 


apart  to  be  retained  by  the  bankrupt  aforesaid,  as  his  own 
property,  under  the  provisions  of  the  Acts  of  Congress  relating 
to  bankruptcy : 


General  head. 

Particular  description. 

Value. 

Military  uniform,  arms,  and 
pfiiiinmfnts             

Dolls. 

Cts. 

■property  exempted  by  state 
laws     

Trustee. 

(l)   B.  A.  1898,  sec.  47,  clause  11.     Loveland's  Bank    sees.  177,  et  seq. 


No.  92. 
Trustee's  Return  of  no  Assets. 

(Official  Form  No.  48.) 

In  the  District  Court  of  the  United  States  for  the 

trict  of  . 


Dis- 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At  ,  in  said  district,  on  the 

18—. 


day  of ,  A.  D. 

— ,  of  ,  in 


On  the  day  aforesaid,  before  me  comes  

the  county  of ,  and  state  of  ,  and  makes  oath  and 

says  that  he,  as  trustee  of  the  estate  and  effects  of  the  al)ove- 
named  bankrupt,  neither  received  nor  paid  any  moneys  on  ac- 
count of  the  estate. 

Subscribed  and  sworn  to  before  me  at ,  this day 

of ,  A.  D.  19 — .  , 

Referee  in  Bankruptcy. 


1088 


BANKRUPTCY. 


6 


o 
Q 

-u 

O 


o 

p 


CO 
OS 

d 
15 


■4-> 

H 


On 

6 


o 


o 

<3 


U 


c 

3 

o 
o 
o 

< 


.5 
O 


-ti 


o 
Q 


e 


u 


c 


P 


PROCEEDINGS  BEFORE  REFEREE.  1089 

(l)   B.  A.  1898,  sec.  47,  clause  10.     Gen.  Ord.   17. 

Compensation  of  trustees :  Trustees  shall  receive  for  their  services, 
payable  after  they  are  rendered,  a  fee  of  five  dollars  deposited  with  the 
clerk  at  the  time  the  petition  is  filed  in  each  case,  except  when  a  fee  is 
not  required  from  a  voluntary  bankrupt,  and  from  estates  which  they 
have  administered  such  commissions  on  all  moneys  disbursed  by  them  as 
may  be  allowed  by  the  courts,  not  to  exceed  six  per  centum  on  the  first  five 
hundred  dollars  or  less,  four  per  centum  on  moneys  in  excess  of  five 
hundred  dollars  and  less  than  fifteen  hundred  dollars,  two  per  centum  on 
moneys  in  excess  of  fifteen  hundred  dollars,  and  less  than  ten  thousand 
dollars,  and  one  per  centum  on  moneys  in  excess  of  ten  thousand  dollars. 
And  in  case  of  the  confirmation  of  a  composition  after  the  trustee  has  quali- 
fied the  court  may  allow  him,  as  compensation,  not  to  exceed  one-half  of  one 
per  centum  of  the  amount  to  be  paid  the  creditors  on  such  composition. 
Sec.  480  of  Bankruptcy  Act,  as  amended  by  act  of  Feb.  5,  1903. 


No.  94. 
Oath  to  Final  Account  of  Trustee. 

(Official  Form  No.  50.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


On  this  day  of  ,  A.  D.   19 — ,  before  me  comes 

of  ,   in  the  county  of  ,   and   state  of 


and  makes  oath,  and  says  that  he  was,  on  the  day  of 

,  A.  D.  19 ,  appointed  trustee  of  the  estate  and  effects 

of  the  above-named  bankrupt,  and  that  as  such  trustee  he  has 
conducted  the  settlement  of  the  said  estate.     That  the  account 

hereto   annexed,    containing  sheets   of  paper,   the   first 

-sheet  whereof  is  marked  with  the  letter  [reference  may 

here  also  be  made  to  any  prior  account  Med  I)y  said  fnistee'], 


1090  BANKRUPTCY. 

is  true,  and  such  account  contains  entries  of  every  sum  of 
money  received  by  said  trustee  on  account  of  the  estate  and 
effects  of  the  above-named  bankrupt,  and  that  the  payments 
purporting  in  such  account  to  have  been  made  by  said  trustee 
have  been  so  made  l)y  him.  And  he  asks  to  be  allowed  for 
said  payments  and  for  commissions  and  expenses  as  charged 

in  said  accounts.  , 

Trustee. 

Subscribed  and  sworn  to  before  me  at  ,  in  said  

district  of ,  this day  of ,  A.  D.  19 — . 


{Official  character.'] 


No.  95. 
Order  Allowing  Account  and  Discharging  Trustee. 

(Official  Form  No.  51.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


The  foregoing  account  having  been  presented  for  allow- 
ance, and  having  been  examined  and  found  correct,  it  is  or- 
dered that  the  same  be  allowed,  and  that  the  said  trustee  be 

discharged  of  his  trust.  , 

Referee  in  Bankruptcy. 


PROCEEDINGS  BEFORE  REFEREE.  1091 

No.  96. 

Notice  of  Filing  Account,  Declaration  of  Dividends,  etc. 

The  District  Court  of  the  United  States 
For  the District  of 

In  the  matter  of 

A.  B.,  I  In  Bankruptcy. 

Bankrupt. 

To  the  Creditors  of  the  Abo\^e  Named  Bankrupt : 

Notice  is  hereby  given  that  the  trustee  has  filed  his  final  ac- 
count  showing  $ balance  on   hand,    and  that  the  final 

meeting  of  the  creditors  of  said  bankrupt  will  be  held  at  the 

office  of  the  undersigned,  1603  Union  Trust  Building,  , 

on  the day  of ,  at  2  o'clock  p.  m.,  when  the  creditors 

may  object  to  the  confirmation  of  said  account,  transact  other 
business,  and  the  court  will  make  allowances  to  counsel  for 
bankrupt  and  trustee,  and  will  declare  a  dividend  to  the  credi- 
tors who  have  proved  their  claims  to  be  paid  by  the  trustee  five 
days  thereafter.  M.  W., 

Referee  in  Bankruptcy. 
Dated . 


No.  97. 

Notice, 

The  District  Court  of  the  United  States 
For  the District  of 

In  the  matter  of 

A.  B.,  -  In  Bankruptcy. 

Bankrupt 

To  the  Creditors  of  the  Above  Named  Bankrtipt: 

Notice  is  hereby  given  that  the  trustee  has  filed  his  final  ac- 
count showing  no  property  other  than  the  bankrupt's  exemp- 


10C)2  BANKRUPTCY. 

tions.  and  that  the  final  meeting;  of  the  creditors  of  said  bank- 
rupt will  be  held  at  the  office  of  the  undersigned,  1603  Union 

Trust  Building, ,  on  the day  of at  2  o'clock  p. 

r.i..  when  tliQ  creditors  may  object  to  the  confirmation  of  said 
account,  and  transact;  other  business. 

M.  W., 
Referee  in  Bankruptcy. 
Dated  at . 


No.  98. 

List  of   Claims  and   Dividends   to  be   Recorded  by   Referee 
and  by  him  Delivered  to  Trustee,     (i). 

(Official  Form  No.  40.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At  ,  in  said  district,  on  the  day  of  ,  A.  D. 

19—. 

A,  list  of  debts  proved  and  claimed  under  the  banl<ruptcy  of 

,  with dividend  at  the  rate  of per  cent,  this  day 

declared  thereon  by ,  a  referee  in  bankruptcy. 


PROCEEDINGS  BEFORE  REFEREE. 


1093 


No 


Creditors. 

[To  be  placed  alphabetically,  and 
the  names  of  all  the  parties  to  the 
proof  to  be  carefully  set  forth.] 


Sum  proved. 


Dividend. 


Dollars. 


Cents 


Dollars.  Cents, 


(i)   B.  A.  1898,  sec,  39,  clause  i. 


Referee  in  Bankruptcy. 


No.  99. 

Notice  of  Dividend   (i). 

(Official  Form  No.  41.) 
In  the  District  Court  of  the  United  States  for  the 

of . 


In  the  matter  of 


Bankrupt. 


■  In  Bankruptcy. 


At ,  on  the day  of ,  A.  D.  18 — . 


To 


District 


1094  BANKRUPTCY. 

Creditor  of .  bankrupt. 

1  hereby  inform  yon  that  yon  may,  on  application  at  my 
office.  .  on  tlie  day  of  .  or  on  any  day  there- 
after, between  the  honrs  of  ,  receive  a  warrant  for  the 

• dividend  thie  to  you  out  of  the  above  estate.     If  you  can 

not  personally  attend,  the  warrant  will  be  delivered  to  your 
order  on  your  filling  up  and  signing  the  subjoined  letter. 

Trustee. 
Creditor's  Letter  to  Trustee. 
To  , 

Trustee  in  bankruptcy  of  the  estate  of ,  bankrupt : 

Please  deliver  to the  warrant  for  dividend  payable  out 

of  the  said  estate  to  me.  , 

Creditor. 

(i)  "The  first  dividend  shall  be  declared  within  thirty  days  after  the 
adjudication,  if  the  money  of  the  estate  in  excess  of  the  amount  necessary 
to  pay  the  debts  which  have  priority  and  such  claims  as  have  not  been,  but 
probably  will  be,  allowed  equals  five  per  centum  or  more  of  such  allowed 
claims.  Dividends,  subsequent  to  the  first  shall  be  declared  tipon  like 
terms  as  the  first  and  as  often  as  the  amount  shall  equal  ten  per  centum  or 
more  and  upon  closing  the  estate.  Dividends  may  be  declared  oftener 
and  in  smaller  proportions  if  the  judge  shall  so  order;  provided,  that  the 
first  dividend  shall  not  include  more  than  fifty  per  centum  of  the  money  of 
the  estate  in  excess  of  the  amount  necessary  to  pay  the  debts  which  have 
priority  and  such  claims  as  probably  will  be  allowed.  And  provided 
further,  that  the  final  dividend  shall  not  be  declared  within  three  months 
after  the  first  dividend  shall  be  declared."  Sec.  6sb  of  the  Bankruptcy 
Act,  as  amended  by  act  of  Feb.  5,  1903. 


No.  100. 
Order  for  Costs  and  Confirming  Accounts   <i;. 

The  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

F.  H., 
Bankrupt. 

At .  in  the  —    District  of on  the day  of 

A.  D.  10—. 


PROCEEDINGS  BEFORE  REFEREE.  1095 

This  cause  coming  on  for  hearing  after  due  notice  by  mail 
to  each  creditor; 

It  is  ordered  that  the  following  sums  be  paid  as  costs,  com- 
missions and  fees  herein,  to  wit : 

C.  C,  Trustee's  Commissions,  $ 

A.  M.,  Referee's  Commissions,  $ 

B.  R.,  Clerk's  Costs,  $ 


C.  I.,  Publications,  etc.,  $- 

C.  I.,  For  Discharge,  $- 

A.  M.,  Stationery,  $- 

T.  M.  S.,  Stenographer,  etc.,  $- 

G.  O.,  Services  in  Rejecting  Claims  $- 


Total  $ 

It  is  further  ordered  that  the  amended  account  of  the  trus- 
tee, filed  the day  of .  19 — ,  and  the  amended  account 

of  the  receiver,  filed  the  — day  of 19 — ,  herein,  having 

been  examined  and  found  correct  are  each  hereby  allowed. 

A.  M., 
Referee  in  Bankruptcy. 

(i)   Taken   from  the   record  in   re  E^gle  Carriage   Co.,  pending  in  the 
District  Court  of  the  United  States  for  the  Southern  District  of  Ohio. 


No.  101. 

Order  for  Choice  of  New  Trustee  (i). 
(Official  Form  No.  55.) 

In  liie  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


At .  on  the day  of .  A.  D.  19 — . 

Whereas,  by  reason  of  the  removal  [or,  the  death,  or,  res- 


1096  DAiNKRUPTCY. 

ignaiionj  of  ,  heretofore  appointed  trustee  of  the  eetate 

of  said  l)ankrupt,  a  vacancy  exists  in  the  office  of  said  trustee. 

It  is  ordered  that  a  meeting  of  the  creditors  of  said  bank- 
rupt be  held  at  ,  in  ,  in  said  district,  on  the 

day  of ,  A.  D.  i8 — ,  for  the  choice  of  a  new  trustee  of 

said  estate. 

And  it  is  further  ordered  that  notice  be  given  to  said  cred- 
itors of  the  time,  place  and  purpose  of  said  meeting,  by  letter 
to  each,  to  be  deposited  in  the  mail  at  least  ten  days  before 

that  day.  , 

Referee  in  Bankruptcy. 

(i)   B.  A.  1898,  sec.  44  and  50c. 


No.  102. 

Notice  of  Final  Meeting  of  Creditors. 

The  District  Court  of  the  United  States 

For  the District  of 

No. 

In  re  Bankruptcy  of  A.  B. 

To  the  Creditors  of  A.  B.,  in  the  County  of and  District 

Aforesaid,  a  Bankrupt : 

Notice  is  hereby  given  that  on  Tuesday,  the  day  of 

,  at  3  o'clock  p.  m.,  there  will  be  a  final  meeting  of  the 

creditors  of  the  above  named  bankrupt  held  at  the  office  of  the 
undersigned  referee,  southwest  corner  of  Third  and  Walnut 

streets,  ,   for  the  purpose  of  passing-  upon  the  accounts 

of  the  trustee,  declaring  a  dividend,  authorizing'  the  sale  of 
uncollected  accounts  at  a  sum  to  be  fixed,  and  transacting  such 
other  business  as  may  properly  come  before  said  meeting,  and 
finally  closing  the  affairs  of  the  estate  of  said  bankrupt. 
Your  presence  is  requested  at  said  meeting. 

A.  M., 
Referee  in  Bankruptcy. 
Dated  at 


PROCEEDINGS  BEFORE  REFEREE. 


1097 


No.  103. 

Record  of  Proceedings  Before  Referee  —  No  Trustee  and  no 

Assets    (i). 

Ill  the  District  Court  of  the  United  States 
For  the District  of 


Division. 


In  the  matter  of 

A.  B., 
Bankrupt. 


No. 


In  Bankruptcy. 
Record  of  Proceed- 
inofs  Before  Referee. 


At 


in  said  District. 


Date. 


Order  of  reference,  petition  and  schedules  received 
from  clerk. 

Bankrupt  directed  to  attend  before  referee  on 

at  m.,  being  the  time  fixed  by  order  of 

reference. 


Ordered  that  first  meeting  of  creditors  be  held  on 
at  . 


Notice  of  first  meeting  of  creditors  published 


times    in    the    newspaper    designated   by    the 
court. 


Notice  of  first  meeting  of  creditors  mailed  to  each 
creditor  listed  in  schedules. 

Proof  of  publication  and  mailing  of  notice  of  first 
meeting  filed. 


1008 
Date. 


BANKRUPTCY, 


( 

Held  first  meeting  of  creditors;  bankrupt  present 

and  examined  by  ;   schedule  disclosing 

no  assets  and  no  creditor  appearing,  ordered 
that   no   trustee  be   appointed   and  no   other 
meeting  of  the  creditors  be  called. 

Forwarded  record  of  proceedings  to  clerk. 

Expenses  incurred. 

$ 

cts. 

Date. 

List  of  Claims  Fikd  with  Referee. 

Dollars. 

Cents. 

[Add  certificate  of  referee  ^'o.  106. J 

( 1 )  This  form  is  conveniently  used  as  a  docket  containing  the  steps  of 
the  case.  With  it  shor-l:l  bo  bound  i;ll  the  orclors  m;:::3  by  the  referee  r.::i 
copies  of  notices  as  rxhibits,  the  whole  constituting  the  separate  record 
book  of  the  case,  as  required  by  Bank.  Act  1898,  sec.  42b. 

When  the  same  is  transmitted  to  the  clerk  at, the  conclusion  of  the  case 
(Bank.  Act  1898,  sec.  30^,  cl.  7)  the  form  of  certificate  No.  1216  may  be 
used. 


No.  104. 

Record  of  Proceedings  Before  Referee,  Claims  Proved,  Trustees 

Appointed,  Assets  Distributed.^ 

\Proceed  as  in  Form  No.  103  to  "held  first  creditors'  meet- 
ing," etc.,  and  th( n  proceed  as  follows:] 


PROCEEDINGS  BEFORE  REFEREE. 


1099 


Date. 


appoint- 


First  meeting  of  creditors  held  and  — 

ed  trustee  by  creditors  or  referee,  creditors 
failing-  to  appoint,  and  bond  of  trustee  fixed  at 
$ notified  trustee  of appointment. 

Received  acceptance  of  trust  from  trustee. 

Bond  of  trustee  presented  and  approved. 


Appointed 


appraisers   to   appraise   real   and 


personal   propert}^  of  bankrupt. 
Received  report  of  appraisers. 


Received    report    of   trustee   of    moneys    in    

hands,  of  no  assets. 
Prepared  dividend  sheets  showing  per  cent. 

of  each  claim  allowed. 
Received  final  account  of  trustee. 
Examined  the  account  of . 


Entered  order  discharging  trustee. 
Forwarded  copy  of  proceedings  to  clerk. 


Date. 

Expenses  Incurred. 

Dollars. 

Cents 

• 

1100 


BANKRUPTCY. 


Date. 

List  of  Claims  Filed  with  Referee. 

Dollars. 

Cents 

[Add  ccrfificatc  of  reference  No.  lOG.] 
(See  uote  to  No.  103. 


No.  105. 

Record  of  Proceedings  Before  Referee  on  Composition. ^ 

[Proceed  as  in  Form  No.  103  to  "licJd  first  creditors'  meet- 
ing/' etc.,  and  proceed  as  follows:] 

Date. 


appoint- 


First  meeting  of  creditors  held  and  — 

ed  trustee  by  referee,  creditors  failing  to  ap- 
point and  bond  of  trustee  fixed  at  $ . 

Notified  trustee  of  his  appointment. 

Received  acceptance  of  trust  from  trustee. 

Bond  of  trustee  presented  and  approved. 

Received  order  referring  petition  of  bankrupt  for 
composition  . 

Entered  order  fixing at for  meeting  of 

creditors  to  consider  composition . 

Mailed  notices  to  all  creditors,  mentioned  in  sched- 
ules, of  meeting  to  consider  composition. 

Meeting  of  creditors  to  consider  composition  held 
per  cent,  accepted  by  creditors. 


Made  report  to  court  of  proceedings  before  me  on 

petition  for  composition. 
Forwarded  record  of  proceedings  to  clerk. 


PROCEEDINGS  BEFORE  REFEREE. 


1101 


Date. 

Date. 

Expenses  Incurred. 

Dollars. 

Cents. 

[Attach  certificate  Form  No.  106.] 
(i)    See  note  to  No.  10.3 


No.  106. 

Certificate  of  Referee  to  Record  of  Proceedings. 

In  the  District  Court  of  the  United  States 
For  the District  of 


Division. 


No. 


In  the  matter  of      ) 

A.  B.,  )  In  Bankruptcy. 

I,  A.  M.,  one  of  the  referees  of  said  court  in  bankruptcy,  do 
hereby  certify  that  the  foregoing  is  the  true  and  complete 
record  of  the  proceedings  had  before  me  in  the  above  entitled 
matter,  which,  together  with  such  papers  as  are  on  file  before 
me,  I  herewith  transmit  to  the  court. 

Dated  at  the  day  of 190 — . 

A.  M., 
Referee  in  Bankruptcy. 


1102  BANKRUPTCY. 


COMPOSITION  WITH  CREDITORS. 
No.  107. 

Petition  for   Meeting  to   Consider   Composition    (i). 

(Official  l-'orm  No.  60.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


To  the  Honorable  ,  Judge  of  the  District  Court  of  the 

United  States  for  the District  of : 

The    above-named   bankrupt    respectfully   represent   that   a 

composition  of  per  cent,  upon  all  unsecured  debts,  not 

entited  to  a  priority  in  satisfaction  of debts  has 

been  proposed  by to  creditors,  as  provided  by  the 

Acts  of  Congress  relating  to  bankruptcy,  and  verily  be- 
lieve that  the  said  composition  will  be  accepted  by  a  majority  in 
number  and  in  value  of  creditors  whose  claims  are  al- 
lowed. 

Wherefore,  they  pray  that  a  meeting  of  • —  creditors  may 

be  duly  called  to  act  upon  said  proposal  for  a  composition, 
according  to  the  provisions  of  said  acts  and  the  rules  of  court. 


Bankrupt. 

(i)   B.  A.  1898,  sec.  12;  Loveland's  Bank.,  sees.  245  and  245. 
The  ofFer  of  composition  should  be  made  to  all  the  creditors.     In  re 
Rider,  96  Fed.  Rep.  808,  3  Am.  B.  R.   178. 
Tt  is  not  necessary  to  call  a  special  meeting  of  the  creditors  to  '•eceivC 


COMPOSITION    WITH    CREDITORS.  1103 

an  offer  of  composition.  The  submission  of  such  offer  may  be  made  to 
the  creditors  at  their  first  meeting  after  the  examination  of  the  bank- 
rupt.    In  re  Hilborn,  104  Fed.  Rep.  866,  4  Am.  B.  R.  741. 

Where  there  has  been  a  composition  it  will  not  be  set  aside  on  the 
ground  that  one  of  the  creditors  has  failed  to  get  notice  of  the  proceed- 
ings because  his  address  was  incorrectly  given  in  the  bankrupt's  schedule. 
In  re  Rudwick,  93  Fed.  Rep.  787,  2  Am.  B.  R.  114. 


No.  108. 

Order  for  Meeting  to  Consider  Composition. 

In  the  District  Court  of  the  United  States 
For  the District  of 

In  tlie  matter  of    i 

A.  B.,  [  In  Bankruptcy. 

Bankrupt.  J 

On  reading  and  fiHng  the  verified  petition  of  A.  B.,  the 
bankrupt  showing  that  he  verily  beHeves  that  a  composition 
upon  all  unsecured  debts  not  entitled  to  a  priority  will  be 
accepted  by  a  majority  in  number  and  in  value  of  his  credi- 
tors whose  claims  are  allowed. 

It  is  ordered  that  a  meeting  of  the  creditors  of  said  A.  B., 

bankrupt,  be  held  at before  A.   M.,    Esq.,   Referee  in 

Bankruptcy,  for  the  purpose  of  considering  the  composition 
proposed  to  be  offered  in  satisfaction  of  the  debts  due  from 
said  bankrupt  \o  his  creditors  and  that  notice  of  the  time,  place 
and  purpose  of  said  meeting  be  sent  by  said  above  named 
referee,  by  mail,  to  each  of  the  known  creditors  of  said  bank- 
rtipt  whose  name  and  address  apjiear  in  schedules  on  file  in 
this  matter  at  least  ten  days  prior  to  the  day  appointed  for  the 
holding  of  such  meeting. 

Witness  the  Honorable  G.  R.,  Judge  of  the  said  court,  and 

the  seal  thereof,  at ,  this day  of  A.  D.,  190 — . 

B.  R., 
Clerk  of  Said  Court. 


in  Bankruptcy. 


1104  BANKRUPTCY. 

No.  109. 

Notice  to  Creditors  of  Meeting  to  Consider  Composition. 

Jn  the  District  Court  of  the  United  States 

For  the District  of 

In  the  matter  of 

A.  B., 

Bankrupt. 

Notice  to  creditors  to  consider  composition  ofifered  by  bank- 
rupt. 

Take  notice,  that  a  meeting  of  the  creditors  of  the  above 
named  bankrupt  will  be  held  at  Room  13.  third  floor,  Post- 
office  Building,  city  of ,  before  the  undersigned  Referee 

in  Bankruptcy,  on  the day  of 190 —  at o'clock 

a.  m.,  for  the  purpose  of  considering  a  proposed  composition 
made  by  the  said  bankrupt  to  his  creditors  in  satisfaction  of 
the  unsecured  debts,  [not  entitled  to  priority]  owed  by  him 
to  each  of  said  creditors,  which  proposed  composition  is  to  pay 

per  cent.  A.  M., 

Referee  in  Bankruptcy. 

I  hereby  certify  that  I  have  on  this day  of A.  D., 

sent  by  mail  copies  of  the  above  notice  of  the  meeting  for 


composition  and   have  duly  published  the  same,   as  appears 
from  the  proof  of  publication  hereto  annexed.  A.  M., 


Referee. 


No.  110. 
Report  of  Referee  on  Composition. 

In  the  District  Court  of  the  United  States 

For  the District  of . 

In  the  matter  of     i 

A.  B.,  [Referee's  Report. 

Bankrupt,  j 

Pursuant  to  an  order  made  by  the  court  on  the day  of 

—  1^0 — ,  a  meeting  of  the  creditors  of  the  above  named 


COMPOSITION    WITH    CREDITORS.  1105 

bankrupt  to  consider  a  composition  of  per  cent,  npon 

all  unsecured  debts  not  entitled  to  a  priority  in  satisfaction  of 

said  debts,  was  on  the day  of ,  A.  D.  190 — ,  held 

before  me  at  Room  13,  Union  Trust  Building-  in  the  city 
of  ,  at o'clock  in  the  forenoon  of  the  said  day. 

Proof  of  mailing  of  notice  to  each  of  the  creditors,  men- 
tioned in  the  bankrupt's  schedules,  of  the  time,  place,  and 
purpose  of  said  meeting,  is  hereto  annexed. 

That  the  said  above-named  bankrupt  was  present  at  the 
said  meeting  and  offered  himself  for  examination  by  any  of 
the  creditors  represented  at  said  meeting. 

That  an  offer  of  composition  with  his  said  creditors  was  ac- 
cepted by  a  majority  in  number  and  in  value  of  all  his  credi- 
tors whose  claims  have  been  allowed,  which  acceptance  is 
hereto  annexed  and  made  a  part  of  this  report. 

Proofs  of  claims  of  creditors  voting  for  said  composition 
were  presented  and  allowed  before  signing  of  said  resolution 
which  are  hereto  annexed. 

That  the  following  are  the  names  of  those  creditors  who 
have  presented  claims  against  the  said  bankrupt's  estate  and 
were  duly  allowed,  but  who  did  not  consent  to,  or  sign  said 
composition.  [Set  out  list  uf  names  of  such  creditors  and 
amount  of  claims  proved.] 


No.  111. 

Application  for  Confirmation  of  Composition  (i). 
(Official  Form  No.  61.) 
In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


To  the  Honorable  .  Judge  of  the  District  Court  of  the 

United  States  for  the District  of . 


1106  BANKRUPTCY. 

At  .  in  said  district,  on  the  day  of  ,  A.  D. 

189 — .    now    comes   ,    the   a1)ove    named    bankrupt,    and 

respectfully  represents  to  the  court  that,  after  he  had  been 
examined  in  open  court  [or,  at  a  meeting  of  his  creditors]  and 
had  filed  in  court  a  schedule  of  his  property  and  a  list  of  his 
creditors,  as  required  by  law.  he  offered  terms  of  composition 
to  his  creditors,  which  terms  have  been  accepted  in  writing  by  a 
majority  in  number  of  all  creditors  whose  claims  have  been 
allowed,  which  number  represents  a'majority  in  amount  of 
such  claims ;  that  the  consideration  to  be  paid  by  the  bank- 
rupt to  his  creditors,  the  money  necessary  to  pay  all  debts 
which  have  priority,  and  the  costs  of  the  proceedings,  amount- 
ing in  all  to  the  sum  of dollars,  has  been  deposited,  sub- 
ject to  the  order  of  the  judge,  in  the National  Bank,  of 

,  a  designated  depository  of  money  in  bankruptcy  cases. 

Wherefore,  the  said  respectfully  asks  that  the  said 

composition  may  be  confirmed  by  the  court.  , 

Bankrupt. 

(i)   B.  A.  1898,  sec.  12  and  sec.  2,  clause  9.     Loveland's  Bank.,  sec.  246. 

The  application  for  a  confirmation  must  be  made  to  the  judge  and  the 
acceptance  of  the  compromise  offered  by  the  creditors  is  not  conclusive 
but  may  be  disallowed  by  the  court  under  stc.  27  of  the  Bankrupt  Act. 
In  re  Heyman,    108   Fed.   Rep.   207. 

A  composition  will  be  confirmed  when  it  appears  to  the  court  that  the 
composition  was  fair  and  for  the  best  intereats  of  the  creditors.  In  re 
Wilson.  107  Fed.  Rep.  83,  5  Am.  B.  R.  849;  City  Nat.  Bank  vs.  Doo~ 
little  (C.  C.  A.,  5U1  Cir.).  107  Fed.  Rep.  236,  5  Am.  B.  R.  -JZT. 

But  where  it  is  not  for  the  best  interests  of  the  creditors  the  court 
will  refuse  to  confirm  and  the  decision  of  the  trial  judge  will  not  be 
disturbed  by  an  Appellate  Court  unless  grossly  biased.  Adler  vs.  Jone," 
(C.  C.  A.,  6th  Cir.),  6  Am.  B.  R.  245.  log  Fed.  Rep.  967. 

As  to  the  duty  of  the  referee  and  his  authority  arising  out  of  appli- 
cations for  composition,  see  in  re  Hilborn,  104  Fed.  Rep.  866,  4  Am.  B. 
R.  741. 

The  specifications  in  opposition  to  an  r  pplic  tion  for  confirmation  of 
a  composition  should  be  similar  to  those  required  in  opposition  to  a  dis- 
charge. City  Nat.  Bank  vs.  Doolittle  (C.  C.  A.,  5th  Cir.)  107  Fed.  Rep. 
236,  5  Am.  B.  R.  736. 


COMPOSITION    WITH    CREDITORS.  1107 

No.  112. 

Order  for  Hearing  on  Petition  to  Confirm  Composition. 

In  the  District  Court  of  the  United  States 

For  the District  of . 

In  the  matter  of 


A.  B., 

Bankrupt. 


In  Bankraptcy. 


At ,  in  said  district,  on  the  day  of  A.  D., 

on  reading  and  filing  the  application  of  the  above  named 


bankrupt  for  confirmation  of  a  composition  offered,  and  it  ap- 
pearing satisfactorily  to  the  court,  from  the  report  of  A.  M., 
Esq.,  referee,  of  all  proceedings  herein,  that  a  majority  in 
number  and  in  value  of  his  creditors  whoso  claims  liavc  been 
allowed  and  whose  claims  were  proved  by  proofs  of  claim  pre- 
sented to  said  referee,  and  which  are  presented  to  the  court 
with  said  report  did,  at  said  meeting  pass  and  vote  [as  ap- 
pears by  the  said  report  of  the  proceedings  of  t-aid  meeting] 
in  favor  of  a  composition,  which  is  set  forth  at  length  in 
said  proceedings,  resolving  that  the  composition  proposed  by 
said  bankrupt  at  said  meeting  shall  be  accepted  in  satisfaction 
of  the  unsecured  debts  due  from  said  bankrupt  to  his  credi- 
tors; now  therefore  on  motion  of  R.  X.,  Esq.,  attorney  for 
said  bankrupt. 

It  is  ordered  that  a  hearing  in  the  matter  of  composition 
by  said  bankrupt  be  had  before  this  court  at  the  United  States 

Court  Rooms,  Postoffice  Building,  in  the  city  of ,  on  the 

day  of  ■ A.  D.,  at   lo  o'clock  a.  m..  for  the 

purpose  of  said  court  inquiring,  upon  hearing  whether  the 
said  composition  so  proposed  by  said  bankrupts  has  been 
passed  in  the  manner  directed  by  the  Act  of  Congress  relating 
to  bankruptcy,  approved  July  t.  1898,  and  lias  1)een  accepted 
by  the  signatures  required  by  said  act  and  whether  it  is  for 
the  best  interest  of  the  creditors;  that  a  notice  of  the  time, 
place  and  purpose  of  said   hearing  be  sent  by  the  clerk  of 


1108  BANKRUPTCY. 

this  court,  by  mail,  to  each  of  the  creditors  to  their  respective 
addresses  as  they  appear  in  the  list  of  creditors  of  the  bankrupt 
or  as  afterwards  filed  with  the  papers  in  the  case  by  the 
creditors  ( i )  at  least  ten  days  prior  to  the  said  day  appointed 
herein  for  such  hearing. 

(i)   See  Bank.  Act  1898,  sec.  58. 


No.  113. 

Order  Confirming  Composition   (i). 

(Official  Form  No.  62.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrui^t. 


In  Bankruptcy. 


An  application  for  the  confirmation  of  the  composition  of- 
fered by  the  bankrupt  having  been  filed  in  court,  and  it  appear- 
ing that  the  composition  has  been  accepted  by  a  majority  in 
number  of  creditors  whose  claims  have  been  allowed  and  of 
such  allowed  claims ;  and  the  consideration  and  the  money 
required  by  law  to  be  deposited  having  been  deposited  as  or- 
dered in  such  place  as  was  designated  by  the  judge  of  said 
court,  and  subject  to  his  order;  and  it  also  appearing  that 
it  is  for  the  best  interests  of  the  creditors ;  and  that  the  bank- 
rupt has  not  been  guilty  of  any  of  the  acts  or  failed  to  perform 
any  of  the  duties  which  would  be  a  bar  to  his  discharge,  and 
that  the  offer  and  its  acceptance  are  in  good  faith  and  have 
not  been  made  or  procured  by  any  means,  promises  or  acts 
contrary  to  the  Acts  of  Congress  relating  to  bankruptcy :  It 
is  therefore  hereby  ordered  that  the  said  composition  be  and  it 
hereby  is  confirmed. 


COMPOSITION   WITH    CREDITORS.  1109 

Witness  the  Honorable  ,  judge  of  said  court,  and  tlie 

seal  thereof,  this day  of A.  D.   19 — . 

[Seal  of  the  court.^  — ■ — , 

Clerk. 

(i)  B.  A.  1898,  sec.  2,  clause  9  and  sec.  12;  Gen.  Ord.  32.  Loveland's 
Bank.,  sec.  249. 

See  note  to  form  No.  iii. 

This  order  will  not  be  entered  until  costs  have  been  provided  for  by 
bankrupt  or  creditors.     In   re  Harris,  9  Am.  B.  R.  20. 

It  has  been  held  that  an  appeal  will  lie  to  an  order  refusing  to  confirm 
a  composition.  U.  S.  vs.  Hammond,  104  Fed.  Rep.  862,  4  Am.  B.  R.  736. 
But  see  Ross  vs.  Saunders  (C.  C.  A.,  ist  Cir.),  105  Fed.  Rep.  915,  5  Am. 
B.  R.  350. 


No.  114. 
Order  of  Distribution  on  Composition. 

(Official  Form  No.  63.) 

United  States  of  America : 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt - 


In  Ba-xi.kruptcy. 


The  composition  offered  by  the  above  named  bankrupt  in 
this  case  b'A'ing  been  duly  confirmed  by  the  judge  of  said 
court,  it  is  hereby  ordered  and  decreed  that  the  distribution 
of  the  dfn}oh\t  shall  be  made  by  the  clerk  of  the  court  as  follows, 
to  wit :  First.  To  pay  the  several  claims  which  have  priority. 
Second.  To  pay  the  costs  of  proceedings.  Tliird.  To  pay, 
according  to  the  terms  of  the  composition,  the  several  claims  of 
general  creditors  which  have  been  allowed  and  appear  upon 
a  list  of  allowed  claims  on  the  files  in  this  case,  which  list  is 
made  a  part  of  this  order. 


|]|0  BANKRUPTCY. 

Witness  the  Hon.  ,  judge  of  said  court,  and  the  seal 

thereof,  this dav  of ,  A.  D.  190 — . 


IScal  of  the  court.'] 


Clerk. 


PROCEEDINGS   BEFORE   THE   JUDGE.  1111 


PROCEEDINGS    BEFORE   JUDGE   SUBSEQUENT    TO 

ADJUDICATION. 

No.  115. 

Motion    for    Rule    to    Show    Cause    Against    Bankrupt    for 

Contempt. 

[Caption.] 

Now  come  the  undersigned  creditors  herein,  and  move  the 
court  that  a  rule  issue  herein  directing  A.  B.,  the  bankrupt, 

to  appear  in  this  court  at County  of ,  on  the 

day  of  19 — ,  at  o'clock  a.   m.,   and  show  cause 

why  an  atachment  for  contempt  should  not  issue  against  him 
for  disobedience  of  the  order  of  A.  M.,  referee  herein,  a  copy 
of  which  order  is  as  follows : 

First.  That  the  said  bankrupt  A.  B.,  within  twenty  days 
from  and  after  the  service  of  a  copy  of  this  order  upon  him, 
pay  over  to  B.  M.,  Esq.,  trustee,  the  sum  of  $ and  de- 
liver to  said  trustee  United  States  three  per  cent,  coupon  bonds, 
face  value  of  $ ,  or  $ in  money. 

Second.  That  in  the  event  of  the  said  bankrupt  A.  B.,  fail- 
ing or  neglecting  to  obey  this  order  to  pay  to  the  said  trustee 
the  above  amounts,  and  deliver  said  bonds  or  money,  the  said 
B.  M.,  Esq..  as  sucli  trustee  is  hereby  ordered  and  directed 
to  institute  proceedings  against  the  above  named  A.  B.  in 
accordance  with  the  provisions  of  Sections  29  of  the  Bankrupt- 
cy Act  of  1898. 

And  it  is  further  ordered  that  a  copy  of  this  order  be  served 
personally  upon  the  said  A.  B.,  the  said  bankrupt,  and  by  mail 
upon  R.  X.,  Esq..  attorney  for  the  bankrupt,  and  on  B.  M., 
Esq.,  said  trustee.  E.  P., 

G.  H., 
By  Y.  &  Y..  their  Attorneys. 


1112  BANKRUPTCY. 

No.  116. 

Affidavit  of  Trustee  that  Bankrupt  Has  Not  Obeyed  Order  of 

Referee. 

[Caption.] 

B.  M.,  being-  first  duly  sworn  says  on  oath  that  he  is  the  duly 
appointed  trustee  herein,  and  that  the  said  bankrupt  has  not 
in  any  way  complied  with  the  order  of  the  referee  herein  here- 
tofore made,  requiring  said  bankrupt  to  pay  to  the  trustee  the 

sum  of  $ and  United   States  Government  bonds, 

three  per  cent,  face  value  of  $ .  that  he  has  not  paid  said 

sum  or  any  part  thereof  to  the  said  trustee. 

Affiant  further  says  not. 

B.  M., 

Sworn  to  and  subscribed  before  me  this day  of ■ 

19 — .  T.  H., 

[Seal.] 

Notary  Public, 
County, . 


No.  117. 

Rule   to   Show   Cause  Against  Bankrupt   for   Contempt. 

[Caption.] 

On  motion  of  creditors  herein,  a  rule  is  allowed  to  Issue 
herein  directing  A.  B.,   the  bankrupt,  to  appear  before  this 

court  at  ,  County,  ,  on  the  day  of  

19 — ,  at o'clock,  a.  m.,  and  show  cause  why  an  attachment 

for  contempt  should  not  issue  against  him  for  disobedience  of 
the  order  of  A.  M.,  refere  herein,  and  which  order  reads  as  fol- 
lows : 

First.  That  the  said  bankrupt  A.  B.,  within  twenty  days 
from  and  after  the  service  of  a  copy  of  this  order  upon  him 

pay  over  to  B.  M.,  Esq.,  trustee,  the  sum  of  $ and  deliver 

to  said  trustee  United  States  three  per  cent,  coupon  bonds,  face 
value  of  $ ,  or  $ in  money. 


PROCEEDINGS    BEFORE   THE   JUDGE.  1113 

Secvnd.  That  in  the  event  of  said  bankrupt- A.  B.,  failing 
or  neglecting  to  obey  this  order  to  pay  the  said  trustee  the 
above  amounts,  and  deliver  said  bonds  or  money,  the  said  B. 
M.,  Esq.,  as  sucli  trustee,  is  hereby  ordered  and  directed  to 
institute  proceedings  against  the  above  named  A.  B.,  in  accord- 
ance with  the  provisions  of  Section  29  of  the  bankruptcy  act 
o^'  1898. 

Third.  And  it  is  further  ordered  that  a  copy  of  this  order 
be  served  personally  upon  tlie  said  A.  B.,  the  said  bankrupt, 
and  by  mail  upon  R  X.,  Esq.,  attorney  for  the  bankrupt,  and 
on  B.  M.,  Esq.,  said  trustee. 
The  United  States  of  America 

District  of ss. 

Division. 

I,  B.  R.,  clerk  of  the  District  Court  of  the  United  States  of 
America,  within  and  for  the  division  and  district  aforesaid, 
do  hereby  certify  that  the  foregoing  entry  is  truly  taken  and 
correctly  copied  from  the  journal  of  said  court. 

In  testimony  whereof,  1  have  hereunto  set  my  hand 
and  affixed  the  seal  of  said  court  at  the  city  of 

,  this day  of A.  D.,  19 — , 

[Seal.] 

B.  R.,  Clerk. 


No.  118. 
.knswer  of  Bankrupt  to  Rule  to  Show  Cause  for  Contempt. 

[Caption.] 

Now  comes  A.  B.,  and  in  obedience  to  the  rule  issued  by 
this  court,  says  that  the  attachment  for  contempt  ought  not  to 
issue  against  him  for  disobedience  of  the  order  of  A.  M., 
referee,  for  the  following  reasons : 

First.  He  says  that  he  can  not  comply  with  the  order  of  this 
court,  because  he  has  not  the  bonds  ordered  turned  over  or 
sum  of  money  ordered  by  said  A.  M.  to  be  paid  to  him. 


1114  BANKRUPTCY. 

Second.  That  said  ovdcv  of  said  referee  is  not  a  lawful  or- 
(.ler  within  tiie  contemplation  i^i  the  Ijankrnptey  ad.  or  such 
an  order,  tlie  disc^bediencc  of  which  would  he  i)iuiishal)le  by 
attachment  for  C(Mitem])t.  and  said  order  is  not  an  order  of 
this  court. 

Third.  Said  order  is  in  effect  a  judgment  directing  the  pay- 
ment of  money,  and  is  not  enforceable  by  proceedings  in  con- 
tempt. 

Fourth.  Section  29  of  the  bankruptcy  act  provides  that  such 
ofYenses.  as  those  charged  by  the  referee  in  his  finding,  shall 
be  punishable  only  in  the  manner  prescribed  therein,  to 
wit,  !)}■  infonnation  or  indictment. 

Wherefore,  said  A.  B.  prays  the  court  that  said  rule  may 
be  dismissed,  and  that  he  may  be  discharged. 

X.  &  X., 
Attorneys  for  Bankrupt. 

State  of , 

County  ss. 

A.  B.,  being  first  duly  sworn,  says  that  the  allegations  con- 
tained in  his  foregoing  answer  are  true.  A.  B., 

Sworn  to  and  subscribed  before  me  this  day 

of A.  D.,  19—.  T.  H., 

Fees cents.  Notary  Public, 


[Seal.] 


County, 


No.  119. 
Order  to  Take  Additional  Evidence  on  Rule  to  Show  Cause. 

[Caption.] 

This  cause  coming  on  to  be  heard  on  the  rule  issued  on  the 
bankrupt  and  his  answer,  and  on  the  findings  and  order  of 
the  referee  filed  herein,  it  appearing  to  the  court  that  on  this 
hearing  the  said  bankrupt  desires  to  offer  additional  testimony 
of  F.  H.,  O.  H.  and  F.  K.,  it  is  ordered  that  the  referee  take 


PROCEEDINGS   BEFORE   THE   JUDGE.  1115 

said  additional  testimony,  together  with  such  evidence  as  the 
creditors  of  said  bankrupt  may  offer  in  rebuttal,  and  that  the 
referee  report  said  evidence,  together  with  whatever,  if  any, 
modification  he  may  decide  ought  to  be  made  of  his  former 
report  and  order  [filed  herein']  upon  consideration  of  the  whole 
evidence  taken  before  him  in  this  matter.  It  is  ordered  that 
this  entry  be  made  as  of  the day  of ,  19 — . 


No.  120. 
Order  Finding  that  Bankrupt  has  Concealed  Assets  (i). 

[Caption.] 

This  cause  coming  on  to  be  heard  upon  the  motion  filed 

herein  on  the  day  of  19 — ,   for  an  order  of  the 

court  requiring  the  said  bankrupt,  A.  B.,  to  show  cause  why 
he  should  not  be  attached  for  contempt  for  disobedience  of 
the  order  of  A.  M.,  Esq.,  the  referee  herein,  and  upon  the 
answer  of  said  A.  B.,  thereto,  and  upon  the  evidence,  and  was 
argued  by  counsel  representing  creditors  of  said  bankr  ipt  and 
by  counsel  representing  said  bankrupt;  and  on  consideration 
whereof  the  court  finds  upon  the  evidence  that  said  bankrupt 

does  conceal,  and  has  in  his  possession  the  sum  of  $ in 

money,    and   the    further    sum   of  $ face   value    United 

States  bonds  for  money  in  said  amount,  all  of  which  he  re- 
fuses to  deliver  to  said  B.  M.,  trustee  appointed  herein,  in 
accordance  with  the  order  of  said  referee  to  that  effect,  and 
which  order  has  been  served  upon  said  bankrupt  more  than 

twenty  (20)  days  before  said  day  of  ,   19 — ,  that 

the  said  sums  constitute  property  belonging  to  the  estate  of 
said  bankrupt,  and  the  court  doth  to  said  extent  confirm  said 
finding  and  order  of  said  referee,   and  dotli  approve  of  the 

referee's  order  made  on  said  A.  B.,  on  the day  of , 

19 — ;  and  the  court  does  further  find  that  said  A.  B.  has  not 
obeyed  the  said  order  of  the   referee  to  the  extent  of  the 


1116  BANKRUPTCY. 

amounts  here  found  to  be  in  his  possession,  and  that  he  is 
thereby  gaiihy  of  contempt. 

It  is  therefore  ordered  that  said  A.   B.,  on  or  before  the 

day  of  — — ,    19 — ,   pay   to   said   B.    M.,   trustee,   the 

sum  of  $ ,  and  also  deHver  to  him  United  States  bonds 

face  vakie  of  $ ,  or  in  Hen  thereof  money  in  the  sum  of 

$ in  money,  and  that  he  appear  for  further  orders  and 

proceedings  herein  in  this  court  at  o'clock  a.  m.,  on  the 

day  of ,  19 — . 

It  is  ordered  that  for  his  appearance  in  court  on  the 

day  of  ,  19 — ,  at  o'clock  a.  m.,  to  abide  the  fur- 
ther orders  of  this  court  in  these  proceedings,  said  A.  B.  exe- 
cute bond  in  the  sum  of  $ — —  in  the  form,  and  with  good 
and  sufficient  surety,  as  provided  by  law,  to  be  approved  of 
by  the  clerk  of  this  court,  and  in  default  thereof  he  be  com- 
mitted to  the  custody  of  the  marshal,  and  by  him  committed 
to  the County  Jail. 

And  said  bankrupt  by  his  attorney  objects  to  said  finding 
of  said  court  and  gives  notice  of  his  intention  to  appeal  there- 
from. 

(i)   This  order  must  be  made  by  the  judge  and  not  by  the  referee. 


No.  121. 

Order  Committing  Bankrupt  for  Contempt  in  Not  Obeying 
Order  to  Pay  Over  Assets  (i). 

[Caption.] 

Now  comes  the  said  A.  B..  in  accordance  with  his  under- 
taking heretofore  made  in  compliance  with  the  order  hereto- 
fore made  on  the  day  of ,  19 — ,  and  it  appearing 

from  the  report  of  B.  M.,  trustee,  and  from  the  evidence, 
that  said  A.  B.  has  wholly  refused  and  neglected  to  per- 
form and  comply  with  the  order  of  court  made  the day 

of ,  19 —  and  has  wholly  failed  to  pay  and  deliver  said 

moneys  and  bonds  or  any  of  them  to  said  trustee,  the  court 


PROCEEDINGS    BEFORE   THE   JUDGE.  1117 

do  find  that  he  has  been  and  is  guilty  of  contempt.  It  is 
thereupon  ordered  and  adjudged  that  he,  said  A.  B.,  be  con- 
fined in  the  county  jail  of  the  county  of ,  State  of , 

until  he  comply  with  said  order  and  make  said  payment  and 

deliveries  as  directed  in  said  order  of  the  day  of  , 

19 — ,  and  that  a  warrant  issue  for  such  commitment, 
(i)   This  order  must  be  made  by  the  judge  and  not  by  the  referee. 


No.  122. 

Order  of  Referee  Recommending  Commitment  for  Contempt. 

In  the  District  Court  of  the  United  States 

For  the District  of .         In  Bantcruptcy. 

In  the  matter  of 

A.  B.  Co.,  et  al.         t^        ,     r 

Report  of 

"VS  r 

_    ^  ■  Referee. 

E.  B., 

Bankrupt. 

I,  J.  S.,  one  of  the  referees  in  bankruptcy  of  this  court,  do 

respectfully  report  that  on  the day  of  ,  I  entered 

an  order  requiring  F.  B.,  to  pay  to  E.  M.,  Trustee  in  Bank- 
ruptcy in  this  cause,  on  or  before  9 130  o'clock  a.  m., ,  the 

sum  of  $ which  came  to  his  hands  as  bailee  or  agent  of  the 

bankrupt,   E.  B.,  w'hich  sum  said  F.   B.   has  not  accounted 
for. 

At  the  time  of  the  entry  of  said  order  said  F.  B.,  was  before 
me  in  person  and  by  counsel,  R.  X.,  Esq.  A  copy  of  said  or- 
der is  filed  herew'ith  and  made  part  hereof,  marked  No.  i. 

I  further  certify  that  said  F.  B.  has  failed  to  comply  wdth 
said  order  in  whole  or  in  part. 

I  therefore  find  that  said  F.  B.  is  in  contempt  of  court,  and 
therefore  recommend  that  he  be  punished  for  contempt  and 
committed  to  prison  until  he  shall  have  paid  to  the  said  trustee 
the  said  sum  of  $ . 

All  of  which  is  respectfully  submitted.  J.  S., 

Referee  in  Bankruptcy. 


Ills  BANKRUPTCY. 


No.  123. 


Order  Committing  Agent  of  Bankrupt  for  Contempt  in  Not 

Obeying   Order   of  Referee  to  Pay  Over 

Assets  of  Bankrupt. 

In  the  District  Court  of  the  United  States 
For  the District  of . 

[Caption.] 

This  cause  coming  on  to  be  heard  on  the  petition  of  W.  T. 
for  a  review  of  the  order  of  court  entered  herein  by  J.  S.,  one 
of  the  referees  of  this  court,  requiring  W.  T.  to  pay  over  to 
E.  M.,  Trustee  in  Bankruptcy  of  the  bankrupt  herein,  and  the 
certification  of  said  referee  as  to  the  disobedience  of  said  W. 
T.  of  said  order  and  the  recommendation  of  said  referee  that 
said  W.  T.  be  punished  for  his  contempt  of  the  order  of  this 
court,  and  the  court  being  fully  advised,  it  is  hereby  ordered 
that  the  said  W.  T.,  be  committed  for  contempt  of  court  as 

charged  and  confined  in  the  jail  of County  until  further 

order  of  this  court. 


No.  124. 
Commitment  for  Contempt. 

In  the  District  Court  of  the  United  States 

For  the District  of . 

Division. 


In  re 
A.  B., 
Bankrupt. 


No. 


In  Bankruptcy. 


The  defendant  A.  B., having  been  adjudged  guilty  for 

contempt  of  court  in  failing  to  pay  and  deliver  moneys  and 
bonds  or  any  of  them  to  the  trustee  herein 

Thereupon  the  court  pronounced  the  following  sentence,  to 
wit :    That  the  said  A.  B.  be  imprisoned  in  the  jail  of ■ 


PROCEEDINGS    BEFORE   THE   JUDGE.  1119 

County,    State  of  until   he   comply    with   the   order  of 

the  day  of  ,    19 — .   and  make  said  payments  and 

deliveries  as  directed  in  said  order. 

This,  therefore,  is  to  commend  the  marshal  of  said  district 
to  take  the  body  of  the  said  A.  B.  and  commit  the  same  to  the 
said  jail  of  County,  pursuant  to  the  above  sen- 
tence. 

Witness,  the  Honorable  G.  R.,  Judge  of  the  District 

Court  of  the  United  States,  this  day  of 

,  A.  D.,  19 — ,  and  in  the year  of  the 

Independence  of  the  United  States  of  America. 
ISeal.^  B.  R., 

Clerk  of  the  District  Court  of  the  United 
States District  of . 


No.  125. 

Order  Purging  A.  B.  of  Contempt  and  Directing  H'-  Release 

from  Jail  (i). 

[Caption.] 

It  appearing  that  the  order  herein  made  against  the  bank- 
rupt A.  B..  and  after  failure  to  comply  therewith  is  impris- 
oned in  the  jail  of  County,  in  the  State  of  ,  has 

now  been  complied  with,  it  is  hereby  ordered  that  said  A. 
B.  is  purged  of  contempt  for  his  disobedience  to  the  order  of 
court. 

It  is  ordered  that  said  A.  B.,  upon  payment  of  costs  taxed 
at  $ ,  be  now  released  and  discharged  from  said  impris- 
onment,   and    the    marshal    is    hereby   ordered    to    deliver   a 

copy  of  this  order  to  the  sheriff  of County,  in  the  State 

of ,  who  is  hereby  directed  upon  receipt  thereof  to  release 

the  said  A.  B.  from  his  custody. 

Ci)  This  order  must  be  made  by  the  judge  and  not  by  the  referee. 


11  JO  BANKRUPTCY. 

No.  126. 

Rule  to  Show  Cause  Why  Assignee  for  Creditors  Should  Not 
Pay  Over  Funds  to  Trustee  in  Bankruptcy  (i). 

[Caption.] 

The  President  of  the  United  States  of  America  to  L.  C,  as- 
sig-nee  for  the  benefit  of  the  creditors  of  A.  B. : 

Wui  are  hereby  cited  and  admonished  to  be  and  appear  be- 
fore tlie  District  Court  of  the  United  States  within  and  for 

the District  of on  the day  of A.  D., 

at  lo  o'clock  a.  m.,  to  show  cause,  if  any  you  know  or  have, 
why  you  should  not  pay  over  and  deliver  to  J.  R.,  Trustee  in 
Bankruptcy,  the  funds  and  assets  of  the  estate  of  the  said  A. 
B.  now  in  your  possession  or  inider  your  control.  It  is 
hereb}^  ordered  that  the  marshal  of  this  district  make  legal 
service  and  return  of  this  rule  on  or  before  the  appearance 
day  above  named. 

Witness,  the  Honorable   (J.  R.,   United  St'itcs  District  .Judge 

for  till' District  of ,  this ~  day  of ,  A.  D.,  19 — , 

tUid  in  the  — —  year  of  the  independence  of  the  United  States 
of  America. 

B.  R. 

(Mei-k  of  the  Disti'ict  Court  of  the  United  States  for  tlie  

District  of  . 

(1 )  Tliis  form  can  be  used  for  the  purpose  of  compelling  tlie  bankrupt 
or  agent  to  pay  over  money.     Seo  Muellor  r.s'.  Nugent,  184  U.  S.  1. 


No.  127. 

Order  that  the  Assignee  for  the  Benefit  of  Creditors  Pay  Over 
Funds  to  the  Trustee  in  Bankruptcy. ^ 

[Caption.] 

This  cause  came  on  to  be  heard  upon  rule  to  show  cause,  etc., 
and  was  arg'ued  by  counsel. 

On  consideration  whereof  it  is  hereby  ordered  that  L.  C, 
assignee   foi'   the    benefit    of  tlie   creditors   of  A.   B.,    forthwith 


PROCEEDINGS   BEFORE  THE  JUDGE.  1121 

pay  over  and   deliver  to  J.    R.,    Trustee  in   Bankruptcy  oi 
the  estate  of  said  A.   B.,  all  funds  and  assets  of  every  de- 
scription belonging  to  the  estate  of  said  A.  B.  now  in  his  pos- 
session or  subject  to  his  control, 
(i)   See  note  to  No.  12(3. 


No.  128. 

Order  for  Assignee  for  Creditors  to  Account. 

In  the  District  Court  of  the  United  States 

For  the District  of . 

A.  B.,  et  al. 

vs.  y  Bankrupt. 

C.  D.  &  Co., 

At ,  in  said  district,  on  the day  of .  A.  D., 

19 — ,  before  J.  B.,  Referee  in  Bankruptcy. 

Notice  having  been  given,  and  no  adverse  interest  appearing, 
it  is  hereby  ordered  that  L.  C,  assignee  for  the  benefit  of  the 
creditors  of  C.  D.  &  Co.,  file  with  J.  B.,  one  of  the  referees  of 
this  court  in  bankruptcy,  at  his  office.  Rooms  1 001-1005,  Co- 
lumbia Building, ,  on  or  before ,  at  9 130  o'clock  a.m., 

a  detailed  and  itemized  statement  showing  all  the  receipts  and 
disbursements  made  by  him  of  money  and  other  assets  be- 
longing to  the  estates  of  C.  D.  &  Co.,  together  with  all 
vouchers  that  he  may  have  for  any  disbursements. 

It  is  further  ordered  that  said  L.  C.  be  and  appear  before 

the  referee  aforesaid  in  person  on ,  at  9  :30  o'clock  a.  m., 

for  the  purpose  of  making  settlement  of  his  accounts  as  as- 
signee of  the  parties  aforesaid. 

Witness  the  Honorable  G.  R.,  Judge  of  said  court, 

and  the  seal  thereof,  at ,  in  said  district,  on 

the day  of ,  A.  D., . 

[Seal.] 

B.  R., 
Clerk  of  Said  Court. 


1  1  22  BANKRUPTCY. 

No.  129. 

Response  of  an  Assignee  for  Benefit  of  Creditors  to  a  Rule  to 

Pay  Over  Money,     (i). 

Ill  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 
A.  B.  &  Co..  ctal., 

vs. 
C.  D.  &  Co..  D.  G.  and  C.  D. 


Bankrupts. 


L.  C.  for  response  to  the  order  herein  to  show  cause  why 
he  shall  not  pay  the  Receiver  in  Bankruptcy  herein  the  sum 

of  $ shown  in  his  report  as  having  been  paid  Messrs.  M. 

A.,  D.  A.  &  J.  G.,  and  $ — —  to  Z.  P.  Esq.,  says  that  said  sums 
were  paid  them  respectively  for  services  rendered  him  as  his 
counsel  whilst  acting  as  assignee  before  any  proceedings  here- 
in, as  already  appears  in  his  report  herein.  He  says  further 
that  he  has  no  money  or  property  or  means  of  any  kind  with 
which  to  pay  said  money  or  any  part  thereof. 

He  respectfully  submits  to  the  court  that  he  ought  not  to  be 
compelled  to  pay  said  money  herein. 

This  respondent  says  further  that  long  before  the  petition 
in  this  proceeding  was  filed  and  before  he  had  any  knowledge, 
information  or  intimation  that  it  was  intended  to  be  filed,  and 
relying  upon  it  that  he  would  be  permitted  to  wind  up  his 
trust  under  the  deed  of  assignment  for  the  bankrupts  shown 
in  the  record  in  this  action  or  proceeding,  he  filed  his  petition 
and  brought  action  in  the  State  court  as  appears  in  this  record, 
which  is  still  pending,  and  he  is  still  subject  to  the  jurisdiction 
and  orders  of  said  State  court  requiring  him  to  settle  his  ac- 
counts there  and  to  be  responsible  there  for  all  his  acts  and 
.  doings  under  said  deed  of  assignment. 

He  submits  to  this  honorable  court  that  this  response  be  held 
suf^cient  and  that  the  "show  cause"  order  herein  should  be  an- 


PROCEEDINGS   BEFORE   THE   JUDGE.  1123 

nulled  or  suspended  until  he  is  relieved  from  his  present  em- 
barrassing position.  L.  C, 

Subscribed  and  sworn  to  before  me  by  L.   C,  June  . 

My  commission  expires .  A.  S., 

Notary  Public,  County, 


(1)  Taken  from  the  record  in  Louisyille  Trust  Co.  vs.  Coniinger,  184  U. 
S.  IS. 

A.S  to  the  right  of  attorneys  for  assignee  in  state  court  to  pay  for 
serv'ices  rendered  prior  to  bankruptcy,  see  Raudolpli  c.s-.  Scrugge,  trustee, 
190  U.  S.  533;  10  Am.  B.  R.  1. 


In  Bankruptcy. 


No.  130. 

Petition  by  a  Trustee  to  Review  an  Order  Allowing  a 

Claim    (i). 

In  the  District  Court  of  the  United  States 
For  the District  of  — — . 

In  the  matter  of  the  estate  of 
A.  B., 
Bankrupt. 

The  petition  of  N.  J.  M.,  trustee  of  A.  B.,  bankrupt,  of  the 
village  of ,  respectfully  represents : 

First.  That  heretofore,  to  wit.  on  the day  of ,  the 

said  A.  B.,  who  before  that  time  had  been  engaged  in  l)usi- 

ness  at  ,  was  duly  adjudged  a  bankrupt  by  an  order  of 

this  court,  and  that  afterwards  your  petitioner  was  chosen  and 
elected  trustee  in  the  estate  of  A.  B,  and  is  now  and  has  for 
some  time  past  been  acting  as  such  trustee. 

Second.  That  heretofore,  to  wit,  on  the day  of , 

the  S.  T.  Company,  of  ,  a  corporation  organized  under 

the  laws  of  the  State  of and  carrying-  on  Imsiness  under 

the  laws  of  the  State  of at  — ■. — ,  aforesaid,  filed  its  claim 

against  said  estate  for dollars  and  cents  as  a  pre- 
ferred claim  against  said  estate  for  the  amount  claimed  to  be 
due  under  and  by  virtue  of  a  certain  chattel  mortgage  made 


1124  BANKRUPTCY. 

and  executed  by  the  said  A.  B.  to  said  The  S.  T.  Company, 

on  the day  of ,  and  which  said  chattel  mortgage  it 

was  claimed  by  said,  The  S.  T.  Company,  was  a  lien  upon  the 
stock  of  goods,  wares  and  merchandise  received  by  the  said 
trustee  and  by  him  converted  into  cash. 

Third.  That  said,  The  S.  T.  Company,  petitioned  A.  M., 
Esq.,  referee,  in  matter  of  said  estate,  that  said  claim  be  al- 
lowed as  a  preferred  claim  and  that  the  said  trustee  should 
be  ordered  by  the  court  to  pay  the  same  out  of  the  assets  of 
said  estate  in  preference  to  other  claims  as  a  first  lien  thereon, 

and  that  your  petitioner  as  trustee  as  aforesaid,  on  the day 

of  ,  filed  his  objections  to  the  allowance  of  said  claim, 

and  afterwards  the  said  matter  came  on  to  be  heard  before 
A.  M.,  Esq.,  referee  in  said  estate,  and  testimony  was  taken 
thereon  before  the  said  referee  and  by  deposition  and  the  mat- 
ter submitted  to  him,  and  afterwards,   on,  to  wit,  the  

day  of ,  the  said  referee  made  an  order  allowing  the  said 

claim  of  said  The  S.  T.  Company,  against  the  estate  of  said 

A.  B.  to  the  amount  of dollars  and cents,  together 

with  costs  amounting  to dollars  and cents  as  a  pre- 
ferred claim  against  the  said  estate,  and  ordering  and  requiring 
your  petitioner  as  such  trustee  to  pay  said  amount  to  said  The 
S.  T.  Company,  out  of  the  moneys  in  his  hands  belonging  to 
said  estate. 

Fourth.  That  your  petitioner  claims  that  the  said  chattel 
mortgage  upon  which  said  claim  is  based  is  void,  and  that  said. 
The  S.  T.  Company,  is  not  entitled  to  enforce  the  same  against 
the  property  purported  to  be  covered  thereby,  and  against  the 
assets  of  said  estate,  and  that  such  mortgage  is  illegal,  fraudu- 
lent and  void  for  the  specific  reasons  set  forth  in  his  ob- 
jections filed  with  said  referee  to  the  claim  of  said.  The  S. 
T.  Company,  to  which  he  hereby  makes  reference. 

Fifth.  Your  petitioner,  therefore,  avers  that  the  ruling  and 
decision  of  the  said  referee  allowing  said  claim  was  error,  and 
that  no  order  should  have  been  made  by  said  referee  allowing 


PROCEEDINGS   BEFORE  THE   JUDGE.  1125 

said  claim,  and  said  referee  should  have  made  an  order  disal- 
lowing said  claim,  and  holding  said  chattel  mortgage  void  for 
the  reasons  set  forth  in  the  petitioner's  objection  thereto. 

Sixth.  That  your  petitioner  desires  a  review  by  the  Judge  of 
this  court  of  the  order  made  by  said  referee,  and  filed  this 
petition  therefor;  and  he  therefore  prays  that  the  error  com- 
plained of  and  the  questions  of  law  and  fact  raised  before  the 
said  referee  and  decided  by  him  may  be  certified  by  the  said 
referee  to  the  Hon.  G.  R.,  District  Judge ;  that  he  may  review 
the  order  heretofore  made  and  make  and  enter  an  order  or  di- 
rect the  referee  to  make  and  enter  an  order  holding  and  decid- 
ing the  said  chattel  motgage  to  be  illegal  fraudulent  and  void 
and  that  the  same  constituted  no  lien  upon  the  property  of  said 
A.  B.  purporting  to  be  covered  thereby,  and  no  lien  against 
the  assets  in  said  estate  in  the  hands  of  your  petitioner,  and 
disallowing  said  claim  of  said  The  S.  T.  Company. 

And  yo«.ir  petitioner  ever  prays.  J.  M., 

R.  X.,  Trustee, 

Attorney  for  Petitioner. 

United  States  of  America,  District  of  — —,   Division, 

County  of  ,  ss. : 

I.  J.  Al.,  the  petitioner  mentioned  and  described  in  the 
foregoing  petition,  do  hereby  make  a  solemn  oath  that  the 
statements  therein  are  true  according  to  the  best  of  my  knowl- 
edge, information  and  belief.  J.  M., 

Petitioner. 

Subscribed  and  sworn  to  before  me  this day  of , 

A.  D.,  .  J.  N., 

Notary  Public,  County, . 


(l)  The  action  of  the  referee  is  always  subject  to  review  by  the  judge  of 
the  court  of  bankruptcy.  Gen.  Ord,  27,  B,  A.  1898,  sec.  38a.  In  any 
proceeding  before  a  referee,  a  party  dissatisfied  with  any  order  of  the 
referee  made  in  the  course  of  such  proceeding,  may  take  the  opinion 
of  the  judge  in  respect  to  such  matter.  The  practice  is  provided  for  by 
General  Order  27,  and  should  be  followed.  In  re  Scott,  99  Fed.  Rep. 
404,  3  Am.  B.  R.  625,  2  N.  B.  N.  440. 


1126  BANKRUPTCY. 

Aficr  tlie  referee  has  made  the  order  sought  to  be  reviewed  (in  re 
Russell,  105  Fed.  Rep.  501,  5  Am.  B.  R.  566;  in  re  Scott,  99  Fed.  Rep. 
404.  3  Aui.  B.  R.  625,  2  N.  B.  N.  440;  in  re  Schiller,  96  Fed.  Rep.  400, 
2  Am.  B.  R.  704;  /;/  re  Smith,  93  Fed.  Rep.  791)  and  not  before  {in  re 
Smith  93  Fed.  Rep.  791),  the  party  dissatisfied  must  file  with  the  referee 
a  petition  that  the  order  be  reviewed  bj'  the  judge  in  which  must  be 
set  out  the  error  complained  of.  In  re  Russell,  105  Fed.  Rep.  501,  5 
Am.  B.  R.  566;  in  re  Scott,  99  Fed.  Rep.  404,  3  Am.  B.  R.  625,  2  N.  B. 
N.  440;  in  re  Schiller.  96  Fed.  Rep.  400,  2  Am.  B.  R,  704;  in  re  Smith, 
93  Fed.  Rep.  791. 

The  limitation  of  ten  days  in  which  appeals  must  be  taken  to  the 
Circuit  Court  of  Appeals  from  the  District  Court  has  no  application,  but 
the  petition  for  review  must  be  filed  within  a  reasonable  time,  which 
may  be  fixed  by  the  local  rule  of  court.     (As  to  such  petitions  to  C.  C. 

A.  which  appear  to  be  analagous  see  in  re   N.  Y.   Economical   Printing 
Co.   (C.  C.  A.,  2nd  Cir.),   106  Fed.  Rep.  839,  5  Am.  B.  R.  697,  3  N.  B. 

N.  5.39). 

The  district  judge  may  refuse  to  act  without  such  petition  and  should 
not  consider  exceptions  not  therein  contained.  In  re  Russell,  105  Fed. 
Rep.  501,  5  Am.  B.  R.  566;  in  re  Scott,  99  Fed.  Rep.  404,  3  Am.  B.  R. 
625,  2  N.  B.  N.  440;  in  re  Schiller,  96  Fed.  Rep.  400,  2  Am.  B.  R.  704; 
in  re  Smith,  93  Fed.  Rep.  791.  The  referee  must  forthwith  certify  to  the 
judge  the  question  presented,  a  summary  of  the  evidence  relating  thereto, 
and  the  finding  and  order  of  the  referee  thereon.  Gen.  Ord.  27.  The 
certificate  will  be  signed  by  the  referee  and  transmitted  by  him  to  the 
judge.     B.  A.  1898,  sec.  39a,  clauses  5  and  9. 

The  "  summary  of  the  evidence "  mentioned  in  the  order  may  be  the 
evidence  taken  stenographically,  or  the  substance  thereof  as  agreed  upon 
by  the  parties.  B.  A.  1898,  sec.  39a,  clauses  5  and  9.  A  summary  and 
not  the  complete  evidence  should  be  certified  wherever  the  rules  of  jus- 
tice will  permit.  Cunningham  vs.  German  Nat.  Bank  (C.  C.  A.,  6th  Cir.), 
103  Fed.  Rep.  932.  Where  this  is  done  the  district  court  may  require 
the  original  evidence  or  parts  thereof  certified  to  it.  Cunningham  vs. 
German- Nat.  Bank   (C.  C.  A.,  6th  Cir.),  103  Fed.  Rep.  932. 

If  the  question  be  improperly  certified  the  court  may  refuse  to  give 
an  opinion.  In  re  Smith,  93  Fed.  Rep.  791.  If  the  judge  is  not  satis- 
fied with  the  evidence  certified  by  the  referee  he  may  allow  further 
evidence  to  be  taken  before  him.  In  re  Stotts,  93  Fed.  Rep.  438,  I  Am.  B. 
R.  641,  or  refer  the  cause  to  the  referee  for  further  proofs.  He  will 
not  set  aside  the  findings  of  fact  of  a  referee  unless  the  same  are  man- 
ifestly contrary  to  the  weight  of  the  evidence.     In  re  Covington,  6  Am. 

B.  R.  374.  But  when  a  referee  finds  that  a  bankrupt  has  property  in  his 
possession  or  control  which  he  conceals  from  the  trustee,  and  such  find- 
ing is  made  the  basis  of  an  order  of  delivery,  which  is  enforceable  by  im- 
prisonment for  contempt  in  disobeying  it,  then  the  judge  in  reviewing 
the  finding  must  be  satisfied  that  the  evidence  establishes  the  fact  beyond 


PROCEEDINGS    BEFOEE    THE   JUDGE.  1127 

a  ptfasonable  doubt.     In  re  Mayer,  98  Fed.  Rep.  839,  3  Am.  B.  R.  533 ; 
in  re  McCormick,  97  Fed.  Rep.  566,  3  Am.  B.  R.  340,  2  N.  B.  N.  104. 

The  judge  will  probably  hear  arguments  of  counsel  on  the  point,  and 
will  give  his  opinion  on  the  point.  If  the  order  of  the  referee  is  modified 
or  reversed  he  may  direct  the  proper  order  to  be  entered  on  the  journal  of 
the  court. 


No.  131. 

Petition  by  an  Assignee  to  Review  an  Order  of  a  Referee  on  a 
Rule  to  Pay  Over  Money  to  Receiver  in  Bankruptcy  (i). 

In  the  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of 
A.  B.  &  Co.,  &c., 

•z'.s-. 
C.  D.  &  Co.,  D.  G.  and  C.  D. 

Bankrupts. 


In  Bankruptcy. 


Respectfully  represents  the  petitioner.  L,  C,  that  during 
the  course  of  the  proceedings  herein,  before  J.  B.,  one  of  the 
Referees  in  Bankruptcy  of  this  court,  a  rule  was  issued  against 
the  petitioner  to  show  cause  why  he  should  not  be  compelled  to 

pay  to  the  receiver  the  sum  of  $ ;  also  another  rule  was 

issued  against  tlie  petitioner  to  show  cause  why  he  should  not 

pay  the  further  sum  of  $ by  him  paid  to  M.  A.,  D.  A.  & 

J.  G..  for  services  as  counsel  for  him  in  his  capacity  as  assignee 
under  the  general  assignment  under  the  State  law;  that  your 
petitioner  filed  responses  to  both  of  said  rules  which  re- 
sponses having  come  on  to  be  heard  were  adjudged  by  the 
said  referee  insufficient  and  said  rules  were  made  absolute. 
Your  petitioner  shows  that  said  referee  erred  to  his  prejudice 
in  issuing  both  of  said  rules,  also  in  adjudging  both  of  said 
responses  insufficient,  also  in  making  both  of  said  rules  abso- 
lute. 

Wherefore,  your  petitioner  prays  that  the  orders  of  said 


1128  KANKKUPTCY. 

referoe  above  S(^i"  fcrtli   may   l)o  rcvic^wcd  by   llic  Honorable 

Jiulgo  of  this  court.  '-"  ^^-j 

By  liis  Ooiinsc'l,  .\.  &  X. 

(1)  As  to  power  of  court  to  review  orders  of  referees  and  tlie  practice  in 
such  cases,  see  Gon.  Ord.  27;  Mu»41er  r^.  Nugent,  1S4  IT.  S.  1;  Cunning- 
ham t>-.  Bank,  103  Fed.  Rep.  9:32;  Courier  Journal  Job  Printing  Co.  vs. 
Brewing  Co.,  101  Fed.  Rep.  699;  Loveland  Bank.,  sec.  32a. 
See  also  note  to  No.  130. 


No.  132. 
Petition  to  Review  Order  of  Referee  Disallowing  Claim  (i). 

[Caption.] 
To  the  Honorable  A.  C.  Judge  of  the  District  Court  of  the 
United  States  for  the District  of . 

The  Petition  of  The  D.  M.  Grocery  Company,  a  corporation 

under  the  laws  of ,  one  of  the  creditors  of  said  bankrupt, 

respectfully  represents  that  on  the  day  of  1901, 

manifest  error  to  the  prejudice  of  complainant,  was  made  by 
the  referee  in  said  matter  in  a  finding  and  order  disallowing 
and  expunging  the  claim  of  said  corporation  against  said  bank- 
rupt from  the  list  of  allowed  claims  upon  the  trustee's  record 
in  said  case ;  and  in  ordering  said  corporation  to  pay  as  pref- 
erences received  from  said  bankrupt  the  sum  of  $ .     The 

errors  complained  of  are : 

First.  That  the  evidence  adduced  before  said  referee  and 
set  out  in  the  agreed  statement  herewith  submitted,  shows  that 
no  preference  in  excess  of  subsequent  credits  given,  were  re- 
ceived by  said  corporation. 

Second.  Said  referee  erred  in  the  method  adopted  for  calcu- 
lating preferences  claimed  to  be  within  four  months  of  bank- 
ruptcy in  said  case. 

Third.  Said  referee  erred  in  finding  from  the  evidence  that 
the  dates  of  payment  on  the  open  account  of  said  bankrupt 
with  said  corporation,  were  those  dates  shown  by  the  books 


PROCEEDINGS    BEFORE   THE   JUDGE.  1129 

of  the   bankers   of   said   bankrupt,    Messrs.    R.,    B.    &   Com- 
pany. 

Fourth.  Said  referee  erred  in  finding  that  any  payments 
made  to  said  corporation  by  said  bankrupt  were  preferences  for 
any  amount. 

Fifth.   Said  referee  erred   in   ordering  said   corporation  to 

pay  the  sum  of  $ .  or  any  sum  at  all,  within  five  days  from 

said  date. 

Sixth.  Said  referee  erred  in  his  conclusions  of  law  from 
the  evidence  offered  at  said  hearing. 

Wherefore  the  D.  M.  Grocery  Company  prays  that  it  may 
be  decreed  by  the  court  to  have  its  claim  against  the  said  bank- 
rupt estate  allowed  for  the  full  amount  thereof,  and  that  it  ne 
restored  to  all  things  lost  by  reason  of  the  finding  and  order  of 
the  referee  in  said  matter. 

The  D.  M.  Grocery  Company, 

By  R.  X., 
Its  Attorney. 

[Verification.^^ 

(i)   See  note  to  No.  130. 


No.  133. 
Petition  to  Review  Order  of  Referee  to  Pay  to  Trustee  Money 

of  Bankrupt    (i). 

The  District  Court  of  the  United  States  for  the District 

of .     In  Bankruptcy. 

In  re 
A.  B.  &  Co.  et  al. 

vs. 
E.  T. 

Comes  W.  T.,  by  counsel,  and  files  herewith  his  petition  for 

review  of  the  order  of  the  referee  entered  herein  on ,  and 

says  that  said  referee  erred  in  ordering  and  adjudging  as  in- 
sufficient his  response  to  the  rule  filed  herein  on  ;  that 

said  referee  erred  in  adjudging  that  there  came  to  the  hands 


Petition  for  Review. 


IK^O  BANKRUPTCY. 

of  said  W.  T.  as  the  agent  of  the  bankrupt,  on ,  the  sum 

of  $ ,  being  the  net  proceeds  reahzed  from  the  mortgage 

executed  by  the  bankrupt  upon  his  house  and  lot  in  the  City  of 

;  that  said  referee  erred  in  adjudging  that  there  came  to 

the  hands  of  said  W.  T..  as  the  agent  of  the  bankrupt  on , 


the  further  sum  of  $ .  being  the  net  proceeds  from  the  sale 

of  the  merchandise  sold  to  H.  S. ;  that  said  referee  erred  in  ad- 
judging that  said  sums  arc  the  property  of  the  bankrupt  E.  T., 
and  belong  to  E.  M.,  trustee  in  bankruptcy  herein  of  said  es- 
tate; that  said  referee  erred  in  ordering  that  said  rule  be  made 
absolute  to  the  amount  of  said  two  sums  aggregating  the  sum 

of  $ ;  that  said  referee  erred  in  ordering  and  requiring  said 

W.  T.  to  pay  to  E.  M.,  trustee  in  bankruptcy  in  this  cause  on 

or  before  9:30  o'clock  on  .  the  said  aggregate  sum  of 

$ ,  and  said  referee  erred  in  entering  said  order  on ,  a 

copy  of  which  is  filed  herewith,  that  said  order  is  erroneous 
and  void,  and  said  referee  had  no  jurisdiction  to  enter  same. 
Wherefore,  said  \\'.  T.  prays  that  said  order  entered  herein 

by  the  referee  on  ,  be  reviewed  by  the  Honorable  Judge 

of  the  District  Court  of  the  United  States  for  the Dis- 
trict of ,  and  that  said  order  be  adjudged  erroneous  and 

void. 

X.  &  X., 

Attorneys  for  W.  T. 

(i)   Taken  from  the  record  in  Mueller  vs.  Nugent,  184   U.  S.  I. 
See  note  to  No.  130. 


No.  134. 
Petition  for  Review  Order  on  Claims   (i). 

[Caption.^ 

And  now  comes  the  L.  Trust  Company,  trustee  in  bankrupt- 
cy, of  the  bankrupts  in  the  above  styled  proceeding,  by  R.  Y., 
Esq.,  of  counsel,  and  respectfully  represents  to  the  court  that 
said  trustee  and  the  lawful  creditors  of  the  estate  of  said  bank- 
rupts whom  said  trustee  represents,  are  aggrieved  by  the  find- 


PROCEEDINGS   BEFORE   THE   JUDGE.  1131 

ing  of  the  Hon.  A.  M.,  referee  herein,  with  reference  to  the 
following  matters,  to  wit : 

That  the  referee  in  his  finding  and  decision,  upon  the  excep- 
tions of  said  trustee  and  of  the  creditors  to  the  claim  of  D.  L. 
&  Son,  erred  to  the  prejudice  of  these  petitioners,  the  said  trus- 
tee and  the  lawful  creditors  of  said  bankrupts. 

First.  In  not  finding  that  the  sum  of  $ had  been  paid  to 

said  D.  L.  &  Son  on  their  claim  filed  here,  by  E,  F.  &  Co.,  en- 
dorsers of  two  $ notes  included  in  and  part  of  said  claim 

of  D.  L.  &  Son. 

Second.  In  not  finding  that  said  claim  of  D.  L.  &  Son  had 
been  paid  in  full,  as  a  preferential  payment,  out  of  the  proceeds 
of  the  fraudulent  sale  of  the  remainder  of  the  stock,  fixtures, 
etc.,  of  the  bankrupt  firm,  to  E.  F.  of  said  firm  of  E.  F.  &  Co., 
as  provided  for  m  the  written  agreement  between  the  three 
members  of  the  bankrupt  firm,  read  in  evidence,  and  in  finding 
that  said  preferential  payment  was  only  one-half  of  said  claim 
of  D.  L.  &  Son,  when  in  fact  said  claim  was  paid  in  full. 

Third.  In  finding  that  only  one-half  of  the  claim  of  E.  F. 
k  Co.  was  paid  as  a  i)referential  payment  out  of  the  profits  of 
said  fraudulent  sale  to  E.  F..  when  in  fact  said  claim  was  paid 
in  full  as  shown  conclusively  by  the  evidence  in  said  proceed- 
ing. 

Fourth.  Because  said  referee  erred  in  not  disallowing  each 
of  said  claims  of  D.  L.  &  Son  and  E.  F.  &  Co. 

Wherefore  said  petitioners  ])ray  this  honorable  court  to  re- 
view the  findings  of  the  said  receiver  with  reference  to  the 
matters  hereinbefore  set  forth,  and  that  the  referee  herein 
certify  the  said  (juestions  to  the  court  for  that  purpose  and  that 
he  send  up  with  said  certificate  all  of  the  testimony  taken  on 
said  issues  of  said  bankrupts'  estate,  etc. 

The  L.  Trust  Company, 
Trustee  in  Bankruptcy. 
R.  Y., 

(I)  See  note  to  No.  130.  Attorney. 


1132  BANKRUPTCY. 

No.  135. 
Petition  to   Review  Order  Relative  to   Exemptions   (i). 

lCaptiiui.~\ 

Now  comes  E,  B.  and  petitions  to  tlie  Honorable  A.  M., 
Referee,   for  any  order  certifying  to  the  Honorable   G.   R., 

Judge  of  the  District  Court  of  the  United  States  for  the 

District  of ,  for  review  of  all  matters  pertaining  in  and 

to  the  order  entered  herein  on  the  day  of ,  A.  D. 

,  relating  to  and  finding  againrt  the  claims  of  said  E.  B., 

as  widow  of  said  A.  B.,  bankrupt,  and  respectfully  represents 
that  the  errors  complained  of  are  as  follows : 

The  court  erred  in  not  making  an  order,  under  Section  8  of 
the  Bankruptcy  Act : 

First.  That  the  trustee  paid  to  said  E.  B.  the  exemptions 
heretofore  demanded  by  her  husband  during  his  lifetime. 

Second.  That  the  trustee  permit  her  to  remain  in  her  hus- 
band's mansion  house  and  in  possession  of  his  household  prop- 
erty for  a  period  of  one  year,  unless  dower  is  sooner  assigned 
her  in  said  mansion  house. 

Third.  That  the  trustee  pay  to  her  from  the  assets  of  ^aid 
estate  the  allowance  provided  for  her  under  Sections  6040  and 

6041  of  the  Revised  Statutes  of ,  and  heretofore  fixed  by 

the  Probate  Court  of County, ,  at  $ . 

Fourth.  That  said  trustee  permit  her  to  retain  as  exempt 
such  part  of  the  assets  of  said  estate  as  are  exempt  under  Sec- 
tion 6038  of  the  Revised  Statutes  of . 

Fifth.  That  said  trustee  allow  and  pay  to  her  such  other  ex- 
emptions as  she  is  entitled  to  receive  under  the  Revised  Statutes 
of  ^— .  E.  B., 

By  R.  Y.,  her  Attorney. 

(i)  See  note  to  No.  Ui). 


PROCEEDINGS  BEFORE  THE  JUDGE.  1133 

No.  136. 

Certificate  by  Referee  to  Judge  (i). 

(Official  Form  No.  56.) 

In  the  District  Court  of  the  United  States  for  the  Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


I,  ,  one  of  the  referees  of  said  court  in  bankruptcy, 

do  hereby  certify  that  in  the  course  of  the  proceedings  in 
said  cause  before  me  the  following  question  arose  pertinent  to 
the  said  proceedings :  [Here  state  the  question,  a  summary  of 
the  evidence  relating  thereto,  and  the  finding  and  order  of 
the  referee  thereon.~\ 

And  the  said  question  is  certified  to  the  judge  for  his  opinion 
thereon. 

Dated  at .  the day  of  — — ,  A.  D.  18 — . 


Referee  in  Bankruptcy, 
(i)    See  note  to  No.  130. 


No.  137. 
Certificate  of  Referee  to  Judge  (i). 

At  ,  in  said  district,  rn  the  day  of  v,  A.  D, 

— ,  before  A.  M.,  Referee  in  Bankruptcy. 


I,  A.  M..  one  of  the  referees  of  said  court  in  bankruptcy, 
do  hereby  certify  that  in  the  co'^rse  of  the  proceedings  in  said 
cause  before  me  the  following  question  arose  pertinent  to  said 
proceedings : 

The  Third  National  Bank,  of  — .  filed  a  claim  evidenced 


1134  BANKRUPTCr. 

by  one  promissory  note  for  $ and  also  another  promissory 

note  for  $ .  and  asserted  a  claim  to  be  subrogated  to  the 

rights  of  the  mortgagees  under  three  mortgages,  to  wit,  one 
dated  April  15th,  1892,  another  dated  February  19th,  1894, 
anil  another  dated  January  12th,  1897.  Prior  to  the  execution 
of  an}'  of  said  mortgages  the  bankrupt  had  also  executed  to  the 

S.  Trust  Company  a  mortgage  to  secure  an  issue  of  $ 

of  bonds,  of  which  $ — —  were  negotiated  and  have  ever  since 
remained  outstanding.  Under  the  provisions  of  the  charter  of 
the  bankrupt  I  find  that  said  bankrupt  was  limited  in  its  power 

to  execute  a  mortgage  to  the  extent  of  $ .     I  also  find  that 

the  Third  National  Bank,  through  its  managing  officer,  E.  C, 
cashier  before  making  any  of  said  loans  had  knowledge  of 
the  existence  of  said  mortgage  to  the  S.  Trust  Company, 
though  it  is  testified  by  E.  C,  and  not  denied,  that  about  the 
time  the  Third  National  Bank  made  its  loans  he  was  informed 

that  the  said  mortgage  to  the  S.  Trust  Company  was  for  $ . 

As  a  matter  of  law  I  find  that  the  information  which  said  E. 
C.  had  of  the  existence  of  said  mortgage  was  sufficient  to 
put  him  upon  inquiry  as  to  the  amount  thereof. 

I  further  find  that  the  notes  of  $ and  $ filed  l)y 

said  Third  National  Bank  are  renewals  of  various  loans  made 
by  said  Third  National  Bank  to  the  bankrupt,  beginning  April 
1 6th,  1892. 

The  mortgage  to  the  S.  Trust  Company  outstanding  amount- 
ed to  $49,000,  and  I  have  allowed  a  lien  to  the  Third  National 
Bank  by  way  of  subrogation  to  the  rights  of  the  mortgagees  in 
the  three  mortgages  dated  April   15th,   1892,   February  19th, 

1894,  and  January  T2th,  1897.  to  the  extent  of  $ ,  making 

together  the  sum  of  $ ,  the  limit  prescribed  l)y  the  charter 

of  the   bankrupt.     The  balance   of  the   claim  of  the  Third 

National  Bank,  to  w^it,  $ ,   I  have  allowed  as  a  general 

claim. 

The  Third  National  Bank  has  filed  a  petition  for  review  of 
the  foregoing  ruling. 


PROCEEDINGS   BEFORE   THE   JUDGE.  1135 

And  the  said  question  is  certified  to  the  Judge  for  his  opinion 
thereon. 

Dated  at the day  of ,  A.  D. . 

A.  M., 
Referee  in  Bankruptcy. 
I  herewith  transmit  the  testimony  pertaining  to  the  claim 
of  said  Third  National  Bank;  also  the  proof  of  claim  of  said 
bank  with  the  mortgages  relied  on  by  it  attached  thereto,  and 
also  a  memorandum  of  the  reasons  for  my  finding. 

A.  M., 
Referee. 

(i)   See  note  to  No.  130. 


No.  138. 

Certificate  of  Referee  to  Judge  on  Allowance  of  Claim   (i). 

[Caption.^ 

I,  A.  M.,  one  of  the  referees  of  said  court  in  bankruptcy,  do 
hereby  certify  that  in  the  course  of  the  proceedings  in  said 
cause  before  me  the  question  came  up  as  to  the  allowance 
of  the  claim  of  the  S.  Trust  Company,  a  corporation  organized 

under  the  laws  of  the  state  of as  a  preferred  claim  against 

said  estate,  which  said  claim  has  been  allowed,  and  that  on  ac- 
count of  the  allowance  thereof  a  petition  to  the  court  has  been 
made  on  behalf  of  the  trustee  asking  for  a  review  of  the 
order  of  said  allowance  and  the  question  of  the  allowance  of 
said  claim  is  certified  to  the  Judge  for  his  opinion  thereon. 

I  return  herewith  as  the  record  the  following  items : 

First.  Proof  of  claim  of  S.  Trust  Company  filed . 

Second.  Obiections  as  to  the  allowance  of  S3u\  claim  made' 
on  behalf  of  the  trustee,  filed . 

Third.  A    further  itemized   statement   of  said   claim,    filed 


I'oiirlh.   l^epositions    taken    in    favor   of   said    claim,     filed 


Fifth.  Depositions  of  E.  F.  in  behalf  of  said  claim. 


I -[36  BANKRUPTCY. 

Sixth.  Testimony  introduced  on  the  part  of  the  estate  in  said 

chiini. 

I  also  return  herewith  an  order  made  In  respect  to  said 
claim  and  the  ])etition  for  a  review  of  said  order,  all  being 
made  a  part  thereof. 

Dated  at the day  of . 

A.  M, 
Referee. 
(i)   See  note  to  No.  130. 


No.  139. 
Certificate  of  Referee  to  Judge  on  Denying  Lien  on  Realty  (i). 

ICaptioii.^ 

I,  A.  M.,  one  of  the  Referees  in  Bankrtiptcy  of  said  court, 
do  hereby  certify  that  in  the  course  of  the  proceedings  in 
said  cause  before  me  the  following  question  arose  pertinent  to 
said  proceedings : 

The  First  National  Bank  of  filed  a  note  for  $ 

claiming  a  lien  upon  the  plant  and  realty  of  the  bankrupt  by 
way  of  subrogation  to  the  rights  of  A.  S.,  under  two  mort- 
gages, dated  April  15th,  1892,  and  February  19th,  1894,  exe- 
cuted by  the  bankrupt  to  said  A.  S.,  and  others. 

I  found  that  said  bank  is  not  entitled  to  the  lien  claimed,  and 
a  petition  for  review  has  this  day  been  filed.  In  the  order 
complained  of  I  also  passed  upon  claims  of  E.  F.  and  Third 
National  Bank.  A  petition  for  review  has  heretofore  been  filed 
by  the  Third  National  Bank,  and  the  mortgages  in  question 
have  been  sent  to  the  court  with  my  reasons  for  the  whole 
order. 

And  the  said  question  raised  by  the  First  National  Bank  is 
also  certified  to  the  Judge  for  his  opinion  thereon. 

Dated  at ,  the day  of ,  A.  D. . 

A.  M., 
Referee  in  Bankruptcy. 

(i)  See  note  to  No.  130. 


PROCEEDINGS  BEFORE  THE  JUDGE.  1137 

No.  140. 
Certificate  of  Referee  on  Finding  Creditor  Held  3 

Preference  (i). 

[Caption.'] 

1,  A.  M.,  one  of  the  referees  of  said  court  in  bankritptcy, 
do  hereby  certify  that  in  the  course  of  the  proceedings  in  said 
cause,  before  me  the  following  questions  arose  pertinent  to 
the  said  proceedings : 

E.  F,  &  Co.  filed  before  me  proof  of  debt  for  $ ,  and 

also  another  claim  verified  by  the  assignee  of  E.  F.  &  Co.  for 
$ . 

D.  L.  §i  Son  filed  a  claim  for  $ ,  and  another  claim  for 

$ ,  which  includes  and  is  a  duplication  of  said  claim  of 

$ . 

The  trustee,  R.  B.,  and  S.  G.,  filed  exceptions  to  said  claims, 
averring  that  the  holders  thereof  had  received  preferences. 

I  found  that  E.  F.  &  Co.  and  D.  L.  &  Son  had  received 
preferences  to  the  amount  of  fifty  per  cent,  of  their  claims  and 
ordered  that  they  elect  whether  or  not  they  will  surrender  the 
preferences  received  by  them  or  have  the  claims  filed  as  afore- 
said disallowed.  To  that  order  and  finding  said  E.  F.  &  Co. 
and  D.  L.  &  Son  have  filed  petitions  for  review,  and  the  trus- 
tee also  filed  a  petition  for  review. 

Said  claims,  also  the  exceptions  aforesaid,  also  the  order  and 
finding  thereon,  also  said  three  petitions  for  review,  are  all 
filed  herewith  and  made  part  hereof,  marked  exhibits  i,  2,  3, 
4,  5,  6,  7,  8  and  9. 

A  summary  of  the  evidence  taken  before  me  and  relating 
to  the  question  involved  is  also  attached  hereto  and  marked  ex- 
hibit "Summary  of  Evidence."  An  opinion  giving  my  reasons 
for  the  finding  and  order  aforesaid  is  also  made  part  of  this 
certificate,  marked  exhibit  "Opinion  of  Referee." 

And  the  said  ((uestions  arc  certified  to  the  Judge  for  his 
opinion  thereon. 

Dated  at ,  this day  of ,  A.  D. . 

A.  M.,    Referee  in  Bankruptcy. 

(i)   See  note  to  No.  1-0. 


1138  BANKRUPTCY. 

No.  141. 
Motion  to  Correct  Journal  Entry. 

Now  comes  the  C.  D.  Company,  a  creditor  of  said  bankrupt, 
and  respectfully  represents  that  in  the  matter  heard  by  the 
court  on  the  14th  day  of  February,  1902,  on  certification  from 
the  referee  disallowing  and  expunging  the  claim  of  said  credi- 
tor, the  written  finding  and  order  of  the  court  in  said  proceed- 
ings was  filed  in  said  court  and  made  part  of  its  records  on  the 
6th  day  of  March,  1902,  at  8  o'clock  a.  m. ;  that  a  journal  entry 
thereof  was  filed  by  said  referee  in  said  court  on  the  28th  day 
of  March,  1902,  and  by  the  clerk  was  made  part  of  the  records 
as  of  said  date,  to  wit;  March  28,  1902, 

Wherefore,  said  creditor  prays  the  court  for  an  order  cor- 
recting the  record  in  said  matter,  and  directing  the  clerk  to 
make  the  record  of  said  entry  as  of  the  date  March  6th  in- 
stead  of  the  date  March  28th,  1902. 

The  C.  D.  Company, 
By  R.  Y.,  Its  Attorney 


No.  142. 
Order  Confirming  Order  of  Referee. 

In  the  District  Court  of  the  United  States 

For  the District  of . 

A.  B., 

vs. 
C.  D.  &  Co., 

This  cause  coming  on  to  be  heard  on  the  petition  of  L.  C,  fo  r 
review  of  the  order  of  court  entered  herein  by  J.  B.,  one  of  th^ 
referees  of  this  court,  requiring  L.  C.  to  pay  over  to  the  E.  F. 
Trust  Company,  Trustee  in  Bankruptcy  herein,  the  sums  (>i 

$ and  $ and  the  court  being  fully  advised,  delivered 

a  written  opinion  which  was  filed  herein,  and  on day  of 

,  and  in  pursuance  of  said  written  opinion,  it  is  consid- 
ered ordered  and  decreed  by  the  court  that  said  order  of  the 


PROCEEDINGS   BEFORE   THK    JUDGE.  1139 

referee  is  hereby  confirmed  and  the  petition  for  review  filed  by- 
said  L.  C.  on  the  day  of is  dismissed  and  it  is  for 

this  adjudged,  ordered  and  decreed  by  the  court  that  said  L.  C. 
pay  to  said  E.  F.  Trust  Company,  trustee,  the  said  sums  of 
$ and  $ on  or  before day  of . 


No.  143. 
Order  Reversing  Order  of  Referee  Disallowing  Claiii 

[n  the  District  Court  of  the  United  States 
For  the District  of . 

In  the  matter  of  F.  H.. 
doino-  business  as  F. 


*& 


No. 


H.  &  Son,  Bankrupt,  [In  Bankruptcy. 
Division. 

This  day  this  cause  came  on  for  hearing  on  the  petition  of 
The  D.  M.  Grocery  Company  for  review  of  the  decision  of 
the  Referee  in  Bankruptcy  disallovving  and  expunging  the 
claim  of  said  The  D.  M.  Grocery  Company,  the  certificate  of 
the  referee  as  to  the  questions  presented  and  summary  of  the 
evidence  relating  thereto,  and  the  finding  and  order  of  the 
referee  thereon,  was  argued  by  counsel  and  submitted  to  the 
court  and  on  consideration  thereof  the  couit  find  that  the  de- 
cision of  the  referee  in  refusing  to  allow  and  in  expunging 
the  claim  of  said  The  D.  M.  Grocery  Company  was  erroneous, 
and  claim  of  said  The  D.  M.  Grocery  Company,  should  have 
been  allowed,  as  proved  by  it,  as  a  valid  claim  in  the  sum  of 

dollars.     It  is,  therefore,  ordered,  adjudged  and  decreed 

that  the  action  of  the  Referee  in  Bankruptcy  in  disallowing  said 
claim  be  and  the  same  is  hereby  reversed  and  this  proceeding 
is  hereby  remanded  with  directions  to  the  referee  to  allow  the 

claim  of  said  The  D.  M.  Grocery  Company,  in  the  sum  of 

($ )  dollars,  to  which  finding,  order,  judginent  and  decree, 

B.  P.,  Trustee  in  Bankruptcy  of  F.  H.,  doing  business  as  F.  H. 


1140  BANKRUPTCY. 

&  Son,  at  the  time  excepted,  and  gave  notice  of  his  intention  to 

appeal  this  matter  to  the  Circuit  Court  of  Appeals  for  the 

Circuit. 


No.  144. 

Decree    Confirming    Order    of    Referee    with    Reference    to 

Election  of  Trustee 

[Caption 

This  matter  came  on  to  be  heard  upon  the  petition  to  review 
the  findings  and  decision  of  the  referee  in  the  matter  of  the 
election  of  a  trustee;  upon  consideration  whereof,  the  court  ap- 
proves and  confirms  the  fLndings  of  the  referee  in  said  behalf. 


No.  14E. 

Order  Marshalling  Liens. 

[Caption.l 

This  day  this  cause  coming  on  to  be  heard  upon  the  petitions 
ior  review  filed  herein  by  the  Third  National  Bank,  the  First 
National  Bank  and  E.  F.,  asking  a  review  of  the  orders  of  the 
referee  herein,  upon  the  allowance  of  their  respective  claims 
as  preferred,  and  counsel  for  said  parties  having  been  heard, 
and  the  court  being  sufficiently  advised,  it  is  therefore  ordered 
and  adjudged  that  the  finding  of  the  referee  herein  be,  and 
the  same  is  hereby  disapproved  in  so  far  as  same  denied  to  E. 
F.,  a  lien  upon  the  property  of  the  bankrupt  for  her  said  debt, 
and  it  is  now  ordered  and  adjudged  that  said  E.  F.  has  a  prior 
lien  for  $ with  interest  thereon  from  the  date  of  adjudi- 
cation herein  until  paid  upon  the  property  of  the  bankrupt  de- 
scribed in  the  mortgage  of  March  9th,  1892,  superior  to  the 
Third  National  Bank,  but  inferior  to  the  claim  of  the  Colum- 
bia Finance  &  Trust  Company,  trustee,  for  the  first  mortgage 
bondholders. 

It  is  also  ordered  and  adjudged  that  the  finding  of  the  referee 
upon  the  claim  of  the  Third  National  Bank  is  erroneou?,  and 


PROCEEDINGS  BEFORE  THE  JUDGE.  1141 

is  set  aside  to  the  extent  that  it  gave  the  Third  National  Bank  a 
lien  under  and  by  virtue  of  the  mortgages  of  April  15th,  1892, 
February  19th,  1894,  and  January  12th,  1897,  for  the  sum  of 

($ )  dollars  and  it  is  now  ordered  and  adjudged  that 

said  Third  National  Bank  is  entitled  to  and  has  a  lien  under 
and  by  virtue  of  the  mortgage  of  April  15th,  1892,  upon  the 
property  therein  described,  for  the  sum  of ($ )  dol- 
lars with  interest  thereon  from  the  day  of  ,  until 

paid,  inferior  only  to  that  of  the  R.  Trust  Company,  trustee, 
and  E.  F.,  and  that  the  balance  of  the  claim  of  the  Third  Na- 
tional Bank  against  said  bankrupt,  to  wit,  ($ )  dol- 
lars is  hereby  allowed  as  a  general  or  unsecured  claim  only 
against  said  estate. 

The  foregoing  amounts  thus  allowed  priority  to  E,  F.  and 

the  Third  National  Bank,   together  with  the  ($ ) 

dollars  first  mortgage  debt  to  the  R.  Trust  Company,  trustee, 
will  make  up  ($ )  dollars  and  leave  nothing  to  sat- 
isfy any  preference,  which  might  otherwise  be  available  to 
the  First  National  Bank,  and  it  is  adjudged  that  the  claim  of 
said  First  National  Bank,  against  said  bankrupt's  estate  be  and 

the  same  is  allowed  for  the  sum  of  dollars  and  

cents   ($ )    as  a  general  claim  against  the  estate  of  the 

bankrupt,  and  that  said  First  National  Bank  has  no  lien  to 
secure  its  said  debt. 

It  is  also  ordered  and  adjudged  by  the  court  that  the  find- 
ing of  the  referee  herein  upon  the  limit  of  mortgaged  indebted- 
ness that  could  be  incurred  by  said  bankrupt,  placing  said  limit 

at ($ )  dollars,  and  that  all  mortgages  issued  above 

this  lirnit  of ($ )  dollars,  were  and  are  under  the  law 

of ,  void,  be  and  the  same  is  now  confirmed,  and  it  is  ad- 
judged that  all  said  mortgages  in  excess  of ($ ")  dol- 
lars, executed  by  said  bankrupt  were  and  are  .under  said  law  of 
,  void  and  of  no  effect. 


1142  BANKRUPTCY. 

No.  146. 

Decree  on  Petition  to   Review   Order  Relative   to   Widow's 

Exemptions. 

[Caption.] 

On  this day  of ,  A.  D.  ,  this  cause  came  on 

to  be  heard  on  the  petition  of  E.  B.,  widow  of  the  bankrupt  for 

review  of  an  order  heretofore  made  on  tlic day  of , 

A.  D.  ,  by  A,   M.,   referee,  on  her  petition  before  said 

referee  for  the  allowance  of  certain  exemptions  under  the  laws 

of  the  state  of ,  and  due  notice  of  said  hearing  having  been 

given  to  all  parties  in  interest,  the  court  finds  that  said  peti- 
tioner, E.  B.,  widow  of  said  bankrupt,  is  entitled  to  special  ex- 
emptions of  household  goods  and  furniture,  under  section  6038 

of  the  Revised  Statutes  of and  that  she  is  entitled  to  the 

allowances  mentioned  under  section  Nos.  6040  and  6041  of  the 
Revised  Statutes  of ,  and  is  entitled  to  remain  in  the  man- 
sion house  of  her  husband  for  the  period  of  one  year,  unless 
dower  is  sooner  assigned  her  therein. 

It  is  therefore  ordered : 

First.  That  the  trustee  permit  the  widow,  E.  B.,  to  remain 
in  the  mansion  house  for  the  period  of  one  year,  unless  dower 
is  sooner  assigned  to  her  therein. 

Second.  That  the  trustee  pay  to  her  the  allowances  made  to 
her  under  sections  6040  and  6041  of  the  Revised  Statutes  of 

,  to  wit :     The  sum  of  $ ,  provided  there  shall  be  so 

much  in  his  hands  after  paying  costs  and  any  mortgage  to 
which  the  widow  was  a  party,  out  of  funds  arising  from  the 
sale  of  mortgaged  premises,  or  any  property  belonging  to  said 
estate. 

Third.  That  the  trustee  permit  her  to  retain  such  parts  of  the 
assets  of  said  estate  as  are  mentioned  in  Section  6038  of  the 
Revised  Statutes  of . 

Fourth.  That  nothing  be  paid  or  turned  over  to  H.  S.,  execu- 
tor of  the  estate  of  A.  B..  on  account  of  exemptions  claimed  by 
said  A.  B.  in  the  proceedings  in  bankruptcy. 


PROCEEDINGS   BEFORE   THE   JUDGE.  1143 

It  is  further  ordered  that  the  decision  and  order  of  A.  M., 
referee,  be  and  is  so  far  overruled  to  the  extent  that  it  is 
inconsistent  with  the  above  findings  of  the  court. 


No.  147. 

Ancillary  Order  to  Pay  Funds  of  Bankrupt  to  a  Trustee  Ap- 
pointed by  Another  District  Court   (i). 

[Caption.^ 

Whereas,  it  appears  that  SoHs  V.  Peiser.  trading  as  Peiser  & 
Co.,  was  adjudicated  a  bankrupt  by  the  District  Court  of  the 
United  States  for  the  Southern  District  of  New  York  on  the 
9th  day  of  November,  1901,  and  that  Theodore  M.  Taft.  of 
New  York,  was  duly  appointed  receiver  of  said  bankrupt; 
and 

Whereas,  said  Theodore  M.  Taft  has  presented  a  petition  to 
this  court  asking  for  its  assistance  in  enforcing  the  orders  of 
the  District  Court  of  the  United  States  for  the  Southern  Dis- 
trict of  New  York  in  proceedings  ancillary  to  the  said  bankrupt- 
cy, and  in  aid  thereof: 

Now  therefore,  this  2d  day  of  April,  A.  D.  1902,  on  hearing 
of  the  said  petition,  and  the  answer  of  the  Union  Trust  Com- 
pany of  Philadelphia  and  W.  J.  Clark,  its  Treasurer,  as  filed 
thereto,  it  is 

Ordered  and  decreed  that  the  Union  Trust  Company  of 
Philadelphia  do  pay  over,  within  ten  days  from  the  date  hereof, 
to  said  Theodore  M.  Taft,  receiver  of  Solis  V.  Peiser,  trading 
as  Peiser  &  Co.,  the  above  bankrupt,  the  sum  of  $350.93,  being 
the  amount  on  deposit  with  said  the  Union  Trust  Company  to 
the  credit  of  said  Peiser  &  Co.  on  November  9,  1901,  the  date 
of  the  said  adjudication  in  bankruptcy,  together  with  any  in- 
terest on  said  deposit  as  the  same  is  allowed  by  the  said  trust 
company  from  said  date,  or  show  cause  why  said  payment 
should  not  be  made. 


1144  BANKRUPTCY. 

(i)  This  order  was  entered  in  the  District  Court  of  the  United  States 
for  the  Eastern  District  of  Pennsylvania  and  is  taken  from  in  re  Peiser,  115 
Fed.  Rep.  198. 


No.  148. 

Order  on  Rule  to   Show   Cause   Against   Bankrupt   to   Pay 
Money   to   Trustee,   Insanity   of    Bankrupt. 

District  Court  of  the  United  States, 
District  of  . 


A.  B.  Co.  &c., 
vs. 
E.  B. 


In  Bankruptcy. 


This  case  has  been  heard  upon  the  question  of  the  adoption 
of  the  referee's  recommendation  to  require  the  bankrupt  E.  B. 

to  pay  to  the  trustee  herein  the  sum  $ ,  money  reaHzed  from 

the  sale  of  the  stock  of  merchandise  and  from  the  mortgage 
described  in  the  papers,  or  to  punish  him  for  contempt  in  case 
he  fails  to  so  pay,  the  response  of  said  bankrupt  filed  thereto 
and  the  suggestion  filed  by  counsel  as  to  the  insanity  of  said 
bankrupt,  evidence  having  been  heard  by  the  court  as  to  the 
present  condition  of  mind  of  said  E.  B.,  and  the  court  being  ful- 
ly advised,  delivered  a  written  opinion  herein,  which  is  ordered 
to  be  filed,  and  pursuant  to  which  it  is  considered  by  the  court 
that  the  said  E.  B.  is  not  now  in  such  condition  of  mind  as  to 
make  him  properly  subject  to  an  order  punishing  him  for  con- 
tempt. It  is  therefore  ordered  that  said  E.  B.  be  permitted  to 
go  hence  without  day,  but  the  trustee  of  said  E.  B.,  in  bankrupt- 
cy has  leave  again  to  bring  the  subject  to  the  attention  of  the 
Referee  in  Bankruptcy,  should  development  or  change  of  condi- 
tion in  said  E.  B.'s  mind  make  it  in  his  judgment  proper. 


PROCEEDINGS   BEFORE   THE   JUDGE,  1145 

No.  149. 

Bill  in  Equity  to  Recover  a  Preference  and  for  an  Injunc- 
tion (i). 

The  Distnrt  Court  of  the  United  Statjs  for  Lhe Dis- 
trict of . 

W.  H.,  Trustee  in  Bankruptcy  of 
A.  B.  and  C.  D.,  late  part- 
ners 2»»  A.  B.  &  Co. 
vs. 
E.  F. 
To  the  Honorable  G.  R.,  Judge  of  the  District  Court  of  the 

United  States  in  and  for  the District  of . 

W.  H.,  trustee  in  bankruptcy  of  A.  B.  and  C.  D.,  co-part- 
ners as  A.  B.  &  Co.,  brings  this  his  bill  of  complaint  against 

E.  F.  of ,  a  citizen  of  the  state  of ,  residing  at 

in  said  state. 

Your  orator  complains  and  says  that  the  said  A.  B.  and 

C.  D.,  co-partners,  doing  business  at ,  in  the  state  of , 

under  the  style  of  A.  B.  &  Co.,  were  by  the  District  Court 
of  the  United  States  in  and  for  the district  of ,  ad- 
judged bankrupts  on  the day  of  ,   19 — ,  and  that 

this  plaintiff  was  duly  appointed  trustee  in  bankruptcy  of  the 
said  A.  B,  and  C.  D.,  co-partners  as  A.  B.  &  Co.,  by  the  said 

District  Court  on  the  day  of  — — ,   19 — ,  and  that  he 

duly  qualified  and  entered  upon  the  performance  of  his  duties 
as  such  trustee  and  is  still  acting  as  such  trustee. 

Your  orator  further  says  that  he  is  informed  and  believes 

that  on  or  about  the  ,day  of ,  19 — ,  said  A.  B.  and 

C.  D.,  well  knowing  at  the  time  that  said  firm  was  insolvent 
and  unable  to  pay  its  creditors  in  full  and  with  intent  to  pre- 
fer the  defendant  E.  F.  as  a  creditor  of  the  said  firm  of  A.  B. 
&  Co..  and  with  the  further  intent  to  defraud  the  other  credi- 
tors of  said  firm  and  in  violation  of  an  Act  of  Congress  to 
establish  a  uniform  system  of  bankruptcy  in  the  United  States, 
did  withdraw  from  the  funds  of  said  firm  the  sum  of  $ • 


1146  BANKRUPTCY. 

and  did  transfer  and  pay  the  same  to  the  said  E.  F.  on  the  day 
aforesaid,  and  that  he,  the  said  E.  P.,  at  that  time  had  reason 
to  be'ieve  and  to  know  that  said  firm  was  insolvent  and  that 
said  payment  to  him  was  for  the  purpose  of  preferring  him  as 
a  creditor  of  said  firm. 

Your  orator  further  complains  and  says  that  he  is  informed 
and  believes  that  said  E,  F.  is  insolvent  and  has  no  money 
or  property  in  his  own  right  and  that  unless  restrained  from 
so  doing,  will  dispose  of  said  funds  and  will  be  unable  to  pay 
over  the  same  to  this  plaintiff  and  that  said  funds  will  be  lost 
to  the  estate  of  the  said  bankrupts. 

Wherefore  your  orator  prays  the  court  to  now  grant  a 
preHminary  injunction  restraining  and  enjoining  the  said  E. 
F.  from  transferring,  paying  over  or  in  any  way  disposing  of 

all  or  any  part  of  said  $ until  further  order  of  this  court, 

and  that  he  may  be  decreed  to  hold  said  funds  in  trust  for  and 
may  be  required  to  account  for  and  pay  over  the  same  to  this 
plaintiff,  and  for  such  other  and  further  relief  as  may  be 
just  and  proper  in  the  premises. 

May  it  please  your  honors  to  grant  unto  this  plaintiff  a 
writ  of  subpoena  to  be  directed  to  the  said  E.  F.,  thereby 
commanding  him  at  a  certain  time  and  under  a  certain  penalty 
personally  to  appear  before  this  honorable  court  and  then  and 
there  full,  true,  direct  and  perfect  answer  make  [but  not  under 
oath']  to  all  and  singular  the  premises  and  further  to  stand  to 
and  perform  and  abide  such  further  order,  direction  and  decree 
therein  as  to  this  honorable  court  shall  seem  meet. 

W.  H., 
Trustee  in  Bankruptcy. 

X.  &  X., 

Attorneys  for  Plaintiff. 

\Veriticatio7i.'] 

(i)  The  District  Court  is  given  concurrent  jurisdiction  with  any  State 
Court  for  the  purpose  of  recovering  property  by  the  trustee  under  Sec. 
6ob  and  Sec.  Sye  of  the  Bankrupt  Act  of  1898.  Act  of  Feb.  3,  1903,  Sec.  8, 
amending  Sec.  23  of  the  Bankrupt  Act  of  1898. 


PROCEEDINGS   BEFORE   THE   JUDGE. 


1147 


The  suit  in  this  class  of  cases  must  be  plenary.  Louisville  Trust  Co.  vs. 
Comingor,  184  U.  S.  18 :  Marshall  vs.  Knox,  16  Wall.  556.  It  may  be 
either  a  suit  at  law  or  in  equity,  as  the  case  may  require. 


No.  150. 


Petition  for  Removal  of  Trustee  (i). 

(Official  Form  No.   52.) 

In  the  District  Court  of  the  United  States  for  the 

trict  of  . 


Dis- 


In  the  matter  of 


Bankrupt. 


-  In  Bankruptcy. 


To  the  Honorable 


Tudg-e  of  the  District  Court  for  the 


District  of 


The  petition  of -,  one  of  the  creditors  of  said  bankrupt, 

.-espectfully  represents  that  it  is  for  the  interest  of  the  estate  of 

said  bankrupt  that .  heretofore  appointed  trustee  of  said 

bankrupt's  estate,  should  be  removed  from  his  trust,  for  the 
causes  following,  to  wii :  [here  set  forth  the  partieular  cause 
or  causes  for  zvhich  such  removal  is  requested.'] 

Wherefore pray  that  notice  may  be  served  upon  said 

,  tristoe  as  aforesaid,  to  show  cause,  at  such  time  as  may 

be  fixed  by  the  court,  why  an  order  should  not  be  made  re- 
moving- him  from  said  trust. 

(i)   Gen.  Order  i^--.     Lov-r.a.idls  Bank.,  sec.  145. 


1148 


BANKRUPTCY. 


No.  151. 

Notice  of  Petition  for  Removal  of  Trustee  (i). 

(Official  Form  No.  53.) 

In  the  District  Court  of  the  United  States  for  the  — 

trict  of  . 


Dis- 


In  the  matter  of 


Bankrujit. 


At 


-,  on  the 


In  Bankruptcy. 


day  of 


-,  A.  D.  19 — . 


To 


Truste  of  the  estate  of ,  bankrupt : 

You  are  hereby  notified  to  appear  before  this  court,  at , 

on  the day  of ,  A.  D.  18 — ,  at o'clock ■ 

m.,  to  show  cause  (if  any  you  have)  why  you  should  not  be 
removed  from  your  trust  as  trustee  as  aforesaid,  according  to 

the  prayer  of  the  petition  of ,  one  of  the  creditors  of  said 

bankrupt,  filed  in  this  court  on  the day  of ,  A.  D. 

19 — ,  in  which  it  is  alleged  [here  insert  the  allegation  of  the 
petition]. 


Clerk. 


(i)   Gen.  Order   13.     Loveland's  Bank.,  sec.  145. 


No.  152. 
Order  for  Removal  of  Trustee  (i). 

(Official  Form  No.  54.) 

In  the  District  Court  of  the  United  States  for  the 

trict  of  . 


Uis- 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


Whereas, ,  of ,  did,  on  the 


day  of ,  A.  D. 


PROCEEDINGS   BEFORE   THE   JUDGE.  1149 

19 — ,  present  his  i^etition  to  this  court,  praying  that,  for  rea- 
sons therein  set  forth,  ,  tne  trustee  of  the  estate  of  said 

,  bankrupt,  might  be  removed  : 

Now,  therefore,  upon  reading  the  said  petition  of  the  said 
and  the  evidence  submitted  therewith,   and  upon  hear- 


ing counsel  on  behalf  of  said  petitioner  and  counsel  for  the 
trustee,  and  upon  the  evidence  submitted  on  behalf  of  said 
trustee. 

It  is  ordered  that  the  said be  removed  from  the  trust 

as  trustee  of  the  estate  of  said  bankrupt,  and  the  costs  of  the 

said  petitioner  incidental  to  said  petition  be  paid  by  said , 

trustee  [or,  out  of  the  estate  of  the  said ,  subject  to  prior 

charges] . 

Witness  the  Honorable  .  judge  of  the  said  court,  and 

the  seal  thereof,  at ,  in  said  district,  on  the day  of 

,  A.  D.  19—.  . 

{Seal  of  the  court.]  Clerk. 

(i)  Gen.  Order  13.     Loveland's  Bank.,  sec.  145. 


No.  153. 
Bankrupt's  Petition  for  Discharge.    (i)> 

(Official  Form  No.  57.) 


In  the  matter  of 


In  Bankruptcy. 


Bankrupt. 


To  the  Honorable 


Judge  of  the  District  Court  of  the  United  States  for  the 

District  of : 

,  of ,  in  the  county  of  ,  and  state  of  , 


in  said  district,  respectfully  represents  that  on  the  day 

of ,  last  past,  he  was  duly  adjudged  bankrupt  under  the 


1150  liANKRLPTCY, 

Acts  of  Congress  rekiling  to  haiikrupLcy ;  that  he  has  duly  sur- 
rendered all  his  property  and  rights  of  property,  and  has  fully 
complied  with  all  the  refjuirements  of  said  acts  and  of  the  or- 
'ders  of  the  court  touching  his  bankruptcy. 

W  here  fore  he  prays  that  he  may  be  decreed  by  the  court  to 
have  a  full  discharge  from  all  debts  provable  against  his  estate 
under  said  bankrupt  acts,  except  such  debts  as  are  excepted 
by  law  from  such  discharge. 

Dated  this day  of ,  A.  D.  19 — . 


Bankrupt. 

ORDER  OF  NOTICE  THEREON. 

District  of ,  ss. 

On  this  day  of  ,  A.   D.    19 — ,   on  reading  the 

foregoing  petition,  it  is 

Ordered  by  the  court  that  a  hearing  be  had  upon  the  same 

on  the  day  of  ,  A.  D.   19 — ,  before  said  court,  at 

,  in  said  district,  at o'clock  in  the noon ;  and  that 

notice  thereof  be  published  in ,  a  newspaper  printed  in  said 

district,  and~  that  all  known  creditors  and  other  persons  in 
interest  may  appear  at  the  said  time  and  place  and  show 
cause,  if  any  they  have,  why  the  prayer  of  the  said  petitioner 
should  not  be  granted. 

And  it  is  further  ordered  by  the  court  that  the  clerk  shall 
send  by  mail  to  all  known  creditors  copies  of  said  petition 
and  this  order,  addressed  to  them  at  their  places  of  residence  as 
stated. 

Witness  the  Honorable  ,  judge  of  the  said  court,  and 

the  seal  thereof,  at  in  said  district,  on  the day  of 

,   A.    D.    19-.  , 

[Seal  of  the  court. ~\  Clerk. 

hereby  depose,  on  oath,  that  the  foregoing  order  was 

published  in  the on  the  following days,  viz. : 

On  the day  of ,  and  on  the day  of  ^— --,  in 

the  year  19 — . 
District  of  . 


PROCEEDINGS   BEFORE   THE   JUDGE.  1151 


19—. 


Personally  appeared ,  and  made  oath  that  the  foregoing 

statement  by  him  subscribed  is  true. 

Before  me,  > 

[Oflicial  character.] 

I  hereby  certify  that  I  have  on  this  day  of  ,  A. 

D.   19 — ,  sent  by  mail  copies  of  the  above  order,  as  therein 

directed.  » 

Clerk. 

(i)  As  to  who  may  file  a  petition  for  discharge,  when  and  where  the  pe- 
tition is  filed  see  Loveland's  Bank.,  sees.  273  and  274.  B.  A.  '898,  sec.  14 
Gen.  Ord.  31. 

The  discharge  should  be  allowed  unless  it  is  opposed  by  creditors  and  a 
case  made  out  tmder  one  of  the  grounds  specified  in  the  statute.  Strause 
vs.  Hooper,  105  Fed.  Rep.  590,  5  Am.  B.  R.  225;  in  re  Holman,  92  Fed. 
Rep.  512,  I  Am.  B.  R.  600;  /;;  re  Thomas,  92  Fed.  Rep.  912,  i  Am.  B.  R. 
515 ;  in  re  Frank,  6  Am.  B.  TR.  156. 

Where  a  petition  for  a  discharge  has  been  refused  upon  the  merits  a 
second  petition  will  not  be  entertained  in  the  same  proceeding.  In  re 
Royal,  7  Am.  B.  R.  636.  A  new  petition  may  be  filed  in  a  second  bank- 
ruptcy proceeding  the  effect  of  which  may  be  limited.  In  re  ClafF,  7  Am, 
B.  R.  128. 


No.  154. 

Notice  to  Attorney  for  Bankrupt  with  Reference  to  Discharge- 

R.  X.  Esq., 
Attorney  at  Law. 

Dear    Sir: — In    the    matter     of    A.     B.,     No.    in 

bankruptcy,  the  petition  for  discharge  and  check  for  $ ,  ad- 
vanced fees  received.  Enclosed  herewith  you  will  find  re^-eipt 
for  said  fees,  and  also  notice  for  insertion  in  the  newspaper  des- 
ignated. Please  see  that  the  notice  is  promptly  inserted  in  th<^ 
said  newspaper,  and  that  proof  thereof,  with  payment  receipted, 
and  the  final  oath  are  filed  with  the  clerk  before  tlie  return  day. 
Neither  the  bankrupt  nor  his  attorney  need  be  present  on  the 
return  day.  The  creditors  are  allowed  ten  days  beyond  return 
day  in  which  to  file  specifications.    If  no  appearance  in  opposi- 


1152  BANKRUPTCY. 

tion  to  discliarge  has  been  entered  before  return  day  or  specifi- 
cations filed  within  the  ten  days,  the  decree  of  discharge  will  be 
made,  and  certificate  thereof  mailed  you.  Please  acknowledge 
receipt  of  notice  for  publication. 

Yours  Respectfully, 

B.  R., 
Clerk. 


No.  155. 

Notice  of  Application  for  Discharge  in  Bankruptcy. 

The  District  Court  of  the  United  States 

For  the District  of . 

Division. 

No. . 


In  the  matter  of  A.  B., 
Bankrupt. 

Notice  is  hereby  given  that  A.  B.,  having  on  the  day 

of been  duly  adjudged  a  bankrupt  in  the  above  entitled 

cause,  has  filed  his  petition  for  a  discharge  as  a  bankrupt,  and 

the  same  will  be  heard  by  said  court  on  the day  of , 

at  lo  o'clock  in  the  forenoon,  at  the  United  States  Court  room 

in ,  at  which  time  and  place  all  creditors  and  other  persons 

in  interest  may  appear  and  show  cause,  if  any  they  have,  why 
the  prayer  of  said  petition  should  not  be  granted. 

B.  R., 
Clerk  of  Said  Court. 


PROCEEDINGS  BEFORE  THE  JUDGE.  1153 

No.  156. 
Proof  of  Publication. 
The  District  Court  of  the  United  States 

For  The District  of 

Division. 

In  the  matter  of 
A.  B., 
Bankrupt. 

State  of  ■ 


In  Bankruptcy. 


C®unty  of ,  ss : 

T.  G.,  of  said  city  of ,  County  of ,  State  of , 

being  first  duly  sworn,  deposes  and  says  that  he  is  the  principal 

clerk  in  the  office  of  the  Times  Co.,  publishers  of  the 

Times,  a  daily  newspaper  in  the  said  city,  that  a  notice  to  credi- 
tors in  the  above  entitled  bankruptcy  matter,  of  which  the  an- 
nexed printed  slip  taken  from  the  said  newspaperis  a  copy,  was 

inserted  and  published  therein  on  the  and  days  of 

,  A.  D.  -^.  T  .G., 

Subscribed  and  sworn  to  before  me  this day  of 

A.  D.  .  F.  C, 

Notary  Public. 

[Seal.]  County,  . 


No.  157. 
Specification    of    Grounds    of    Opposition    to    Bankrupt's 

Discharge  (i). 

(Official  Form  No.  58.) 
In  the  District  Court  of  the  United  States  for  the Dis- 
trict of  . 


In  the  matter  of 


Bankrupt. 


In  Bankruptcy. 


-,  of ,  hi  the  county  of ,  and  state  of ,  a 


1154  BANKRUPTCY. 

party  interested  in  the  estate  of  said ,  bankrupt,  do  hereby 

oppose  the  granting  to  him  of  a  discharge  from  his  debts, 
and  iov  the  grounds  of  such  opposition  do  file  the  following 
sijecitication  :  [Here  specify  the  grounds  of  opposition'].  (2) 

Creditor. 

(i)  Where  creditors  object  to  a  bankrupt's  discharge  it  is  incumbent  on 
them  to  enter  their  appearance  and  file  specifications  as  to  the 
grounds  of  opposition.  Gen.  Ord.  32,  Loveland's  Bank.  sees.  276  to  281. 
In  re  Hixon,  93  Fed.  Rep.  440,  i  Am,  B.  R.  610. 

The  specification  should  b-e  filed  with  the  clerk  and  not  with  the  judge. 
In  re  Sykes,  6  Am.  B.  R.  264. 

The  specifications  of  objection  to  the  discharge  of  the  bankrupt  must  be 
filed  within  the  time  prescribed  by  Gen.  Ord.  32,  and  by  leave  of  court  for 
cause  shown,  or  they  will  be  disinissed.  /;»  re  Albrecht,  104  Fed.  Rep. 
974;  in  re  Clothier,  108  Fed.  199,  6  Am.  B.  R.  203. 

The  court  may  require  a  positive  verification  of  the  specification  of  ob- 
jection to  the  bankrupt's  discharge.  In  re  Brown  (C.  C.  A.  5th  Cir.)  7 
Am.  B.  R.  252,  112  Fed.  Rep.  49. 

The  specification  of  objections  are  in  the  nature  of  a  pleading.  In  re 
Hirsch,  96  Fe^.  Rep.  468,  2  Am.  B.  R.  715.  It  must  in  order  to  prevent  a 
discharge  set  forth  one  of  the  statutory  grounds.  Strause  vs.  Hooper, 
105  Fed.  Rep.  590,  5  Am.  B.  R.  225 ; 'jm  re  Holman,  92  Fed.  Rep.  512,  i 
Am.  B.  R.  600;  in  re  Thomas,  92  Fed.  Rep.  912,  i  Am.  B.  R.  515;  in  re 
Frank,  6  Am.  B.  R.  156.  The  allegations  must  be  distinct,  specific  and 
definite,  so  as  to  advise  the  bankrupt  of  the  acts  charged  which  bring 
him  within  the  inhibition  of  the  Act  so  far  as  they  relate  to  his  discharge. 
In  re  Hirsch,  96  Fed.  Rep.  468,  2  Am.  B.  R.  715;  in  re  Hixon,  93  Fed. 
Rep.  440,  I  Am.  B.  R.  613;  in  re  Holman,  92  Fed.  Rep.  512,  i  Am.  B.  R. 
600;  in  re  Quackenbush,  102  Fed.  Rep.  282,  4  Am.  B.  R.  274;  in  re  Kaiser, 
99  Fed.  Rep.  689,  3  Am.  B.  R.  767. 

The  sufficiency  of  a  specification  in  opposition  to  a  discharge  may  be 
attacked  before  a  referee  to  whom  the  issue  is  referred.  In  re  Quacken- 
bush, 102  Fed.  Rep.  282,  4  Am.  B.  R.  274.  As  to  the  manner  of  making 
attack,  see  in   re  Crispt,  9  Am.  B.   R.   i. 

The  allegations  of  the  specification  must  be  proved.  In  re  Logan,  102 
Fed.  Rep.  876,  4  Am.  B.  R.  525.     In  re  Crispt,  9  Am.  B.  R.  i. 

A  finding  by  a  referee  on  the  hearing  of  a  petition  for  discharge  in 
bankruptcy  will  not  be  reversed  except  upon  clear  and  convincing  proof 
of  error.  In  re  Covington,  6  Am.  B.  R.  2i72>- 

The  referee  has  been  allowed  additional  fees  for  hearing  a  petition 
on  discharge.    In  re  Grossman,  6  Am.  B.  R.  510. 

Amendments  to  the  specifications  of  creditors  may  be  allowed  on  appli- 
cation to  the  judge  and  not  to  the  referee.    The  allowance  rests  in  the  dis- 


PROCEEDINGS   BEFORE   THE   JUDGE.  1155 

cretion  of  the  judge.  In  re  Kaiser,  99  Fed.  Rep.  689,  3  Am.  B.  R.  770; 
in  re  Wolfensohn,  5  Am.  B.  R.  60;  in  re  Mudd,  105  Fed.  Rep.  348. 

Tlie  act  of  February  5,  1903,  adds  new  grounds  of  opposition  to  grant- 
ing discharge  to  the  grounds  named  in  the  act  of  1898  by  amending  Sec. 
14b  to  read  as  follows : 

"  b.  The  judge  shall  hear  the  application  for  a  discharge,  and  such 
proofs  and  pleas  as  may  be  made  in  opposition  thereto  by  parties  in 
interest,  at  such  time  as  will  give  parties  in  interest  a  reasonable  oppor- 
tunity to  be  fully  heard,  and  investigate  the  merits  of  the  application  and 
discharge  the  applicant  unless  he  has  ( i )  committed  an  offense  punishable 
by  imprisonment  as  herein  provided;  or  (2)  with  intent  to  conceal  his 
financial  condition,  destroyed,  concealed,  or  failed  to  keep  books  of  account 
or  records  from  which  such  condition  might  be  ascertained;  or  (3)  ob- 
tained property  on  credit  from  any  person  upon  a  materially  false  state- 
ment in  writing  made  to  such  person  for  the  purpose  of  obtaining  such 
property  on  credit ;  or  (4)  at  any  time  sub^quent  to  the  first  day  of  the 
four  months  immediately  preceding  the  filing  of  the  petition  transferred, 
removed,  destroyed,  or  concealed,  or  permitted  to  be  removed,  destroyed, 
or  concealed  any  of  his  property  with  intent  to  hinder,  delay,  or  defraud 
his  creditors;  or  (5)  in  voluntary  proceedings  been  granted  a  discharge  in 
bankruptcy  within  six  years ;  or  (6)  in  the  course  of  the  proceedings  in 
bankruptcy  refused  to  obey  any  lawful  order  of  or  to  answer  any  material 
question  approved  by  the  court." 


No.  158. 

Specifications  of  Grounds  of  Opposition  to  Discharge  (i). 

The  District  Court  of  the  United  States 
For  the District  of . 


In  the  matter  of  the  Bankruptcy  of 
A.  B., 
Bankrupt. 

Now  comes  M  F..  G.  H.  and  J.  K..  creditors  of  the  said 
bankrupt  and  object  to  the  discharge  of  said  bankrupt  for  the 
following  reasons : 

First.  That  while  a  l.ankru])t  he  concealed  from  the  trustee 

the  sum  of  $ ,  being  j^roperty  belonging  to  his  estate  in 

bankruptcy,  and  he  concealed  the  fiuiher  sum  of  $ from 

the  trustee,   being  property  belonging  to. his   said   estate   in 
bankruptcy. 

Second.  Tliat  imder  oath  he  stated  in  the  schedules  attached 


1156  BANKRUPTCY. 

io  his  petition  in  bankrnptcy  that  he  had  no  assets,  whereas, 
and  in  fact,  the  assets  consisted  of  $ ,  at  least. 

Third.  That  while  under  examination   under  oath  before 

the  referee,  he  falsely  stated  and  testified  that  said  $ did 

not  belong  to  him,  but  was  the  property  of  his  wife,  consisting 
of  a  loan  to  her  by  her  brother  A.  G.,  whereas,  and  in  fact  said 
$ was  and  constituted  his  property. 

Fourth.  That  while  under  examination  under  oath  before  the 
referee  herein,  he  made  numerous  statements,  too  numerous  to 
be  embodied  in  these  specifications,  but  are  more  fully  set  forth 
in  the  transcript  of  the  evidence  in  this  court  by  the  trustee  in 
his  report,  such  statements  were  knowingly  false  when  made. 

Y.  &  Y., 
Attorneys  for  Creditors. 

(i)    See  note  to  No.  157. 


No.  159. 

Order  Referring  Petition  for  Discharge  to  Referee  (i). 

The  petition  of  said  bankrupt  praying  that  he  may  be  dis- 
charged from  all  his  debts  pursuant  to  the  acts  of  Congress 
relating  to  bankruptcy  coming  on  for  hearing  on  this  day  pur- 
suant to  orders  herein  the  26th  day  of  January,  1901,  now  in 
accordance  with  Section  3,  No.  XII,  General  Orders  in  Bank- 
ruptcy and  no  objections  or  specifications  having  been  filed  in 
opposition  thereto,  the  matter  of  said  petition  is  hereby  referred 
to  A.  M.,  one  of  the  referees  in  bankruptcy  of  this  court,  at 

the  city  of ,  to  ascertain  and  report  to  the  court  the  facts 

relating  to  said  petition,  and  the  rights  of  said  petitioner  to  a 
discharge  under  the  provision  of  said  act. 

Witness  the  Honorable  G.  R.,  Judge  of  said  court, 

and  the  seal  thereof,  at ,  in  said  district,  this 

day  of ,  A.  D., . 

B.  R., 
Clerk  of  Said  Court. 


PROCEEDINGS   BEFORE   THE   JUDGE.  1157 

(l)  A  reference  may  be  made  to  referee  after  specifications  have  been 
filed  to  report,  but  the  judge  must  make  the  order  of  discharge.  Bank.  Act 
of  1898,  sec.  14/. 

For  proceedings  for   discharge   see   Loveland  on   Bankruptcy,   chap.   26. 


No.  160. 

Order  Referring  Specifications  in  Opposition  to  Discharge  to 

Referee. 

[Caption.^ 

At  the  city  of ,  in  said  district,  this  day  of 

190 — , District  of ,  ss. 

And  now,  to  wit,  this day  of 190 —  the  specifica- 
tions of  objection  to  the  discharge  of  said  bankrupt  filed  by  E. 

F.,  of ,  a  party  interested,  are  referred  to  A,  M.,  referee 

in  bankruptcy,  at  as  a  Special  Master,  to  take  the  testi- 
mony and  make  report  thereof  to  the  court,  and  of  his  findings 
of  fact  together  with  his  recommendation  in  favor  of,  or 
against,  said  discharge;  said  referee  to  be  entitled  to  receive 
for  his  services  five  dollars  ($5.00)  for  each  day  actually  spent 
in  hearing  such  reference  and  preparing  his  report ;  such  sum  to 
be  chargeable  in  the  first  instance  to  the  party  opposing  the 
discharge;  and  indemnity  may  be  demanded  by  the  referee  be- 
fore proceeding  with  the  heading. 


No.  161. 

Referee's  Report  on  Petition  for  Discharge. 

To  the  Honorable  G.  R.,  Judge  of  the  District  Court  of  the 

United  States  for  the District  of : 

In  accordance  with  an  order  of  your  honorable  court  where- 
by I  was  directed  to  ascertain  and  report  to  the  court  the  facts 
relating  to  the  petition  of  the  said  bankrupt  for  his  discharge 
and  the  right  of  said  petitioner  for  a  discharge  under  the  pro- 
visions of  the  bankrupt  act,  I  do  hereby  report  that  said  bank- 


1158  BANKRUPTCY. 

nipl's  petition  to  be  adjudicated  bankrupt  was  filed  on  the 

day  of ,  and  that  he  was  at  the  time  of  fifing  such  petition 

a  resident  of ,  in  the  County  of .  in  said  district. 

And  I  do  further  report  that  said  bankrupt  has  in  all  things 
conformed  to  the  requirements  of  said  act  and  that  so  far 
as  the  papers  on  file  with  nie  and  the  proceedings  had  before 
me  show,  he  has  committed  none  of  the  offenses  and  done 
none  of  the  acts  prohibited  in  subdivision  B.  section  14  of 
said  act  and  that  in  my  opinion  he  is  entitled  to  his  dis- 
charge. 

And  I  do  further  report  that  there  are  assets  in  said  bauK- 
rupt's  estate  and  that  a  trustee  has  been  appointed,  that  the  es- 
tate is  unsettled  and  that  my  disbursements  have  been  provided 
for. 

Dated  this day  of .  A.  M., 

Referee. 


No.  162. 

Final   Oath  of  Bankrupt. 

In  the  District  Court  of  the  United  States, 
For  the District  of . 

In  the  matter  of     1        t.. 

No. 


In  Bankruptcy. 


A.  B., 
Bankrupt. 
District  of ,  ss  : 

I,  A.  B.,  of ,  in  the  county  of ,  and  State  of , 

the  bankrupt  above  named,  upon  my  oath,  do  hereby  declare 
that,  on  petition  filed  by  [or  against]  me,  I  was  duly  adjudged 

a  bankrupt  by  the  decree  of  the  court  made  on  the day 

of A.  D.  190 — ,  under  and  by  virtue  of  an  act  of  Con- 
gress entitled  "An  Act  to  Establish  a  Uniform  System  o£ 
Bankruptcy  Throughout  the  United  States,"  approved  the  first 
day  of  July,  1898 ;  that  I  have  not  knowingly  and  fraudulently, 
concealed,  while  a  bankrupt,  and  am  not  now  concealing  from 
trustee,  any  of  the  property  belonging  to  my  estate  in  bank- 


PROCEEDINGS   BEFORE   THE   JUDGE.  1159 

riiptcy;  that  I  have  not  knowingly  and  fraudulently  made  a 
false  oath  or  account  in,  or  in  relation  to,  any  proceeding  in 
bankruptcy;  that  I  have  not  knowingly  and  fraudulently  pre- 
sented under  oath  any  false  claim  for  proof  against  any  estate 
in  bankruptcy,  or  used  any  such  claim  in  composition,  either 
personally  or  by  agent,  proxy  or  attorney ;  and  that  I  have  not 
knowingly  or  fraudulently  extorted,  or  attempted  to  extort  any 
money  or  property  from  any  person  as  a  consideration  for  act- 
ing, or  for  forbearing  to  act  in  bankruptcy  proceedings ;  that  I 
have  not  committed  any  of  the  offenses  punishable  by  imprison- 
ment, as  provided  in  said  act,  nor  have  I,  with  fraudulent  intent 
to  conceal  my  true  financial  condition  and  in  contemplation  of 
my  bankruptcy,  destroyed,  concealed,  or  failed  to  keep  books 
of  account  or  record  from  which  my  true  condition  might  be 
ascertained ;  nor  have  I  done,  suffered,  or  procured  to  be  done, 
or  been  privy  to  any  act,  matter  or  thing  specified  in  the  said 
act  of  Congress  as  a  ground  of  withholding  my  final  discharge 
thereunder,  or  as  invalidating  such  discharge  if  granted. 

Subscribed  and  sworn  to  before  me  this  day 

of A.  D.   190 — ,  at  — ■ —  in  said  district. 

A.  B. 

B.  R., 
Clerk  of  Said  Court. 

\l)  Oaths  required  by  the  Act,  except  upon  hearings  in  court,  may  be 
Administered  by  referees  and  by  officers  authorized  to  administer  oaths 
in  proceedings  before  the  courts  of  the  United  States,  or  under  the  laws 
of  the  state  where  the  same  arc  to  be  taken.  Bankrupt.  Act  of  1898,  chap. 
4,  sec.  20. 

This  oath  should  not  be  administered  by  an  officer  who  is  the  attorney 
for  the  bankrupt. 

Bank.  Act  of  i8(>S.  Sec.  14  B  (i)  and  (2).  Sec.  29  B  (i),  (2),  (3), 
and   (5). 


1160  BANKRUPTCY. 

No.  163. 
Clerk's  Memoranda  of  Bankrupt's  Petition  for   Discharge. 

In  the  District  Coin-t  of  ihc  Tiiited  States, 

For  the District  of . 

In  the  matter  of 

A.  B., 
Bankrtipt. 

Residence  of  bankrupt 


No. 


In  Bankruptcy. 


Name  and  address  of  attorney . 

Petition  for  adjudication — date  of  tiling . 

V^oluntary  or  involuntary . 

Adjudication — date  of . 

Examination  of  bankrupt — referee's  certificate  of  [Rule  i6 

(b)]  . 

Certified  list  of  creditors  who  have  proved  their  clanns  [Rule 

i6  (b)]  . 

Final  oath  [Sec.  14  (b)  (i)  and  (2)  ;  Sec.  29  (i)  (2)  (3) 

(4)  and  (5)] . 

Fees  of  clerk  on  petition  for  discharge  [Fihng  fees — Rule  20 

(3)  and  (5)1 

Application  for  discharge  [Sec.  14  (a)  ;  Rule  14  (a)  and  (c) 

and  Form  57]  . 

Hearing  thereon  [Rule  12  (3)  G.  O.] — date  of . 

Notice  by  clerk  to  creditors  [Sec.  58  (a)    (2)  and  (b)  and 

(c)  Form  57] — date . 

(i)    Names  on  schedules  [Sec.  58  (a)]  . 

(2)   Names  on  proofs  of  claims  [Sec.  58  (a)]  . 

Newspaper  designated  [Sec.  28  (a);  Sec.  58   (b)]— name 
of -. 


Publication — [See  General  Provisions,  Rule  37  G.  O.]  . 

Proof  of  publication — [N.  B. — Correct  name;  printed  notice 
attached ;  proof  sworn  to ;  bill  receipted.] 

Date  of  last  publication  [10  days  before  hearing] . 

Specifications  against  discharge — date  for  filing  [10  days 
from  hearing]  . 


PROCEEDINGS   BEFORE  THE  JUDGE.  1161 

Appearance  in  opposition  to  discharge  [Rule  32  G.  O.] — 
date  of . 


Disposition  af  same  [Rule  12  (3)  G.  O.]  . 

Specifications  of  objection  to  discharge  [Rule  32  G.  O. 

See  Form  58.]  . 

Disposition  of  same  [Rule  12  (3)  G.  O.] . 

Referee's  fees — if  paid  [Rule  20]  . 

Memoranda : . 


No.  164. 
Discharge  of  Bankrupt    (i). 

(Official  Form  No.  59.) 

District  Court  of  the  United  States, District  of . 

Whereas,  ,  of ,  in  said  district,  has  been  duly  ad- 
judged a  bankrupt  under  the  Acts  of  Congress  relating  to 
bankruptcy,  and  appears  to  have  conformed  to  all  the  require- 
ments of  law  in  that  behalf,  it  is  therefore  ordered  by  this 

court  that  said  be  discharged  from  all  debts  and  claim? 

which  are  made  provable  by  said  acts  against  his  estate,  and 

which  existed  on  the day  of  — — ,  A.  D.  19 — ,  on  which 

day  the  petition  for  adjudication  was  filed  him ;  except- 
ing such  debts  as  are  by  law  excepted  from  the  operation  of  a 
discharge  in  bankruptcy. 

Witness  the  Honorable  ,  judge  of  said  district  court, 

and  the  seal  thereof  this day  of .  A.  D.  19 — . 

[Seal  of  flic  court. 1  , 

Clerk. 

Ci)  The  effect  of  a  discharge  is  not  determined  by  the  court  granting  it 
but  by  subsequent  proceedings  in  which  the  discharge  is  pleaded  as  a  de- 
fense to  an  action  for  debt.  See  in  re  Marshall  Paper  Co.  (C.  C.  A.  ist 
Cir.)  102  Fed.  Rep.  872,  4  Am.  B.  R.  468;  in  re  Black,  97  Fed.  Rep.  49.!.  4 
Am.  B.  R.  471  (note). 

Debts  not  affected  by  a  discharge  —  a.  IK  discharge  in  bankruptcy  shall 
release  a  bankrupt  from  all  of  his  provable  debts,  except  such  as  (i)  are 
due  as  a  tax   levied  by  the  United  States,  the  state,  county,  district,  or 


11(,2  ,  BANKRUPTCY. 

municipaliu-  in  which  he  resides;  (2)  arc  liabilities  for  obtaining  property 
by  false  pretenses  or  false  representations,  or  for  willful  and  malicious 
injuries  to  the  person  or  property  of  another,  or  for  alimony  due  or  to 
become  due,  or  for  maintenance  or  support  of  wife  or  chfld,  or  for  seduction 
of  an  unmarried  fomalo.  (ir  for  criminal  conversation;  (3)  have  not  been 
duly  scheduled  in  time  for  proof  and  allowance,  with  the  name  of  the 
creditor  if  known  to  the  bankrupt,  unless  such  creditor  had  notice  or 
actual  knowledge  of  the  proceedings  in  bankruptcy;  or  (4)  were  created 
by  his  fraud,  embezzlement,  misappropriation,  or  defalcation  while  acting 
as  an  officer  or  in  any  fiduciary  capacity."  [Sec.  17,  as  amended  by  act 
of  Feb.  5,  1903.] 


PROCEEDIXGS   BEFOUK  THE   JUDGE.  1163 

No.   165. 

Deed  from  Trustee  to  Purchaser. 

Know  All  Men  by  These  Presents:  That  whereas,  on  the 
day  of 19 — ,  A.  B.  was  duly  adjudged  bankrupt  by 


the  District  Court  of  the  United  States  for  the District  of 

,  and  the  said  A.  M.  was  duly  appointed  and  qualified  as 

trustee  of  the  estate  of  the  said  A.  B.  in  bankruptcy,  and  is  now 

acting  as  said  trustee,  and  on  the  — —  day  of  ,  19 — ,  said 

trustee  tiled   a   certain   petition   in   said   District   Court   of  the 

United  States  for  the District  of ,  praying  among  other 

things,  for  an  order  of  sale  of  certain  real  estate  therein  men- 
tioned and  hereinafter  described. 

And  Whereas,  proceedings  were  had  on  said  petition  in  accord- 
ance with  the  bankruptcy  laws  of  the  United  States  in  such  case 
made  and  provided,  and  the  petition  coming  on  for  hearing  on 

the  day  of  ,  19 — -,  of  which  hearing  ten  days'  notice 

had  been  given  by  mail  to  creditors  of  said  bankrupt,  it  was  or- 
dered that  the  said  trustee  be  authorized  to  sell  the  portion  of 
the  bankrupt's  estate  specified  in  his  petition  and  hereinafter 
described,  by  auction  (or  at  private  sale,  or  as  may  he),  keeping 
an  accurate  account  of  the  property  sold  and  the  price  received 
therefor,  and  to  whom  sold,  and  on  the  same  da.y  In  pursuance 
of  said  order  and  judgment,  an  order  of  sale  of  said  real  estate 
therein  described,  was  issued  out  of  said  court  under  the  seal 
thereof  to  said  A.  ]\I.,  trustee  of  the  estate  of  A.  B.  in  bankruptcy, 
as  aforesaid,  directed,  commanding  him  to  execute  the  said  order, 
and  of  the  same,  together  with  his  proceedings  thereon,  to  make 
due  return  to  said  court. 

And  Whereas,  said  A.  M.,  trustee  of  the  estate  of  A.  B.,  in 
bankruptcy,  having  caused  said  premises  to  be  appraised,  and  the 
report  of  said  appraisement  to  be  filed  with  S.  T.,  the  referee, 

and  having  on  the  — day  of ,19 — ,  returned  said  order  of 

sale  to  said  court  as  commanded  with  the  procoediugs  thereon, 
stating  in  substance  that  in  obedience  to  said  order  he  duly  ad- 
vertised   the    real    estate    therein    described    for    sale    for    

consecutive  weeks  before  the  day  of  sale  in  the  "Gazette,"  a 

newsj)a|)er    printed    and    of    general    circulation    in    said    

County,  State  of ,  stating  in  said  notice  the  time,  place,  and 

terms  of  said  sale,  and  on  the day  of ,  19 — ,  he  attended 

at  the  place  named  for  the  sale,  and  at  the  hour  of  —  o'clock  — 
M.,  he  offered  said  real  estate   (hereinafter  described)   for  sale, 

when  G.   II.,  bid  to  \)ny  for  tlie  same  the  sum  of  ($ ) 

dollars,  which,  being  the  highest  and  best  bid  that  was  offered, 
and   being  more  tluni   seventy-five  percentum  of  the  a])pi'aise(l 


1164  BA^'KHl'l'TCY. 

valiK'  of  said  prruiisi's.  he  tlicii  aiul  tlu'iv  sold  the  same  to  said 
G.  S.  for  that  sum.' 

And  Avlioroas,  on  the  day  of  ,  19 — ,  the  said  court 

having  examined  the  pi-oceedings  of  tlie  said  sale,  aforesaid, 
under  said  order  of  sale,  and  it  appearing  to  the  court  that 
said  sale  Avas  in  all  respects  legally  made,  ordered  that  the  same 
be  approved  and  confirmed,  and  that  said  A.  IM.,  trustee,  as 
aforesaid,  should  execute  and  deliver  a  proper  deed  to  the  pur- 
chaser, of  the  real  estate  so  sold; 

All  of  which  will  more  fully  appear  by  the  records  of  said 
court,  to  which  reference  is  here  made. 

Now,  therefore,  I,  the  said  A.  M.,  trustee  of  the  estate  of  A.  B., 
in  bankruptcy,  aforesaid,  by  virtue  of  said  order  of  sale,  sale,  and 
confirmation,  and  of  the  statute  in  such  cases  made  and  pro- 
vided, and  of  the  powers  vested  in  me  and  for  and  in  considera- 
tion of  the  premises,  and  the  sum  of dollars  ($ )  paid,  or 

secured  to  be  paid  to  me  by  said  G.  II.,  the  receipt  whereof  is 
hereby  acknowledged,  do  hereby  grant,  bargain,  sell,  and  con- 
vey to  the  said  G.  H.,  his  heirs  and  assigns  forever,  the  follow- 
ing real  estate,  situated  in  the  county  of  ,  in  the  state  of 

,  and  in  the  and  bounded  and  described  as  follows: 

[Here  set  forth  the  description  hij  metes  and  hounds.] 

To  have  and  to  hold  said  premises,  with  all  the  privileges  and 
appurtenances  thereto  belonging,  to  the  said  G.  II.,  his  heirs 
and  assigns  forever,  as  fully  and  completely  as  the  said  A.  I\I. 
as  such  trustee  in  bankruptcy,  by  virtue  of  said  order  of  sale, 
sale,  and  confirmation,  and  of  the  statute  made  and  provided 
for  such  cases,  might  or  should  sell  and  convey  the  same. 

In  witness  whereof,  the  said  A.  ]\1.,  as  such  trustee,  has  here« 
unto  set  liis  hand,  this day  of ,  A.  D.,  19 — . 

Signed  and  acknowledged  in  presence  of: 
R.  S. 

G.  T.  A.  M., 

Trustee  of  the  Estate  of  A.  B.,  in  Bankruptcy. 


APPELLATE  PROCEEDINGS.  1165 

The  State  of^ }  ^^ 

County  of ^ 

Be  it  remembered,  that  on  this day  of ,  19 — ,  befoi-e 

me,  the  subscriber,  a  notary  public,  in  and  for  said  county, 
personally  came  the  above  named  A.  ^I.,  as  trustee  of  the  estate 
of  A.  B.,  in  bankruptcy,  the  grantor,  in  the  forgointi-  deed,  and 
acknowledged  the  signing  of  the  same  to  be  his  voluntary  act 
and  deed  as  such  trustee  for  the  uses  and  purposes  therein  men- 
tioned. 

In  testimony  whereof,  I  have  hereunto  subscribed  my  name 
and  affixed  my  official  seal  on  the  day  and  year  last  aforesaid. 

[Seal.]  J.  R., 

Xotarv  Public  in  and  for  the  County  of  ,  State  of 


( 1 )  In  case  of  a  private  sale  omit  this  paragraph  and  state  the  terms  and 
conditions  of  the  order  of  sale  actually  complied  with  and  proceed  witli 
the  form  as  given. 


APPELLATE   PROCEEDINGS. 
No.  166. 

Petition  for  Appeal  in  Bankruptcy   ^i). 

The  District  Court  of  the  United  States  for  the District 

of . 

In  the  Matter  of  L.  W.  doing  business  as  L.  ]  No. 


W.  &  Son,   Bankrupt.  Jin  Bankruptcy. 

Petition  on  appeal  of  B.  Y.,  trustee  in  bankruptcy,  of  L. 
\\'.,  doing-  business  as  L.  W.  &  Son.  Bankrupt. 

The  above  named  B.  Y.,  trustee  in  bankruptcy,  consider- 
ing himself  aggrieved  by  the  judgment  made  and  entered  on 

the   day   of  ,    in    tlie    above   entitled    cause,    does 

hereby  ai)peal  from  such  judgment  to  the  United  States  Cir- 
cuit Court  of  Appeals  for  the  Circuit,   for  the  reasons 

si)ecified  in  the  assignment  of  errors,  which  is  filed  herewith, 
and  he  prays  that  this  appeal  may  be  allowed,  and  that  a  tran- 
script of  the  record,  i)roceedings  and  papers  upon  which  said 


1166  AlM'Kl.l.ATK    I'KOC'KKIHNGS. 

judgment  was  maile,  duly  authenticated,  may  be  sent  to  the 

United  States  Circuit  Court  of  Appeals  for  the Circuit 

R.  S. 
Attorney  for  B.  Y.,  Trustee  in  Bankruptcy. 

The  foregoing  claim  of  appeal  is  allowed. 

A.  C. 
District  Judge. 

(l)  An  appeal  lies  from  a  court  of  bankruptcy  to  the  Circuit  Court  of 
Appeals  in  three  classes  of  cases  specified  in  sec.  25  of  the  Bankruptcy 
Act  of  1898  and  in  no  other  cases. 

The  petition  for  appeal  and  the  allowance  must  be  made  within  ten 
days  after  the  entry  of  ihe  judgment  appealed  from.  Norcross  vs.  Nave 
&  McCord  I\Ierc.  Co.,  loi  Fed.  Rep.  796,  4  Am.  B.  R.  317. 


No.  167. 

Order  Granting  Appeal  in  Bankruptcy,  Severing  Co-defend- 
ants   and   Allowing    Supersedeas. 

The  District' Court  of  the  United   States  for  the  Dis- 
trict of . 

A.    B.,    ct   al.,    Petitioners 

7'S. 

C.   D.,  ct  al.,   Respondents. 

The  defendant,  D.  G.,  having  heretofore  filed  herein  his 
petition  for  appeal  and  assignment  of  errors,  and  having 
given  notice  to  E.  F.  and  G.  H.,  and  they  failing  to  appear, 
said  appeal  is  allowed  to  petitioner,  and  said  E.  F.  and  G.  H. 
may  be  made  appellees. 

Said  appeal  is  to  operate  as  a  supersedeas   of  the  decree 

of ,  but  not  to  affect  the  injunction  granted  ,  upon 

the  execution  of  a  bond  in  the  penalty  of  $ , 

The  United  States  Fidelity  and  Guaranty  Company  of 
Baltimore,  Maryland,  is  accepted  on  said  bond  as  surety,  and 
said  bond  is  now  approved. 


APPEALS    FROM     DISTRICT    COURT,  116/ 

No.  168. 
Order  Allowing  Cross  Appeal. 

[Caption   in   Trial   Court.'] 

This  day  came  the  complainant  herein  by  its  counsel,  and 
presented  the  petition  for  a  cross-appeal  and  an  assignment 
of  errors  accompanying  the  same,  which  petition  upon  con- 
sideration of  the  court  is  hereby  allowed  and  the  court  al- 
lows a  cross-appeal  to  the  United  States  Court  of  Appeals  for 

the Circuit  upon  the  filing  of  a  bond  in  the  sum  of  five 

hundred  dollars  ($500.00)  with  good  and  sufficient  security 
to  be  approved  by  the  court. 

No.  169. 
Bond  on  Appeal  in  Bankruptcy  (1). 

Know  all  men  by  these  presents,  that  we.  A.  B.,  as  prin- 
cipal, and  S.  R.  and  L.   P.,  as  sureties,  are  held  and  firmly 

bound  unto  C.  D.  in  the  full  and  just  sum  of ($ ) 

dollars,  to  be  paid  to  the  said  C.  D.,  his  certain  attorneys, 
executors,  administrators  or  assigns:  to  which  payment,  well 
and  truly  to  be  made,  we  bind  ourselves,  our  heirs,  executors 
and  administrators,  jointly  and  severally,  by  these  presents. 

Sealed  with  our  seals  and  dated  this day  of in  the 

year  of  our  Lord  one  thousand  nine  hundred  and . 

AVhereas  lately  at  a  Circuit  Court  of  the  United  States 
for  the  District  of in  a  suit  de- 
pending in  said  court,  between  A.  B.,  plaintiff,  and  C.  D., 
defendant,  a  decree  was  rendered  against  the  said  A.  B.,  and 
the  said  A.  B.  having  obtained  an  api^eal  and  filed  a  copy 
thereof  in  the  clerk's  office  of  the  said  court  to  reverse  the 
decree  in  the  aforesaid  suit,  and  a  citation  directed  to  the  said 
C.  D.,  citing  and  admonishing  him  to  be  and  ai)pear  at  a  ses- 
sion of  the  United  States  Circuit  Court  of  Appeals  for  the 

Circuit,  to  be  holden  at  the  city  of .  in  said  circuit, 

on  the day  of next. 

Now,  the  condition  of  the  above  obligation  is  such,  that  if 
the  said  A.  B.  shall  prosecute  his  appeal  to  effect,  and  answer 


1168  AiTF.l.l.ATF.    PROrEEDINaR. 

all  damages  and  costs  if  he  fail  to  make  his  plea  good,  then 
the  above  obligation  to  be  void;  else  to  remain  in  full  force 
and  virtue. 

Sealed  and  delivered  in  presence  of 

L    S  A.  B.  [Scal.'\ 

G.  s'.  S.  R.  [Seal.] 

L.  P.  [Seal.] 

Approved  by 
H.  S., 

U.  S.  Circuit  Judge. 

(i)  The  bond  on  appeal  from  a  Circuit  or  District  Court  to  a  Circuit 
Court  of  Appeals  may  be  allowed  by  the  circuit  or  district  judge.     R.  S. 

sec.  999- 

An  appeal  to  operate  as  a  supersedeas  must  be  filed  m  accordance  with 
R.    S.  sec.   1007.     Adams  vs.  Law,   16  How.  148;  Kitchen  vs.   Randolph, 

93  U.  S.  86. 

A  trustee  in  bankruptcy  is  not  required  to  give  bond  on  appeal.     Sec.  25c 
of  the  bankruptcy  law  of  1898,  30  Stat,  at  L.  544. 


No.  170. 
Citation  on  Appeal  in  Bankruptcy. 

The  United  States  Circuit  Court  of  Appeals,  for  the Dis- 
trict. 

The  United  States  of  America,  Judicial  Circuit,  ss. 

To  The  D.  M.  Grocery  Company  —  Greeting: 

You  are  hereby  cited  and  admonished  to  be  and  appear  at 
a  session  of  the  United  States  Circuit  Court  of  Appeals  for 

the circuit,  to  be  holden  at  the  city  of  Cincinnati,  in  said 

district,  on  the day  of next,  pursuant  to  a  petition 

on  appeal  and  assignment  of  error  filed  in  the  clerk's  office 
of  the  District  Court  of  the  United  States  for  the  dis- 
trict of  ,  division,  in  the  matter  of  F.  H.,  doing 

business  as   F.   H.  &  Son,  to  show  cause,   if  any  there  be, 


APPEALS    FROM     DISTRICT     COURT. 


1169 


why  the  judgment  rendered  in  said  cause  reversing  the  find- 
ing and  order  of  the  referee  in  bankruptcy  disallowing  and  ex- 
punging the  claim  of  The  D.  M.  Grocery  Company  and  or- 
dering the  allowance  of  said  claim,   as  proved  by  it,  before 

said  referee,  in  the  sum  of  $ ,  as  in  said  petition  of  appeal 

mentioned,  should  not  be  corrected,  and  why  speedy  justice 
should  not  be  done  to  the  parties  in  that  behalf. 

Witness  the  Hon.  A.  C,  Judge  of  said  District  Court,  thie 
day  of in  the  year  of  our  Lord .  and  of  the  in- 
dependence of  the  United  States  of  America  the  one  hundred 

and  .  A.  C, 

United  States  District  Judge. 


No.  171. 
Assignment  of  Errors  to  an  Adjudication  of  Bankruptcy. 

District  Court  of  the  United  States,  District  of . 

In  the  matter  of  A.  B.  and  C.  B. 
In  Bankruptcy. 

No. . 

And  now  on  this  the day  of .  came  A.  B.  and  C. 

B.  by  R.  X.  Esq.  and  T.  B.,  their  attorneys,  and  say  that  the 
judgment  in  said  cause  adjudicating  Lhem  involuntary  bank- 
rupts is  erroneous  and  against  their  just  right,  and  they  assign 
the  judgment  of  said  District  Court  adjudicating  them  bank- 
rupts is  erroneous  and  against  their  just  right  in  that  it  was 
adjudged  that  [here  state  the  ground  of  the  objection,  as,  in 
that  they  were  insolvent,  or  had  given  a  preference,  or  as  inav 
be.] 

Wherefore  the  said  A.  B.  and  C.  B.  pray  that  the  said  judg- 
ment may  be  reversed  and  said  petition  in  involuntary  bank- 
ruptcy against  them  be  dismissed.  R.  X. 

r.  B. 

Attorneys  for  A.  B.  and  C.  B. 


W/O  APPKLLATE    PROCEEDINGS. 

No.  172. 
Assignment  of  Errors  to  an  Adjudication  of  Bankruptcy. 

The  District  Court  of  the  United  States,  for  the District 

of . 


A.  B.  &  Co.,  ct  al. 
vs. 

C.  D.  &  Co.. 

Your  petitioner  assigns  the  following-  as  the  errors  upon 
which  he  will  rely : 

First.  The  court  erred  in  failing  to  hold  that  the  petition- 
ers had  estopped  themselves  from  prosecuting  their  petition 
herein  on  account  of  the  execution  by  the  said  C.  D.  &  Com- 
pany of  the  alleged  deed  of  assignment. 

Second.  The  court  erred  in  adjudicating  the  firm  of  C.  D. 
&  Company  bankrupt. 

Third.  The  court  erred  in  adjudicating  the  individual  mem- 
bers of  said  firm,  and  especially  your  petitioner,  bankrupt. 

Wherefore,  your  petitioner  prays  that  the  court  would  allow 
an  appeal  herein  from  the  said  decree  of ,  and  would  ap- 
prove a  bond  for  the  stay  of  all  proceedings  pending  such  ap- 
peal, and  your  petitioner  will  ever  pray,  etc. 

D.  G. 
X.  &  X. 
Attorneys  for  D.  G. 

No.  173. 
Assignment  of  Errors  by  a  Trustee   in   Bankruptcy   to  the 

Allowance  of  a  Claim. 

The  District  Court  of  the  United  States,  for  the District 

of . 

In  the  Matter  of  L.  W.,  doing  business  )  ^^  g^j^i^^uptcy.   ' 

as  L.  W.  &  Son,  Bankrupt.  ) 

And  now  on  the day  of ,  comes  the  said  B.  Y.,  as 

trustee  in  bankruptcy  of  L.  W.,  doing  business  as  L.  W.  &  Son, 


APPEAI,S    FROM     DISTRICT     COURT.  1171 

bankrupt,  by  R.  X..  Esq.,  his  solicitor,  and  says  that  the  decree 
in  said  cause  is  erroneous  and  against  the  just  rights  of  said 
trustee  in  bankruptcy  for  the  fohowing  reasons : 

First.  Because  the  evidence  shown  and  set  out  in  the  agreed 
statement  of  facts  certified  by  the  referee  to  be  correct  shows 
that  said  The  S.  D.  Grocery  Company,  received  preferences 
which  it  did  not  surrender  or  offer  to  surrender  at  the  time  of 
or  before  proving  its  claim. 

Second.  Because  the  facts  as  set  out  in  the  agreed  state- 
ment of  facts  and  certified  by  the  referee  to  be  correct  shows 
that  said  claimant.  The  S.  D.  Grocery  Company,  within  four 
months  next  preceding  the  date  when  the  petition  in  bank- 
ruptcy was  filed,  had  received  preferences  in  excess  of  further 
credits  afterward  given  in  good  faith  by  it  to  said  bankrupt 
debtor  without  security  of  any  kind  for  property  which  became 
a  part  of  the  estate  of  said  bankrupt  debtor,  and  remained  un- 
paid at  the  time  of  adjudication  for  bankruptcy  herein,  in  the 
sum  of  $ . 

Third.  Because  the  evidence  showed  that  said  claimant, 
the  S.  D.  Grocery  Company,  should  not  be  allowed  to  prove  its 
claim  until  it  had  surrendered  or  oflfered  to  surrender  the 
amount  of  the  excess  of  preference  it  has  received  from  said 
bankrupt  within  four  months  prior  to  the  filing  of  the  petition 
in  bankruptcy,  over  the  amount  of  subsequent  credits  extended 
to  said  bankrupt,  without  security  of  any  kind,  by  said  claimant 
for  property  which  became  a  part  of  the  estate  of  said  bank- 
rupt. 

Fourth.  Because  the  evidence  showed  that  the  finding  and 
order  of  the  referee  in  bankruptcy  disallowing-  and  expung- 
ing the  claim  of  said  The  S.  D.  Grocery  Company  was  correct 
and  legal. 

FiftJi.  Because  the  finding,  judgment  and  decree  of  this 
court  reversing  the  action  of  the  referee  in  disallowing  said 
claim  for  v$ without  any  refunder  of  preferring  and  ex- 
punging said  claim  and  in  allowing  said  claim  for  $ with- 


1172  Al'PKl.l.ATK    rWOC'IvEDlNGS. 

out  any  rcfimder  of  preference  on  the  part  of  said  claimant  is 
erroneous  and  illegal. 

Si.vtJi.  Because  the  evidence  showed  that  within  four 
months  prior  to  the  time  of  the  filing  of  the  petition  in  bank- 
ruptcy claimant  received,  at  different  times,  within  said  period, 
payments  of  money  from  said  bankrupt  in  excess  of  subse- 
quent sales  of  merchandise  to  said  bankrupt  by  said  claimant 
without  security  of  any  kind  therefor. 

Wherefore,  the  said  B.  Y.,  trustee  in  bankruptcy  of  said  L. 
W.,  doing-  business  as  L.  W.  &  Son,  bankrupt,  pray  that  said 
order,  judgment  and  decree  reversing  the  action  and  ruling  of 
the  referee  and  allowing  the  claim  of  said  The  S.  D.  Grocery 

Company  in  the  sum  of  $ ,  be  reversed  and  that  the  said 

court  may  be  directed  to  enter  a  decree  affirming  the  action  rul- 
ing an  order  of  the  referee. 

R.  X. 
Solicitor  for  B.  Y.,  Trustee  in  Bankruptcy  of  L.  W.,  doing 
business  as  L.  W.  &  Son. 


No.  174. 

Assignment  of  Errors  by  a  Creditor  to  Judgment  Disallowing 

Claim. 

The  District  Court  of  the  United  States,  for  the District 

of . 


In  Bankruptcy. 
Assignment  of 
Error  on  Appeal. 


In  the  Matter  of  A.  B.  &  Co.,  et  al. 
vs. 

C.  D.  and  Son,  Defendants. 

And  now,  on  the day  of ,  came  the  said  E.  F.  Com- 
pany, a  creditor  of  the  above  named  defendants,  C.  D.  and  Son, 
by  Messrs.  X.  &  X.,  its  solicitors,  and  says  that  the  judgment 
and  decree,  in  said  cause  is  erroneous  and  against  the  just 
rights  of  said  creditor  of  said  defendants  for  the  following 
reasons : 


APPEALS    FROM     DISTRICT     COURT.  11/3 

First.  Because  the  evidence  shows  that  the  claim  of  said 
creditor  of  said  above  named  defendants  was  a  provable  debt 
against  the  estate  of  the  bankrupts. 

Second.  Because  the  evidence  shows  that  the  claim  of  said 
creditor  ol  said  above  named  defendants  should  have  been  al- 
lowed as  a  valid  debt  against  the  estate  of  the  bankrupts. 

Third.  Because  the  evidence  shows  that  the  judgment  and 
decree  should  have  been  in  favor  of  this  creditor  of  the  said 
above  named  defendants  and  against  the  trustee  of  the  above 
named  defendauc. 

Wherefore,  the  said  creditor  of  the  above  named  defendant 
prays  that  said  judgment  and  decree  be  reversed,  and  that  the 
said  court  may  be  directed  to  enter  a  decree  and  judgment  al- 
lowing said  claim  of  said  creditor  as  a  provable  debt  against 
the  estate  of  the  bankrupts,  in  accordance  with  the  prayer  of 

the  bill. 

X.  &  X. 
Solicitors  fof  said  Creditoi,  The  E.  F.  Company.  " 

No.  175. 

Assignment  of  Errors  to   an   Order    Disallowing   Claims   in 

Bankruptcy. 

The  District  Court  of  the  United  States  for  the Division 

of  the District  of . 

In  re  A.  B.  Hardware  Company,     ) .,      

Bankrupt.  ) 

In  the  matter  of  the  petition  of  M.  R.,  G.  R.,  and  W.  R., 
partners  as  R.  &  R.,  for  allowance  of  their  claim  for  fees  and 
payment  of  the  same,  as  expenses,  or  as  preferred,  out  of  the 
assets  of  the  bankrupt. 

Assignment  of  errors  by  R.  &  R.  in  the  above  matter  made 
a  part  of  their  petition  for  appeal.  The  said  appellants  come, 
and  for  error  in  the  order  and  judgment  of  the  court  herein,  as- 
sign as  follows : 


\\/4  Ari'ELI.ATK    I'KOCEEDINGS. 

I'irst.  The  couvt  erred  in  holding  and  adjudghig  that  the 
general  assignment  of  the  A.  B.  Hardware  Company  was  a 
fraud  upon  the  Bankrupt  Act. 

Second.  The  court  erred  in  holding  and  adjudging  that  the 
services  charged  for  hy  petitioners,  rendered  in  preparing  the 
said  assignment,  and  in  the  effort  to  uphold  and  execute  the 
same,  can  not  and  should  not  he  paid  out  of  the  assets  belong- 
ing to  the  estate  of  the  bankrupt. 

Third.  The  court  erretl  in  holding  and  adjudging  that  there 

was  no  lien  under  the  statutes  and  laws  of  the  state  of  , 

on  assets  of  the  bankrupt,  in  favor  of  the  said  R.  &  R..  for  the 
payment  of  their  fees  for  the  services  set  out  in  their  petition, 
at  the  time  of  the  filing  of  the  petition  herein  for  adjudication 
in  involuntary  bankruptcy,  and  at  the  time  such  adjudication 

was  made. 

Fourth.  The  court  erred  in  holding  and  adjudging  that  the 
assets  of  the  bankrupt  came  to  the  hands  of  the  trustee  upon  the 
adjudication  of  bankruptcy,  and  his  appointment  as  such,  free 
and  discharged  of  any  lien  in  favor  of  petitioners  for  compen- 
sation for  their  said  services,  and  in  not  holding  that  such  as- 
sets were  legally  and  equitably  charged,  with  a  lien  for  and 
the  payment  of  the  compensation  due  therefor,  upon  their  re- 
ceipt by  the  said  trustee. 

Fifth.  The  court  erred  in  holding  and  adjudging  that  the 
referee  in  bankruptcy  was  in  error  in  ruling  that  the  fee  of  pe- 
titioners for  preparing  the  general  assignment  was  a  provable 
debt  against  the  estate  of  the  bankrupt,  and  payable  out  of  such 
estate,  and  in  reversing  the  judgment  of  the  referee  as  to. the 
said  matter. 

Sixth.  The  court  erred  in  dismissing  the  petition  of  petition- 
ers, and  in  not  granting  them  the  relief  they  therein  prayed 
for. 

Wherefore  the  said  R.  &  R.  pray  that  the  judgment  of  said 

District  Court  be  reversed  with  diections  to  said  court  to  allow 

their  claim. 

R.  &  R. 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.     1175 


PETITIONS  TO  REVIEW  ORDERS  IN  BANKRUPTCY 
IN  A  CIRCUIT  COURT  OF  APPEALS. 

No.  176. 

Notice  of  Filing  Petition  for  Review  (i). 

United  States  Circuit  Court  of  Appeals 

For  the Circuit. 

In  re  Petition  of  A.  B.,      )  ^    ^     . 

^     ^     .  [-In  Bankruptcy. 

For  Review.  ) 

To  R.  Y.,  attorney  for  the  C.  D.  Trust  Company,  trustee 
in  bankruptcy  for  G.  H. : 

You  are  hereby  notified  that  on  the day  of  ,  at 

12  o'clock  m.,  I  will  file  in  the  clerk's  of^ce  of  the  United 

States  Circuit  Court  of  Appeals  for  the Circuit,  in  the 

city  of ,  a  petition  for  review  in  the  above  entitled  cause, 

a  copy  (A  which  petition  is  hereto  attached  as  a  part  of  this 
notice,  and  I  will  then  ask  to  have  the  case  docketed  and  the 
necessary  order  made  therein  to  have  such  case  set  down  for 
hearing.  R.  X., 

Attorney  for  Petitioner. 

I  hereby  accept  service  of  the  above  notice  this  day 

of .  R.  Y., 

Attorney  for  C.  D.  Trust  Co.,  Trustee  in  Bankruptcy 
of  the  said  Bankrupt's  Estate. 

Tt)  Some  notice  should  be  given  the  parties  in  the  bankruptcy  court 
who  are  interested  in  the  appeal  either  by  form  of  citation  or  notice.  The 
petition  is  sometimes  filed  in  the  Court  of  Appeals  and  when  docketed  and 
printed,  a  copy  of  the  printed  petition  and  exhibits  are  served  upon  oppos- 
ing counsel.  The  better  practice,  however,  is  to  give  notice  in  substantially 
the  form  above  given. 


1176  APFELLATK  TROCEEDINGS. 

No.  178. 

Petition  to  a  Circuit  Court  of  Appeals  to  Review  an  Order 

in  Bankruptcy  (i). 

The  United  States  Circuit  Court  of  Appeals 
For  the Circuit. 

In  the  Matter  of  A.  B.  and  C.  B.,     1  „    .  .       ,      r)^,,;^,,. 

[Petition  for  Keview. 

Petitioners.  f 

To  the  Honorable  Judges  of  the  United  States  Circuit  Court 

of  Appeals  for  the Circuit. 

The  petition  of  A.  B.  and  C.  B.  respectfully  shows  unto  the 
court : 

First  That  on  the day  of ,  A.  D.  ,  they  pre- 
sented the  petition  unto  the  Honorable  G.   S.,  judge  of  the 

District  Court  of  the  United  States  for  the  District  of 

,   a  true  copy  of  which  petition  is   hereto  attached  and 

marked  "Exhibit  A." 

Second.   On  the  day  of  ,  A.  D.  ,  the  said 

A.  H.,  trustee  in  bankruptcy,  and  G.  F.,  administrator  of  the 
estate  of  E.  F.,  deceased,  by  their  counsel,  filed  a  plea  and  de- 
murrer to  said  petition,  a  true  copy  of  each  of  which  is  here- 
to attached  and  marked  "Exhibit  B  and  C."  No  other  per- 
sons appeared  in  opposition  thereto. 

Third.  On  the  day  of  ,   A.  D.  ,  the  Hor/- 

orable  G.  S.  entered  an  order  duly  dismissing  said  petition 
with  costs  and  sustaining  said  demurrer;  said  matter  having 
been  fully  argued  before  said  court. 

Fourth.  Your  petitioners  charge  the  fact  to  be  that  the  said 
District  Court  erred  in  dismissing  said  petition  and  in  sus- 
taining said  demurrer;  and  your  petitioners  are  aggrieved 
thereby  and  therefore  pray  this  honorable  court  to  review 
and  revise  the  decision  of  said  court  below. 

Fifth.  No  proof  was  taken  in  connection  with  the  deter- 
mination by  the  Honorable  G.  S.  and  the  entire  proceedings 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.      11/7 

upon  which  said  dismissal  was  grounded  appear  in  the  ex- 
hibits hereto  attached. 

Sixth.  Your  petitioners  further  show  that  no  opinion  was 
filed  by  said  court  in  the  matter. 

Seventh.  Your  petitioners  therefore  pray  that  such  order 
of  the  District  Court  be  set  aside  and  held  for  naught  and  that 
by  the  order  of  this  court  it  be  decreed  that  your  petitioners 
have  a  rig^ht  to  have  an  issue  framed  and  the  truth  of  the 
averments  contained  in  tlieir  said  petition  determined  accord- 
ing to  the  rules  and  procedure  applicable  in  such  cases,  and 
that  your  petitioners  be  given  such  other  relief  as  shall  be 
proper. 

That  an  order  be  entered  directing  the  manner  and  time 
of  service  of  this  petition.  A.   B., 

C  B., 

R.  X.,  Attorney  for  Petitioners. 
A.  B.,  one  of  the  petitioners  mentioned  and  described  in 
tb«e  foregoing  petition,  does  hereby  make  solemn  oath  that  the 
statements  contained  therein  are  true  according  to  the  best  of 
hi;>  knowledge,  information  and  belief.  A.  B. 

Sworn  and  sub-^cribed  to  before  me  this  day  of , 

A,  D.  — .  j.  N.. 

Notary  Public,  County,  . 

(i)  Coii£:ress  has  provided  two  means  of  review  by  a  Circuit  Court  of 
Appeals  of  orders  and  judgments  of  a  court  of  bankruptcy.  Sec.  25  of  the 
Bankruptcy  Act  of  1898  provides  for  appeals  in  three  classes  of  cases. 
Par.  24b  of  the  same  act  provides  for  superintending  and  revising  in  mat- 
ters of  law  only.  An  appeal  is  taken  in  the  usual  form,  and  the  Court  of 
Appeals  may  review  both  matters  of  fact  and  law  on  such  proceedings.  But 
on  a  petition  to  review  an  order  of  a  court  of  bankruptcy  the  Circuit  Courts 
of  Appeals  are  confined  to  questions  of  law.  This  distinction  has  been 
clearly  made  in  the  opinions.  See  Mueller  vs.  Nugent,  184  U.  S.  i  ;  Cun- 
ningham vs.  German  Ins.  Bank,  loi  Fed.  Rep.  977,  4  Am.  B.  R.  192;  Cour- 
ier-Journal Job  Print.  Co.  vs.  Schaefifer-Meyer  Brewing  Co.,  loi  Fed.  Rep. 
699,  4  Am.  B.  R.  183;  in  re  Rouse,  Hazard  &  Co.,  33  C.  C.  A.  356,  91 
Fed.  Rep.  96;  hi  re  Richards,  37  C.  C.  A.  634,  96  Fed.  Rep.  935;  ''«  '<' 
Abraham,  35  C.  C.  A.  592,  93  Fed.  Rep.  767 ;  in  re  Purvine,  37  C.  C.  A.  446, 

g6  Feo.  Rep.  192.     See  also  Loveland  on  Bankruptcy,  sec.  312. 

% 


1178  APPELLATE  PROCEEDINGS. 

This  petition  should  be  tiled  in  the  United  Slates  Circuit  Court  of  Ap- 
peals. Ill  re  Williams,  105  Fed.  Rep.  906;  Courier-Journal  Job.  Print  Co. 
vs.  Schacffer-Meyer  Brew.  Co.,  loi  Fed.  Rep.  699,  4  Am.  R.  R.  183- 
As  to  the  form  of  petition  and  proceedings  on  petition  to  review  and  re- 
vise matters  of  law  in  a  Circuit  Court  of  Appeals,  consult  Loveland  on 
Bankruptcy,  sec.  313. 

The  statute  prescribes  no  time  limit  within  which  to  file  a  petition  for 
review  in  a  Circuit  Court  of  Appeals.  In  re  New  York  Econornical  Print- 
ing Co.,  106  Fed.  Rep.  839,  5  Am.  B.  R.  697 ;  in  re  Good,  99  Fed.  Rep.  389, 
3  Am.  B.  R.  605. 

No  answer  or  reply  need  be  filed  to  a  petition  for  review  in  a  United 
States  Circuit  Court  of  Appeals.  A  question  of  law  is  presented  to  the 
court  sub.stantially  as  on  a  writ  of  error. 

The  record  must  contain  sufficient  matter  upon  which  the  court  may  re- 
view and  revise  a  question  of  law  and  no  other.  See  Cunningham  vs.  Ger- 
man Ins.  Bank,  103  Fed.  Rep.  932. 


No.  179. 

Petition  in  a  Circuit  Court  of  Appeals  to  Review  an  Order 
in  Bankruptcy  Disallowing  Labor  Claims. 

The  United  States  Circuit  Court  of  iVppeals 
For  the Circuit. 

In  re  A.  B.  &  Company  et  al.,  Petitioners. 

And  now  comes  E.  F.,  for  himself  and  eighty-eight  other 
labor  claimants,  whose  names,  as  well  as  the  amounts  due 
them,  respectively,  for  labor  performed  by  them  for  said  A.  B. 
&  Company  within  three  months  next  before  the  appointment 
of  the  receiver,  August  27th,  1898,  appear  in  the  agreed  state- 
ment of  facts  attached  to  this  petition  and  marked  "Exhibit 
A,"  and,  complaining  of  the  orders  and  judgment  heretofore 
rendered  against  these  complainants  by  the  Hon.  A.  J.,  judge 

of  the  District  Court  of  the  United  States  for  the District 

of — ,  says  : 

On  the  22nd  day  of  October,  A.  D.  1900,.  this  cause  came  on 
to  be  heard  before  said  judge,  to  review  the  proceedings  and 


PETITIONS    TO    REVIEW    ORDERS    IX    BANKRUPTCY.      11/9 

final  order  of  A.  M.,  Esq.,  one  of  the  referees  in  bankruptcy 
within  and  for  said  district,  which  said  proceedings  and  final 
order  was  based  upon  said  agreed  statement  of  facts. 

All  creditors  and  all  persons  in  interest  having-  consented 
to  said  agreement,  and  to  this  proceeding,  and  having  so  con- 
sented after  the  expiration  of  the  time  limited  for  other  per- 
sons to  come  into  the  case,  it  is  conceded  that  all  are  bound 
by  the  order  of  this  court  under  the  provisions  of  said  stipu- 
lation. 

Your  petitioners  contended  in  the  court  below,  as  they  now 
contend  in  this  court : 

First.  That  upon  the  facts  set  forth  in  said  agreed  statement 
of  facts  which  is  attached  hereto,  marked  "Exhibit  A,"  and 
made  a  part  of  this  petition,  said  funds  passed  into  the  hands 

of  the  said  trustee  charged  by  force  of  the  laws  of with 

an  equitable  lien  in  favor  of  said  claimants,  and  each  of  them, 
as  set  forth  in  schedule  B,  attached  to  said  statement  of  facts, 
and  that  said  claimants  were  and  are  entitled  to  be  first  paid 
from  said  funds  after  the  payment  of  taxes  and  costs  of  ad- 
ministration. 

Second.  That  in  said  proceeding  of  the  Common  Pleas 
Court,  that  court  acquired  full  and  complete  jurisdiction  for 
the  purpose  of  determining  the  respective  rights  of  the  parties 
to  that  suit.  That  the  parties  and  subject  matter  were  all  be- 
fore that  court,  and  that  no  other  court  had  jurisdiction,  nor 
could  they  acquire  jurisdiction  to  adjudicate  and  determine 
the  issues  there  involved. 

That  no  proceedings  were  ever  instituted  in  the  court  of 
bankruptcy  to  stay  that  proceeding,  and  that  that  court  had, 
therefore,  complete  jurisdiction  to  proceed  as  it  did  proceed 
to  final  decree,  and  that  before  the  adjudication  in  bank- 
ruptcy. 

The  petitioners,  therefore,  contended,  as  they  now  contend, 
that  that  fund  was  in  the  custody  of  that  court,  which  was 


1180  APPELLATE  PROCEEDINGS. 

proceeding  to  administer  upon  it,  and  that  by  reason  of  the 
ruling  and  judgment  herein  complained  of,  they  have  been 
aggrieved  and  damaged  to  the  full  extent  of  the  several 
amounts  due  them  as  aforesaid. 

This  cause  thus  being  submitted  to  the  court  on  questions 
of  law  arising  upon  the  facts  so  as  aforesaid  agreed  upon  by 
all  the  parties  having  an  interest  in  the  estate  of  said  bank- 
rupt, or  either  of  them,  the  court  decided  and  held,  as  matter 
of  law. 

First.  That  section  3206a  of  the  Revised  Statutes  of 

created  no  lien  in  favor  of  said  labor  claimants  upon  the  funds 
in  the  hands  of  the  receiver  in  the  state  courts,  or  in  the  hands 
of  the  trustee  in  bankruptcy  for  distribution. 

Second.  That  section  64/;  of  the  Bankrupt  Act  does  not 
fix  or  prescribe  any  lien  in  favor  of  the  wages  due  these 
claimants. 

Third.  That  under  the  facts  set  forth  under  the  agreed 
statement  of  facts,  said  labor  claimants  have  no  interest  in 
said  funds  other  than  as  common  creditors. 

The  court  declined  to  pass  upon  and  construe  the  effect  and 

validity  of  the  decree  of  the  Court  of  Common  Pleas  of 

county,  ,  in  favor  of  said  labor  claimants  January  13th, 

1899. 

The  court  thereupon  ordered,  adjudged  and  decreed  that 
the  orders  of  said  referee  heretofore  made  in  this  case  upon 
the  same  issues,  and  based  upon  the  same  facts  in  respect  to 
these  labor  claims,  be  affirmed,  and  that  the  petition  of  these 
claimants  on  their  behalf  be,  and  the  same  was  dismissed.  A 
copy  of  said  order,  marked  "  B,"  is  attached  hereto. 

To  all  of  which  ruling  of  law  and  judgment  of  the  court 
these  labor  claimants  at  the  time  excepted  and  still  do  except, 
and  they  now  pray  this  honorable  court  to  review  said  rulings, 
orders  and  judgments  of  the  honorable  District  Court  herein 
complained  of,  order  the  payment  of  said  labor  claims  as  set 
forth  in  said  schedule  "  A,"- attached  to  said  agreed  statement 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.     1181 

of  facts  from  the  funds  now  in  the  hands  of  the  trustee,  H.  S., 
and  for  such  other  rehef  as  they  may  be  found  entitled  to. 

Y.  &  Y. 
Attorneys  for  ah  the  within  named  labor  claimants  and  Peti- 
tioner E.  F. 

United  States  of  America,  State  of ,  County  of ,  ss. 

District  aforesaid. 
E.  F.,  being  the  petitioner  above  named,    for  himself  and 
others,  does  hereby  make  solemn  oath  that  the  statements  con- 
tained in  the  foregoing  petition  subscribed  by  him  are  true. 

E.  F. 
Sworn  to  and  subscribed  by  E.  F.,  before  me,  this day 

of ,  A.  D. . 

W.  E.. 

Notary  Public, 

County. 

(l)   Taken  from  the  record  in  re  Laird,  109  Fed.  Rep.  550.  48  C.  C.  A.  538. 


No.  177. 

Petition  to  a  Circuit  Court  of  Appeals  to  Review  an  Order  in 
Bankruptcy  to  Compel  Assignee  to  Pay  over  Moneys 
to  Trustee. 

United  States  Circuit  Court  of  Appeals,   Sixth  Circuit. 

Leonard  Comingor,    )  ^^^  B^^,^i,,,,ptcy. 

Petitioner.  ) 

The  petitioner,  Leonard  Comingor,  respectfully  represents 
that  on  the  14th  day  of  February.  1899,  Sinsheimer,  and 
others,  creditors  of  Simcnison,  Whiteson  and  Company,  filed 
their  petition  in  bankruptcy  in  the  District  Court  of  the  United 
States  for  the  district  of  Kentucky,  showing  that  said  debtors 
made  an  assignment  to  this  petitioner  December  5th,  1898, 
for  the  benefit  of  creditors,  asking  an  adjudication  in  l)ank- 


1182  APPELLATE  PROCEEDINGS. 

ruptcy  and  praying  a  subpoena  against  the  alleged  bankrupts 
and  this  petitioner,  to  which  said  alleged  bankrupts  tendered 
answer  and  plea  and  this  petitioner  did,  March  21st,  1899, 
move  the  court  to  dismiss  as  to  him  and  without  waiving  the 
same,  tender  an  answer,  although  nothing  was  alleged  against 
him  save  that  he  was  assignee  for  creditors.  Petitioner  says 
that  no  further  notice  was  taken  of  him  in  this  proceeding 
and  no  action  taken  on  his  motion  to  dismiss  or  offer  to 
answer.  He  says  that  in  both  subsequent  appeals  and  in  all 
proceedings  subsequent  to  said  motion  to  dismiss,  he  was 
simply  dropped  out  of  the  case  by  common  consent.  He  says 
he  was  never  treated  or  considered  as  a  party  to  this  bank- 
ruptcy proceeding  by  the  court  or  the  parties,  since  March, 
1899,  either  in  the  District  Court  or  either  of  the  appeals  to  this 
court,  as  the  orders,  pleadings  and  records  will  show.  (See 
record  in  this  court  No.  716.  page  20,  paragraph  3,  which 
record  is  hereinafter  referred  to  as  part  hereof.) 

This  petitioner  says  further  that  on  March  28th,  1899,  said 
Simonson,  Whiteson  and  Company  were  adjudged  bankrupts 
and  an  appeal  was  taken  to  this  honorable  court,  resulting  in 
a  reversal,  with  directions  to  the  District  Court  to  allow  the 
tendered  answer  of  Simonson,  Whiteson  and  Company  to  be 
filed  and  directing  a  trial  on  issue  made.  In  accordance  there- 
to said  District  Court  did  on  August  12th,  1899,  set  aside  and 
annul  said  adjudication,  file  said  answer,  and  on  the  20th  day 
of  September,  1899,  again  adjudge  said  Simonson,  Whiteson 
and  Company  bankrupts,  who  again  appealed,  September 
22nd,  1899.  All  of  the  matters  herein  so  far  referred  to  ap- 
-pear  in  Records  Nos.  716  and  ']']'],  in  this  court,  and  are  re- 
ferred to  as  parts  hereof. 

Petitioner  says  that  on  said  last  appeal  the  adjudication  of 
the  said  District  Court,  made  the  20th  day  of  September,  1899, 
was  affirmed  and  the  mandate  of  this  court  was  filed  below  on 
the  17th  day  of  May,  1900,  and  the  case  referred  to  Baskin, 
referee  in  bankruptcy,  who  did  on  the  28th  day  of  May,  1900, 
enter  an  order  without  notice  and  no  appearance  of  any  one, 


PETITIOiXS    TO    REVIEW    ORDERS    IX    BANKRUPTCY.      1183 

directing  this  petitioner  to  tile  with  him  an  itemized  statement 
of  receipts  and  disbursements  as  assignee  under  the  deed  of 
assignment  of  the  bankrupts  and  to  appear  before  him  in  per- 
son to  settle  his  accounts  as  said  assignee.  A  certified  copy  of 
said  order  was  served  on  this  petitioner  and  is  filed  herewith 
as  part  hereof,  marked  Exhibit  No.  i. 

Petitioner  says  that  he  was  thus  required  to  give  and  did 
give  to  said  referee  said  itemized  account,  from  which  it  ap- 
peared that  before  any  proceedings  in  bankruptcy  he  had 
realized  on  all  the  assets  of  the  bankrupts,  under  direction  and 
order  of  the  state  court,  where  a  suit  was  pending  long  before 
any  petition  in  bankruptcy,  in  which  he  was  settling  his  ac- 
counts ;  that  he  realized  from  said  assets  the  sum  of  $92,865.77, 
being  over  22  per  cent,  more  than  the  appraised  value  as  made 
under  oath  by  the  appraisers  appointed  by  the  state  court ;  that 
he  had  disbursed  for  expenses  in  carrying  on  the  business  and 
converting  assets  into  cash  the  sum  of  $19,876.73;  that  he 
drew  as  his  commissions  $3,398.90,  and  paid  his  counsel  for 
necessary  services  $3,200.00,  all  before  any  proceedings  in 
bankruptcy.  A  copy  of  said  statement  is  filed  as  part  hereof, 
marked  Exhibit  No.  2. 

Whereupon  on  the  20th  of  June,  1900,  the  referee  entered 
an  order  appointing  the  Louisville  Trust  Company  receiver 
herein  and  directing  the  said  receiver  to  apply  to  the  Jefferson 
Circuit  Court,  Common  Pleas  Division,  for  an  order  directing 
the  state  court  receiver  to  pay  over  to  the  receiver  herein  the 
entire  fund  in  said  state  court  in  the  action  of  L.  Comingor, 
asignee,  etc.,  vs.  Simonson,  Whiteson  and  Co.,  at  the  same 
time  directing  that  the  receiver  shall  not  appear  in  said  action 
and  shall  not  receive  less  than  the  whole  sum  in  said  court. 
Said  referee's  order  further  required  petitioner  herein  and  his 
counsel  in  said  state  court  proceedings  to  appear  three  days 
thereafter  and  show  cause  why  they  should  not  pay  over  to 
the  receiver  the  sums  held  by  them  as  commissions  and  fees 
and  the  balance  of  $6,766.53,  not  then  paid  into  the  state  court 
by  Comingor,  assignee,  for  creditors  and  still  in  his  hands.     A 


1184  APPELLATE  PROCEEDINGS. 

copy  of  said  order  is  tiled  as  part  hereof,  marked  Exhibit  No. 
3.     On  the  next  day,  June  21st,  1900,  said  Trust  Company,  re- 
ceiver herein,  appeared  before  said   state  Circuit  Court  and 
asked  leave  to  withdraw  the  entire  fund  in  court,  $46,305.03, 
all  of  which  was  submitted  to  said  Circuit  Court.     A  copy  of 
said  motion  is  filed  as  part  hereof,  marked  Exhibit  No.  4.    Ac- 
companying said  motion  was  a  notice  served  on  petitioner  by 
the  receiver  in  bankruptcy  that  the  motion  would  be  made  be- 
fore the  state  court  June  21st,  1900,  and  a  copy  of  an  injunc- 
tion of  the  District  Court  in  this  matter  enjoining  and  restrain- 
ing this  petitioner  from  making  any  opposition  to  said  motion, 
said  injunction  expressly  prohibiting  this  petitioner  by  name 
"  from  taking  any  steps,  instituting  or  having  any  proceedings 
affecting  the  estate  and  assets  of  Simonson,  Whiteson  and  Co., 
in  any  state  court  and  especially  in  action  No.  19,944.  entitled 
L.  Comingor,  etc.,  vs.  Simonson,  Whiteson,  etc.,  pending  in 
the  Jefferson  Circuit  Court."     A  certified  copy  of  said  injunc- 
tion and  said  notice  are  hereby  filed  herewith  as  part  hereof 
marked  Exhibits  Nos.   5  and  6,  respectively.     All  of  which 
the  state  court  took  under  advisement. 

At  the  same  time  that  the  receiver  in  bankruptcy  was  ap- 
plying to  the  state  court  as  shown,  and  your  petitioner  was 
restrained  from  opposing  or  appearing  in  response  to  said  no- 
tice, the  referee  in  bankruptcy,  sua  sponte,  ruled  the  petitioner 
herein  to  pay  to  said  receiver  the  money  retained  by  him  as 
commissions  as  appears  in  said  Exhibit  No.  3.  Petitioner  re- 
sponded June  23rd,  1900,  to  this  rule,  that  he  retained  the 
money  as  his  commissions  as  assignee  under  the  deed  before 
any  proceedings  in  bankruptcy,  and  that  he  had  used  them 
and  was  unable  to  pay  it  to  the  receiver.  A  copy  is  herewith 
filed  as  part  hereof,  marked  Exhibit  No.  7.  Immediately  on 
filing  said  response,  said  referee  adjudged  the  same  insuf- 
ficient, made  the  rule  absolute,  and  ordered  the  petitioner  to 
pay  said  sum  to  the  receiver  before  June  30th,  1900.  A  copy 
of  said  order  is  filed  herewith  as  part  hereof  marked  Exhibit 
No.  8.    Before  said  date,  however,  viz. :  June  28th,  1900,  said 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.     1185 

referee,  without  notice  or  appearance  of  any  one  and  sua 
sponte  entered  another  show  cause  order  and  had  the  same 
served  on  petitioner,  ruHng  him  to  pay  by  June  30th,  1900, 
to  the  receiver  in  bankruptcy  the  further  sum  of  $3,000.00, 
"  recited  in  his  report,"  as  having  been  paid  to  his  counsel  and 
the  further  sum  of  $200.00,  as  shown  in  said  report  to  have 
been  paid  to  others  counsel  A  copy  of  which  order  is  filed 
as  part  hereof,  marked  Exhibit  No.  9.  To  which  this  peti- 
tioner responded  June  30th.  1900,  that  these  payments  were 
made  before  any  bankruptcy  proceedings,  that  he  has  no 
means  to  pay  said  sums  to  the  receiver,  that  before  the  petition 
in  bankruptcy  was  filed  and  before  he  had  any  knowledge,  in- 
formation or  intimation  that  it  would  be  filed,  relying  upon 
it  that  he  would  wind  up  his  trust  under  the  assignment,  he 
filed  his  petition  in  the  said  court  and  his  action  is  there  pend- 
ing and  he  is  still  subject  to  that  jurisdiction  and  required  to 
settle  in  the  state  court.  A  copy  of  this  response  is  filed  as 
part  hereof  marked  Exhibit  No.  10.  On  the  same  day  that 
said  response  was  filed.  June  30th,  1900,  the  Jefferson  Circuit 
Court  declined  to  entertain  said  bankruptcy  receiver's  motion 
hereinabove  shown  to  withdraw  funds  from  the  court,  because 
said  receiver  was  not  a  party  to  the  action,  and  said  court  sug- 
gested that  the  motion  would  be  entertained  when  said  receiver 
filed  its  petition  asserting  claim  to  the  fund  as  provided  in 
section  29,  Kentucky  Code  of  Practice.  Said  ruling  of  the 
court  is  in  writing  and  a  copy  thereof  is  filed  as  part  hereof, 
marked  Exhibit  No.  11. 

In  accordance  with  the  suggestion  of  the  state  Circuit  Court 
the  receiver  (who  had  in  the  meantime  been  chosen  trustee  in 
bankruptcy),  did  on  the  3rd  day  of  July.  1900,  file  a  claimant's 
petition  under  said  Kentucky  Code  provision,  in  the  state  Cir- 
cuit Court,  making  himself  a  party  to  said  action,  having  been 
directed  so  to  do  by  the  order  of  the  referee  in  bankruptcy. 
A  copy  of  said  petition  and  exhibits  attached  thereto,  including 
the  said  referee's  order  are  filed  as  parts  hereof,  marked  Ex- 
hibit No.  12.     Thereafter,  on  July  5th,  1900,  said  trustee  in 


1186  APPELLATE  PROCEEDINGS. 

bankruptcy  tendered  his  proposed  order  for  withdrawal  of  said 
fund  accompanying  the  same  with  notice  to  petitioner's  counsel 
and  their  response  whereupon  the  court  made  him  a  party  and 
entered  the  motion  for  leave  to  withdraw  the  funds  then  in 
said  court,  and  sustained  his  motion  and  gave  said  trustee  leave 
to  withdraw,  which  was  done.  A  copy  of  said  motions  or  or- 
der and  the  notice  to  petitioner's  counsel  and  their  reply  is 
filed  as  part  hereof,  marked  Exhibit  No.  13. 

From  all  of  which  it  appears  that  the  trustee  in  bankruptcy 
became  a  party  to  the  petitioner's  suit  for  settlement  in  the 
state  court,  made  it  appear  to  said  court  that  all  its  officers, 
including  petitioner  and  his  counsel,  were  paid  and  the  fund 
remaining  in  said  court  would  be  distributed  among  the  cred- 
itor beneficiaries  of  said  deed  of  assignment  and  thus  obtained 
the  said  fund  for  distribution  in  bankruptcy  herein.  At  the 
same  time,  whilst  this  was  being  done,  the  petitioner  was  un- 
der injunction  from  the  District  Court  herein  as  already  shown» 
preventing  any  action  on  his  part  in  said  state  court,  and  at 
the  same  time  was  being  pressed  by  said  show  cause  rules  of 
the  referee  in  bankruptcy  to  surrender  his  commission  and  pay 
back  the  money  expended  by  him  in  paying  counsel  before 
any  bankruptcy  proceedings,  his  response  to  said  rules,  among 
other  things,  showing  that  the  state  court  suit  was  pending  and 
he  was  within  that  jurisdiction  making  his  settlement.  He, 
therefore,  filed  his  petition  for  review  by  the  District  Court,  a 
copy  of  which  is  filed  as  part  hereof,  marked  Exhibit  No.  14. 
Upon  which  the  referee  filed  his  report  in  said  District  Court, 
of  which  a  copy  is  filed  as  part  hereof,  marked  Exhibit  No.  15. 
On  the  7th  day  of  July,  1900,  said  petition  foi  review  came 
on  for  hearing  before  the  District  Court,  was  heard,  and  the 
District  Court  took  time  to  consider;  then,  on  the  i6th  day  of 
July,  1900,  the  court  entered  an  order  referring  the  matter 
back  to  the  referee  with  directions  to  take  testimony  concern- 
ing the  character  of  the  services  of  the  petitioner  and  his  coun- 
sel under  the  deed  of  assignment,  and  their  value  to  the  bank- 
rupt estate,  and  directing  the  referee  to  report  fiindings  of  fact 


PETITIONS    TO    REVIEW    ORDERS    IX    BAXKRUPTCY.     118/ 

and  any  modification  he  niiglit  choose  to  make  of  his  former 
report  and  recommendation,  a  copy  of  which  is  filed  as  part 
hereof,  marked  Exhibit  No.  i6.  Whereupon  the  referee  im- 
mediately commenced  taking-  evidence  and  continued  to  take 
from  time  to  time,  during  which,  viz.  :  on  the  loth  day  of 
November,  1900,  this  petitioner  filed  an  additional  response 
before  the  referee,  showing  in  substance  that  as  appears  in 
these  proceedings,  neither  the  referee  nor  the  District  Court  has 
any  jurisdiction  of  the  petitioner  or  of  the  subject  matter  in 
controversy,  and  this  whole  proceeding  is  illegal  and  in  con- 
flii:t  with  the  provisions  of  the  bankruptcy  law.  A  copy  of 
savd  response  is  filed  as  part  hereof,  marked  Exhibit  No.  17. 
Thereafter  the  referee  reported  to  the  District  Court  on  De- 
cember II,  1900,  in  which  report  he  declines  to  modify  his  for- 
mti'f  rulings  and  report  and  recommends  the  dismissal  of  pe- 
titioner's appeal  to  the  District  Court  for  review.  A  copy  of 
sa;d  report  is  filed  herewith  as  part  hereof,  marked  Exhibit 
N'O.  18.  Thereafter,  on  December  22nd.  1900,  and  whilst 
this  matter  vv-as  pending  before  the  District  Court,  the  said 
amended  or  additional  response  (Exhibit  No.  17)  was  also 
fikd  in  said  court. 

Thereafter,  on  the  19th  day  of  January,  1901,  the  District 
Cmrt  filed  an  opinion,  of  which  a  copy  is  filed  as  part  hereof, 
marked  Exhibit  No.  20.  sustaining  the  referee  and  dismissing 
the  petition  for  review  and  directing  proper  orders  to  be  en- 
tered to  that  end,  which  orders  were  entered  on  the  26th  day  of 
January,  1901.  and  a  copy  of  the  same  is  filed  as  part  hereof, 
marked  Exhibit  No.  21,  and  which  is  in  words  and  figures 
as  follows : 

In  the  District  Court  of  the  United  States,  Saturday.  Janu- 
ary 26th,  1 90 1. 
In  the  matter  of 
Sinsheimer,  Levinson  &  Co.,  etc., 

z's.  \   In  Bankruptcy. 

Simon,  Whiteson  &  Co.,  D.  G.  Simon- 

,sor:,  I  Whiteson  &  Leo  Stern. 


1188  APPELLATI-:  PROCEEDINGS. 

This  cause  coming  on  to  be  heard  on  the  petition  of  Leonard 
Comingor,  for  review  of  the  order  of  court  entered  herein  by 
John  B.  Baskin.  one  of  the  referees  of  this  court,  requiring 
Leonard  Comingor  to  pay  over  to  the  Louisville  Trust  Com- 
pany, trustee  in  bankruptcy  herein,  the  sums  of  $3,398.90  and 
$3,000.00  and  the  court  being  fully  advised,  delivered  a  writ- 
ten opinion  which  was  filed  herein,  and  on  Jan.  19,  1901, 
and  in  pursuance  of  said  written  opinion,  it  is  considered,  or- 
dered and  decreed  by  the  court  that  said  petition  for  review 
filed  by  said  Comingor,  June,  1900,  is  refused  and  dismissed, 
to  which  said  Comingor  excepts  and  it  is  adjudged  and  or- 
dered by  the  court  that  said  Comingor  pay  to  said  Louisville 
Trust  Company,  trustee,  the  said  sums  of  $3,398.90  and 
$3,000.00  on  or  before  February  i6th.  1901,  to  all  of  which 
said  Comingor  excepts. 

Your  petitioner  further  shows  that  he  is  aggrieved  by  the 
orders  of  said  District  Court  and  injured  thereby  and  that  the 
errors  complained  of  consist : 

First.  In  said  court  holding  that  the  referee  and  said  court 
had  jurisdiction  and  power  to  proceed  against  petitioner 
Leonard  Comingor,  in  the  summary  way  had,  he  being  a 
third  party,  and  not  one  of  the  bankrupts,  in  said  court  re- 
fusing and  dismissing  said  petition  for  review  and  in  not 
sustaining  same. 

Second.  In  said  court  holding  that  it  had  jurisdiction  and 
power  upon  the  proceedings,  orders  and  recommendations  of 
the  referee  had  to  adjudge  said  Leonard  Comingor  in  con- 
tempt, and  to  punish  him  for  contempt,  or  to  order  him  to 
pay  said  money. 

Third.  In  said  court  holding  that  the  referee  had  jurisdic- 
tion and  power  to  proceed  against  said  Leonard  Comingor,  in 
said  summary  manner  had. 

Fourth.  In  said  court  holding  that  said  Leonard  Comingor 
held  said  money  for  the  bankrupts  and  could  be  proceeded 
against  in  said  summary  manner  had. 

Fifth.  In  said  court  holding  that  it  had  the  power  and  juris- 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.      1189 

diction  herein  to  grant  or  issue  the  injunction  against  Leonard 
Comingor. 

Sixth.  In  said  court  holding  that  said  referee  had  the  power 
or  jurisdiction  to  issue  said  show  cause  orders  or  rules  there- 
on or  to  proceed  against  said  Leonard  Comingor  in  the  man- 
ner had  upon  said  orders  issued. 

Seventh.  In  said  court  holding  that  the  filing  of  said  re- 
sponses of  Leonard  Comingor  gave  said  referee  or  court  juris- 
diction or  power  to  proceed  thereon  in  any  manner  in  said 
matter,  or  in  the  manner  had. 

Eighth.  In  said  referee  and  said  court  adjudging  said  re- 
sponses and  each  of  them  insufficient. 

Ninth.  In  said  court  finding  the  facts  to  be  and  adjudging 
that  said  sums  of  money  were  the  property  of  the  bankrupts' 
estate  and  that  said  Leonard  Comingor  never  claimed  title 
to  any  of  it  nor  made  any  claim  of  right  to  it,  or  ownership 
thereof  at  any  time,  and  that  he  had  never  claimed  to  have 
converted  it  to  his  own  use,  or  to  have  claimed  it  adversely  to 
the  bankrupts  or  the  trustee  or  the  receiver  in  bankruptcy. 

Tenth.  In  the  court's  adjudging  that  said  money  was  not 
converted  by  Leonard  Comingor  to  his  own  use,  but  held  for 
the  benefit  of  the  trustee. 

Eleventh.  In  the  court's  adjudging  that  said  Leonard  Co- 
mingor was  properly  before  the  court  in  said  proceedings. 

Twelfth.  In  the  court's  failing  to  dismiss  said  contempt  pro- 
ceedings against  Leonard  Comingor  and  discharging  him. 

Thirteenth.  In  the  court's  finding  as  a  fact  and  adjudging 
that  said  Leonard  Comingor  was  a  party  to  this  proceeding  in 

bankruptcy. 

Fourteenth.  In  the  court  adjudging  and  ordering  said  Leon- 
ard Comingor  to  pay  said  sums  of  money  to  the  receiver  (who 
afterwards  became  the  trustee  in  bankruptcy)  in  the  summary 
manner  had.  after  ordering  said  receiver  and  trustee  to  make 
itself  a  party  to  the  state  court  proceeding  which  was  done, 
and  the  receiver  and  trustee  became  a  party  to  said  suit  in 


1190  APPELLATE  PROCEEDINGS. 

the  state  court  and  withdrew  all   the  money  paid   into  the 
state  court  hy  said  Leonard  Comingor, 

Fifteenth.  In  the  court  holding  that  the  proceedings  herein 
against  petitioner  Comingor  are  equivalent  to  a  plenary  pro- 
ceeding against  him. 

Sixteenth.  In  the  court  holding  that  the  acts  and  proceed- 
ings herein  by  or  on  behalf  of  the  petitioner,  Comingor,  amount 
to  or  are  equivalent  to  or  constitute  a  consent  to  the  jurisdic- 
tion of  the  referee  in  bankruptcy  or  the  District  Court  herein, 
in  these  proceedings  against  petitioner. 

Wherefore  your  petitioner  prays  that  the  orders,  judgments 
and  decrees  of  the  District  Court  be  reviewed  and  revised 
in  the  matters  of  law  and  that  it  be  adjudged  that  said  Dis- 
trict Court  was  without  jurisdiction,  and  if  that  can  not  be 
done,  then  adjudge  that  the  summary  proceedings  herein  were 
illegal  and  void  or  if  that  can  not  be  done  then  adjudge  that 
his  responses  were  sufficient  in  law  and  he  be  discharged.  He 
prays  for  an  order  of  this  honorable  court  directing  the  Dis- 
trict Court  to  suspend  the  execution  of  its  judgment  of  Janu- 
ary 26th,  1 90 1,  and  all  further  proceedings  against  your  peti- 
tioner in  this  matter  until  the  further  order  of  this  court,  and 
he  prays  further  for  all  other  necessary  and  proper  relief  herein. 

R.  X., 
Attorney  for  Petitioner. 

State  of  Kentucky,  County  of  Jefferson,  ss. 

Petitioner,  L.  Comingor,  on  oath  states  that  the  statements 
of  the  foregoing  petition  are  true  as  he  believes. 

Leonard  Comingor. 
Subscribed  and  sworn  to  before  me  by  L.  Comingor,  this 
28th  day  of  January,  1901.     My  commission  expires  January 
6,  1904.  D.  A.  Sachs, 

Notary    Public   in   and    for  Jefferson 
County,  Kentucky. 

(i)  Taken  from  the  record  in  Louisville  Trust  Co.  vs.  Comingor,  184 
U.  S.  18. 


In  Bankruptcy. 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.       1191 

No.  180. 

Petition  to  a  Circuit  Court  of  Appeals  to  Review  an  Order  in 
Bankruptcy  Marshalling  Liens. 

United  States  Circuit  Court  of  Appeals 
For  the  Circuit. 

In  the  matter  of 

E.  F.,  S.  H.,  &  J.  K., 

vs. 
The  A.  B.  Company,  Bankrupt. 

Petition  of  First  National  Bank  of for  Review. 

The  petition  of  the  First  National  Bank  of ,  a  creditor 

of  the  A.  B.  Company,  bankrupt  herein,  respectfully  shows 
to  this  court  that  on  the  3rd  day  of  April,  1899,  a  creditor's 
petition  was  filed  against  the  sai4  A.  B.  Company,  which  is  a 
corporation,  in  the  District  Court  of  the  United  States  for  the 

district  of ,  and  that  on  the  21st  day  of  April,  1899.  the 

said  A.  B.  Company  was  duly  adjudged  a  bankrupt,  and  that 

on  said  21st  day  of  April  the  District  Court  of referred 

said  estate  to  A.  M..  referee  for  said  court,  and  that  one  of  the 
purposes  of  said  reference  was  for  said  referee  to  receive 
claim  against  said  bankrupt's  estate,  allow  or  disallow  same, 
and  to  pass  upon  secured  and  preferred  claims. 

Your  petitioner  shows  that  on  the  7th  day  of  June,  1899, 
it  filed  its  duly  verified  proof  of  claim  with  said  referee,  set- 
ting up  a  claim  against  said  bankrupt's  estate  for  seventeen 
hundred  ($1,700.00)  dollars,  said  claim  consisting  of  a  note 
for  a  like  amount,  signed  by  said  bankrupt  and  A.  B..  and 
also  claiming  and  asserting  a  lien  upon  certain  property  of 
said  bankrupt  under  and  by  virtue  of  a  mortgage  executed 
by  said  bankrupt  to  said  A.  B..  J.  F.  and  N.  G.  mortgagees, 
to  secure  them  or  any  of  them  from  loss  by  reason  of  their 
being  liable  as  sureties  for  debts  of  said  bankrupt  or  becom- 
ing liable  therefor  within  a  period  of  four  years  thereafter. 
The  property  conveyed  by  said  mortgage  is  as  follows: 


1192  APPELLATE    PROCEEDINGS. 

"Lying  and  being  in  connty,  of ,  and  more  par- 

ticnlaiiy  described  as  follows,  to  wit : 

[Here  describe  the  properly  iit(>rtgaged.'\ 

Said  mortgage  was  dated  April  15th,  1892,  was  dnly  ac- 
knowledged and  recorded  October  12th,  1892,  and  the  limit  of 
indemnity  afforded  the  mortgagees  thereby  was  twenty-five 
thousand  ($25,000.00)  dollars.  A  copy  of  said  mortgage  was 
filed  with  said  proof  of  claim,  and  a  copy  thereof  is  filed  here- 
with as  a  part  hereof  marked  "Exhibit  A." 

Your  petitioner  further  shows  that  its  said  debt  was  origi- 
nally created  April  loth,  1895,  within  the  four  years'  limit 
set  out  in  said  mortgage,  and  it  claimed  and  now  claims  to 
be  substituted  and  subrogated  to  the  rights  of  said  mortgagee, 
A.  B.,  under  said  mortgage  and  that  its  said  debt  was  protected 
thereby  and  entitled  to  share  in  the  indemnity  thereof.  Your 
petitioner  also  showed  and  shows  that  its  said  debt  was  origi- 
nally for  the  sum  of  three  thousand  ($3,000)  dollars,  and 
had  been  reduced  from  time  to  time  by  partial  payments  there- 
on down  to  seventeen  hundred  ($1,700)  dollars,  and  that  this 
sum  was  due  and  unpaid,  and  is  now  due  and  unpaid,  and  the 
lien  had  not  and  has  not  been  waived,  released  nor  in  any 
wise  relinquished. 

Your  petitioner  further  shows  that  on  the  i8th  day  of  No- 
vember, 1899,  said  referee  passed  upon  its  said  claim,  and  al- 
lowed it  only  as  a  general  or  unsecured  claim  against  said  bank- 
rupt's estate,  and  refused  to  allow  the  same  as  secured  or  en- 
titled to  any  lien  under  said  mortgage  dated  April  15th,  1892, 
or  the  rights  of  the  said  mortgagee,  A.  B.,  therein.  A  copy 
of  the  order  of  said  referee  upon  the  claim  is  filed  herewith  as 
a  part  hereof,  marked  "Exhibit  B." 

Your  petitioner  shows  that  thereafter  on  the  24th  day  of 
November,  1899,  it  filed  its  petition  for  review  with  said  ref- 
eree, setting  out  the  error  complained  of,  and  that  the  referee 
forthwith  certify  to  the  judge  of  the  District  Court  the  ques- 
tion presented,  a  summary  of  the  evidence  relative  thereto  and 
the  finding  and  order  of  the  referee  thereon.     Whereupon  said 


PETITIONS    TU    REVIEW    ORDERS    IX    DAXKRUPTCV.     1193 

referee  certified  to  said  judge  the  question  presented,  a  sum- 
mary of  the  evidence  relating  thereto,  the  finding  and  the 
order  thereon.  A  copy  of  said  order  of  the  referee  is  filed  here- 
with as  a  part  hereof  marked  "Exhibit  C." 

Your  petitioner  further  shows  that  thereafter,  on  the  ist 
day  of  December,  1899,  the  judge  of  the  said  District  Court 
in  reviewing  the  findings  and  orders  of  the  referee  on  said 
questions,  held  that  said  debt  was  only  a  common  or  unsecured 
claim  against  said  bankrupt's  estate  and  not  protected  nor  se- 
cured by  the  mortgage  of  April  15th,  1892,  but  said  District 
Court  allowed  as  a  prior  and  secured  claim  a  debt  of  twenty- 
five  thousand  ($25,000)  dollars  due  to  the  Third  National 
Bank  by  said  bankrupt,  giving  to  said  bank  the  entire  indemni- 
ty afforded  by  said  mortgage  of  April  15th.  1892.  and  adjudg- 
ing to  said  bank  a  Hen  for  the  entire  sum  of  twenty-five 
thousand  ($25,000)  dollars.  A  copy  of  the  order  of  the  said 
District  Judge  is  filed  herewith  as  a  part  hereof  marked  "Ex- 
hibiv  D." 

Your  petitioner  further  shows  that  the  question  of  law  de- 
cided by  the  District  Court  was.  that  under  the  provisions  and 
construction  of  the  mortgage  of  April  15th.  1892.  your  peti- 
tioner was  not  entitled  to  any  share  or  pro  rata  in  the  indem- 
nity of  said  mortgage,  or  to  be  substituted  to  the  rights  of  the 
mortgagee,  A.  B.,  thereunder,  but  that  the  Third  National  Bank 
was  entitled  to  and  should  receive  all  of  said  indemnity,  and 
be  adjudged  a  lien  for  the  entire  sum  of  twenty-five  thousand 
($25,000)  dollars. 

Your  petitioner  further  shows  that  at  the  time  the  District 
Court  made  the  order  complained  of  herein  there  was  only 
twenty-two  thousand  ($22,000)  dollars  of  indebtedness  of 
said  bankrupt  due  said  Third  National  Bank  which  was  in 
existence  at  the  execution  of  the  mortgage,  or  was  created 
within  four  years  thereafter,  and  that  the  balance  of  said  twen- 
ty-five thousand  ($25,000)  dollars,  to  wit,  three  thousand 
($3,000)  dollars,  was  not  created  until  more  than  four  years 


1194  APPELLATE  PROCEEDINGS, 

after  the  execution  of  said  mortgage,  and  said  three  thousand 
($3,000)  dollars  was  not  and  is  not  secured  thereunder. 

Your  petitioner  further  shows  that  it  is  aggrieved  by  the 
orders  of  the  said  District  Court,  and  injured  thereby,  and  that 
the  error  complained  of  consists : 

First.  That  said  District  Court  did  not  allow  and  refused 
to  adjudge  your  petitioner  a  lien  for  its  said  debt  upon  the 
property  of  said  bankrupt's  estate  under  and  by  virtue  of  the 
provisions  of  the  mortgage  of  April  15th,  1892,  and  the 
rights  of  mortgagee,  A.  B.,  thereunder,  upon  the  property  of 
the  bankrupt  described  therein,  and  refused  to  subrogate  your 
petitioner  to  said  mortgagee's  rights. 

Second.  That  said  District  Court  did  not  allow,  and  re- 
fused to  adjudge  your  petitioner  its  pro  rata  share  upon  its  said 
debt  of  the  indemnity  afforded  the  mortgagees  in  the  mort- 
gage of  April  15th,  1892, 

Third.  That  said  District  Court  allowed  and  a:d judged  to 
the  Third  National  Bank  the  full  amount  of  indemnity  af- 
forded the  mortgagees  in  the  mortgage  of  April  15th,  1892, 
to  secure  a  debt  of  twenty-five  thousand  ($25,000)  dollars, 
when  your  petitioner  shows  that  three  thousand  ($3,000)  dol- 
lars thereof  was  not  and  is  not  secured  by  said  mortgage. 

Fourth.  That  said  District  Court  adjudged  that  the  entire 
security  of  said  mortgage  redounded  to  the  benefit  of  said 
Third  National  Bank,  when  the  debt  of  said  bank  is  not  spe- 
cifically provided  for  therein,  nor  does  said  mortgage  show 
said  bank  is  entitled  to  any  priority  or  security  superior  to  your 
petitioner. 

Your  petitioner  shows  that  under  the  provisions  of  the  mort- 
gage of  April  15th,  1892^  and  under  the  rules  of  equity  and 
the  law  of  substitution  and  subrogation,  and  under  section  64, 
b.  5,  chapter  7,  of  the  Bankruptcy  Act  of  1898,  your  peti- 
tioner is  entitled  to  all  the  rights  of  said  mortgagee,  A,  B.,  to 
the  extent  of  its  said  debt,  and  that  thereunder  your  petitioner 
has  a  lien  upon  the  property  in  said  mortgage  described  to  se- 
cure its  said  debt,  inferior  only  to  that  of  the  S.  Trust  Com- 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.      1195 

pany,  trustee,  and  Mrs.  Anna  Mueller,  and  of  equal  dignity 
to  the  lien  of  the  Third  National  Bank,  and  that  it  was  the 
duty  of  the  District  Court  to  so  hold. 

Your  petitioner  asks  for  an  early  hearing  of  this  matter, 
and  that  the  same  may  be  presented  upon  the  petition  and  ex- 
hibits filed  herewith,  or  if  your  honors  so  direct,  upon  the  orig- 
inal pleadings,  proofs,  evidence  and  proceedings  now  on  file  in 
the  office  of  the  clerk  of  the  United  States  District  Court,  where 
said  proceedings  were  had. 

Wherefore,  your  petitioner  prays  that  the  order  of  the  said 
District  Court  may  be  reviewed  and  revised  in  matters  of  law 
so  as  to  adjudge  your  petitioner  a  lien  for  its  said  debt  under 
the  mortgage  of  April  15th,  1892,  and  the  rights  of  mortgagee, 
A.  B.,  thereunder  for  its  costs  herein,  and  all  proper  and  equita- 
ble relief.  R.  X., 

\_V eriiication.~\  Attorney  for  Petitioner. 

Taken  from  the  record  in  Courier-Journal  Job  Printing  Co.  vs.  Schaeffer- 
Meyer  Brewing  Co.,  loi  Fed.  Rep.  699;  41  C.  C.  A.  614. 


No.  181. 

Petition  to  a  Circuit  Court  of  Appeals  to  Review  an  Order  in 
Bankruptcy  under  Sec.   67f. 

The  United  States  Circuit  Court  of  Appeals 

For  the Circuit  : 

In  the  matter  of  A.  B.,    )    ^    ^     , 

-r^     ,  h    111  Bankruptcy. 

Bankrupt,  ) 

Your  petitioner,  T.  A.,  comes  and  shows  to  the  Honorable 
Court,  that  on  September  10,  1900,  A.  B.  was  adjudged  a 
bankrupt  in  the  District  Court  of  the  United  States  for  the 

■ Division  of  the  District  of  ,  and  tliat  on  the 

22nd  day  of  the  same  month  your  petitioner  was  duly  appoint- 
ed trustee  of  the  estate  of  said  bankrupt,  and  having  qualified 


1196  APPELLATE  PROCEEDINGS. 

as  such,  has  since  been,  and  is  now.  in  the  discharge  of  the  du- 
ties of  said  trust. 

At   the  time  of  fihng  his  petition  in  bankruptcy,  the   said 

A.  B.  was  the  owner  of  a  stock  of  merchandise  in county, 

.  which  he  had  acquired  about  two  months  previous,  and 

which  constituted  ah  his  avaikible  assets.  In  October,  1893, 
C.    Bros,    obtained   judgment   against   him    in   the    Supreme 

Court  at ,  for  $ and  cost  of  suit.     An  alias  execution 

was  issued  on  this  judgment  by  the  clerk  of  the  Supreme  Court 
on  September  6,  1900,  tested  the  first  day  of  the  preceding 
term,  to  wit,  the  second  Monday  in  September,  1899,  which 

came  to  the  hands  of  the  sheriff  of  county,  ,  the 

next  day,  and  was  by  him,  on  September  8,  1900,  levied  on 
said  stock  of  merchandise.  This  with  the  levy  of  another 
execution,  precipitated  the  bankruptcy  of  A.  B.,  who  filed  his 
petition  the  same  day,  but  a  few  hours  later.  He  was  insolvent 
when  the  levy  was  made,  and  had  been  more  than  four  months 
prior  thereto. 

Under  the  orders  of  the  bankrupt  court  said  stock  of  goods 
was  turned  over  to  petitioner  as  trustee,  who  converted  the 
same  into  cash.  The  proceeds  were  enough  to  pay  said  judg- 
ment and  cost,  but  insufficient  to  pay  all  the  creditors  of  said 
bankrupt. 

The  said  judgment  creditors  asserted  a  prior  claim  to  the 
proceeds  of  said  stock  of  goods,  claiming  a  lien  thereon  by 
virtue  of  the  levy  of  said  execution  as  of  the  date  of  the  teste 
of  the  execution,  which  your  petitioner  denied,  insisting  the 
levy  and  whatever  lien  the  creditors  obtained  by  said  levy,  was 
avoided  by  the  subsequent  bankrupt  proceedings  had  within 
four  months  next  after  the  levy.  The  referee  refused  to  allow 
the  judgment  creditors  priority,  sustaining  the  contention  of 
the  trustee,  but  his  action  was  overruled  by  said  district 
judge,  who  sustained  the  contention  of  the  said  judgment  cred- 
itors, and  ordered  the  payment  of  their  judgment,  interest  and 
cost  in  full. 

Your  petitioner  excepted  to  the  said  action  and  judgment 


PETITIONS    TO    REVIEW    ORDERS    IN    BANKRUPTCY.      119/ 

of  said  district  judge,  and  the  said  creditors  and  petitioner 
filed  in  said  court  a  condensed  and  agreed  statements  of  facts 
and  the  record  in  the  cause,  and  a  duly  certified  copy  of  the 
same  is  filed  herewith  as  Exhibit  No.  i,  with  the  prayer  that 
it  be  made  part  of  this  petition. 

Your  petitioner  shows  that  the  levy  and  lien  created  by  the 
levy  of  said  execution,  was  avoided  by  the  subsequent  bank- 
ruptcy proceedings,  under  section  67/  of  the  B.  A.  of  1898, 
making  null  and  void  all  levies,  judgments,  attachments  or  oth- 
er liens,  obtained  against  an  insolvent  person  at  any  time  within 
four  months  prior  to  filing  a  petition  in  bankruptcy,  and  the 
said  trustee  is  aggrieved  by  the  action  aiid  judgment  of  said 
district  judge  in  refusing  to  avoid  the  levy  of  said  execution 
and  discharge  the  lien  created  thereby,  thus  defeating  the  law- 
ful application  of  the  section  referred  to,  and  preventing  a 
ratable  distribution  of  the  estate  of  said  bankrupt  amongst  all 
his  creditors. 

The  trustee  therefore  prays  that  he  be  allowed  to  file  this, 
his  petition  for  a  review  of  the  action  of  said  district  judge, 
and  that  said  judgment  be  reviewed,  revised  and  reversed,  and 
that  petitioner  be  allowed  and  directed  to  make  a  ratable  distri- 
bution of  the  estate  of  said  bankrupt  amongst  all  his  creditors, 
and  he  will  ever  so  pray.  T.  A.,  Trustee. 

.  R.  Y.,  Attorney. 

State  of , 

County  of ,  ss. 

Personally  appeared  before  me,  the  undersigned  authority, 
T.  A.,  and  makes  oath  in  due  form  of  law,  that  he  is  the  trus- 
tee in  the  foregoing  matter,  and  is  familiar  with  all  the  facts  set 
out  in  the  foregoing  petition,  and  that  the  same  are  true  to 
the  best  of  his  knowledge  and  belief.  T.  A., 
Sworn  to  and  subscribed  before  me,  this day  of . 

[Seal.l  J.  N., 

Notary  Public  in  and  for , 

County . 

(l)  Taken  from  the  record  in  re  Darwin,  Petitioner,  117  Fed.  Rep.  407, 


1198  APPELLATE  PROCEEDINGS. 


MISCELLANEOUS  ENTRIES,  ORDERS,  ETC. 

No.  182. 
Stipulation   Reducing  Record. 

The  District  Court  of  the  United  States,  for  the 

District  of -. 

A.  B.,  Plaintiff, 

vs. 
C.  D.,  Defendant. 

In  the  above-entitled  case,  it  is  hereby  stipulated  by  the 
solicitors  for  the  parties  thereto  that  if  an  appeal  be  taken, 
the  clerk,  in  making  a  transcript  of  the  record  may  omit 
therefrom  the  following  papers  and  records,  to  wit,  [here  set 
forth  the  papers  and  records  by  name  which  are  to  be  oimtted.l 
and  that  an  order  may  be  entered  if  the  same  to  the  coii.rt 
shall  seem  proper,  in  accordance  with  this  stipulation. 
]3ated  — .  [  To  be  signed  by  all  the  solicitors^ 

(i)  Unless  a  stipulation  or  prcecipe  is  filed  with  the  clerk,  designatitig 
what  parts  of  the  record  are  to  be  included  in  making  a  transcript,  it  is  his 
duty  to  send  up  the  whole  record  in  the  strict  sense  of  the  word,  made  as 
directed  by  R.  S.  sec.  750.  Keene  vs.  Whitaker,  13  Pet.  459;  Curtis  t'S. 
Petitpain,  iS  How.  109;  West  vs.  East  Coast  Cedar  Co.,  113  Fed.  Rep.  737; 
Meyer  vs.  Mansur  &  Tebbetts  Imp.  Co.,  85  Fed.  Rep.  874;  29  C.  C.  A. 
465;  R.  R.  Co.  vs.  Schutte,  100  U.  S.  644;  Cunningham  vs.  German  Ins. 
Bank,  103  Fed.  Rep.  932;  Nashua  &  Lowell  Corp.  vs.  Boston  &  Lowell 
Corp.,  61  Fed.  Rep.  237  (244),  9  C  C.  A.  468. 

If  the  record  is  too  meager  the  Appellate  Court,  upon  proper  application, 
settles  it  by  a  certiorari.  Redfield  vs.  Parks,  130  U.  S.  625,  9  Sup.  Ct.  642, 
32  L.  Ed.  1053;  Hoskin  vs.  Fisher,  125  U.  S.  217,  8  Sup.  Ct.  834,  31  L.  Ed. 
759.  If  it  contain  unnecessary  matter,  the  Appellate  Court  can  rectify  this 
\n  fi.xing  the  costs  of  the  case. 

In  case  the  clerk  is  requested  by  one  party  to  include  a  paper  in  the 


MISCELLANEOUS    ORDERS,    ETC.  1199 

transcript  and  is  requested  by  the  other  party  to  leave  out  the  same  paper, 
he  may  apply  to  the  judge  for  instruction.     Hoe  vs.  Kahler,  27  Fed.  Rep. 

145- 

The  clerk  should  not  transmit  original  papers  except  for  the  purpose  of 
inspection.     Smith  vs.  Craig,  100  U.  S.  226. 


No.  183. 

Praecipe    Designating    Parts   of   Record   to    be    Included   in 
Transcript  of  Appeal  or  Writ  of  Error  (i). 

The  District  Court  of  the  United  States 

For  the District  of . 

A,  B., 

vs. 
C  D. 
To  the  Clerk : 

You  are  requested  to  take  a  transcript  of  record  to  be  filed 

in  the  United  States  Circuit  Court  of  Appeals  for  the Cir- 

cuit.  pursuant  to  an  appeal  [or  writ  of  error]  allowed  in  the 
above  entitled  cause  and  to  include  in  such  transcript  of  record 
the  following  and  no  other  papers  or  exhibits,  to  wit : 

[Here  specify  by  name  each  paper  desired  to  be  included  in 
thi-  transcript.^  Respectfully, 

X.  &X., 
Attorneys  for  Appellant  [or  Plaintiff  in  Error.] 

(i)  The  certificate  of  the  clerk  should  show  that  the  transcript  of  record 
was  made  in  accordance  with  pracipc  of  the  party  removing  the  case,  desig- 
nating the  papers  to  be  included.  See  Meyer  vs.  Mansur  &  Tebbetts  Imp. 
Co.,  85  Fed.  Rep.  874,  29  C.  C.  A.  465  ;  Nashua  &  Lowell  Corp.  vs.  Boston 
&  Lowell  Corp.,  6r  Fed.  Rep.  237  (244),  9  C.  C.  A.  468;  Cunningham  vs. 
German  Ins.  Bank,  103  Fed.  Rep.  932;  R.  R.  Co.  vs.  Schutte,  100  U.  S.  644; 
West  vs.  East  Coast  Cedar  Co.,  113 -Fed.  Rep.  727- 

It  is  proper,  but  not  necessary,  for  counsel  to  submit  prcccipe  to  adverse 
counsel  before  the  transcript  is  made.  In  case  the  clerk  is  requested  by  one 
party  to  include  a  paper  in  the  transcript  and  is  requested  by  the  other 
party  to  leave  out  the  same  paper,  he  may  apply  to  the  judge  for  instruc- 
tion.    Hoe  vs.  Kahler,  27  Fed.  Rep.  145. 

The  clerk  should  not  transmit  original  papers  except  for  the  purpose  of 
inspection.     Smith  vs.  Craig,  100  U.  S.  226.  _^ 


1200  APPELLATE  PROCEEDINGS. 

No.  184. 
Praecipe  for  Transcript  in  Bankruptcy  (i). 

[Caption.^ 
To  Clerk : 

Please  make  tranecript  of  following  named  papers  in  the 
above  entitled  matter : 

First.  Claim  of  The  E.  F.  Company. 

Second.  Petition  of  trustee  to  expunge  said  claim. 

Third.  Waiver  of  the  E.  F.  Company  as  to  the  filing  and 
date  of  hearing  of  said  petition. 

Fourth.  Proceedings  before  referee  in  the  claim  of  the  E. 
F.  Grocery  Company. 

Fifth.   Petition  of  The  E.  F.  Co.  in  review  of  referee's  opin- 
ion and  order  expunging  its  claim. 

Sixth.   Opinion  of  District  Judge,  Hon.  A.  C. 

Seventh.  Decree  filed  March  28,  1902. 

Eighth.  Petition  on  appeal. 

Ninth.  Assignment  of  errors. 

Tenth.  Allowance  of  appeal. 

Eleventh.  Citation  and  service  of  same. 

Tivelfth.  Motion  of  the  E.  F.  Co.  to  correct  entry  of  March 
28th,  1902. 

Thirteenth.  Entry  overruling  same. 

Fourteenth.  Praecipe  for  transcript. 

Fifteenth.     Certificate. 

And  file  said  transcript  with  clerk  of  the  United  States  Cir- 

*  cuit  Court  of  Appeals  for  the  Circuit. 

B.  Y., 
Trustee  in  Bankruptcy. 

Dated . 

(i)  As  to  this  practice  see  Cunningham  vs.  German  Ins.  Bank,  103  Fed. 
Rep.  932. 


MISCELLANEOUS    ORDERS,    ETC.  1201 

No.  185. 

Order  that  Defendant  Deliver  to  Clerk  Exhibit  to  be  Trans- 
mitted with  the  Transcript  to  the  Court  of  Appeals  (i). 

[Caption  in  Trial  Court.] 

This  matter  coming  on  to  be  heard  upon  the  motion  of  com- 
plainant, therefor,  after  hearing  counsel,  on  motion  of  R.  X., 
Esq.,  solicitor  and  of  counsel  for  complainant,  it  is  ordered 
that  the  defendants  in  this  cause,  produce  and  deliver  to  the 
clerk  of  this  court,  the  original  trust  deed  marked  "Exhibit 
I,"  which  was  produced  and  offered  in  evidence  at  the  taking 
of  proofs  and  hearing  of  said  cause ;  and  that  the  same  be  trans- 
mitted by  the  clerk  of  this  court  with  the  record  of.  this  case 
on  appeal  to  the  Circuit  Court  of  Appeals,  for  inspection  at  the 
hearing  and  determination  of  said  cause,  and  that  the  same 
be  returned  to  defendants  forthwith  after  said  hearing. 

(i)  R.  S.  sec.  698.  Original  papers  can  be  transmitted  to  Appellate 
Court  only  for  inspection  and  not  in  lieu  of  a  transcript  of  them.  Smith 
vs.  Craig,  100  U.  S.  226. 


No.  186. 

Order  to  send  Exhibits  to  a  Circuit  Court  of  Appeals  with 

Transcript. 

[Caption.] 

On  motion  of  Messrs.  X.  &  X.,  solicitors  for  complainant,  it 
is 

Ordered  that  in  addition  to  the  transcript  of  the  record  on 
appeal  in  this  suit  that  the  clerk  of  this  court  transmit  to  the 
clerk  of  the  United  States  Circuit  Court  of  Appeals  for  the 

Circuit  at  ,  the  following  original  exhibits  in  this 

suit  to  be  by  him  safely  kept  and  returned  to  tliis  court  upon 
the  final  determination  of  the  appeal  in  this  suit  in  said  Court 
of  Appeals,  viz.  : 

[Here  name  e.vhibits  to  be  transmitted.] 


1-0-  APPELLAT1-:  PROCEEDINGS. 

No.  187. 
Order  to  Send  Exhibits  to  Circuit  Court  of  iippeals. 
[Caption  in  District  Court. 

It  is  ordoi'cd  by  tlie  court  that  all  original  exhibits  produced 
or  used  at  the  hearing  of  the  motion  for  a  preliminary  injunc- 
tion in  the  District  Court  be  forwarded  to  the  cleric  of  the  United 

States  Circuit  Court  of  Appeals  for  the Circuit  at  , 

to   be   used   on   the   hearing   of   said   cause   in   said    Court   of 
Appeals. 


ITo.  188. 

Stipulation  that  Printed  Record  May  be  Certified  as 

Transcript 

The  District  Court  of  the  Ignited  States 

For  the District  of Division — In  Equity. 

The  A.  B.  Company,  Complainant, 

vs. 
C.  D.  and  E.  F., 
Doing  Business  as  the  C.  D.  Company,  Defendants. 

In  the  alcove  entitled  cause  it  is  stipulated  that  the  forego- 
ing- printed  volume  may  be,  by  the  clerk  of  the  District  Court, 
returned  to  the  Circuit  Court  of  Appeals  as  and  for  the  tran- 
script upon  the  appeal  in  this  cause. 

Dated  .  X.  &  X., 

Solicitors  for  Complainant. 

R.  Y., 
Solicitor  for  Defendants. 


MISCELLANEOUS    ORDERS,    ETC.  1203 

No.  189. 

Stipulation  to  use   Printed   Records  on  a   Former   Writ  of 

Error., 

\_Caption.] 

It  is  agreed  by  counsel  for  both  sides  that  this  case  was  heard 
on  being  remanded  to  the  record  on  which  it  was  heard  in  this 
court  on  the  former  appeal  by  the  A.  B.  Company,  with  the  ad- 
dition of  certain  letters  now  shown  in  the  transcript  as  writ- 
ten by  Harrison  &  Dortch,  agents  of  said  company,  to  the 
said  company  and  its  special  agent,  Kimball,  from  December 
6th,  1896,  to  January  5th,  or  6th,  1897;  and  it  has  heretofore 
been  agreed,  and  is  agreed,  that  the  printed  record  in  this  court 
may  be  used  upon  this  appeal,  up  to  the  action  of  the  court  in 
taking  the  case  from  the  jury  on  the  completion  of  the  hear- 
ing, and  that  the  said  letters,  the  said  action  of  the  court,  and 
the  exceptions  filed  to  such  action  only  need  to  be  printed  upon 
this  appeal ;  the  record  in  this  case  on  this  appeal  is  the  same 
as  the  record  on  the  former  appeal,  with  the  exception  of  said 
letters  introduced  as  evidence  below,  the  said  action  of  the 
court,  and  the  exceptions  made  thereto  by  the  plaintiffs  be- 
low. R.  X., 

Attorney  for  Appellant. 
R.  Y., 
For  Appellees. 


No.  190. 

Order  Extending  Time  Within  Which  to  File  Record  in  Ap- 
pellate Court   (i). 

[Caption.} 

For  satisfactory  reasons  appearing  to  the  court  the  time  for 
filing  the  record  in  this  cause  in  the  Circuit  Court  of  Appeals, 

pursuant  to  the  appeal  sued  out,  is  extended  until  the  > 

day  of . 

(i)  This  order  should  be  filed  in  trial  court  and  sent  to  Appellate  Court 


No. 


1204  APPELLATE  PROCEEDINGS. 

No.  191. 

Appearance  of  U.  S.  in  Circuit  Court  of  Appeals   Without 

Citation. 

United  States  Circuit  Court  of  Appeals 

For  the Circuit. 

A.  B.,  ct  al,  Appellants, 

vs. 
The  United  States  of  America,  Appellee. 

The  United  States  come  into  court  and  say  that  there  is 
no  error  either  in  the  record  or  proceedings,  or  in  the  giving  of 
the  judgment  aforesaid,  and  pray  that  the  said  Circuit  Court 
of  Appeals  may  proceed  to  examine  as  well  the  record  and  pro- 
ceedings aforesaid  as  the  matters  aforesaid  above  assigned  for. 
error,  and  that  the  judgment  aforesaid,  in  form  aforesaid 
given,  may  be  in  all  things  affirmed.  H.  C, 

United  States  Attorney 
For  the  United  States,  Appellees. 


No.  192. 
Motion  to  Dispense  with  Printing  Record  (i). 

[Caption.'] 

Now  comes  the  appellant  [or  plaintiff  in  error]  and  moves 
the  court  for  leave  to  prosecute  his  appeal  [or  writ  of  error]  in 
this  court  without  printing  the  record  in  accordance  with  the 
rules  of  this  court. 

K..   X.., 

Attorney  for  Appellant. 

(i)  It  has  been  the  practice  in  the  Circuit  Courts  of  Appeals  to  permit 
a  writ  of  error  to  be  prosecuted  in  forma  pauperis,  as  provided  by  the  Act 
of  Congress  of  July  20,  1892,  27  Stat,  at  L.  252 ;  Volk  vs.  Sturtevant  Co., 
99  Fed.  Rep.  532,  39  C.  C.  A.  647;  Wickelman  vs.  A.  B.  Dick  Co.,  85  Fed. 
Rep.  851,  29  C.  C.  A.  436;  Reed  vs.  Pennsylvania  Co.,  iii  Fed.  Rep.  714,  49 
C.  C.  A.  572.  But  see  in  re  Presto,  93  Fed.  Rep.  522,  35  C.  C.  A.  394.  The 
Supreme  Court  in  Callaway  vs.  Fort  Worth  Bank,  186  U.  S.  177,  held  that 


MISCELLANEOUS    ORDERS,    ETC.  1205 

a  writ  of  error  could  not  be  prosecuted,  without  giving  bond  as  required 
by  R.  S.  sec.  looo,  under  the  Act  of  Congress  of  July  20,  1892,  supra.  The 
effect  of  this  ruling  is  that  the  security  for  costs  and  deposit  for  costs  in 
the  Appellate  Court  are  not  affected  by  the  Act  of  July  20,  1892.  Whether 
printing  the  record  may  be  dispensed  with  is  still  left  to  the  discretion  of 
the  Appellate  Court,  because  the  printing  is  done  under  a  rule  of  court  and 
not  under  an  act  of- Congress.  It  is  clear,  however,  that  a  poor  person 
cannot  claim  it  as  a  matter  of  right  under  the  statute  above  referred  to. 


No.  193. 
Order  to  Dispense  with  Printing  Record  (i). 

{^Caption.'] 

Upon  motion  of  the  appellant  [or  plaintiff  in  error]  it  is 
hereby  ordered  that  the  printing  of  the  record  in  this  court  be 
dispensed  with  and  no  deposit  made  therefor. 

(i)   See  Form  No.  192. 


No.  194. 

Order  Granting  Leave  to  use  Printed  Records  in  Making  up 
Record  in  an  Appellate   Court. 

{^Caption.l 

Upon  the  application  of  the  appellant  [or  plaintiff  in  error] 
it  is  hereby  ordered  that  the  clerk  of  this  court  may  use  the 
records  printed  in  the  court  below  in  making-  the  record  in 
this  court  upon  the  payment  of  the  usual  supervision  fee. 


No.  195. 
Stipulation  to  Omit  Parts  of  Record  in  Printing. 
The  United  States  Circuit  Court  of  Appeals  for  the Dis- 
trict. 
A.  B.,  Appellant, 

vs. 
C.  D.,  Appellee. 

In  the  above  cause  it  is  mutually  agreed  between  the  parties 
signing  this  stipulation  that  the  transcript  of  the  record  sent 


■  No. 


1206  APPELLATE  PROCEEDINGS. 

lip  by  the  clerk  of  the  Circuit  Court  of  the  United  States  for  the 
western  division  of  the  western  district  of  Tennessee,  at 
Memphis,  shall  be  printed  as  sent  up,  except  that  the  following 
portions  thereof  may  be  omitted  : 

The  pages  referred  to  are  the  manuscript  pages  of  the 
record : 

First.  Subpoena  in  Chancery,  p.  53. 

Second.  Marshal's  service  of  same,  p.  54. 

Third.  Order  of  continuance,  p.  72. 

Fourth.  Order  of  continuance,  p.  78. 

Fifth.   Notice  of  taking  depositions,  p.  80. 

Sixth.  Order  of  continuance,  p.  82. 

Seventh.  Order  showing  plaintiff's  motion  to   remand,   p. 

234- 

Eighth.  Opinion  of  Hammond,  Judge,  pp.  235-238. 

Ninth.  Order  of  court  denying  motion  to  remand,  p.  239. 

Tenth.  Order  setting  demurrer  for  hearing,  p.  342. 

Eleventh.  Order  setting  demurrer  for  hearing,  p.  343. 

Twelfth.  Order  setting  demurrer  for  hearing,  p.  344. 

Thirteenth.  Order  setting  demurrer  for  hearing,  p.  345. 

Fourteenth.  Order  setting  demurrer  for  hearing,  p.  346. 

Fifteenth.  Oder  of  continuance,  p.  457. 

Sixteenth.  Notice  for  taking  depositions,  p.  478. 

Seventeenth.  Order  of  continuance,  p.  480. 

Eighteenth.  Transcript  of  Record  in  National  Revere  Bank 
vs.  Potter  and  others,  pp.  481-499. 

Nineteenth.  Subpoena  to  answer  Cross  Bill,  p.  546. 

Tzventieth.  Marshal's  return  of  service,  p.  547. 

Tzventy-first.'  Exhibit  "  A  "  to  Vogel's  deposition,  debts  due 
to  Hill  Shoe  Company,  pp.  671-693. 

Tzventy-second.  Exhibit  "  B  "  to  Vogel's  deposition,  debts 
due  by  Hill  Shoe  Company,  and  dividends  paid,  pp.  694-703. 

Twenty-third.  Exhibit  "  B  "  to  C.  W.  Edmonds'  deposition 
being  assignment  of  Mary  T.  Hill  to  Edmonds,  provided  page 
of  the  record  where  the  assignment  is  previously  copied  is  re- 
ferred to  in  this  connection.    Record,  pp.  756-760. 


MISCELLANEOUS    ORDERS,    ETC.  1207 

Tzventy-fourtli.  Petition   of   National   City    Banl<   of   New 

York,  pp.  1035-1036- 

Twenty-fifth.  Deposition   of   W.    A.   Wheatley,    pp.    1094- 

1103. 

Twenty-sixth.  Deposition  of  S.  L.  Moore,  pp.  1126-1127. 

Twenty-seventh.  Order  of  continuance,  p.  1143. 

Twenty-eighth.  Order  of  continaunce,  p.  1309. 

Twenty-ninth.  This  stipulation. 

But  the  appellees  reserve  the  right  to  insist  hereafter,  if  ma- 
terial or  necessary,  that  many  parts  of  the  record  are  designated 
to  be  printed  by  the  appellants,  and  agreed  to  by  them  for  that 
reason,  which  are  not  required  for  the  purjDOse  of  the  appeal. 

Dated  . 

X.  &X. 

For  Appellants. 

Y.  &  Y. 
For  Appellees. 


No.  196. 

Writ  of  Certiorari  for  Diminution  of  Record.i 

United  States  Circuit  Court  of  Appeals,  for  the  Circuit. 

United  States  of  America,  Judicial  Circuit,  ss. : 

The  President  of  the  United  States  of  America  to  the  Honor- 
able Judge  of  the  District  Court  of  the  United  States  for  the 
District  of : 


1208  MISCELLANEOUS   ORDERS.    ETC. 

Whereas,  there  is  now  jiending  before  ns  a  suit  in  which 
S.  M..  receiver  of  the  A.  B.  Railway  Company,  and  the  Mer- 
chantilc  Trust  Company  are  appellants,  and  C.  D..  guardian  of 
E.  F.,  and  R.  H.,  guardian  of  G.  H.,  are  appellees,  which  suit 
was  removed  into  this  court  by  virtue  of  an  appeal  from  the 

District   Court   of   the    United    States    for    the   district 

of ;  and.  whereas,  it  has  been  suggested  to  this  court  that 

there  is  a  diminution  of  the  record  in  said  cause  because  the 
transcript  of  record  in  this  court  does  not  contain  certain  rec- 
ord \_Iicrc  name  the  papers  claimed  to  be  omitted  from  the 
transcript^,  which  were  introduced  in  evidence  as  alleged. 

We  being  willing  that  said  omission  or  defect,  if  any,  may  be 
corrected,  herewith  return  such  transcript  and  do  command 
that  under  your  seal,  distinctly  and  openly  you  send  the  rec- 
ord and  proceedings,  with  all  things  concerning  the  same,  as 
fully  and  entirely  as  they  remain  of  record  in  said  District  Court 
of  the  United  States  to  the  United  States  Circuit  Court  of 
Appeals  for  the circuit,  together  with  this  writ  forthwith. 

Witness  the  Honorable  Melville  W.  Fuller,  chief  justice  of 

the  United  States,  this  day  of .  in  the  year  of  our 

Loi;d  one  thousand  nine  hundred  and  .  and  of  the  inde- 
pendence of  the  United  States  the  one  hundred  and  twenty- 

ISeal.'] .  F.  L., 

Clerk  of  the  United  States  Circuit  Court 
of  Appeals  for  the Circuit. 

(i)  The  Supreme  Court  is  authorized  by  sec.  716  to  issue  writs  of  cer- 
tiorari, (ex  parte  VaHandingham,  i  Wall.  243,  249,)  to  supply  imperfections 
in  a  record  of  a  case  already  before  it ;  and,  not  like  a  writ  of  error,  to  re- 
view the  judgment  of  an  inferior  court.  Luxton  vs.  North  River  Bridge 
Co.,  147  U.  S.  337 :  U.  S.  vs.  Young,  94  U.  S.  258 ;  ex  parte  Gordon,  i  Black 
503;  Beach  Mod.  Eq.  Prac,  sec.  963.  See  also  ex  parte  Hitz,  iii  U.  S.  766. 
The  Court  of  Appeals  act  did  not  affect  this  power.  Am.  Construe.  Co. 
vs.  Jacksonville  Ry.  Co.,  148  U.  S.  380 ;  Sup.  Ct.  Rule  14. 

The  Circuit  Courts  of  Appeals  are  vested  by  the  act  creating  them  with 
power  to  grant  writs  of  certiorari.  Act  of  March  3,  1891,  sec.  12,  26  Stat, 
at  L.  826 ;  Rule  18,  C.  C.  A. ;  Merrill  vs.  Floyd.  2  C.  C.  A.  58,  50  Fed.  Rep. 
849;  Blanks  vs.  Klein,  i  C.  C.  A.  254,  49  Fed.  Rep.  i  ;  Randolph  vs.  Allen, 


MISCELLANEOUS    OKDEKS,    ETC.  1209 

IQ  C.  C.  A.  353,  Ti  Fed.  Rep.  23;  Burnham  vs.  Ry.  Co..  30  C.  C.  A.  594,  87 
Fed.  Rep.  168;  Dow  vs.  U.  S.  27,  C.  C.  A.  42,  81  Fed.  Rep.  1004. 

The  application  for  writ  of  certiorari  to  supply  an  omission  or  cure  a 
defect  in  a  record  should  be  made  to  the  court  in  which  the  case  is  peikd- 
ing.  It  is  usually  made  by  petition,  entitled  in  the  court  and  cause  and 
addressed  to  the  court.  It  should  state  the  defect  or  parts  claimed  to  be 
omitted,  and  pray  for  a  writ  of  certiorari  to  issue.  The  petition  should  be 
signed  and  verified.  If  a  proper  showing  is  made,  the  court  will  ordinarily 
order  a  writ  to  issue,  directed  to  the  court  below,  commanding  it  to  re- 
turn a  true  and  complete  record,  including  the  omitted  or  defective  parts,  if 
any  there  be.  The  order  also  regularly  contains  a  direction  to  the  clerk 
of  the  Appellate  Court  to  also  return  the  transcript  for  the  purpose  of  be- 
ing corrected.  The  court  will  not  usually  order  the  alleged  omitted  por- 
tions or  the  defective  portions  to  be  corrected.  If  the  record  is  faulty  it 
should  be  made  to  conform  to  the  record  below  by  certifying  the  correc- 
tions to  be  made.  The  Appellate  Court  will  not  undertake  to  make  a 
record  in  the  inferior  court. 

The  writ  of  certiorari  is  regularly  issued  under  the  hand  and  seal  of 
the  clerk  of  the  Appellate  Court,  and  is  transmitted  to  the  clerk  of  the 
court  below,  together  with  the  transcript  and  a  copy  of  the  petition,  setting 
forth  the  alleged  defects  or  omissions  in  the  record.  The  clerk  of  the  in- 
ferior court  thereupon  compares  the  transcript  with  the  original  record, 
and  returns  the  writ  with  a  certified  correction,  or  a  certified  copy  of  the 
omitted  papers,  or  with  a  certificate  to  the  effect  that  the  record  is  true  and 
complete,  or  such  other  facts  as  may  be  necessary  for  a  full  understanc'ing 
of  the  matter.  This  is  to  be  returned  under  the  seal  of  the  court.  It  is 
not  necessary  to  have  the  return  made  by  the  judge.  Stewart  vs.  Ingle.  9 
Wheat.  526.     It  is  regularly  made  by  the  clerk. 

A  writ  of  certiorari  for  diminution  of  the  record  will  not  be  granted  if 
the  application  is  not  made  at  the  first  term  as  required  by  Supreme  Court 
Rule  14  and  Rule  18,  C.  C.  A.     See  Chappell  vs.  U.  S.,  160  U.  S.  499. 


No.  197. 
Return  to  Writ  of  Certiorari  for   Diminution  of  Record. 
United  States  of  America, District  of . 


In  pursuance  of  the  command  of  the  within  writ  of  cer- 
tiorari,  I,   B.    R.,   clerk  of  the  District  Court  of  the   United 

States,  within  and  for  the district  of and  the 

division  thereof,  do  herewith  transmit,  under  the  seal  of  said 
court,  a  full  and  complete  copy  of  the  records  referred  to  in  the 


1210  ArKLLATE     I'llO'CEEDINGS. 

testimony  taken  before  the  master  appointed  in  the  cause  of  the 
Mercantile  Trust  Company  against  the  C.  &  D.  Railway  Com- 
pany, in  the  matter  of  the  intervening  petitions  of  E.  F.,  guard- 
ian of  G.  H.,  and  R.  S.,  guardian  of  F.  S.,  against  said  rail- 
way company,  and  inadvertently  omitted  from  the  record  of 
said  cause  now  pending  on  appeal  in  the  Circuit  Court  of  Ap- 
peals for  the circuit,  and  which  by  the  command  of  said 

writ  were  ordered  to  be  returned. 

In  testimony  wdiereof.  I  have  affixed  my  signature  as  clerk 

of  said  court  and  the  seal  thereof,  at ,  in  said  district,  this 

day  of ,  Anno  Domini  ,  and  in  the year 

of  the  independence  of  the  United  States  of  America. 

[Seal.']  B.  R., 

Clerk  of  the  District  Court  of  the  United 
States  for  the District  of . 


No.  198. 
Final  Decree  or  Judgment  on  Mandate  (1). 

The  District  Court  of  the  United  States 

For  the District  of  • , 

A.   B. 

vs. 

C.  D. 

On  reading  and  filing  the  mandate  of  the  ITnilcd  S^-ates  Cir- 
cuit Court  of  Appeals  for  the circuit,  in  tliis  cause,  bear- 
ing date  the day  of ,  A.  D. ,  in  obedience  to  said 

mandate  and  in  cognizance  with  the  opinion  of  the  said  United 
States  Circuit  Court  of  Appeals  herein,  it  is  hereby  ordered, 
adjudged  and  decreed  that  [here  set  out  the  proper  judgment 
or  decree  according  to  the  lazu  and  facts  of  the  case.] 


CEKTIOltAKI.  1211 

CERTIORARI. 

No.  199. 

Petition  for  Writ  of  Certiorari  in  Bankruptcy. 

In  the  Supreme  Court  of  the  United  States, 

October  Term,  A.  D.  1900. 
Aithur  E,  Mueller,  Trustee  in  Bankruptcy 
of  Edward  B.  Nug-ent,  Bankrupt,  Petitioner, 

vs. 
William  T.  Nugent,  Respondent. 
Petition  for  Writ  of  Certiorari,  to  the  United  States  Circuit 
Court  of  Appeals  for  the  Sixth  Circuit,  Requiring  it  to 
Certify  to  the  Supreme  Court  of  the  United  States,  for 
its  Revision  and  Determination,  the  Petition  for  Review 
in  Bankruptcy  taken  by  said  W.  T.  Nugent  against  Ar- 
thur E.  ]\Iueller,  Trustee  in  Bankruptcy  of  Edward  B. 
Nugent,  in  the  Matter  of  Wayne  Knitting  Alills,  Belding 
Bros.  &  Co.  and  the  German  Insurance  Bank  vs.  Edward 
B.  Nugent,  Bankrupt,  in  Bankruptcy,  Lately  Depending 
in  said  Court  of  Appeals. 
To  the  Honorable,  the  Chi^f  Justice  and  Associate  Justices  of 
the  Supreme  Cour*.  ^f  fhr  UniA-ed  States : 


1212  APPELLATE  PROCEEDINGS. 

The  petition  of  Arthur  E.  Mueller,  trustee  in  bankruptcy 
of  Edward  B.  Nugent,  bankrupt,  filed  under  the  provisions  of 
section  2^d  of  the  Bankruptcy  Act  of  1898,  respectfully  rep- 
resents as  follows : 

First.  This  cause  involves  a  question  entirely  novel  and  one 
of  the  most  vital  importance  arising  under  the  Act  of  1898 — a 
question  more  far-reaching  in  its  importance  than  the  one  de- 
cided by  this  court  in  Bardes  1^^.  Bank,  178  U.  S.,  page  524. 
Upon  its  determination  by  this  court  depends  to  a  large  extent 
the  usefulness  of  said  act. 

On  February  19,  1900,  about  the  hour  of  2  o'clock  p.  m., 
being  more  than  three  hours  before  a  petition,  praying  for  the 
involuntary  adjudication  of  Edward  B.  Nugent,  bankrupt,  was 
filed,  the  respondent,  W.  T.  Nugent,  son  of  the  bankrupt,  re- 
ceived from  the  bankrupt  (Edward  B.  Nugent),  as  his  agent 
and  as  custodian  of  the  fund,  money  belonging  to  the  bank- 
rupt amounting  to  $14,233.95.  It  is  nowhere  claimed  by  the 
one  side  or  relied  upon  by  the  other  in  this  controversy  that 
the  delivery  of  said  fund  to  the  agent  as  custodian  was  a 
"transfer"  or  "fraudulent  transfer"  within  the  meaning  of  the 
case  of  Bardes  vs.  Bank,  178  U.  S.,  524. 

After  the  adjudication,  certain  proceedings  in  contempt 
were  had  against  Edward  B.  Nugent,  the  bankrupt,  looking 
to  the  recovery  of  that  fund,  but  because  of  the  then  condition 
of  mind  of  said  bankrupt  he  was  discharged  from  further  at- 
tendance about  that  matter.  Upon  the  petition  of  the  trustee, 
the  referee,  to  whom  the  case  had  been  referred,  then  issued 
a  rule  against  said  W.  T.  Nugent  to  show  cause,  five  days 
after  service  thereof,  why  he  should  not  be  required  to  turn 
over  said  funds  to  the  trustee.  (R.,  p.  19.)  After  some 
months'  delay,  said  W.  T.  Nugent,  having  been  served  with 
a  copy  of  said  order,  appeared  before  the  referee  in  person 
and  by  counsel,  and  without  objecting  to  the  time  given  for 
response,  or  that  he  was  improperly  or  irregularly  made  a 
party,  filed  a  response  (R.,  p.  23)  to  the  rule  in  which  he 
objected  only  to  the  jurisdiction  of  the  referee  or  the  cour^ 


CERTIORARI.  1213 

to  issue  said  rule;  aud  further  responded  that  if  he  had  re- 
ceived the  said  money,  or  any  part  thereof,  it  was  before  the 
petition  in  bankruptcy  was  file.d.  He  also  responded  that  by 
reason  of  the  fact  that  he  was  indicted,  charged  with  the  of- 
fense of  receiving  said  money  and  retaining  the  same  and  aid 
ing  and  abetting  in  the  retention  thereof,  after  the  filing  of  the 
petition  in  bankruptcy,  he  could  not  make  further  response 
without  incriminating  himself.  A\^ithout  waiving,  but  reserv- 
ing, the  jurisdictional  question,  Nugent  then  agreed  that  cer- 
tain depositions  of  his  father  the  bankrupt,  his  sisters  and  oth- 
ers should  be  read  on  the  hearing  of  the  response.  (R.,  p.  21.) 
Nugent  offered  no  proof  in  his  own  behalf. 

The  referee,  in  order  to  first  determine  whether  he  had  ju- 
risdiction, then  heard  the  proof  offered  by  the  trustee  and 
found  that  said  Nugent  had  received  said  money  only  as  agent 
and  custodian  of  his  father,  the  bankrupt ;  that  he  had  not  ac- 
counted for  the  same,  and  that  said  money  belonged  at  the 
time  of  the  hearing  of  the  rule  to  the  bankrupt's  estate.  No 
additional  response  was  then  offered  by  Nugent.  Whereupon 
the  referee  then  exercised  jurisdiction  and  mad©  said  rule  ab- 
solute and  ordered  Nugent  to  pay  over  the  money  to  the  trus- 
tee in  bankruptcy.  (  R..  p.  21.)  Upon  his  failure  to  comply 
with  said  order,  and  still  without  additional  response,  the  ref- 
eree found  him  guilty  of  contempt  and  certified  the  ca-se  to 
the  judge,  with  a  recommendation  that  said  W.  T.  Nugent 
be  punished  for  contempt  and  committed  until  he  should  pay 
said  sum.     ( R.,  p.  25.) 

The  respondent  then  filed  with  referee  his  petition  for  re- 
view, in  pursuance  of  General  Order  No.  27  of  the  Supreme 
Court  (R.,  p.  26),  and  upon  the  certification  by  the  referee 
to  the  judge,  showing  the  question  presented,  the  summary 
of  the  evidence,  and  the  findings  and  order  thereon,  accord- 
ing to  said  General  Order  27,  and  form  56,  a  hearing  was  had 
before  him.  The  referee  also  certified  to  the  judge  the  deposi- 
tions read  on  the  hearing  of  the  case,  and  same  were  before 
the  judge. 


1214  APPELLATE  PROCEEDINGS. 

The  judge,  after  the  liearing,  rendered  an  opinion  (R.,  p. 
28)  in  which  the  finding  of  the  referee  was  sustained,  and  said 
W.  T.  Nugent,  being-  in  court,  he  was  called  to  the  bar  to 
receive  sentence;  whereupon,  at  the  recjuest  of  said  W.  T.  Nu- 
gent by  his  counsel,  the  judge  deferred  passing  sentence  for 
two  days.  At  the  expiration  of  said  two  days  said  respondent, 
by  his  counsel,  tendered  an  amended  response  ( R.,  p.  37)  in 
which  for  the  first  time  he  sought  to  answer,  in  general  terms, 
and  with  conclusions  of  law  only,  that  the  funds  in  question 
were  held  and  claimed  by  him  adversely  to  the  bankrupt  or 
his  estate.  The  judge,  on  the  theory  that  the  hearing  was 
in  the  nature  of  an  appeal  from  the  decision  of  the  referee, 
refused  to  permit  that  response  to  be  filed,  holding  that  it 
manifestly  came  too  late  ( R.,  p.  36)  ;  that  such  response  should 
have  been  filed  before  the  referee  at  the  time  of  the  hearing 
upon  the  rule.  That  amended  response  so  offered  was  neither 
filed  generally  nor  for  the  purposes  of  appeal  or  review.  In 
his  opinion  filed,  the  judge,  in  addition  to  sustaining  the  find- 
ings of  fact  by  the  referee  above  recited,  also  found  from  the 
proof  before  him  the  following  facts  in  this  language : 

"The  court  finds  the  facts  of  the  case  to  be  as  above  stated, 
with  the  addition  that  the  entire  amount,  $14,233.95,  is  the 
property  of  the  bankrupt's  estate  alone;  that  it  had  been  taken 
possession  of,  and  was  held  by  W.  T.  Nugent  as  the  agent  only 
of  his  father  up  to  and  at  the  time  of  the  adjudication,  and 
that  the  respondent  never  claimed  title  to  any  part  of  it, 
nor  made  any  claim  or  right  to  it  by  reason  of  any  attempted 
transfer  of  title  or  ownership  therein  to  him  at  any  time,  either 
in  fraud  of  the  bankrupt's  creditors  or  otherwise,  nor  has  he 
ever  claimed  to  have  converted  any  part  of  it  to  his  own  use, 
nor  in  anywise  to  have  claimed  it  adversely  to  the  bankrupt  or 
the  trustee."     (R.,  pp.  30-31.) 

In  refusing  to  permit  said  amended  response  to  be  filed,  the 
court  entered  the  following  order : 

"Came  William  T.  Nugent,  respondent  herein,  and  tendered 
an  amended  response  and  moved  to  file  same,  and  the  court 


I 


CERTIORARI.  1215 

not  having  postponed  the  imposing  of  the  sentence  for  that 
purpose,  and  being  of  the  opinion  that  it  is  not  discreet  or  ad- 
missible practice  to  permit  amendments  upon  hearings  such  as 
this,  especially  after  the  delivery  of  an  opinion  of  the  court, 
decHnes  at  this  stage  of  the  proceedings  to  permit  a  further  re- 
sponse to  be  filed. 

"And  thereupon,  pursuant  to  the  opinion  of  the  court  filed 
herein  on  the  ist  instant,  it  is  the  judgment  of  the  court  that 
William  T.  Nugent,  for  his  contempt  aforesaid,  be  imprisoned 
and  confined  in  the  county  jail  of  Jefferson  county,  Kentucky, 
until  he  shall  deliver  or  pay  to  Arthur  E.  Mueller,  the  trustee 
herein,  said  sum  of  $14,233.95,  or  otherwise  satisfy  the  said 
trustee  with  respect  thereto;  and  the  court  reserves  the  right 
and  power  to  suspend  or  set  aside  this  judgment  and  sentence 
upon  the  delivery,  payment  or  satisfaction  aforesaid. 

"To  all  of  which  the  respondent,  William  T.  Nugent,  ex- 
cepts."    (R.,  p.  36.) 

Thereafter  said  W.  T.  Nugent,  under  section  24b  of  the  act, 
filed  a  petition  in  the  United  States  Circuit  Court  of  Appeals 
for  review,  praying  that  the  orders,  judgment  and  sentence  of 
the  District  Court  be  reviewed  and  revised  in  the  matter  of 
law,  etc.     (R.,  p.  i.  i.) 

After  hearing  said  petition  for  review,  said  Circuit  Court  of 
Appeals,  on  the  13th  day  of  December,  1900,  entered  a  decree 
(R.,  p.  53)  reversing  and  vacating  the  order  of  the  District 
Court  for  the  commitment  of  the  respondent,  and  the  order 
made  by  the  referee  upon  the  respondent  to  show  cause,  and 
the  further  order  of  the  referee  adjudging  that  said  respond- 
ent be  required  to  pay  to  the  trustee  the  moneys  alleged  to  be 
under  his  control,  as  well  as  the  order  of  the  referee  adjudg- 
ing the  respondent  to  be  in  contempt;  and  on  the  same  day 
filed  a  memorandum  opinion  (R.,  p.  54)  and  issued  its  forth- 
with mandate  (R.,  p.  53)  in  direct  contravention  of  its  Rules 
of  Court  No.  29  and  32,  which  are  as  follows : 

29.  "A  petition  for  rehearing  after  judgment  can  be  pre- 
sented only  within  thirty  days  after  the  day  when  the  printed 


1216  APPELLATE    PROCEEDINGS. 

opinion  of  the  conrt  is  retnrned  by  the  printer  to  the  clerk,  and 
can  be  obtained  by  connsel  for  the  parties  (  which  date  the  clerk 
shall  note  upon  the  appearance  docket),  nnless  by  special  leave 
granted  dnring  such  thirty  days,  and  must  be  printed,  and 
briefly  and  distinctly  state  its  grounds,  and  be  supported  by 
certificate  of  counsel,  and  will  not  be  granted  or  permitted  to 
be  argued,  unless  a  judge  who  concurred  in  the  judgment  de- 
sires it  and  a  majority  of  the  court  so  determine." 

32.  "In  all  cases  finally  determined  in  this  court  a  mandate 
or  other  proper  process  in  the  nature  of  a  procedendo  shall  be 
issued,  on  the  order  of  this  court,  to  the  court  below,  for  the 
purpose  of  informing  such  court  of  the  proceedings  in  this 
court,  so  that  further  proceedings  may  be  had  in  such  court 
as  to  law  and  justice  may  appertain. 

"  Such  mandate  shall  not  issue  until  time  has  elapsed  far  fil- 
ing a  petition  to  rehear,  as  defined  by  rule  29;  and  no  man- 
date or  other  process  or  procedendo  shall  issue  when  a  peti- 
tion to  rehear  is  pending,  unless  specially  ordered. 

"Every  mandate  shall  be  accompanied  by  a  copy  of  the 
opinion  filed  in  the  cause  in  which  it  is  issued,  and  the  charge 
for  the  same  shall  be  taxed  in  the  costs  of  the  case." 

By  that  action  W.  T.  Nugent  was  immediately  released 
from  custody,  and  that  before  this  petitioner  could  apply  for 
a  rehearing  in  that  court  or  certiorari  here. 

On  the  17th  day  of  January,  1901,  said  Circuit  Court  of 
Appeals  filed  a  printed  opinion  in  the  case.     (R.,  p.  56.) 

Second.  With  the  petition  for  review  said  W.  T.  Nugent 
filed  various  exhibits  containing  matters  not  part  of  the  rec- 
ord in  the  court  below,  one  of  which  was  a  copy  of  said 
amended  response  (R.,  p.  37),  which  was  not  a  part  of  the 
record  or  before  the  referee  or  judge  below,  as  shown  herein 
above.  And  said  petition  for  review  further  contained  alle- 
gations of  fact  not  in  or  shown  by  the  record,  and  not  before 
the  District  Court  or  the  referee. 

Among  other  things  said  petition  for  review  contained  the 
following  allegations,  to  wit : 


CERTIORARI. 


1217 


"  He  says  that  he  had  converted  all  of  said  money  of  E. 
B.  Nugent  which  came  into  his  hands  to  his  own  use,  he  being 
a  creditor  of  said  Nugent,  and  to  the  paying  of  the  other  debts 
of  E.  B.  Nugent  before  the  filing  of  said  petition  in  bankrupt- 
cy or  the  appointment  of  said  trustee  or  the  adjudication  there- 
in, and  that  there  was  no  evidence  to  the  contrary,  or  that  he 
had  any  of  said  money  on  hand  or  under  his  control  when 
he  was  served  herein  as  stated."  (R.,  p.  6,  beginning  on  25th 

line. ) 

As  stated,  that  allegation  was  never  before  the  referee  or 
the  judge  of  the  District  Court,  nor  was  it  acted  upon  by 
them,  but  was  wholly  original  matter,  and  not  properly  a  part 
of  the  record.  All  the  irrelevant  and  impertinent  matter  the 
trustee  moved  the  Circuit  Court  of  Appeals  to  expunge  from 
the  record,  which  motion  said  Court  of  Appeals  failed  to  sus- 
tain or  act  upon ;  though  it  is  contended,  as  appears  from  the 
opinion  of  that  court,  many  of  those  impertinent  matters,  and 
particularly  said  so-called  amended  response,  were  relied  upon. 

Third.  The  Supreme  Court,  in  Bardes  vs.  Bank,  178  U.  S., 
524,  has  decided  that,  except  with  the  consent  of  the  proposed 
defendant,  the  District  Court  has  no  jurisdiction  to  entertain 
an  independent  suit  brought  by  a  trustee  in  bankruptcy  to  set 
aside  a  fraudulent  transfer  made  by  the  bankrupt  to  a  third 
party,  in  possession  of  and  claiming  the  property  "as  his  own," 
and  which  transfer  is  alleged  to  have  been  fraudident  as 
against  creditors.  Except  as  to  suing  a  debtor,  that  is  all  that 
said  case  does  decide. 

But,  upon  authority  of  that  decision,  the  Circuit  Court  of 
Appeals  has  held  that  the  District  Court,  which  included  the 
referee,  has  no  jurisdiction,  by  summary  process  or  rule,  to 
compel  a  mere  custodian  of  the  property  of  a  bankrupt  to  de- 
liver the  same  to  a  trustee  in  bankruptcy  when  the  elements 
of  a  fraudulent  transfer  did  not  exist,  nor  were  alleged ;  and 
that,  too,  even  though  it  be  conceded  that  the  legal  title  of  said 
property  was  in  the  bankrupt  and  is  vested  by  the  Bankrupt 
Act  in  the  trustee;  and,  too,  when  the  custodian  is  asserting 


1218 


APPELLATE    PROCEEDINGS. 


no  adverse  title  to  the  property;  and,  fnrther,  the  Court  of 
Appeals  has  decided  that  where  a  party  makes  a  general  as- 
signment for  the  benefit  of  creditors,  and  by  reason  thereof  is 
adjudged  a  bankrupt,  the  trustee  in  bankruptcy  can  not  recover 
the  proj^erty  of  the  bankrupt  from  the  assignee  by  summary- 
process,  notwithstanding  the  deed  of  assignment  is  made  void 
by  the  adjudication  in  bankruptcy;  but  he  must  resort  to  an 
independent  action  unless  there  be  jurisdiction  upon  other 
grounds  than  those  arising  under  the  bankruptcy  law. 

And  the  Court  of  Appeals  has  in  effect  held  that  the  referee 
may  not  by  summary  procedure  inquire  into  the  nature  of  the 
custodian's  holdiifg,  to  ascertain  if  it  be  adverse  or  not;  and 
it  has  further  held  that,  though  the  custodian  fails  to  assert 
any  adverse  claim,  and  the  proof  shows  his  holding  to  be 
amicable,  the  referee  is  nevertheless  without  jurisdiction  to 
compel  him  to  surrender  the  property  to  the  trustee.  These 
rulings  it  is  contended  are  not  warranted  by  Bardes  vs.  Bank, 
supra. 

It  is  to  review  the  rulings  of  the  Circuit  Court  of  Appeals 
on  these  questions  that  this  petition  for  a  writ  of  certiorari  is 
applied  for.  The  questions  are  of  paramount  importance, 
because,  unless  that  decision  of  the  Court  of  Appeals  is  T-e- 
versed  or  materially  modified,  the  power  of  the  Bankruptcy 
Court  under  section  2  (6),  (7)  and  (13)  of  the  act  to  brijig 
in  and  substitute  additional  persons  or  parties  in  proceedings 
in  bankruptcy,  when  necessary  for  the  complete  determination 
of  a  matter  in  controversy,  to  cause  the  estate  of  bankrupts 
to  be  collected,  reduced  to  money  and  distributed,  to  deter- 
mine controversies  in  relation  thereto,  and  to  enforce  obedi- 
ence by  bankrupts  and  other  persons,  will  be  almost,  if  not 
entirely,  rendered  nugatory. 

The  question  in  this  case  is  not  as  it  was  in  Bardes'  case, 
whether  the  District  Court  has  jurisdiction  to  entertain  a 
plenary  and  independent  suit,  brought  by  a  trustee  in  bank- 
ruptcy against  a  citizen  of  the  same  state  to  recover  assets, 
the  title  of  which  is  in  dispute ;  but  the  question  involved  is 


CERTIORARI  1219 

this :  Can  the  District  Court  ijy  rule  compel  an  agent  or  cus- 
todian for  the  bankrupt  or  for  the  court,  who  has  the  mere 
naked  possession  of  the  bankrupt's  estate,  claiming  no  inter- 
est therein,  and  asserting  no  title  thereto,  to  deliver  such 
property  to  the  trustee?  Or  must  the  trustee  be  compelled 
to  resort  to  an  ordinar}^  action  and  the  expense  and  delays 
incident  thereto  in  another  court  to  obtain  possession  of  such 
property  from  such  a  custodian  ?  Or  does  not  the  bankruptcy 
law  provide  means  for  the  speedy  and  economical  adminis- 
tration of  the  estate,  and  does  not  section  2  with  its  sub-sec- 
tions exactly  cover  just  such  cases  as  this? 

Your  petitioner,  with  all  due  respect,  maintains  that  the 
case  of  Bardes  vs.  Bank,  supra,  is  not  susceptible  of  the  con- 
structions placed  upon  it  by  the  Court  of  Appeals,  and  was 
evidently  not  so  intended  by  this  court;  and  therefore  under 
that  authority,  the  Court  of  Appeals  erred  when  it  held,  as 
it  did  in  effect,  that  under  no  circumstances  can  the  posses- 
sion of  property  be  recovered,  except  by  an  independent, 
plenary,  dilatory  and  expensive  suit  in  some  other  court. 

Your  petitioner  contends  that,  on  the  contrary,  the  Dis- 
trict Court  has  jurisdiction  by  summary  process  to  require  the 
custodian  of  property  belongmg  to  the  bankrupt's  estate,  to 
deliver  the  same  to  the  trustee,  unless  said  custodian  is  hold- 
ing the  property  adversely  or  claiming,  in  good  faith,  title,  or 
at  least  colorable  title,  to  said  property;  that  the  custodian  is 
the  agent  or  trustee  of  the  court  holding  such  property,  and 
can  by  a  rule  be  compelled  to  deliver  it  over  to  the  trustee; 
that  the  mere  naked  possession  of  property  without  claim  of 
title  or  color  of  title,  is  not  sufficient  to  put  the  case  at  bar 
within  the  principles  of  the  Bardes  case.  In  fact,  this  court, 
in  stating  the  question  decided  in  the  Bardes  case,  laid  stress 
upon  the  point  that  the  third  party,  from  whom  it  was  sought 
to  recover  the  property,  was  holding  it  adversely;  and  that 
adverse  holding  was  the  foundation  upon  which  this  court 
based  that  opinion. 

After  diligent  search  petitioner  has  been  unable  to  find  any 


1220  APPELLATE    PROCEEDINGS. 

definition  of  "adverse  possession"  which  does  not  contemplate 
the  holding-  by  some  claim  or  color  of  title. 

The  petition  for  review  filed  in  the  Court  of  Appeals  gave 
that  court  only  the  power  to  review  matters  of  law.  {In  re 
Purvine,  5th  Circuit  Court  of  Appeals,  96  Fed.,  192.)  And 
the  Circuit  Court  of  Appeals  in  this  circuit  has  so  declared 
in  Cunningham  vs.  German  Insurance  Bank,  103  Fed.,  932, 
and  has  further  decided  that  only  such  matters  as  were  acted 
upon  by  the  court  below  could  be  reviewed. 

So  that  upon  the  record,  disregarding  the  impertinent  mat- 
ter as  it  reached  the  District  Court  and  Circuit  Court  of  Ap- 
peals, it  was  conclusively  established,  as  matter  of  fact,  that 
W.  T.  Nugent  received  said  funds  only  as  the  agent  or  cus- 
todian of  the  bankrupt ;  that  at  no  time  until  after  the  rendition 
of  the  opinion  by  the  District  Judge  was  he  asserting  any  claim 
or  right  to  or  ownership  in  said  fund;  consequently  the  cold 
question  of  law  was  before  the  Court  of  Appeals  as  to  whether 
or  not  the  referee  or  the  District  Court  had  pow'er  by  rule  to 
compel  such  a  custodian,  claiming  no  title  in  the  property,  to 
deliver  it  to  the  trustee. 

Fourth.  This  court,  in  the  case  of  White  vs.  Schloerb,  178 
U.  S.,  542,  decided  that  a  judge  of  the  Bankruptcy  Court  may 
compel  a  sheriff  to  return  goods  to  the  judicial  custody  of 
his  court,  seized  and  taken  therefrom  by  a  sheriff  in  replevin 
proceedings. 

The  petitioner  contends  that  in  the  case  at  bar,  the  agent's 
custody,  being  amicable  and  without  adverse  claim,  placed 
the  agent  in  the  attitude  of  the  sheriff  in  the  White  vs.  Schlo- 
erb case;  and  there  being  no  adverse  claim  at  the  time  of  the 
adjudication,  trial  and  decision  by  the  referee  and  judge,  the 
property  could  not  be  lifted  from  the  judicial  custody  by  any 
adverse  claim  thereafter  made. 

Nugent's  taking  or  holding  the  money  as  custodian  was 
continuous  from  the  moment  he  received  it  until  he  w^as  or- 
dered to  pay  it  over ;  and  it  was  at  all  times  a  holding  for 


CERTIORARI.  1221 

the  benefit  of  the  bankrupt,  and  hence  for  the  court  and  its  of- 
ficer, the  trustee.    There  never  was  a  break  in  that  continuity. 

In  the  case  of  in  re  Rosser,  loi  Fed.,  562,  the  Eighth  Cir- 
cuit Court  of  Appeals  has  hekl  that  upon  adjudication  all  the 
property  of  the  bankrupt  is  placed  in  aistodia  legis,  and  that 
the  bankrupt  and  every  other  party  who  has  the  possession  or 
control  of  any  part  of  it,  holds  that  part  as  agent  and  trus- 
tee of  the  court  and  its  officer. 

The  Circuit  Court  of  Appeals  for  the  Ninth  Circuit,  in  re 
Francis-Valentine  Co.,  94  Fed.,  793,  has  decided  that  the  court 
may  summarily  require  a  sheriff  to  deliver  to  the  trustee  the 
possession  of  a  bankrupt's  property  seized  wnthin  four  months 
prior  to  the  proceedings  in  bankruptcy;  and  in  that  case  the 
court,  commenting  on  Marshall  vs.  Knox,  16  Wall.,  551,  used 
this  language : 

"In  that  case  a  lessor  of  the  bankrupt  had  caused  the  sheriff, 
under  a  writ  of  provisional  seizure,  to  take  possession  of  cer- 
tani  property  of  the  bankrupt,  which  the  lessor  claimed  the 
right  to  hold  as  a  pledge  for  the  payment  of  rent  which  was 
due  him.  It  was  held  that  the  District  Court  sitting  in  bank- 
ruptcy has  no  jurisdiction  to  proceed  by  rule  to  take  the  goods 
from  the  possession  of  the  sheriff.  The  court,  referring  to 
the  seizure  of  the  goods,  said :  'The  landlord  claimed  the  right 
thus  to  hold  possession  of  them  until  his  rent  was  satisfied. 
This  claim  was  adverse  to  that  of  the  assignee.'  These  words 
quoted  from  the  opinion  fully  explain  the  ground  of  the  decis- 
ion. It  was  because  the  claim  was  adverse  to  that  of  the  as- 
signee. In  the  present  case  the  sheriff  had  possession,  not 
in  opposition  to  the  right  of  the  bankrupt  nor  in  antagonism 
to  its  title,  but  his  possession  was  based  entirely  upon  the  as- 
sumption that  the  title  was  in  the  bankrupt." 

The  court  will  observe  that  the  analogy  between  the  Valen- 
tine case  and  the  case  at  bar  is  complete,  for  it  is  established 
by  facts  binding  upon  the  Court  of  Appeals  that  W.  T.  Nugent 
received  this  money  as  custodian  only;  that  the  capacity  of 
custodian  was  never  changed,  and  that  he  was  asserting  no 


1222  APPELLATE  PROCEEDINGS. 

adverse  claim  or  title  thereto;  but,  in  the  words  of  the  Court 
of  Appeals  for  the  Ninth  Circuit,  Nugent  "had  possession, 
not  in  opposition  to  the  right  of  the  bankrupt,  nor  in  opposi- 
tion to  his  title,  but-  his  possession  was  based  entirely  upon 
the  assumption  that  the  title  was  in  the  bankrupt."  The  Dis- 
trict Courts  in  Vermont,  New  York  and  West  Virginia,  which 
decisions  are  the  law  in  those  districts  respectively,  have  also 
sustained  the  right  to  issue  such  rules.  {In  re  Brooks,  91 
Fed.,  518:  in  re  Raymond  W.  Kenney,  95  Fed.,  427;  in  re 
Moore,  104  Fed.,  869.)  Then,  too,  it  is  contended  the  opin- 
ion of  the  Court  of  Appeals  is  in  conflict  with  White  vs.  Schlo- 
erb,  178  U.  S.,  542. 

In  re  Ward,  104  Fed..  985,  it  was  sought  to  obtain  an  in- 
junction against  one  O'Donald  from  disposing  of  certain 
"funds  and  credits  due"  to  the  bankrupt  and  which  were  in 
the  possession  of  the  said  O'Donald.  Judge  Lowell,  of  the 
Massachusetts  district,  basing  his  opinion  upon  the  case  of 
Bardes  vs.  Bank  refused  to  grant  the  injunction,  and  comment- 
ing on  the  cases  of  Bardes  vs.  Bank  and  White  vs.  Schloerb, 
closes  his  opinion  with  the  following  language  : 

"It  is  greatly  to  be  desired  that  a  further  exposition  of  the 
jurisdiction  of  the  District  Court  in  bankruptcy  should  be 
made  as  speedily  as  possible  by  the  Supreme  Court,  and  if 
counsel  for  the  petitioners  shall  desire  to  take  this  case  direct- 
ly to  the  Supreme  Court,  as  is  provided  by  section  5  of  the 
Judiciary  Act  of  1891,  26  Stat.,  827,  I  will  gladly  facilitate 
proceedings  to  that  end." 

And  so  it  is  that  your  petitioner  contends  that  by  reason 
of  the  decision  in  the  case  at  bar,  and  the  others  so  cited,  there 
is  a  contrariety  of  opinion,  and  not  a  uniform  administration 
of  the  Bankruptcy  Act  (as  necessary  as  uniformity  in  the  act 
itself,  required  by  section  8,  sub-section  4,  Article  I.,  of  the 
constitution  of  the  United  States)  as  to  the  grave  and  impor- 
tant question,  to  wit:  The  right  of  the  court  of  bankruptcy 
to  summarily  order  in  property  which  is  admittedly  assets  of 


CERTIORARI.  1223 

a  bankrupt's  estate  and  which  the  holder  thereof  is  not  claim- 
ing- as  his  own. 

Your  petitioner  appends  hereto  his  brief  in  support  of  this 
petition. 

Wherefore,  your  petitioner  prays  that  a  writ  of  certiorari 
may  be  issued  out  of  and  under  the  seal  of  this  court,  di- 
rected to  the  United  States  Circuit  Court  of  Appeals  for  the 
Sixth  Circuit,  commanding  said  court  to  certify  and  send  to 
this  court  a  full  and  complete  transcript  of  the  record  in  all 
proceedings  in  said  Circuit  Court  of  Appeals  in  the  case  there- 
in, entitled  "The  Wayne  Knitting  Mills,  Belding  Brothers  & 
Company  and  the  German  Insurance  Bank,  against  E.  B. 
Nugent,  bankrupt,  on  petition  of  W.  T.  Nugent  for  review. 
No.  920,"  to  the  end  that  said  case  may  be  reviewed  and 
determined  by  this  court,  as  provided  by  law ;  and  that  the . 
judgment  of  the  said  Circuit  Court  of  Appeals  in  said  case 
may  be  modified  so  as  to  deny  the  petition  for  review  filed  by 
said  W.  T.  Nugent  to  that  court  in  bankruptcy. 

And  your  petitioner  will  ever  pray. 

William  W.  Watts, 
John  Richard  Watts, 

Counsel  for  Petitioner. 

State  of  Kentucky,    ) 

Jefferson  County,  ) 

William  W.  Watts,  being  duly  sworn,  says  that  he  is  one 
of  the  counsel  for  Arthur  E.  Mueller,  trustee  in  bankruptcy 
of  Edward  B.  Nugent,  bankrupt,  the  petitioner  named ;  that 
he  lias  read  the  foregoing  petition,  and  the  facts  therein  stated 
are  true,  as  he  believes.  William  W.  Watts. 

Subscribed  and  sworn  to  before  me  this  29th  day  of  Jan- 
uary, A.  D.  1 90 1.  My  commission  as  Notary  Public  expires 
on  the  1 2th  day  of  January,  A.  D.   1904. 

E.  B.  Kerr, 

[Seal.l  Notary  Public  within  and  for  County  of 

Jefferson,   State   of   Kentucky. 

(l)Takeu  from  tlie  record  in  Nngent  vs.  U.  S.,  184  U.  S.  1. 
See  Lovelaiid  on  Bankruptc}',  sections  307  and  0O8, 


THE      ■ 
UNITED   STATES   BANKRUPTCY  LAW, 

1898. 

As  Amended  February  5,  1903,  32  Stat,  at  L.  797. 

(Sections   amended   are   inclosed   in   brackets   £],    amendments   and 
new  sections  are  printed  in  italics.) 


AN  ACT  TO  ESTABLISH  A  UNIFORM  SYSTEM  OF  BANKRUPTCY 
THROUGHOUT  THE  UNITED  STATES. 

Be  it  e7iacted  by  the  Senate  and  House  of  Representatives  of  the 
United  States  of  America  i)i  Congress  assembled.^ 

CHAPTER  I. 
Definitions. 

Section  i.  Meaning  of  words  and  phrases.  ^The  words 
and  phrases  used  in  this  Act  and  in  proceedings  pursuant  hereto 
shall,  unless  the  same  be  inconsistent  with  the  context,  be  con- 
strued as  follows: 

(1)  ^'A  person  against  whom  a  petition  has  been  filed." 
"A  person  against  whom  a  petition  has  been  filed"  shall  include 
a  person  who  has  filed  a  voluntary  petition ; 

(2)  "Adjudication."  "Adjudication"  shall  mean  the  date 
of  the  entry  of  a  decree  that  the  defehdant,  in  a  bankruptcy  pro- 
ceeding, is  a  bankrupt,  or  if  such  decree  is  appealed  from,  then 
the  date  when  such  decree  is  finally  confirmed ; 

(.3)  -'Appellate  courts."  "x^ppellate  courts"  shall  include 
the  circuit  courts  of  appeals  of  the  United  States,  the  supreme 
courts  of  the  Territories,  and  the  Supreme  Court  of  the  United 
States ; 

(4)  "Bankrupt."  "Bankrupt"  shall  include  a  person 
against  whom  an  involuntary  petition  or  an  application  to  set  a 
composition  aside  or  to  revoke  a  discharge  has  been  filed,  or  who 


1226  BANKRUPTCY  ACT  OF  1898,  §1 

has  filed  a  voluntary  petition,  or  who  has  been  adjudged  a  bank- 
rupt ; 

(5)  ''Clerk."  "Clerk"  shall  mean  the  clerk  of  a  court  of 
bankruptcy ; 

(6)  ''Corporations."  "Corporations"  shall  mean  all  bodies 
having  any  of  the  powers  and  privileges  of  private  corporations 
Inot  possessed    by  individuals  or  partnerships,  and  shall    include 

limited  or  other  partnership  associations  organized  under  laws 
making  the  capital  subscribed  alone  responsible  for  the  debts  of 
the  association ; 

(7)  "Court."  "Court"  shall  mean  the  court  of  bankruptcy 
in  which  the  proceedings  are  pending,  and  may  include  the  referee; 

(8)  "Courts  of  bankruptcy."  "Courts  of  bankruptcy" 
shall  include  the  district  courts  of  the  United  States  and  of  the 
Territories,  the  supreme  court  of  the  District  of  Columbia,  and 
the  United  States  court  of  the  Indian  Territory,  and  of  Alaska; 

(9)  "Creditor."  "Creditor"  shall  include  anyone  who 
owns  a  demand  or  claim  provable  in  bankruptcy,  and  may  include 
his  duly  authorized  agent,  attorney,  or  proxy ; 

(10)  "Date  of  bankruptcy";  "bankruptcy,"  etc.  "Date 
of  bankruptcy,"  or  "time  of  bankruptcy,"  or  "commencement  of 
proceedings,"  or  "bankruptcy,"  with  reference  to  time,  shall 
mean  the  date  when  the  petition  was  filed ; 

(11)  "Debt."  "Debt"  shall  include  any  debt,  demand,  or 
claim  provable  in  bankruptcy ; 

(12)  "Discharge."  "Discharge"  shall  mean  the  release 
of  a  bankrupt  from  all  of  his  debts  which  are  provable  in  bank- 
ruptcy, except  such  as  are  excepted  by  this  Act; 

(13)  "Document."  "Document"  shall  include  any  book, 
deed,  or  instrument  in  writing; 

(14)  "Holiday."  "Holiday"  shall  include  Christmas,  the 
Fourth  of  July,  the  Twenty-second  of  February,  and  any  day  ap- 
pointed by  the  President  of  the  United  States  or  the  Congress  of 

I  the  United  States  as  a  holiday  or  as  a  day  of  public  fasting  or 
[thanksgiving; 

(15)  When  deemed  "insolvent."  A  person  shall  be  deemed 
insolvent  within  the  provisions  of  this  Act  whenever  the  aggregate 
of  his  property,  exclusive  of  any  property  which  he  may  have  con- 
veyed, transferred,  concealed,  or  removed,  or  permitted  to  be  con- 
cealed  or  removed,  with    intent  to  defraud,  hinder  or    delay  his 


§1  BANKRUPTCY   ACT    OF    1 898.  1227 

creditors,  shall  not,  at  a  fair  valuation,  be  sufficient  in  amount  to 
pay  his  debts; 

(16)  ''Jufice."  "Judge"  shall  mean  a  judge  of  a  court 
of  bankruptcy,  ri^>l  including  the  referee; 

(17)  "  Orith.''     "Oath"  shall  include  affirmation; 

(18)  ^'Ofl&cer.  •'  "Officer"  shall  include  clerk,  marshal,  re- 
ceiver, referee,  and  viustee,  and  the  imposing  of  a  duty  upon  or 
the  forbvJding  of  an  .xct  by  any  officer  shall  include  his  successor 
and  any  person  author;:j-d  by  law  to  perform  the  duties  of  such 
officer; 

(19y  *' Persons."  'Persons"  shall  include  corporations, 
except  where  otherwise  :i.pecified,  and  officers,  partnerships,  and 
woir-en,  and  when  used  \;ith  reference  to  the  commission  of  acts 
which  are  herein  forbiddv,n  shall  include  persons  who  are  partici- 
parits  in  the  forbidden  ac/s,  and  the  agents,  officers,  and  members 
of  the  board  of  directors  or  trustees,  or  other  similar  controlling 
b-xiies  of  corporations ; 

(20)  "Petition."  ''Petition"  shall  mean  a  paper  filed  in 
a  court  of  bankrujDtcy  o ;  with  a  clerk  or  deputy  clerk  by  a  debtor 
praying  for  the  benefits,  of  this  Act,  or  by  creditors  alleging  the 
commission  of  an  act  of  bankruptcy  by  a  debtor  therein  named ; 

(21)  "Referee."  "Referee"  shall  mean  the  referee  who 
has  jurisdiction  of  the  case  or  to  whom  the  case  has  been  referred, 
or  anyone  acting  in  his  stead ; 

(22)  "Conceal."  "Conceal"  shall  include  secrete,  falsify, 
and  mutilate; 

(23)  "Secured  creditor."  "Secured  creditor"  shall  include 
a  creditor  who  has  security  for  his  debt  upon  the  property  of  the 
bankrupt  of  a  nature  to  be  assignable  under  this  Act,  or  who  owns 
such  a  debt  for  which  some  indorser,  surety,  or  other  persons  sec- 
ondarily liable  for  the  bankrupt  has  such  security  upon  the  bank- 
rupt's assets; 

(24)  "States."  "States"  shall  include  the  Territories,  the 
Indian  Territory,  Alaska,  and  the  District  of  Columbia; 

(25)  "Transfer."  "Transfer"  shall  include  the  sale  and 
every  other  and  different  mode  of  disposing  of  or  parting  with 
property,  or  the  possession  of  property,  absolutely  or  conditionally, 
as  a  payment,  pledge,  mortgage,  gift,  or  security; 

(26)  "Trustee."  "Trustee"  shall  include  all  of  the  trus- 
tees of  an  estate ; 


1—8  BANKRUPTCY    ACT    OF    1 89.8.  ^2 

(27)  *' Wage-earner."  "Wage-earner"  shall  mean  an  indi- 
vidnal  who  works  for  wages,  salary,  or  hire,  at  a  rate  of  compen- 
sation  not  exceeding  one  thonsand  five  hundred  dollars  per  year; 

(28)  Words  in  masculine  gender.  Words  importing  the 
masculine  gender  may  be  applied  to  and  include  corporations,  part- 
nerships, and  women ; 

(29)  Importing  plural.  Words  importing  the  plural  nunv 
ber  may  be  applied  to  and  mean  only  a  single  person  or  thing; 

(30)  Importing  singular.  Words  importing  the  singular 
number  may  be  applied  to  and  mean  several  persons  or  things. 


CHAPTER  11. 

Creation  of  Courts  of  Bankruptcy  and  their 

Jurisdiction. 

Section  2.  U.  S.  district  courts;  supreme  court,  D.  C;  Terri- 
torial courts;  jurisdiction.  That  the  courts  of  bankruptcy  as 
hereinbefore  defined,  viz.,  the  district  courts  of  the  United  States 
in  the  several  States,  the  supreme  court  of  the  District  of  Colum- 
bia, the  district  courts  of  the  several  Territories,  and  the  United 
States  courts  in  the  Indian  Territory  and  the  District  of  Alaska, 
are  hereby  made  courts  of  bankruptcy,  and  are  hereby  invested, 
within  their  respective  territorial  limits  as  now  established,  or  as 
they  may  be  hereafter  changed,  with  such  jurisdiction  at  law  and 
in  equity  as  will  enable  them  to  exercise  original  jurisdiction  in 
bankruptcy  proceedings,  in  vacation  in  chambers  and  during  their 
respective  terms,  as  they  are  now  or  may  be  hereafter  held,  to 

(1)  To  adjudge  bankrupt.  Adjudge  persons  bankrupt  who 
have  had  their  principal  place  of  business,  resided,  or  had  their 
domicile  within  their  respective  territorial  jurisdictions  for  the  pre- 
ceding six  months,  or  the  greater  portion  thereof,  or  who  do  not 
have  their  principal  place  of  business,  reside,  or  have  their  domi- 
cile within  the  United  States,  but  have  property  within  their  juris- 
dictions, or  who  have  been  adjudged  bankrupts  by  courts  of  com- 
petent  jurisdiction  without  the  United  States  and  have  property 
within  their  jurisdictions; 

(2)  Allow  and  disallow  claims,  etc.  Allow  claims,  d'sallow 
claims,  reconsider  allowed  or  disallowed  claims,  and  aliow  or  dis- 
allow them  against  bankrupt  estates ; 


§3  BANKRUPTCY    ACT    OF    1 898.  1229 

(3)  Appcint  receivers,  etc.  Appoint  receivers  or  the  mar- 
shals, npon  application  of  parties  in  interest,  in  case  the  courts 
shall  find  it  absolutely  necessary,  for  the  preservation  of  estates, 
to  take  charge  of  the  property  of  bankrupts  after  the  filing  of  the 
petition  and  until  it  is  dismissed  or  the  trustee  is  qualified ; 

(4)  Try  and  punish  bankrupts,  etc.  Arraign,  try,  and 
punish  bankrupts,  officers,  and  other  persons,  and  the  agents, 
officers,  members  of  the  board  of  directors  or  trustees,  or  other 
similar  controlling  bodies,  of  corporations  for  violations  of  this 
Act,  in  accordance  with  the  laws  of  procedure  of  the  United  States 
now  in  force,  or  such  as  may  be  hereafter  enacted,  regulating  trials 
for  the  alleged  violation  of  laws  of  the  United  States ; 

(5)  To  permit  temporary  transaction  of  business.  [Author- 
ize the  business  of  bankrupts  to  be  conducted  for  limited  periods  by 
receivers,  the  marshals,  or  trustees,  if  necessary  in  the  best  interests  of 
the  estates ;] 

(5)  Authorize  the  hitsiness  of  hankrupts  to  he  conducted  for  lim- 
ited periods  hy  receivers,  the  marshals,  or  trustees,  if  necessary  in  the 
lest  interests  of  the  estates,  and  allow  such  officers  additional  compen- 
sation for  such  services,  hut  not  at  a  greater  rate  than  in  this  act 
allowed  trustees  for  similar  services; 

(6)  To  substitute  additional  persons  in  proceedings,  etc. 
Bring  in  and  substitute  additional  persons  or  parties  in  proceeding's 
in  bankruptcy  when  necessary  for  the  complete  determination  of 
a  matter  in  controversy ; 

(7)  To  collect  and  distribute  assets.  Cause  the  estates  of 
bankrupts  to  be  collected,  reduced  to  money  and  distributed,  and 
determine  controversies  in  relation  thereto,  except  as  herein  other- 
wise provided ; 

(8)  To  close  estates.  Close  estates,  whenever  it  appears 
that  they  have  been  fully  administered,  by  approving  the  final  ac- 
counts and  discharging  the  trustees,  and  reopen  them  whenever  it 
appears  they  were  closed  before  being  fully  administered ; 

(9)  To  confirm  or  reject  compositions.  Confirm  or  reject 
compositions  between  debtors  and  their  creditors,  and  set  aside 
compositions  and  reinstate  the  cases ; 

(10)  To  confirm,  etc.,  referee's  findings.  Consider  and  con- 
firm, modify  or  overrule,  or  return,  with  instructions  for  further 
proceedings,  records  and  findings  certified  to  them  by  referees; 


l-^O  BANKRUPTCY    ACT    OF    1898.  §§2     3 

(11)  Determine  exemptions.  Determine  all  claims  of  bank- 
rupts to  their  exemptions; 

(12)  Discharge  bankrupts,  etc.  Discharge  or  lefnse  to  dis- 
charge bankrupts  and  set  aside  discharges  and  reinstate  the  cases; 

(13)  Enforce  orders.  Enforce  obedience  by  bankrupts,  of- 
ficers, and  other  persons  to  all  lawful  orders,  by  fine  or  imprison- 
ment  or  fine  and  imprisonment ; 

(14)  Extradite  bankrupts.  Extradite  bankrupts  from  their 
respective  districts  to  other  districts ; 

(15)  Make  orders.  Make  such  orders,  issue  such  process, 
and  enter  such  judgments  in  addition  to  those  specifically  provided 
for  as  may  be  necessary  for  the  enforcement  of  the  provisions  of 
this  Act ; 

(16)  Punish  for  contempt.  Punish  persons  for  contempts 
committed  before  referees; 

(17)  Appoint  trustees.  Pursuant  to  the  recommendation 
of  creditors,  or  when  they  neglect  to  recommend  the  appointment 
of  trustees,  appoint  trustees,  and  upon  complaints  of  creditors,  re- 
move trustees  for  cause  upon  hearings  and  after  notices  to  them ; 

(18)  Tax  costs.  Tax  costs,  whenever  they  are  allowed  by 
law,  and  render  judgments  therefor  against  the  unsuccessful  party, 
or  the  successful  party  for  cause,  or  in  part  against  each  of  the 
parties,  and  against  estates,  in  proceedings  in  bankruptcy;   and 

(19)  Transfer  cases.  Transfer  cases  to  other  courts  of  bank- 
ruptcy. 

Unspecified  powers.  Nothing  in  this  section  contained  shall 
be  construed  to  deprive  a  court  of  bankruptcy  of  any  power  it 
would  possess  were  certain  specific  powers  not  herein  enumerated. 


CHAPTER  III. 
Bankrupts. 

Section  3.  Acts  of  bankruptcy  ;  of  what  to  consist,  a  Acts  of 
bankruj)tcy  by  a  person  shall  consist  of  his  having  (1)  conveyed, 
transferred,  concealed,  or  removed,  or  permitted  to  be  concealed 
or  removed,  any  part  of  his  property  with  intent  to  hinder,  delay, 
or  defraud  his  creditors,  or  any  of  them ;  or  (2)  transferred,  while 
insolvent,  any  portion  of  his  property  to  one  or  more  of  his  cred- 


§3  BANKRUPTCY   ACT   OF    1898,  1231 

itors  with  intent  to  prefer  such  creditors  over  his  other  creditors; 
or  (3)  suffered  or  permitted,  while  insolvent,  any  creditor  to  ob- 
tain a  preference  through  legal  proceedings,  and  not  having  at 
'east  five  days  before  a  sale  or  final  disposition  of  any  property 
affected  by  such  preference  vacated  or  discharged  such  preference; 
or  £(4)  made  a  general  assignment  for  the  benefit  of  his  creditors ;] 

or  (4)  made  a  general  assignment  for  the  benefit  of  liis  creditors^  or, 
being  insolvent,  applied  for  a  receiver  or  trustee  for  Ids  property  or 
because  of  insolvency  a  receiver  or  trustee  has  been  put  in  charge  of 
his  property  under  the  laivs  of  a  state,  of  a  territory,  or  of  the 
United  States; 

or  (5)  admitted  in  writing  his  inability  to  pay  his  debts  and  his 
willingness  to  be  adjudged  a  bankrupt  on  that  ground. 

Petition  to  be  filed  within  four  months,  d  A  petition  may  be 
filed  against  a  person  who  is  insolvent  and  who  has  committed  an 
act  of  bankruptcy  within  four  months  after'  the  commission  of  such 
act.     Such  time  shall  not  expire  until  four  months  after 

(1)  From  when  to  date.  The  date  of  the  recording  or  reg- 
istering of  the  transfer  or  assignment  when  the  act  consists  in 
having  made  a  transfer  of  any  of  his  property  with  intent  to  hin- 
der, delay,  or  defraud  his  creditors  or  for  the  purpose  of  giving  a 
preference  as  hereinbefore  provided,  or  a  general  assignment  for 
the  benefit  of  his  creditors,  if  by  law  such  recording  or  registering 
is  required  or  permitted,  or,  if  it  is  not,  from  the  date  when  the 
beneficiary  takes  notorious,  exclusive,  or  continuous  possession  of 
the  property  unless  the  petitioning  creditors  have  received  actual 
notice  of  such  transfer  or  assignment. 

Defense  of  solvency.  ^It  shall  be  a  complete  defense  to  any 
proceedings  in  bankruptcy  instituted  under  the  first  subdivision  of 
this  section  to  allege  and  prove  that  the  party  proceeded  against 
was  not  insolvent  as  defined  in  this  Act  at  the  time  of  the  filing 
the  petition  against  him,  and  if  solvency  at  such  date  is  proved 
by  the  alleged  bankrupt  the  proceedings  shall  be  dismissed. 

Burden  of  proof.  And  under  said  subdivision  one  the  burden 
of  proving  solvency  shall  be  on  the  alleged  bankrupt. 

Person  denying  insolvency ;  to  testify,  d  Whenever  a  per- 
son against  whom  a  petition  has  been  filed  as  hereinbefore  pro- 
vided under  the  second  and  third  subdivisions  of  this  section  takes 
issue  with  and  denies  the  allegation  of  his  insolvency,  it  shall  be 


1232  BANKRUPTCY  ACT   OF   1898.  §§J],  4 

his  duty  to  appear  in  court  on  the  hearing,  with  his  books,  papers, 
and  accounts,  and  submit  to  an  examination,  and  give  testimony 
as  to  all  matters  tending  to  establish  solvency  or  insolvency. 

Burden  of  proof,  etc.  And  in  case  of  his  failure  to  so  attend 
and  submit  to  examination  the  burden  of  proving  his  solvency 
shall  rest  upon  him. 

Petitioner  to  give  bond.  ^Whenever  a  petition  is  filed  by 
any  person  for  the  purpose  of  having  another  adjudged  a  bank- 
rupt, and  an  application  is  made  to  take  charge  of  and  hold  the 
property  of  the  alleged  bankrupt,  or  any  part  of  the  same,  prior 
to  the  adjudication  and  pending  a  hearing  on  the  petition,  the 
petitioner  or  applicant  shall  file  in  the  same  court  a  bond  with  at 
least  two  good  and  sufficient  sureties  who  shall  reside  within  the 
jurisdiction  of  said  court,  to  be  approved  by  the  court  or  a  judge 
thereof,  in  such  sum  as  the  court  shall  direct,  conditioned  for  the 
payment, 

Liability  for  costs,  etc.  In  case  such  petition  is  dismissed, 
to  the  respondent,  his  or  her  personal  representatives,  all  costs, 
expenses,  and  damages  occasioned  by  such  seizure,  taking,  and 
detention  of  the  property  of  the  alleged  bankrupt. 

Allowance  of  costs,  etc.  If  such  petition  be  dismissed  by 
the  court  or  withdrawn  by  the  petitioner,  the  respondent  or  respon- 
dents shall  be  allowed  all  costs,  counsel  fees,  expenses,  and  dam- 
ages occasioned  by  such  seizure,  taking,  or  detention  of  such 
property. 

Counsel  fees,  etc.,  to  be  fixed  by  court.  Counsel  fees,  costs, 
expenses,  and  damages  shall  be  fixed  and  allowed  by  the  court, 
and  paid  by  the  obligors  in  such'  bond. 

Section  4.  Who  may  become  voluntary  bankrupt,  a  Any  per- 
son who  owes  debts,  except  a  corporation,  shall  be  entitled  to  the 
benefits  of  this  Act  as  a  voluntary  bankrupt. 

Who  may  become  involuntary  bankrupt.  ||&  Any  natural  per- 
son, except  a  wage  earner  or  a  person  engaged  chiefly  in  farming  or 
the  tillage  of  the  soil,  any  u,nincorporated  company,  and  any  corpora- 
tion engaged  principally  in  manufacturing,  trading,  printing,  pub- 
lishing, or  mercantile  pursuits,  owing  debts  to  the  amount  of  one 
thousand  dollars  or  over,  may  be  adjudged  an  involuntary  bankrupt 
upon  default  or  an  impartial  trial,  and  shall  be  subject  to  the  provi- 
sions and  entitled  to  the  benefits  of  this  Act.  Private  bankers,  but 
not  national  banks  or  banks  incorporated  under  State  or  Territorial 
laws,  may  be  adjudged  involuntary  bankrupts.] 


§  5  BANKRUPTCY   ACT    OF    1898.  1233 

1)  Any  natural  person,  except  a  icage-earner,  or  a  person  engaged 
chiefly  in  farming  or  the  tillage  of  the  soil,  any  unincorporated  com- 
pany, and  any  corporation  engaged  principally  in  manufacturing, 
trading,  printing,  publishing,  mining  or  mercantile  pursuits,  owing 
debts  to  the  amount  of  one  thousand  dollars  or  over,  may  be  adjudged 
an  involuntary  bankrupt  upon  default  or  an  impartial  trial,  and  shall 
be  subject  to  the  provisions  and  entitled  to  the  benefits  of  this  act. 
Private  bankers,  but  not  national  banks  or  banks  incorporated  under 
state  or  territorial  laws,  may  be  adjudged  involuntary  bankrupts. 

The  banhruptcy  of  a  corporation  shall  not  release  its  officers,  di- 
rectors, or  stockholders,  as  such,  from  any  liability  under  the  laws  of  a 
state  or  territory  or  of  the  United  States. 

Sections.  Partners;  partnership.  «A  partnership,  during- 
the  continuation  of  the  partnership  business,  or  after  its  dissolu- 
tion and  before  the  final  settlement  thereof,  may  be  adjudged  a 
bankrupt. 

Administration  of  estate,  i^"  The  creditors  of  the  partnership 
shall  appoint  the  trustee;  in  other  respects  so  far  as  possible  the 
estate  shall   be  administered  as  herein  provided   for  other  estates. 

Jurisdiction  over  one  partner  sufficient,  c  The  court  of  bank- 
ruptcy which  has  jurisdiction  of  one  of  the  partners  may  have 
jurisdiction  of  all  the  partners  and  of  the  adm.inistration  of  the 
partnership  and  individual  property. 

Trustee's  duty.  d'Xh.e  trustee  shall  keep  separate  accounts 
of  the  partnership  property  and  of  the  property  belonging  to  the 
individual  partners. 

Expenses.  (?The  expenses  shall  be  paid  from  the  partner- 
ship property  and  the  individual  property  in  such  proportions  as 
the  court  shall  determine. 

Payment  of  partnership  debts.  /"The  net  proceeds  of  the 
partnership  proj)erty  shall  be  appropriated  to  the  ^^ayment  of  the 
partnership  debts,  and  the  net  proceeds  of  the  individual  estate  of 
each  partner  to  the  payment  of  his  individual  debts. 

Surplus  of  individ.i-al  property.  Should  any  surplus  remain 
of  the  property  of  any  partner  after  paying  his  individual  debts, 
such  surplus  shall  be  added  to  the  partnership  assets  and  be  ap- 
plied to  the  payment  of  the  partnership  debts. 

Surplus  of  partnership  property.  Should  any  surplus  of  the 
partnership  property  remain  after  paying  the  partnership  debts, 
such  surplus  shall  be  added  to  the  assets  of  the  individual  partners 
in  the  proportion  of  their  respective  interests  in  the  partnership. 


1-34  BANKRUPTCY   ACT   OF    1898.  §§5 — 7 

Claims  of  partnership  against  individual  estates,  etc.  ^The 
court  may  permit  the  proof  of  the  claim  of  the  partnership  estate 
against  the  individual  estates,  and  vice  versa,  and  may  marshal 
the  assets  of  the  partnership  estate  and  individual  estates  so  as  to 
prevent  preferences  and  secure  the  equitable  distribution  of  the 
property  of  the  several  estates. 

Administration  of  estate  where  all  partners  are  not  bank- 
rupt, h  In  the  event  of  one  or  more  but  not  all  of  the  members 
of  a  partnership  being  adjudged  bankrupt,  the  partnership  prop- 
erty shall  not  be  administered  in  bankruptcy,  unless  by  consent  of 
the  partner  or  partners  not  adjudged  bankrupt;  but  such  partner 
or  partners  not  adjudged  bankrupt  shall  settle  the  partnership 
business  as  expeditiously  as  its  nature  will  permit,  and  account  for 
the  interest  of  the  partner  or  partners  adjudged  bankrupt. 

Section  6.  Exemptions  of  bankrupts,  a  This  Act  shall  not 
affect  the  allowance  to  bankrupts  of  the  exemptions  which  are 
prescribed  by  the  State  laws  in  force  at  the  time  of  the  filing  of 
the  petition  in  the  State  wherein  they  have  had  their  doiuicile  for 
the  six  months  or  the  greater  portion  thereof  immediately  preced- 
ing the  filing  of  the  petition. 

Section  7.     Duties  of  bankrupts,     a  The  bankrupt  shall 

(1)  Attend  meetings.  Attend  the  first  meeting  of-  his  cred- 
itors, if  directed  by  the  court  or  a  judge  thereof  to  do  so,  and  the 
hearing  upon  his  application  for  a  discharge,  if  filed; 

(2)  Comply  with  orders.  Coiuply  with  all  lawful  orders 
of  the  court ; 

(3)  Examine  proofs  of  claims.  Examine  the  correctness  of 
all  proofs  of  claims  filed  against  his  estate; 

(4)  Execute  papers.  Execute  and  deliver  such  papers  as 
shall  be  ordered  by  the  court ; 

(5)  Execute  transfers.  Execute  to  his  trustee  transfers  of 
all  his  property  in  foreign  coimtries; 

(6)  Inform  trustee.  Immediately  inform  his  trustee  of  any 
attempt,  by  his  creditors  or  other  persons,  to  evade  the  provisions 
of  this  Act,  coming  to  his  knowledge; 

(7)  Disclose  false  claims.  In  case  of  any  person  having  to 
his  knowledge  proved  a  false  claim  against  his  estate,  disclose  that 
fact  immediately  to  his  trustee; 


§§7,  8  BANKRUPTCY   ACT   OF    1898.  1235 

(8)  Prepare  schedule  of  property.  Prepare,  make  oath  to, 
and  file  in  court  within  ten  days,  unless  further  time  is  granted, 
after  the  adjudication,  if  an  involuntary  bankrupt,  and  with  the 
petition  if  a  voluntary  bankrupt,  a  schedule  of  his  property,  show- 
ing the  amount  and  kind  of  property,  the  location  thereof,  its 
money  value  in  detail,  and  a  list  of  his  creditors,  showing  their 
residences,  if  known,  if  unknown,  that  fact  to  be  stated,  the 
amounts -due  each  of  them,  the  consideration  thereof,  the  security 
held  by  them,  if  any,  and  a  claim  for  such  exemptions  as  he  may 
be  entitled  to,  all  in  triplicate,  one  copy  of  each  for  the  clerk,  one 
for  the  referee,  and  one  for  the  trustee;  and 

(9)  Submit  to  examination.  When  present  at  the  first  meet- 
ing of  his  creditors,  and  at  such  other  times  as  the  court  shall  order, 
submit  to  an  examination  concerning  the  conducting  of  his  busi- 
ness, the  cause  of  his  bankruptcy,  his  dealings  with  his  creditors 
and  other  persons,  the  amount,  kind,  and  whereabouts  of  his  prop- 
erty, and,  in  addition,  all  matters  which  may  affect  the  adminis- 
tration and  settlement  of  his  estate;  but  no  testimony  given  by 
him  shall  be  offered  in  evidence  against  him  in  any  criminal 
proceeding. 

Bankrupt,  when  not  compelled  to  attend  meeting;  examine 
claims.  Provided,  hoivever^  That  he  shall  not  be  required  to  at- 
tend a  meeting  of  his  creditors,  or  at  or  for  an  examination  at  a 
place  more  than  one  hundred  and  fifty  miles  distant  from  his  home 
or  principal  place  of  business,  or  to  examine  claims  except  when 
presented  to  him,  unless  ordered  by  the  court,  or  a  judge  thereof, 
for  cause  shown, 

Expenses  for  attending  meetings.  And  the  bankrupt  shall 
be  paid  his  actual  expenses  from  the  estate  when  examined  or 
required  to  attend  at  any  place  other  than  the  city,  town,  or  vil- 
lage of  his  residence. 

Section  8.  Death  or  insanity  of  bankrupts;  not  to  abate  pro- 
ceedings. «The  death  or  insanity  of  a  bankrupt  shall  not  abate 
the  proceedings,  but  the  same  shall  be  conducted  and  concluded  in 
the  same  manner,  so  far  as  possible,  as  though  he  had  not  died  or 
become  insane : 

Widow  entitled  to  dower,  etc.  Provided.,  That  in  case  of 
death  the  widow  and  children  shall  be  entitled  to  all  rights  of 
dower  and  allowance  fixed  by  the  laws  of  the  State  of  the  bank- 
rupt's residence. 


1236  BANKRUPTCY  ACT  OF  1898,  §§U — 11 

f 

Section  9.  Protection  and  detention  of  bankrupts;  exemption 
from  arrest.  ^^A  bankrupt  shall  be  exempt  from  arrest  upon 
civil  process  except  in  the  following  cases:  (1)  When  issued  from 
a  court  of  bankruptcy  for  contempt  or  disobedience  of  its  lawful 
orders;  (2)  when  issued  from  a  State  court  having  jurisdiction, 
and  served  within  such  State,  upon  a  debt  or  claim  from  which 
his  discharge  in  bankruptc}'  would  not  be  a  release,  and  in  such 
case  he  shall  be  exempt  from  such  arrest  when  in  attendance  upon 
a  court  of  bankruptcy  or  engaged  in  the  performance  of  a  duty 
imposed  by  this  Act. 

Detention  for  purposes  of  examination.  ^^iThe  judge  may, 
at  any  time  after  the  filing  of  a  petition  by  or  against  a  person, 
and  before  the  expiration  of  one  month  after  the  qualification  of 
the  trustee,  upon  satisfactory  proof  by  the  affidavits  of  at  least  two 
persons  that  such  bankrupt  is  about  to  leave  the  district  in  which 
he  resides  or  has  his  principal  place  of  business  to  avoid  examina- 
tion, and  that  his  departure  will  defeat  the  proceedings  in  bank- 
ruptcy, issue  a  warrant  to  the  marshal,  directing  him  to  bring 
such  bankrupt  forthwith  before  the  court  for  examination. 

May  be  kept  in  custody  ten  days,  etc.  If  upon  hearing  the 
evidence  of  the  parties  it  shall  appear  to  the  court  or  a  judge  there- 
of that  the  allegations  are  true  and  that  it  is  necessary,  he  shall 
order  such  marshal  to  keep  such  bankrupt  in  custody  not  exceed- 
ing ten  days,  but  not  imprison  him,  until  he  shall  be  examined 
and  released  or  give  bail  conditioned  for  his  appearance  for  exam- 
ination, from  time  to  time,  not  exceeding  in  all  ten  days,  as  re- 
quired by  the  court,  and  for  his  obedience  to  all  lawful  orders 
made  in  reference  thereto. 

Section  10.  Extradition  of  bankrupts,  a  Whenever  a  warrant 
for  the  apprehension  of  a  bankrupt  shall  have  been  issued,  and  he 
shall  have  been  found  within  the  jurisdiction  of  a  court  other  than 
the  one  issuing  the  warrant,  he  may  be  extradited  in  the  same 
manner  in  which  persons  under  indictment  are  now  extradited 
from  one  district  within  which  a  district  court  has  jurisdiction  to 
another. 

Section  11.  Suits  by  and  against  bankrupts;  stay  until  ad- 
judication, ah.  suit  which  is  founded  upon  a  claim  from  which 
a  discharge  would  be  a  release,  and  which  is  pending  against  a 
person  at  the  time  of  the  filing  of  a  petition  against  him,  shall  be 
stayed  until  after  an  adjudication  or  the  dismissal  of  the  petition; 


§§11,   12  BANKRUPTCY   xVCT    OF    1898,  1237 

Further  stay.  If  such  person  is  adjudged  a  bankrupt,  such 
action  may  be  further  stayed  until  twelve  months  after  the  date 
of  such  adjudication,  or,  if  within  that  time  such  person  applies 
for  a  discharge,  then  until  the  question  of  such  discharge  is  deter- 
mined. 

Appearance  of  trustee.  ^^iThe  court  may  order  the  trustee 
to  enter  his  appearance  and  defend  any  pending  suit  against  the 
bankrupt. 

Commenced  prior  to  adjudication,  c  K  trustee  may,  with  the 
approval  of  the  court,  be  permitted  to  prosecute  as  trustee  any  suit 
commenced  by  the  bankrupt  prior  to  the  adjudication,  with  like 
force  and  effect  as  though  it  had  been  commenced  by  him. 

Time  for  bringing  suits  by  or  against  trustees.  ^  Suits  shall 
not  be  brought  by  or  against  a  trustee  of  a  bankrupt  estate  subse- 
quent to  two  years  after  the  estate  has  been  closed. 

Section  12.  Compositions,  when  confirmed;  when  may  be  of- 
fered, a  A  bankrupt  may  offer  terms  of  composition  to  his  cred- 
itors after,  but  not  before,  he  has  been  examined  in  open  court  or 
at  a  meeting  of  his  creditors  and  filed  in  court  the  schedule  of  his 
property  and  list  of  his  creditors,  required  to  be  filed  by  bankrupts. 

Application  for  confirming,  b  An  application  for  the  con- 
firmation of  a  composition  may  be  filed  in  the  court  of  bankruptcy 
after,  but  not  before,  it  has  been  accepted  in  writing  by  a  majority 
in  number  of  all  creditors  whose  claims  have  been  allowed,  which 
number  must  represent  a  majority  in  amount  of  such  claims,  and 
the  consideration  to  be  paid  by  the  bankrupt  to  his  creditors,  and 
the  money  necessary  to  pay  all  debts  which  have  priority  and  the 
cost  of  the  proceedings,  have  been  deposited  in  such  place  as  shall 
be  designated  by  and  subject  to  the  order  of  the  judge. 

Date,  etCc,  for  hearing.  ^A  date  and  place,  with  reference 
to  the  convenience  of  the  parties  in  interest,  shall  be  fixed  for  the 
hearing  upon  each  application  for  the  confirmation  of  a  composi- 
tion, and  such  objections  as  may  be  made  to  its  confirmation. 

Conditions  of  confirmance.  a' The  judge  shall  confirm  a 
composition  if  satisfied  that  (1)  it  is  for  the  best  interests  of  the 
creditors;  (2)  the  bankrupt  has  not  been  guilty  of  any  of  the  acts 
or  failed  to  perform  any  of  the  duties  which  would  be  a  bar  to  his 
discharge;  and  (3)  the  offer  and  its  acceptance  are  in  good  faith 
and  have  not  been  made  or  procured  except  as  herein  provided,  or 
by  any  means,  promises,  or  acts  herein  forbidden. 


1238  BANKRUPTCY   ACT   OF    1898.  §§12—14 

Distribution  of  coiivSideration.  ^Upon  the  confirmation  of  a 
composition,  the  consideration  shall  be  distributed  as  the  judge 
shall  direct,  and  the  case  dismissed.  Whenever  a  composition  is 
not  confirmed,  the  estate  shall  be  administered  in  bankruptcy  as 
herein  provided. 

Section  13.  Compositions,  when  set  aside;  upon  practice  of 
fraud.  aThe  judge  may,  upon  the  application  of  parties  in  inter- 
est filed  at  any  time  within  six  months  after  a  composition  has 
been  confirmed,  set  the  same  aside  and  reinstate  the  case  if  it  shall 
be  made  to  appear  upon  a  trial  that  fraud  was  practiced  in  the 
procuring  of  such  composition,  and  that  the  knowledge  thereof  has 
come  to  the  petitioners  since  the  confirmation  of  such  composition. 
Section  14.  Discharges,  when  granted;  application  for.  ^Any 
person  may,  after  the  expiration  of  one  month  and  within  the  neit 
twelve  months  subsequent  to  being  adjudged  a  bankrupt,  file  an 
application  for  a  discharge  in  the  court  of  bankruptcy  in  which 
the  proceedings  are  pending;  if  it  shall  be  made  to  appear  to  the 
judge  that  the  bankrupt  was  unavoidably  prevented  from  filing  it 
within  such  time,  it  may  be  filed  within  but  not  after  the  expira- 
tion of  the  next  six  months. 

Hearing  of  application,  ^b  The  judge  shall  hear  the  applica- 
tion for  a  discharge,  and  such  proofs  and  pleas  as  may  be  made  in 
opposition  thereto  by  parties  in  interest,  at  such  time  as  will  give 
parties  in  interest  a'reasonable  opportunity  to  be  fully  heard,  and 
investigate  the  merits  of  the  application  and  discharge  the  applicant 
unless  he  has  (1)  committed  an  offense  punishable  by  imprisonment 
as  herein  provided;  or  (2)  with  fraudulent  intent  to  conceal  his  true 
financial  condition  and  in  contemplation  of  bankruptcy,  destroyed, 
concealed,  or  failed  to  keep  books  of  account  or  records  from  which 
his  true  condition  might  be  ascertained.  J 

h  The  judge  shall  hear  the  application  for  a  discharge,  and  such 
proofs  and  pleas  as  may  he  made  in  opposition  thereto  hy  parties  in 
interest,  at  such  time  as  ivill  give  parties  in  interest  a  reasonable  op- 
portunity to  he  fully  heard,  and  investigate  the  merits  of  the  applica- 
tion, and  discharge  the  applicant  unless  he  has  (1)  committed  an 
offense  punishaUe  hy  impriso7iment  as  herein  provided;  or  (2)  with 
intent  to  conceal  his  financial  condition,  destroyed,  concealed,  or  faded 
to  keep  hooks  of  account  or  records  from  which  such  condition  might 
he  ascertained;  or  (3)  ohtained  property  on  credit  from  any  person 
upon  a  materially  false  statement  in  writing  made  to  such  person  for 
the  purpose  of  ohtaining  such  property  on  credit;  or  (4)  at  any  time 
subsequent  to  the  first  day  of  the  four  months  immediately  preceding 
the  filing  of  the  petition  transferred,  removed,  destroyed,  or  concealed, 
or  permitted  to  he  removed,  destroyed,  or  concealed  any  of  his  prop- 


§§  14-J7  BANKRUPTCY   ACT   OF    1898.  1239 

erty  with' intent  to  hinder,  delay,  or  defraud  his  creditors;  or  (5)  in 
voluntary  proceedings  been  granted  a  discharge  in  bankruptcy  within 
six  years;  or  (6)  in  the  course  of  the  proceedings  in  bankruptcy  re- 
fused to  obey  any  lawful  order  of  or  to  answer  any  material  question 
approved  by  the  court. 

Confirmation  discharges  from  debts.  <rThe  confirmation  of 
a  composition  shall  discharge  the  bankrnpt  from  his  debts,  other 
tlian  those  agreed  to  be  paid  by  the  terms  of  the  composition  and 
those  not  affected  bv  a  discharge. 

Section  15.  Discharges,  when  revoked.  «The  judge  may, 
upon  the  application  of  parties  in  interest  who  have  not  been 
guilty  of  undue  laches,  filed  at  any  time  within  one  year  after  a 
discharge  shall  have  been  granted,  revoke  it  upon  a  trial  if  it  shall 
be  made  to  appear  that  it  was  obtained  through  the  fraud  of  the 
bankrupt,  and  that  the  knowledge  of  the  fraud  has  come  to  the 
petitioners  since  the  granting  of  the  discharge,  and  that  the  actual 
facts  did  not  warrant  the  discharge. 

Section  16.  Co-debtors  of  bankrupts;  liability  not  affected 
by  bankrupt's  discharge,  etc.  «The  liability  of  a  person  who  is 
a  co-debtor  with,  or  guarantor  or  in  any  manner  a  surety  for,  a 
bankrupt  shall  not  be  altered  by  the  discharge  of  such  bankrupt. 

["Section  17.  Debts  not  effected  by  a  discharg-e.  a  A  discharge 
in  bankruptcy  shall  release  a  bankrupt  from  all  of  his  provable 
debts,  except  such  as 

(1)  U.  S.  and  State  taxes.  Are  due  as  a  tax  levied  by  the 
United  States,  the  State,  county,  district,  or  municipality  in  which 
he  resides; 

(2)  Judgments  in  actions  for  frauds,  etc.  Are  judgments  in 
actions  for  frauds,  or  obtaining  property  by  false  pretenses  or  false 
representations,  or  for  willful  and  malicious  injuries  to  the  person 
or  property  of  another; 

(3)  Claims  not  scheduled,  etc.  Have  not  been  duly  sched- 
uled in  time  for  proof  and  allowance,  with  the  name  of  the  cred- 
itor if  known  to  the  bankrupt,  unless  such  creditor  had  notice  or 
actual  knowledge  of  the  proceedings  in  bankruptcy ;  or 

(4)  Created  by  fraud,  etc.  Were  created  by  his  fraud,  em- 
bezzlement, misappropriation,  or  defalcation  while  acting  as  an 
officer  or  in  any  fiduciary  capacity.] 


1240  BANKRUPTCY    ACT    OF    1898.  §§  ]T^I8 

Section  17.  Debts  not  affected  by  a  discharge— a  A  dkcharge  in 
haiil-rupicy  shall  release  a  bankrupt  from,  all  of  his  ■provahle  debts, 
except  suck  as  (1)  are  due  as  a  tax  levied  hij  the  United  States,  the 
state,  county,  district,  or  municipality  in  ivhicli  he  resides;  (2)  are 
liahilities  for  obtaining  property  by  false  pretenses  or  false  representa- 
tions, or  for  tvillful  and  malicious  injuries  to  the  person  or  property 
of  another,  or  for  alimony  due  or  to  become  due,  or  for  maintenance 
or  support  of  wife  or  child,  or  for  seduction  of  an  unmarried  female, 
or  for  criminal  conversation;  (3)  have  not  been  duly  scheduled  in  time 
for  proof  and  allowance,  ivith  the  name  of  the  creditor  if  knoivn  to  the 
bankrupt,  unless  such  creditor  had  notice  or  actual  Tcnowledge  of  the 
proceedings  in  bankruptcy ;  or  (4)  were  created  by  his  fraud,  embez- 
zlement, misappropriation,  or  defalcation  while  acting  as  an  officer  or 
in  any  fiduciary  capacity. 

CHAPTER    IV. 
Courts  and  Procedure  Therein. 

Section  18.  Process,  pleadings,  and  adjudications;  service 
of  petition,  involuntary  bankruptcy,  ^o.  Upon  the  filing  of  a  peti- 
tion for  involuntary  bankruptcy,  service  thereof,  with  a  writ  of 
subpoena,  shall  be  made  upon  the  person  therein  named  as  defend- 
ant in  the  same  manner  that  service  of  such  process  is  now  had 
upon  the  commencement  of  a  suit  in  equity  in  the  courts  of  the 
United  States,  except  that  it  shall 

Returnable  in  fifteen  days.  Be  returnable  within  fifteen  days, 
unless  the  judge  shall  for  cause  fix  a  longer  time; 

By  publication.  But  in  case  personal  service  can  not  be  made, 
then  notice  shall  be  given  by  publication  in  the  same  manner  and 
for  the  same  time  as  provided  by  law  for  notice  by  publication  in 
suits  in  equity  in  courts  of  the  United  States.  J 

a  Upon  the  filing  of  a  petition  for  involuntary  "bankruptcy,  service 
thereof,  with  a  writ  of  subpoena,  shall  be  made  upon  the  person 
therein  named  as  defendant  in  the  same  manner  that  service  of  such 
process  is  noiv  had  upon  the  commencement  of  a  suit  in  equity  in  the 
courts  of  the  United  States,  except  that  it  shall  be  returnable  within 
fifteen  days,  unless  the  judge  shall  for  cause  fix  a  longer  time;  but 
in  case  personal  service  can  not  be  made,  then  notice  shall  be  given 
by  publication  in  the  same  mminer  and  for  the  same  time  as  provided 
by  law  for  notice  by  publication  in  suits  to  enforce  a  legal  or  equitable 
lien  in  courts  of  the  United  States,  except  that,  unless  the  judge  shall 


§§  18,   19  BANKRUPTCY   ACT    OF    1898..  1241 

otlieririse  direct,  the  order  shall  be  published  not  more  than  once  a 
week  for  tivo  consecutive  weeks,  dnd  the  return  day  shall  be  ten  days 
after  the  last  publication  unless  the  judge  shall  for  cause  fix  a  longer 
time. 

Pleading  within  ten  days.  f5  The  bankrupt,  or  any  creditor, 
may  appear  and  plead  to  the  petition  within  ten  days  after  the 
return  day,  or  within  such  further  time  as  the  court  may  allow.] 

b  The  bankrupt,  or  any  creditor,  may  appear  and  plead  to  the 
petition  within  five  days  after  the  return  day,  or  within  such  further 
time  as  the  court  may  alloiv. 

Verification.  cAU  pleadings  setting  up  matters  of  fact  shall 
be  verified  under  oath. 

Court  to  determine  issues  when  facts  controverted.  ^If  the 
bankrupt,  or  any  of  his  creditors,  shall  appear,  within  the  time 
limited,  and  controvert  the  facts  alleged  in  the  petition,  the  judge 
shall  determine,  as  soon  as  may  be,  the  issues  presented  by  the 
pleadings,  without  the  intervention  of  a  jury,  except  in  cases  where 
a  jury  trial  is  given  by  this  Act,  and  makes  the  adjudication  or 
dismiss  the  petition. 

Decision  where  pleadings  not  filed.  ^If  on  the  last  day  within 
which  pleadings  may  be  filed  none  are  filed  by  the  bankrupt  or  any 
of  his  creditors,  the  judge  shall  on  the  next  day,  if  present,  or  as 
soon  thereafter  as  practicable,  make  the  adjudication  or  dismiss 
the  petition. 

If  judge  absent,  case  to  be  referred  to  referee.  /If  the  judge 
is  absent  from  the  district,  or  the  division  of  the  district  in  which 
the  petition  is  pending,  on  the  next  day  after  the  last  day  on  which 
pleadings  may  be  filed,  and  none  have  been  filed  by  the  bankrupt 
or  any  of  his  creditors,  the  clerk  shall  forthwith  refer  the  case  to 
the  referee. 

Hearing  on  filing  voluntary  petition,  g  Upon  the  filing  of  a 
voluntary  petition  the  judge  shall  hear  the  petition  and  make  the 
adjudication  or  dismiss  the  petition. 

Absence  of  judge.  If  the  judge  is  absent  from  the  district,  or 
the  division  of  the  district  in  which  the  petition  is  filed  at  the  time 
of  the  filing,  the  clerk  shall  forthwith  refer  the  case  to  the  referee. 

Section  19.  Jury  trials  ;  person  against  whom  involuntary 
petition  filed,  entitled,  a  A  person  against  whom  an  involuntary 
petition  has  been  filed  shall  be  entitled  to  have  a  trial  by  jury,  in 
respect  to  the  question  of  his  insolvency,  except  as  herein  other- 


1242  BANKRUPTCY  ACT  OF  1898.  §§19 — 21 

wise  provided,  and  any  act  of  bankruptcy  alleged  in  such  petition 
to  have  been  committed,  upon  filing  a  written  application  therefor 
at  or  before  the  time  within  which  an  answer  may  be  filed. 

Right  waived.  If  such  application  is  not  filed  within  such 
time,  a  trial  by  jury  shall  be  deemed  to  have  been  waived. 

Attendance  of  jury,  etc.  dU  a  jury  is  not  in  attendance  upon 
the  court,  one  may  be  specially  summoned  for  the  trial,  or  the 
case  may  be  postponed,  or,  if  the  case  is  pending  in  one  of  the 
district  courts  within  the  jurisdiction  of  a  circuit  court  of  the 
United  States,  it  may  be  certified  for  trial  to  the  circuit  court  sit- 
ting at  the  same  place,  or  by  consent  of  parties  when  sitting  at  any 
other  place  in  the  same  district,  if  such  circuit  court  has  or  is  to 
have  a  jury  first  in  attendance. 

Laws  as  to  jury  trials  applicable.  cThe  right  to  submit  mat- 
ters in  controversy,  or  an  alleged  offense  under  this  Act,  to  a  jury 
shall  be  determined  and  enjoyed,  except  as  provided  by  this  Act, 
according  to  the  United  States  laws  now  in  force  or  such  as  may 
be  hereafter  enacted  in  relation  to  trials  by  jury. 

Sectiop  20.  Oaths,  affirmations;  by  whom  administered. 
a  Oaths  required  by  this  Act,  except  upon  hearings  in  court,  may 
be  administered  by  (1)  referees;  (2)  officers  authorized  to  ad- 
minister oaths  in  proceedings  before  the  courts  of  the  United 
States,  or  under  the  laws  of  the  State  where  the  same  are  to  be 
taken;  and  (3)  diplomatic  or  consular  officers  of  the  United 
States  in  any  foreign  country. 

Affirmations,  d  Any  person  conscientiously  opposed  to  taking 
an  oath  may,  in  lieu  thereof,  affirm.  Any  person  who  shall  aflSrm 
falsely  shall  be  punished  as  for  the  making  of  a  false  oath. 

Section  21.  Evidence;  compulsory  attendance  of  witnesses, 
[a  A  court  of  bankruptcy  may,  upon  application  of  any  officer,  bank- 
rupt, or  creditor,  by  order  require  any  designated  person,  including 
the  bankrupt,  who  is  a  competent  witness  under  the  laws  of  the 
State  in  which  the  proceedings  are  pending,  to  appear  in  court  or 
before  a  referee  or  the  judge  of  any  State  court,  to  be  examined  con- 
cerning the  acts,  conduct,  or  property  of  a  bankrupt  whose  estate 
is  in  process  of  administration  under  this  Act.J 

a  A  court  of  haiikruptcy  may,  upon  application  of  any  officer, 
hankrupt,  or  creditor,  by  order  require  any  designated  person,  in- 
cluding the  hankrupt  and  Jiis  wife,  to  appear  in  court  or  before  a 
referee  or  the  judge  of  any  state  court,  to  be  examined  concerning  the 


§  21,  22  BANKRUPTCY   ACT   OF    1898.,  1243 

acts,  conduct,  or  property  of  a  bankrupt  whose  estate  is  in  process  of 
administration  under  this  act;  provided,  that  the  wife  may  be  exam- 
ined only  touching  business  transacted  by  her  or  to  which  she  is  a 
party,  and  to  determine  the  fact  whether  she  has  transacted  or  been 
a  party  to  any  business  of  the  bankrupt. 

Depositions,  laws  governing.  <5The  right  to  take  depositions 
in  proceedings  under  this  Act  shall  be  determined  and  enjoyed 
according  to  the  United  States  laws  now  in  force,  or  such  as  may 
be  hereafter  enacted  relating  to  the  taking  of  depositions,  except 
as  herein  provided. 

Notice  of  taking,  c  Notice  of  the  taking  of  depositions  shall 
be  filed  with  the  referee  in  every  case.  When  depositions  are  to  be 
taken  in  opposition  to  the  allowance  of  a  claim  notice  shall  also 
be  served  upon  the  claimant,  and  when  in  opposition  to  a  discharge 
notice  shall  also  be  served  upon  the  bankrupt. 

Certified  copies  of  proceedings  evidence,  d  Certified  copies  of 
proceedings  before  a  referee,  or  of  papers,  when  issued  by  the  clerk 
or  referee,  shall  be  admitted  as  evidence  with  like  force  and  effect 
as  certified  copies  of  the  records  of  district  courts  of  the  United 
States  are  now  or  may  hereafter  be  admitted  as  evidence. 

Of  order  approving  trustees'  bond,  e  A  certified  copy  of  the 
order  approving  the  bond  of  a  trustee  shall  constitute  conclusive 
evidence  of  the  vesting  in  him  of  the  title  to  the  property  of  the 
bankrupt,  and  if  recorded  shall  impart  the  same  notice  that  a  deed 
from  the  bankrupt  to  the  trustee  if  recorded  would  have  imparted 
had  not  bankruptcy  proceedings  intervened. 

Of  order  confirming  composition,  etc.  f  h.  certified  copy  of  an 
order  confirming  or  setting  aside  a  composition,  or  granting  or 
setting  aside  a  discharge,  not  revoked,  shall  be  evidence  of  the 
jurisdiction  of  the  court,  the  regularity  of  the  proceedings,  and  of 
the  fact  that  the  order  was  made. 

Evidence  of  revesting  title  in  bankrupts.  gA.  certified  copy 
of  an  order  confirming  a  composition  shall  constitute  evidence  of 
the  revesting  of  the  title  of  his  property  in  the  bankrupt,  and  if 
recorded  shall  impart  the  same  notice  that  a  deed  from  the  trustee 
to  the  bankrupt  if  recorded  would  impart. 

Section  22.  Reference  of  cases  after  adjudication,  a  After  a 
person  has  been  adjudged  a  bankrupt  the  judge  may  cause  the 
trustee  to  proceed  with  the  administration  of  the  estate,  or  refer 
it  (!)  generally  to  the  referee  or  specially  with  only  limited  au- 


1244  BANKRUPTCY  ACT  OF  1898.  §§23,  24 

thority  to  act  in  the  premises  or  to  consider  and  report  upon  spec- 
ified issues;  or  ^2)  to  any  referee  within  the  territorial  jurisdiction 
of  the  court,  if  the  convenience  of  parties  in  interest  will  be  served 
thereby,  or  for  cause,  or  if  the  bankrupt  does  not  do  business, 
reside,  or  have  his  domicile  in  the  district. 

Transfer  of  case  to  different  referee,  b  The  judge  may,  at  any 
time,  for  the  convenience  of  parties  or  for  cause,  transfer  a  case 
from  one  referee  to  another. 

Section  23.  Jurisdiction  of  the  United  States  and  State  courts. 
a  The  United  States  circuit  courts  shall  have  jurisdiction  of  all 
controversies  at  law  and  in  equity,  as  distinguished  from  proceed- 
ings in  bankruptcy,  between  trustees  as  such  and  adverse  claimants 
concerning  the  property  acquired  or  claimed  by  the  trustees,  in  the 
same  manner  and  to  the  same  extent  only  as  though  bankruptcy 
proceedings  had  not  been  instituted  and  such  controversies  had 
been  between  the  bankrupts  and  such  adverse  claimants. 

Suits  by  trustees,  where  brought.  [&  Suits  by  the  trustee  shall 
only  be  brought  or  prosecuted  in  the  courts  where  the  bankrupt, 
whose  estate  is  being  administered  by  such  trustee,  might  have  brought 
or  prosecuted  them  if  proceedings  in  bankruptcy  had  not  been  insti- 
tuted, unless  by  consent  of  the  proposed  defendant.] 

&  ^uiU  "by  the  trustee  shall  only  he  hrougJit  or  prosecuted  in  tlw 
courts  ivliere  the  bankrupt,  whose  estate  is  being  administered  ty  such 
trustee,  might  have  brought  or  prosecuted  them  if  proceedings  in 
banliTuptcy  had  not  been  instituted,  unless  by  consent  of  the  proposed 
defendant,  except  suits  for  the  recovery  of  property  under  section 
sixty,  subdivision  b,  and  section  sixty-seven,  subdivision  e. 

Concurrent  jurisdiction  of  circuit  courts  and  courts  of  bank- 
ruptcy. ^The  United  States  circuit  courts  shall  have  concurrent 
jurisdiction  with  the  courts  of  bankruptcy,  within  their  respective 
territorial  limits,  of  the  offenses  enumerated  in  this  Act. 

Section  24.  Jurisdiction  of  appellate  courts,  a  The  Supreme 
Court  of  the  United  States,  the  circuit  courts  of  appeals  of  the 
United  States,  and  the  supreme  courts  of  the  Territories,  in  vaca- 
tion in  chambers  and  during  their  respective  terms,  as  now  or  as 
they  may  be  hereafter  held,  are  hereby  invested  with  appellate 
jurisdiction  of  controversies  arising  in  bankruptcy  proceedings 
from  the  courts  of  bankruptcy  from  which  they  have  appellate 
jurisdiction  in  other  cases. 

Appeals  from  courts  not  in  organized  circuits  and  in  District 
of  Columbia.  The  Supreme  Court  of  the  United  States  shall  exer- 
cise a  like  jurisdiction  from  courts  of  bankruptcy  not  within  any 


§§24,    25  BANKRUPTCY    ACT    OF    1 898.  1245 

organized  circuit  of  the  United  States  and  from  the  supreme  court 
of  the  District  of  Columbia. 

Jurisdiction  of  circuit  court  of  appeals,  b  The  several  circuit 
courts  of  appeal  shall  have  jurisdiction  in  equity,  either  interlocu- 
tory or  final,  to  superintend  and  revise  in  matter  of  law  the  pro- 
ceedings of  the  several  inferior  courts  of  bankruptcy  within  their 
jurisdiction.  Such  power  shall  be  exercised  on  due  notice  and 
petition  by  any  party  aggrieved. 

Section  25.  Appeals  and  writs  of  error;  when  taken.  «That 
appeals,  as  in  equity  cases,  may  be  taken  in  bankruptcy  proceed- 
ings from  the  courts  of  bankruptcy  to  the  circuit  court  of  appeals 
of  the  United  States,  and  to  the  supreme  court  of  the  Territories, 
in  the  following  cases,  to  wit,  (1)  from  a  judgment  adjudging  or 
refusing  to  adjudge  the  defendant  a  bankrupt ;  (2)  from  a  judg- 
ment granting  or  denying  a  discharge;  and  (3)  from  a  judgment 
allowing  or  rejecting  a  debt  or  claim  of  five  hundred  dollars  or 

over. 

To  be  within  ten  days;  hearing.  Such  appeal  shall  be  taken 
within  ten  days  after  the  judgment  appealed  from  has  been  ren- 
dered, and  may  be  heard  and  determined  by  the  appellate  court  in 
term  or  vacation,  as  the  case  may  be. 

Appeal  to  U.  S.  Supreme  Court,  b  From  any  final  decision  of 
a  court  of  appeals,  allowing  or  rejecting  a  claim  under  this  Act, 
an  appeal  may  be  had  under  such  rules  and  within  such  time  as 
may  be  prescribed  by  the  Supreme  Court  of  the  United  States,  in 
the  following  cases  and  no  other : 

1.  Where  amount  exceeds  $2,000,  etc.  Where  the  amount 
in  controversy  exceeds  the  sum  of  two  thousand  dollars,  and  the 
question  involved  is  one  which  might  have  been  taken  on  appeal 
or  writ  of  error  from  the  highest  court  of  a  State  to  the  Supreme 
Court  of  the  United  States ;  or 

2.  Where  question  certified  by  Supreme  Court  Justice. 
Where  some  Justice  of  the  Supreme  Court  of  the  United  States 
shall  certify  that  in  his  opinion  the  determination  of  the  question 
or  questions  involved  in  the  allowance  or  rejection  of  such  claim  is 
essential  to  a  uniform  construction  of  this  Act  throughout  the 
United  States. 

Trustees  not  to  give  bond.  ^Trustees  shall  not  be  required  to 
give  bond  when  they  take  appeals  or  sue  out  writs  of  error. 

Certification   to  Supreme  Court   by  courts.      ^Controversies 


1246  BANKRUPTCY  ACT  OF  1 898.  §§26 29 

may  be  certified  to  the  Supreme  Court  of  the  United  States  from 
other  courts  of  the  United  States,  and  the  former  court  may  exer- 
cise jurisdiction  thereof  and  issue  writs  of  certiorari  pursuant  to 
the  provisions  of  the  United  States  laws  now  in  force  or  such  as 
may  be  hereafter  enacted. 

Section  26.  Arbitration  of  controversies;  trustees  may  sub- 
mit to.  aThQ  trustee  may,  pursuant  to  the  direction  of  the  court, 
submit  to  arbitration  any  controversy  arising  in  the  settlement  of 
the  estate. 

Selection  of  arbitrators,  d  Threo  arbitrators  shall  be  chosen 
by  mutual  consent,  or  one  by  the  trustee,  one  by  the  other  party 
to  the  controversy,  and  the  third  by  the  two  so  chosen,  or  if  they 
fail  to  agree  in  five  days  after  their  appointment  the  court  shall 
appoint  the  third  arbitrator. 

Findings  of  arbitrators.  <rThe  written  finding  of  the  arbitra- 
tors, or  a  majority  of  them,  as  to  the  issues  presented,  may  be  filed 
in  court  and  shall  have  like  force  and  effect  as  the  verdict  of  a 
jury. 

Section  27.  Compromises,  a  The  trustee  may,  with  the  ap- 
proval of  the  court,  compromise  any  controversy  arising  in  the 
administration  of  the  estate  upon  such  term?  as  he  may  deem  for 
the  best  interests  of  the  estate. 

Section  28.  Designation  of  newspapers  to  publish  notices. 
«  Courts  of  bankruptcy  shall  by  order  designate  a  newspaper  pub- 
lished within  their  respective  territorial  disificts,  and  in  the  county 
in  which  the  bankrupt  resides  or  the  major  part  of  his  property  is 
situated,  in  which  notices  required  to  be  published  by  this  Act 
and  orders  which  the  court  may  direct  to  be  published  shall  be 
inserted.  Any  court  may  in  a  particular  c£-se,  for  the  convenience 
of  parties  in  interest,  designate  some  ado'tional  newspaper  in 
which  notices  and  orders  in  such  case  shall  be  published. 

Section  29.  Offenses  ;  penalty  for  misapi:ropriating  property? 
etc.  a  A  person  sliall  be  punished,  by  imprisoiiment  for  a  period 
not  to  exceed  five  years,  upon  conviction  of  tlic  offense  of  having 
knowingly  and  fraudulently  appropriated  to  hh  own  use,  embez- 
zled, spent,  or  unlawfully  transferred  any  prop.vity  or  secreted  or 
destroyed  any  document  belonging  to  a  bankr\^pt  estate  which 
came  into  his  charge  as  trustee. 

Concealing  property,  b  A  person  shall  be  punished,  by  im- 
prisonment for  a  period  not  to  exceed  two  years,  upon  conviction 


§§29 3^  BANKRUPTCY    ACT    OF    1  898.  1247 

of  the  offense  of  having  knowingly  and  fraudulently  (1)  concealed 
while  a  bankrupt,  or  af'.er  his  discharge,  from  his  trustee  any  of 
the  property  belonging  to  his  estate  in  bankruptcy  ;  or 

(2)  False  oath  or  account,  etc.  Made  a  false  oath  or  account 
in,  or  in  relation  to,  any  proceeding  in  bankruptcy; 

(3)  Presenting  false  claim.  Presented  under  oath  any  false 
claim  for  proof  against  the  estate  of  a  bankrupt,  or  used  any  such 
claim  in  composition  personally  or  by  agent,  proxy,  or  attorney, 
or  as  agent,  proxy,  or  attorney ;  or 

(4)  Receiving  property  from  bankrupt.  Received  any  mate- 
rial amount  of  property  from  a  bankrupt  after  the  filing  of  the 
petition,  with  intent  to  defeat  this  Act;  or 

(5)  Extorting  money  for  forbearing  to  act,  etc.  Extorted  or 
attempted  to  extort  any  money  or  property  from  any  person  as  a 
consideration  for  acting  or  forbearing  to  act  in  bankruptcy  pro- 
ceedings. 

Acting  as  referee  when  interested,  r  A  person  shall  be  pun- 
ished by  fine,  not  to  exceed  five  hundred  dollars,  and  forfeit  his 
office,  and  the  same  shall  thereupon  become  vacant,  upon  convic- 
tion of  the  offense  of  having  knowingly  (1)  acted  as  a  referee  in  a 
case  in  which  he  is  directly  or  indirectly  interested;  or 

(2)  Purchasing  property,  etc.  Purchased,  while  a  referee, 
directly  or  indirectly,  any  property  of  the  estate  in  bankruptcy  of 
which  he  is  referee  ,  or 

(3)  Refused  to  permit  inspection  of  accounts.  Refused, 
while  a  referee  or  trustee,  to  permit  a  reasonable  opportunity  for 
the  inspection  of  the  accounts  relating  to  the  affairs  of,  and  the 
papers  and  records  of  estates  in  his  charge  by  parties  in  interest 
when  directed  by  the  court  so  to  do. 

Prosecutions  to  be  in  one  year,  d  A  person  shall  not  be  prose- 
cuted for  any  offense  arising  under  this  Act  unless  the  indictment 
is  found  or  the  information  is  filed  in  court  within  one  year  after 
the  commission  of  the  offense. 

Section  30.  Rules,  forms,  and  orders;  United  States  Supreme 
Court  to  make.  a  All  necessary  rules,  forms,  and  orders  as  to 
procedure  and  for  carrying  this  Act  into  force  and  effect  shall  be 
prescribed,  and  may  be  amended  from  time  to  time,  by  the  Supreme 
Court  of  the  United  States. 

Section  31.  Computation  of  time.  ^Whenever  time  is  enu- 
merated  by  days  in  this  Act,  or  in  any  proceeding  in  bankruptcy, 


1248  BANKRUPTCY  ACT  OF  1898.         §§31 — 35 

the  number  of  days  shall  be  computed  by  excluding  the  first  and 
including  the  last,  unless  the  last  fall  on  a  Sunday  or  holiday,  in 
which  event  the  day  last  included  shall  be  the  next  day  thereafter 
which  is  not  a  Sunday  or  a  legal  holiday. 

Section  32.  Transfer  of  cases  in  different  courts,  a  In  the 
event  petitions  are  filed  against  the  same  person,  or  against  differ- 
ent members  of  a  partnership,  in  different  courts  of  bankruptcy 
each  of  which  has  jurisdiction,  the  cases  shall  be  transferred,  by 
order  of  the  courts  relinquishing  jurisdiction,  to  and  be  consoli- 
dated by  the  one  of  such  courts  which  can  proceed  with  the  same 
for  the  greatest  convenience  of  parties  in  interest. 


CHAPTER  V. 
Officers,  their  Duties  and  Compensation. 

Section  33.  Creation  of  two  offices,  referee  and  trustee,  a  The 
offices  of  referee  and  trustee  are  hereby  created. 

Section  34.     Appointment,  removal,  and  districts  of  referees. 

«  Courts  of  bankruptcy  shall,  within  the  territorial  limits  of  which 
they  respectively  have  jurisdiction,  (1)  appoint  referees,  each  for 
a  term  of  two  years,  and  may,  in  their  discretion,  remove  them 
because  their  services  are  not  needed  or  for  other  cause;  and 

(2)  Designation  of  districts.  Designate,  and  from  time  to 
time  change,  the  limits  of  the  districts  of  referees,  so  that  each 
county,  where  the  services  of  a  referee  are  needed,  may  constitute 
at  least  one  district. 

Section  35.  Qualifications  of  referees.  <2  Individuals  shall 
not  be  eligible  to  api^ointment  as  referees  unless  they  are  respec- 
tively (1)  competent  to  perform  the  duties  of  that  office;  (2)  not 
holding  any  office  of  profit  or  emolument  under  the  laws  of  the 
United  States  or  of  any  State  other  than  commissioners  of  deeds, 
justices  of  the  peace,  masters  in  chancery,  or  notaries  public;  (3) 
not  related  by  consanguinity  or  affinity,  within  the  third  degree  as 
determined  by  the  common  law,  to  any  of  the  judges  of  the  courts 
of  bankruptcy  or  circuit  courts  of  the  United  States,  or  of  the  jus- 
tices or  judges  of  the  appellate  courts  of  the  districts  wherein  they 
may  be  appointed ;  and  (4)  residents  of,  or  have  their  offices  in, 
the  territorial  districts  for  which  they  are  to  be  appointed. 


§§36—39  BANKRUPTCY    ACT    OF    1 898.  1249 

Section  36.  Oath  of  office  of  referees,  a  Referees  shall  take 
the  same   oath  of  office  as  that  prescribed  for  judges  of  United 

States  courts. 

Section  37.  Number  of  referees.  «Such  number  of  referees 
shall  be  appointed  as  may  be  necessary  to  assist  in  expeditiously 
transacting  the  bankruptcy  business  pending  in  the  various  courts 

of  bankruptcy. 

Section  38.  Jurisdiction  of  referees,  a  Referees  respectively 
are  hereby  invested,  subject  always  to  a  review  by  the  judge, 
within  the  limits  of  their  districts  as  established  from  time  to  time, 

with  jurisdiction  to  .  .  r        j  * 

(1)  To  consider  petitions.     Consider  all  petitions  referred  to 
them  by  the  clerks  and   make  the  adjudications  or   dismiss  the 

petitions;  .        , 

(2)  Administer  oaths,  examine  witnesses,  etc.     Exercise  the 

powers  vested  in  courts  of  bankruptcy  for  the  administering  of 
oaths  to  and  the  examination  of  persons  as  witnesses  and  for  re- 
quiring the  production  of  documents  in  proceedings  before  them, 
except  the  power  of  commitment ;  ^         .      ^, 

(3)  Take  possession  and  release  property,  etc.  Exercise  the 
powers  of  the  judge  for  the  taking  possession  and  releasing  of  the 
property  of  the  bankrupt  in  the  event  of  the  issuance  by  the  clerk 
of  a  certificate  showing  the  absence  of  a  judge  from  the_  judicial 
district,  or  the  division  of  the  district,  or  his  sickness,  or  mability 

(4)  Perform  certain  duties  of  bankruptcy  courts.  Perform 
such  part  of  the  duties,  except  as  to  questions  arising  out  ot  the 
applications  of  bankrupts  for  compositions  or  discharges  as  are  by 
this  Act  conferred  on  courts  of  bankruptcy  and  as  shall  be  pre- 
scribed  by  rules  or  orders  of  the  courts  of  bankruptcy  of  their 
respective  districts,  except  as  herein  otherwise  provided ;  and 

(5)  Authorize  employment  of  stenographers.  Upon  the  ap- 
plication of  the  trustee  during  the  examination  of  the  bankrupts, 
or  other  proceedings,  authorize  the  employment  of  stenographers 
at  the  expense  of  the  estates  at  a  compensation  not  to  exceed  ten 
cents  per  folio  for  reporting  and  transcribing  the  proceedings. 

Section  39.      Duties  of  referees,     a  Referees  shall 
(1)      Declare  dividends.     Declare  dividends  and  prepare  and 
deliver  to  trustees  dividend  sheets  showing  the  dividends  declared 
*  and  to  whom  payable; 


1250  BANKRUPTCY  ACT  OF  189S.  ^39)  4^ 

(2)  Examine  schedules,  etc.  Examine  all  schedules  of  prop- 
erty and  lists  of  creditors  filed  by  bankrupts  and  cause  such  as  are 
incomplete  or  defective  to  be  amended ; 

(3)  Furnish  information,  etc.  Furnish  such  information 
concerning  the  estates  in  process  of  administration  before  them  as 
may  be  requested  by  the  parties  in  interest ; 

(4)  Give  notices.  Give  notices  to  creditors  as  herein  pro- 
vided ; 

(5)  Prepare  records,  etc.  Make  up  records  embodying  the 
evidence,  or  the  substance  thereof,  as  agreed  upon  by  the  parties 
in  all  contested  matters  arising  before  them,  whenever  requested 
to  do  so  by  either  of  the  parties  thereto,  together  with  their  find- 
ings therein,  and  transmit  them  to  the  judges; 

(6)  Prepare  schedules,  etc.  Prepare  and  file  the  schedules 
of  property  and  lists  of  creditors  required  to  be  filed  by  the  bank- 
rupts, or  cause  the  same  to  be  done,  when  the  bankrupts  fail, 
refuse,  or  neglect  to  do  so ; 

(7)  Preserve  records,  etc.  Safely  keep,  perfect,  and  transmit 
to  the  clerks  the  records,  herein  required  to  be  kept  by  them,  when 
the  cases  are  concluded ; 

(8)  Transmit  papers  to  clerks,  etc.  Transmit  to  the  clerks 
such  papers  as  may  be  on  file  before  them  whenever  the  same  are 
needed  in  any  proceedings  in  courts,  and  in  like  manner  secure 
the  return  of  such  papers  after  they  have  been  used,  or,  if  it  be 
impracticable  to  transmit  the  original  papers,  transmit  certified 
copies  thereof  by  mail ; 

(9)  Preserve  evidence,  etc.  Upon  application  of  any  party 
in  interest,  preserve  the  evidence  taken  or  the  substance  thereof 
as  agreed  upon  by  the  parties  before  them  when  a  stenographer  is 
not  in  attendance  ;  and 

(10)  Obtain  papers,  etc.  Whenever  their  respective  offices 
are  in  the  same  cities  or  towns  where  the  courts  of  bankruptcy 
convene,  call  upon  and  receive  from  the  clerks  all  papers  filed  in 
courts  of  bankruptcy  which  have  been  referred  to  them. 

Referees  not  to  act  if  interested.  <5' Referees  shall  not  (1)  act 
in  cases  in  which  they  are  directly  or  indirectly  interested;  (2) 
practice  as  attorneys  and  counselors  at  law  in  any  bankruptcy  pro- 
ceedings; or  (3)  purchase,  directly  or  indirectly,  any  property  of 
an  estate  in  bankruptcy. 

Section  40.  Compensation  of  referees,  [a  Referees  shall  re- 
ceive as  full  compensation  for  their  services,  payable  after  they  are 


28  40  41  BA^^KRUPTCY  ACT  OK  1898.  ^-^^ 

rendered,  a  fee  of  ten  dollars  deposited  with  the  clerk  at  the  time 
he  petition  is  filed  in  each  case,  except  when  a  fee  is  not  required 
from  a  voluntary  bankrupt,  and  from  estates  which  have  been  admin- 
istered before  them  one  per  centum  commissions  on  sums  to  be 
paid  as  dividends  and  commissions,  or  one-half  of  one  per  centum 
on  the  amount  to  be  paid  to  creditors  upon  the  confirmation  of  a 

composition."!  ,       ,7    •  • 

a  Referees  shall  receive  as  full  compensation  for  their  services 
payable  after  they  are  rendered,  a  fee  of  fifteen  dollars  deposited  with 
the  clerk  at  the  time  the  petition  is  filed  in  each  case,  except  when  a 
fee  is  not  required  from  a  voluntary  bankrupt,  and  twenty-five  cens 
for  every  proof  of  claim  filed  for  allowance,  to  be  paid  from  the 
estate,  if  Lj,  as  a  part  of  the   cost   of  administration,  and  from 
estates  which  ^>^^^  been  administered  before  them  one  per  centum 
'^is^ons  on  all  moneys  disbursed  to  creditors  by  ^^^    -  -;  - 
one-half  of  one  per  centum  on  the  amount  to  be  paid  to  creditors 
upon  the  confirmation  of  a  composition. 

On  transfer  from  one  to  another,  b  Whenever  a  case  is  trans- 
ferred from  one  referee  to  another  the  judge  shall  determine  the 
proportion  in  which  the  fee  and  commissions  therefor  shall   be 

divided  between  the  referees.  .    ,         .  f 

Where  reference  revoked,  c  In  the  event  of  the  reference  of  a 
case  beinc.  revoked  before  it  is  concluded,  and  when  the  case  is 
especially  referred,  the  judge  shall  determine  what  part  of  the  fee 
and  commissions  shall  be  paid  to  the  referee. 

Section  41.  Contempts  before  referees,  a  A  person  shah  not 
in  proceedings  before  a  referee,  (1)  disobey  or  resist  any  lawful 
order,  process,  or  writ;  (2)  misbehave  during  a  hearmg  or  so  near 
the  place  thereof  as  to  obstruct  the  same;  (3)  neglect  to  produce, 
after  having  been  ordered  to  do  so,  any  pertinent  document ;  or 
(4^  refuse  to  appear  after  having  been  subpoenaed,  or,  upon  ap- 
pearing, refuse  to  take  the  oath  as  a  witness,  or,  after  having  taRen 
the  oath,  refuse  to  be  examined  according  to  law : 

When  witness  not  required  to  attend.  Provided^  That  no 
person  shall  be  required  to  attend  as  a  witness- before  a  referee  at 
a  place  outside  of  the  State  of  his  residence,  and  more  than  one 
hundred  miles  from  such  place  of  residence,  and  only  m  case  his 
lawful  mileage  and  fee  for  one  day's  attendance  shall  be  first  paid 
01  ^:endered  to  him. 


1252  BANKRUPTCY  ACT  OF  1898.  §§41 — iS 

Contempt  proceedings;  penalty.  /;The  referee  shall  certify 
the  facts  to  the  judge,  if  any  person  shall  do  any  of  the  things 
forbidden  in  this  section.  The  judge  shall  thereupon,  in  a  sum- 
mary manner,  hear  the  evidence  as  to  the  acts  complained  of,  and, 
if  it  is  such  as  to  warrant  him  in  so  doing,  punish  such  person  in 
the  same  manner  and  to  the  same  extent  as  for  a  contempt  com- 
mitted before  the  court  of  bankruptcy,  or  commit  such  person 
upon  the  same  conditions  as  if  the  doing  of  the  forbidden  act  had 
occurred  with  reference  to  the  process  of,  or  in  the  presence  of,  the 

court. 

Section  4.2.     Records  of  referees  ;  manner  of  keeping,     a  The 

records  of  all  proceedings  in  each  case  before  a  referee  shall  be 
kept  as  nearly  as  may  be  in  the  same  manner  as  records  are  now 
kept  in  equity  cases  in  circuit  courts  of  the  United  States. 

b  h.  record  of  the  proceedings  in  each  case  shall  be  kept  in  a 
separate  book  or  books,  and  shall,  together  with  the  papers  on  file, 
constitute  the  records  of  the  case. 

Books  to  be  certified  and  transmitted  to  court.  <rThe  book  or 
books  containing  a  record  of  the  proceedings  shall,  when  the  case 
is  concluded  before  the  referee,  be  certified  to  by  him,  and,  together 
with  such  papers  as  are  on  file  before  him,  be  transmitted  to  the 
court  of  bankruptcy  and  shall  there  remain  as  a  part  of  the  records 
of  the  court. 

Section  43.  Referee's  absence  or  disability;  filling  vacancy. 
a  Whenever  the  office  of  a  referee  is  vacant,  or  its  occupant  is 
absent  or  disqualified  to  act,  th"  judge  may  act,  or  may  appoint 
another  referee,  or  another  referee  holding  an  appointment  under 
the  same  court  may,  by  order  of  the  judge,  temporarily  fill  the 
vacancy. 

Section  44.  Appointment  of  trustees.  ^^The  creditors  of  a 
bankrui)t  estate  shall,  at  their  first  meeting  after  the  adjudication 
or  after  a  vacancy  has  occurred  in  the  oflfice  of  trustee,  or  after  an 
estate  has  been  reopened,  or  after  a  composition  has  been  set  aside 
or  a  discharge  revoked,  or  if  there  is  a  vacancy  in  the  office  of 
trustee,  appoint  one  trustee  or  three  trustees  of  such  estate.  If  the 
creditors  do  not  appoint  a  trustee  or  trustees  as  herein  pro-^'ided, 
the  court  shall  do  so. 

Section  45.  Qualifications  of  trustees.  (T  Trustees  may  be  (1) 
individuals  who  are  respectively  competent  to  j)erform  the  duties 


§§45 — 47  BANKRUPTCY  ACT   OF   1898.  1253 

of  that  office,  and  reside  or  have  an  office  in  the  judicial  district 
within  which  they  are  appointed,  or  (2)  corporations  authorized 
by  their  ciiarters  or  by  law  to  act  in  such  capacity  and  having  an 
office  in  the  judicial  district  within  which  they  are  appointed. 

Section  46.  Death  or  removal  of  trustees  ;  suits  not  to  abate, 
etc.  (7  The  death  or  removal  of  a  trustee  shall  not  abate  any  suit 
or  proceeding  which  he  is  prosecuting  or  defending  at  the  time  of 
his  death  or  removal,  but  the  same  may  be  proceeded  with  or 
defended  by  his  joint  trustee  or  successor  in  the  same  manner  as 
though  the  same  had  been  commenced  or  was  being  defended  by 
such  joint  trustee  alone  or  by  such  successor. 

Section  47.  Duties  of  trustees,  a  Trustees  shall  respectively 
(1)  account  for  and  pay  over  to  the  estates  under  their  control  all 
interest  received  by  them  upon  property  of  such  estates ; 

(2)  Collect  money,  etc.  Collect  and  reduce  to  money  the 
property  of  the  estates  for  which  they  are  trustees,  under  the  direc- 
tion of  the  court,  and  close  up  the  estate  as  expeditiously  as  is 
compatible  with  the  best  interests  of  the  parties  in  interest ; 

(3)  Deposit  money,  etc.  Deposit  all  money  received  by  them 
in  one  of  the  designated  depositories; 

(4)  Disburse  money  ;  how.  Disburse  money  only  by  check 
or  draft  on  the  dej^ositories  in  which  it  has  been  deposited ; 

(5)  Furnish  information.  Furnish  such  information  con- 
cerning the  estates  of  which  they  are  trustees  and  their  adminis- 
tration as  may  be  requested  by  parties  in  interest ; 

(6)  Keep  accounts.  Keep  regular  accounts  showing  all 
amounts  received  and  from  what  sources  and  all  amounts  expended 
and  on  what  accounts ; 

(7)  Detailed  statements  to  creditors.  Lay  before  the  final 
meeting  of  the  creditors  detailed  statements  of  the  administration 
of  the  estates ; 

(8)  Make  final  reports.  Make  final  reports  and  file  final 
accounts  with  the  courts  fifteen  days  before  the  days  fixed  for  the 
final  meetings  of  the  creditors; 

(9)  Pay  dividends.  Pay  dividends  within  ten  days  after  they 
are  declared  by  the  referees ; 

(10)  Report  condition  of  estates.  Report  to  the  courts,  in 
writing,  the  condition  of  the  estates  and  the  amounts  of  money  on 
hand,  and  such  other  details  as  may  be  required   by  the  courts. 


1254  BANKRUPTCY  ACT  OF  1898.  §§47,  48 

within  the  first  month  after  their  appointment  and  every  two 
months  thereafter,  nnless  otherwise  ordered  by  the  courts;  and 

(11)  Exemptions.  Set  apart  the  bankrupt's  exemptions  and 
report  the  items  and  estimated' value  thereof  to  the  court  as  soon 
as  practicable  after  their  appointment. 

Concurrence  of  two  out  of  three  necessary.  /;  Whenever  three 
trustees  have  been  appointed  for  an  estate,  the  concurrence  of  at 
least  two  of  them  shall  be  necessary  to  the  validity  of  their  every 
act  concerning  the  administration  of  the  estate. 

File  adjudication  in  recorder's  office,  c  Hie  trustee  shall,  within 
thirty  days  after  the  adjudication,  file  a  certified  copy  of  the  decree 
of  adjudication  in  the  office  ivhere  conveyances  of  real  estate  are 
recorded  in  every  county  where  the  'bankrupt  owns  real  estate  not 
exempt  from  execution,  and  pay  the  fee  for  such  filing,  and  he  shall 
receive  a  compensation  of  fifty  cents  for  each  copy  so  filed,  which, 
together  with  the  filing  fee,  shall  he  paid  out  of  the  estate  of  the  hank- 
rupt  as  a  part  of  the  cost  and  disbursements  of  the  proceedings. 

Section  48.  Compensation  of  trustees;  fee.  £a  Trustees  shall 
receive  as  full  compensation  for  their  services,  payable  after  they 
are  rendered,  a  fee  of  five  dollars  deposited  with  the  clerk  at  the 
time  the  petition  is  filed  in  each  case,  except  when  a  fee  is  not  required 
from  a  voluntary  bankrupt, 

Commissions.  And  from  estates  which  they  have  administered, 
such  commissions  on  sums  to  be  paid  as  dividends  and  commissions 
as  may  be  allowed  by  the  courts,  not  to  exceed  three  per  centum 
on  the  first  five  thousand  dollars  or  less,  two  per  centum  on  the  second 
five  thousand  dollars  or  part  thereof,  and  one  per  centum  on  such 
sums  in  excess  of  ten  thousand  dollars.] 

a  Trustees  shall  receive  for  their  services,  payable  after  they  are 
rendered,  a  fee  of  five  dollars  deposited  with  the  clerk  at  the  time 
the  petition  is  filed  in  each  case,  except  when  a  fee  is  not  required 
fi'om  a  voluntary  bankrupt,  and  from  estates  which  they  have  admin- 
istered such  commissions  on  all  moneys  disbursed  by  them  as  may  be 
allowed  by  the  courts,  not  to  exceed  six  per  centum  on  the  first  five 


|§  48-50  BANKRUPTCY  ACT  OF    1898.  1255 

hundred  dollars  or  Jess,  four  per  centum  on  moneys  in  excess  of  five 
hundred  dollars,  and  less  than  fifteen  hundred  dollars,  two  per  centum 
on  moneijs  in  excess  of  fifteen  hundred  dollars  and  less  than  ten 
thousand  dollars,  and  one  per  centum  on  moneys  in  excess  of  ten 
thousand  dollars.  And  in  case  of  the  confirmation  of  a  composition 
after  the  trustee  Ms  qualified  the  court  may  allow  him,  as  compen- 
sation, not  to  exceed  one-half  of  one  per  centum  of  the  amount  to 
he  paid  the  creditors  on  such  composition. 

Apportionment  where  more  than  one.  d  In  the  event  of  an 
estate  being  administered  by  three  trustees  instead  of  one  trustee 
or  by  successive  trustees,  the  court  shall  apportion  the  fees  and 
commissions  between  them  according  to  the  services  actually  ren- 
dered, so  that  there  shall  not  be  paid  to  trustees  for  the  adminis- 
tering of  any  estate  a  greater  amount  than  one  trustee  would  be 

entitled  to. 

Withholding  of .     ^  The  court  may,  in  its  discretion,  withhold 

all  compensation  from  any  trustee  who  has  been  removed  for  cause. 

Section  49.     Accounts  and  papers  of  trustees,    a  The  accounts 

and  papers  of  trustees  shall   be  open  to  the  inspection  of  officers 

and  all  parties  in  interest. 

Section  50.  Bonds  of  referees  and  trustees,  a  Referees,  be- 
fore assuming  the  duties  of  their  offices,  and  within  such  time  as 
the  district  courts  of  the  United  States  having  jurisdiction  shall 
prescribe,  shall  respectively  qualify  by  entering  into  bond  to  the 
United  States  in  such  sum  as  shall  be  fixed  by  such  courts,  not  to 
exceed  five  thousand  dollars,  with  such  sureties  as  shall  be  ap- 
proved by  such  courts,  conditioned  for  the  faithful  performance  of 
their  official  duties. 

Of  trustees,  d  Trustees,  before  entering  upon  the  performance 
of  their  official  duties,  and  within  ten  days  after  their  appoint- 
ment, or  within  such  further  time,  not  to  exceed  five  days,  as  the 
court  may  permit,  shall  respectively  qualify  by  entering  into  bond 
to  the  United  States,  with  such  sureties  as  shall  be  approved  by 
the  courts,  conditioned  for  the  faithful  performance  of  their  official 

duties. 

Of  new  trustee,  etc.;  amount  may  be  increased,  rThe  cred- 
itors of  a  bankrupt  estate,  at  their  first  meeting  after  the  adjudica- 
tion, or  after  a  vacancy  has  occurred  in  the  office  of  trustee,  or 
after  an  estate  has  been  reopened,  or  after  a  composition  has  been 
set  aside  or  a  discharge  revoked,  if  there  is  a  vacancy  in  the  office 


1256  BANKRUPTCY  ACT  OF  1898.  §§50,  51 

of  trustee,  shall  fix  the  amount  of  the  bond  of  the  trustee;  they 
may  at  any  time  increase  the  amount  of  the  bond.  If  the  creditors 
do  not  fix  the  amount  of  the  bond  of  the  trustee  as  herein  provided 
the  court  shall  do  so. 

Surety's  property,  value.  ^The  court  shall  require  evidence 
as  to  the  actual  value  of  the  property  of  sureties. 

Two  necessary.  (?  There  shall  be  at  least  two  sureties  upon 
each  bond. 

Excess  of  property.  /The  actual  value  of  the  property  of  the 
sureties,  over  and  above  their  liabilities  and  exemptions,  on  each 
bond  shall  equal  at  least  the  amount  of  such  bond. 

Corporations  may  be.  ^  Corporations  organized  for  the  pur- 
pose of  becoming  sureties  upon  bonds,  or  authorized  by  law  to  do 
so,  may  be  accepted  as  sureties  upon  the  bonds  of  referees  and 
trustees  whenever  the  courts  are  satisfied  that  the  rights  of  all 
parties  in  interest  will  be  thereby  amply  protected. 

Filing  of  bonds,  /i  Bonds  of  referees,  trustees,  and  designated 
depositories  shall  be  filed  of  record  in  the  office  of  the  clerk  of  the 
court  and  may  be  sued  upon  in  the  name  of  the  United  States  for 
the  use  of  any  person  injured  by  a  breach  of  their  conditions. 

Bond,  trustee's  liability.  /Trustees  shall  not  be  liable,  per- 
sonally or  on  their  bonds,  to  the  United  States,  for  any  penalties 
or  forfeitures  incurred  by  the  bankrupts  under  this  Act,  of  whose 
estates  they  are  respectively  trustees. 

Joint,    y  Joint  trustees  may  give  joint  or  several  bonds. 

Failure  to  give  creates  vacancy,  .k  If  any  referee  or  trustee 
shall  fail  to  give  bond,  as  herein  provided  and  within  the  time 
limited,  he  shall  be  deemed  to  have  declined  his  apiDointment,  and 
such  failure  shall  create  a  vacancy  in  his  office. 

Suits  upon  referees'.  /Suits  upon  referees'  bonds  shall  not  be 
brought  subsequent  to  two  years  after  the  alleged  breach  of  the 
bond. 

Suits  upon  trustees'.  ?« Suits  upon  trustees'  bonds  shall  not 
be  brought  subsequent  to  two  years  after  the  estate  has  been  closed. 

Section  51.     Duties  of  clerks.     «  Clerks  shall  respectively 

(1)  To  account.  Account  for,  as  for  other  fees  received  by 
them,  the  clerk's  fee  paid  in  each  case  and  such  other  fees  as  may 
be  received  for  certified  copies  of  records  which  may  be  prepared 
for  persons  other  than  officers ; 

(2)  Collect  fees,  etc.     Collect  the  fees  of  the  clerk,  referee, 


§§51 — 54  BANKRUPTCY   ACT   OF    1898.  ^  1257 

and  trustee  in  each  case  instituted  before  filing  the  petition,  except 
the  petition  of  a  proposed  vohintary  bankrupt  which  is  accom- 
panied by  an  affidavit  stating  that  the  petitioner  is  without,  and 
can  not  obtain,  the  money  with  which  to  pay  such  fees; 

(3)  Deliver  papers  to  referee,  etc.  Deliver  to  the  referees 
upon  application  all  papers  which  may  be  referred  to  them,  or,  if 
the  offices  of  such  referees  are  not  in  the  same  cities  or  towns  as 
the  offices  of  such  clerks,  transmit  such  papers  by  mail,  and  in 
like  manner  return  papers  which  were  received  from  such  referees 
after  they  have  been  used ; 

(4)  Pay  referee.  And  within  ten  days  after  each  case  has 
been  closed  pay  to  the  referee,  if  the  case  was  referred,  the  fee 
collected  for  him,  and  to  the  trustee  the  fee  collected  for  him  at 
the  time  of  filing  the  petition. 

Section  52.  Compensation  of  clerks  and  marshals,  a  Clerks 
shall  respectively  receive  as  full  compensation  for  their  service  to 
each  estate,  a  filing  fee  of  ten  dollars,  except  when  a  fee  is  not 
required  from  a  voluntary  bankrupt. 

Of  marshals,  b  Marshals  shall  respectively  receive  from  the 
estate  where  an  adjudication  in  bankruptcy  is  made,  except  as 
herein  otherwise  provided,  for  the  performance  of  their  services  in 
proceedings  in  bankruptcy,  the  same  fees,  and  account  for  them  in 
the  same  way,  as  they  are  entitled  to  receive  for  the  performance 
of  the  same  or  similar  services  in  other  cases  in  accordance  with 
laws  now  in  force,  or  such  as  may  be  hereafter  enacted,  fixing  the 
compensation  of  marshals. 

Section  53.  Duty  of  Attorney-General  to  report  annually. 
a  The  Attorney-General  shall  annually  lay  before  Congress  statis- 
tical tables  showing  for  the  whole  country,  and  by  States,  the 
number  of  cases  during  the  year  of  voluntary  and  involuntary 
bankruptcy;  the  amount  of  the  property  of  the  estates;  the  divi- 
dends paid  and  the  expenses  of  administering  such  estates;  and 
such  other  like  information  as  he  may  deem  important. 

Section  54.  Statistics  of  bankruptcy  proceedings,  a  Officers 
shall  furnish  in  writing  and  transmit  by  mail  such  information  as 
is  within  their  knowledge,  and  as  may  be  shown  by  the  records 
and  papers  in  their  possession,  to  the  Attorney-General,  for  statis- 
tical purposes,  within  ten  days  after  being  requested  by  him  to 
do  so. 


1258  BANKRUPTCY   ACT   OP    1898.  S    55 


CHAPTER  VI. 
Creditors. 

Secdon  55.  Meetings  of  creditors,  a  The  court  shall  cause 
ihe  first  meeting  of  the  creditors  of  a  bankrupt  to  be  held,  not  less 
than  ten  nor  more  than  thirty  days  after  the  adjudication,  at  the 
county  seat  of  the  county  in  which  the  bankrupt  has  had  his  prin- 
cipal place  of  business,  resided,  or  had  his  domicile;  or  if  that 
place  would  be  manifestly  inconvenient  as  a  place  of  meeting  for 
the  parties  in  interest,  or  if  the  bankrupt  is  one  who  does  not  do 
business,  reside,  or  have  his  domicile  within  the  United  States, 
the  court  shall  fix  a  place  for  the  meeting  which  is  the  most  con- 
venient for  parties  in  interest.  If  such  meeting  should  by  any 
mischance  not  be  held  within  such  time,  the  court  shall  fix  the 
date,  as  soon  as  may  be  thereafter,  when  it  shall  be  held. 

Presiding  officer,  duties,  b  At  the  first  meeting  of  creditors 
the  judge  or  referee  shall  preside,  and,  before  proceeding  with  the 
other  business,  may  allow  or  disallow  the  claims  of  creditors  there 
presented,  and  may  publicly  examine  the  bankrupt  or  cause  him 
to  be  examined  at  the  instance  of  any  creditor. 

Creditors'  duty.  <rThe  creditors  shall  at  each  meeting  take 
such  steps  as  may  be  pertinent  and  necessary  for  the  promotion  of 
the  best  interests  of  the  estate  and  the  enforcement  of  this  Act. 

Subsequent  meetings  of.  d  A.  meeting  of  creditors,  subsequent 
to  the  first  one,  may  be  held  at  any  time  and  place  when  all  of  the 
creditors  who  have  secured  the  allowance  of  their  claims  sign  a 
written  consent  to  hold  a  meeting  at  such  time  and  place. 

Call  of  meeting  by  court.  ^The  court  shall  call  a  meeting  of 
creditors  whenever  one-fourth  or  more  in  number  of  those  who 
have  proven  their  claims  shall  file  a  written  request  to  that  effect ; 
if  such  request  is  signed  by  a  majority  of  such  creditors,  which 
number  represents  a  majority  in  amount  of  such  claims,  and  con- 
tains a  request  for  such  meeting  to  be  held  at  a  designated  place, 
the  court  shall  call  such  meeting  at  such  place  within  thirty  da^'s 
after  the  date  of  the  filing  of  the  request. 

Final  meeting.  /Whenever  the  affairs  of  the  estate  are  ready 
to  DC  closed  a  final  meeting  of  creditors  shall  be  ordered. 


§§0(),  57  BANKRUPTCY  ACT  OF  1898.  1259 

Section  56.  Voters  at  meetings  of  creditors,  a  Creditors  shall 
pass  upon  matters  submitted  to  them  at  their  meetings  by  a  major- 
ity vote  in  number  and  amount  of  claims  of  all  creditors  whose 
claims  have  been  allowed  and  are  present,  except  as  herein  other- 
wise  provided. 

Holders  of  secured  claims  not  entitled,  etc.  b  Creditors  hold« 
ing  claims  which  are  secured  or  have  priority  shall  not,  in  respect 
to  such  claims,  be  entitled  to  vote  at  creditors'  meetings,  nor  shah 
such  claims  be  counted  in  computing  either  the  number  of  cred- 
itors or  the  amount  of  their  claims,  unless  the  amounts  of  such 
claims  exceed  the  values  of  such  securities  or  priorities,  and  then 
only  for  such  excess. 

Section  57.  Proof  and  allowance  of  claims  ;  of  what  to  con- 
sist, a  Proof  of  claims  shall  consist  of  a  statement  under  oath,  in 
writing,  signed  by  a  creditor  setting  forth  the  claim,  the  consid- 
eration therefor,  and  whether  any,  and,  if  so  what,  securities  are 
held  therefor,  and  whether  any,  and,  if  so  what,  payments  have 
been  made  thereon,  and  that  the  sum  claimed  is  justly  owing  from 
the  bankrupt  to  the  creditor. 

When  founded  upon  a  writing,  b  Whenever  a  claim  is  founded 
upon  an  instrument  of  writing,  such  instrument,  unless  lost  or 
destroyed,  shall  be  filed  with  the  proof  of  claim.  If  such  instru- 
ment is  lost  or  destroyed,  a  statement  of  such  fact  and  of  the 
circumstances  of  such  loss  or  destruction  shall  be  filed  under  oath 
with  the  claim.  After  the  claim  is  allowed  or  disallowed,  such 
instrument  may  be.  withdrawn  by  permission  of  the  court,  upon 
leaving  a  copy  thereof  on  file  with  the  claim. 

After  proved,  may  be  filed,  ^r  Claims  after  being  proved  may, 
for  the  purpose  of  allowance,  be  filed  by  the  claimants  in  the  court 
where  the  proceedings  are  pending  or  before  the  referee  if  the  case 
has  been  referred. 

Allowance  of  claims,  etc.  a' Claims  which  have  been  duly 
proved  shall  be  allowed,  upon  receipt  by  or  upon  presentation  to 
the  court,  unless  objection  to  their  allowance  shall  be  made  by 
parties  in  interest,  or  their  consideration  be  continued  for  cause  by 
the  court  upon  its  own  motion. 

Claims  of  secured  creditors,  etc.  e  Claims  of  secured  creditors 
and  those  who  have  priority  may  be  allowed  to  enable  such  cred- 
itors to  participate  in  the  proceedings  at  creditors'  meetings  held 
prior  to  the  determination  of  the  value  of  their  securities  or  prior- 


1260  BANKRUPTCY  ACT   OF    1898..  §  56 

ities,  but  shall  be  allowed  for  such  sums  only  as  to  the  courts  seem 
to  be  owing  over  and  above  the  value  of  their  securities  or  priorities. 

Claims,  hearing-  objections.  /  Objections  to  claims  shall  be 
heard  and  determined  as  soon  as  the  convenience  of  the  court  and 
the  best  interests  of  the  estates  and  the  claimants  will  permit. 

Preferred  claims.  [^  The  claims  of  creditors  who  have  received 
preferences  shall  not  be  allowed  unless  such  creditors  shall  surrender 
their  preferences.] 

g  The  claims  of  creditors  who  have  received  preferences,  voidahU 
■under  section  sixty,  subdivision  d,  or  to  whom  conveyances,  transfers, 
assignments,  or  incumbrances,  void  or  voidable  under  section  sixty - 
seven,  subdivision  e,  have  been  made  or  given,  shall  not  be  allowed 
unless  such  creditors  shall  surrender  such  preferences,  conveyances^ 
transfers,  assignments,  or  incvmbrances. 

Value  of  securities  held  by  secured  creditors,  etc.  h  The  value 
of  securities  held  by  secured  creditors  shall  be  determined  by  con- 
verting the  same  into  money  according  to  the  terms  of  the  agree- 
ment pursuant  to  which  such  securities  were  delivered  to  such 
creditors  or  by  such  creditors  and  the  trustee,  by  agreement,  arbi- 
tration, compromise,  or  litigation,  as  the  court  may  direct,  and  the 
amount  of  such  value  shall  be  credited  upon  such  claims,  and  a 
dividend  shall  be  paid  only  on  the  unpaid  balance. 

Claims  secured  by  individual  undertaking.  i  Whenever  a 
creditor,  whose  claim  against  a  bankrupt  estate  is  secured  by  the 
individual  undertaking  of  any  person,  fails  to  prove  such  claim, 
such  person  may  do  so  in  the  creditor's  name,  and  if  he  discharge 
such  undertaking  in  whole  or  in  part  he  shall  be  subrogated  to 
that  extent  to  the  rights  of  the  creditor. 

Penalty,  forfeiture,  debts  due  as,  allowance.  /Debt?  owing  to 
the  United  States,  a  State,  a  county,  a  district,  or  a  municipality 
as  a  penalty  or  forfeiture  shall  not  be  allowed,  except  for  the 
amount  of  the  pecuniary  loss  sustained  by  the  act,  transaction,  or 
proceeding  out  of  which  the  penalty  or  forfeiture  arose,  with  rea- 
sonable and  actual  costs  occasioned  thereby  and  such  interest  as 
may  have  accrued  thereon  according  to  law. 

Reconsideration  of  claims.  /^Claims  which  have  been  allowed 
may  be  reconsidered  for  cause  and  reallowed  or  rejected  in  whole 
or  in  part,  according  to  the  equities  of  the  case,  before  but  not  after 
the  estate  has  been  closed. 

Recovery  of  dividend.  /Whenever  a  claim  shall  have  been 
reconsidered  and  rejected,  in  whole  or  in  part,  upon  which  a  divi- 


§§57-59  BANKRUPTCY  ACT  OF  1898.  1261 

dend  has  b^en  paid,  the  trustee  may  recover  from  the  creditor  the 
amount  of  the  dividend  received  upon  the  claim  if  rejected  in 
whole,  or  the  propoitional  part  thereof  if  rejected  only  in  part. 

Claims  of  one  bankrupt  against  another,  m  The  claim  of  any 
estate  which  is  being  administered  in  bankruptcy  against  any  like 
estate  may  be  proved  by  the  trustee  and  allowed  by  the  court  in  the 
same  manner  and  upon  like  terms  as  the  claims  of  other  creditors. 
Time  for  proving  claims,  n  Claims  shall  not  be  proved  against 
a  bankrupt  estate  subsequent  to  one  year  after  the  adjudication; 
or  if  they  are  liquidated  by  litigation  and  the  final  judgment 
therein  is  rendered  within  thirty  days  before  or  after  the  expiration 
of  such  time,  then  within  sixty  days  after  the  rendition  of  such 
judgment : 

Of  infants,  etc.  Provided,  That  the  right  of  infants  and  insane 
persons,  without  guardians,  ^vithout  notice  of  the  proceedings,  may 
continue  six  months  longer. 

Section  58.  Notices  to  creditors;  unless  waived,  etc.  a  Cred- 
itors shall  have  at  least  ten  days'  notice  by  mail,  to  their  respective 
addresses  as  they  appear  in  the  list  of  creditors  of  the  bankrupt, 
or  as  afterwards  filed  with  the  papers  in  the  case  by  the  creditors, 
unless  they  waive  notice  in  writing,  of  (1)  all  examinations  of  the 
bankrupt;  (2)  all  hearings  upon  applications  for  the  confirmation 
of  compositions  or  the  discharge  of  bankrupts;  (3)  all  meetings  of 
creditors;  (4)  all  proposed  sales  of  property;  (5)  the  declaration 
and  time  of  payment  of  dividends;  (6)  the  filing  of  the  final  ac- 
counts of  the  trustee,  and  the  time  when  and  the  place  where  they 
will  be  examined  and  passed  upon;  (7)  the  proposed  compromise 
of  any  controversy,  and  (8)  the  proposed  dismissal  of  the  proceed- 
ings. 

Of  first  meeting.  ^Notice  to  creditors  of  the  first  meeting 
shall  be  published  at  least  once  and  may  be  published  such  num- 
ber of  additional  times  as  the  court  may  direct;  the  last  publica- 
tion shall  be  at  least  one  week  prior  to  the  date  fixed  for  the 
meeting. 

Other  notices.  Other  notices  may  be  published  as  the  court 
shall  direct. 

By  referee.  ^  All  notices  shall  be  given  by  the  referee,  unless 
otherwise  ordered  by  the  judge. 

Section  59.  Petition,  who  may  file  as  voluntary  bankrupt. 
ahxiy  qualified  person  may  file  a  petition  to  be  adjudged  a  volun- 
tary bankrupt. 


1262  Bx^NKRUPTCY  ACT  OF   1898.  §§59,  60 

Involuntary.  <^  Three  or  more  creditors  who  have  provable 
claims  against  any  person  which  amount  in  the  aggregate,  in  ex- 
cess of  the  value  of  securities  held  by  them,  if  any,  to  five  hundred 
dollars  or  over;  or  if  all  of  the  creditors  of  such  person  are  less 
than  twelve  in  number,  then  one  of  such  creditors  whose  claim, 
equals  such  amount  may  file  a  petition  to  have  him  adjudged  a 
bankrupt. 

To  be  in  duplicate,  c  Petitions  shall  be  filed  in  duplicate,  one 
copy  for  the  clerk  and  one  for  service  on  the  bankrupt. 

Notice  to  creditors  not  joined  in  petition,  d  If  it  be  averred  in 
the  petition  that  the  creditors  of  the  bankrupt  are  less  than  twelve 
in  number,  and  less  than  three  creditors  Jiave  joined  as  petitioners 
therein,  and  the  answer  avers  the  existence  of  a  larger  number  of 
creditors,  there  shall  be  filed  with  the  answer  a  list  under  oath  of 
all  the  creditors,  with  their  addresses,  and  thereupon  the  court 
shall  cause  all  such  creditors  to  be  notified  of  the  pendency  of  such 
petition  and  shall  delay  the  hearing  upon  such  petition  for  a  rea- 
sonable time,  to  the  end  that  parties  in  interest  shall  have  an 
opportunity  to  be  heard; 

Hearing  of  case,  etc.;  when  dismissed.  If  upon  such  hearing 
it  shall  appear  that  a  sufficient  number  have  joined  in  such  peti- 
tion, or  if  prior  to  or  during  such  hearing  a  sufficient  number  shall 
join  therein,  the  case  may  be  proceeded  with,  but  otherwise  it  shall 
be  dismissed. 

Creditors,  computing  number  of.  ^In  computing  the  number 
of  creditors  of  a  bankrupt  for  the  purpose  of  determining  how 
many  creditors  must  join  in  the  petition,  such  creditors  as  were 
employed  by  him  at  the  time  of  the  filing  of  the  petition  or  are 
related  to  him  by  consanguinity  or  affinity  within  the  third  degree, 
as  determined  by  the  common  law,  and  have  not  joined  in  the 
petition,   shall  not  be  counted. 

Appearance  of.  /"Creditors  other  than  original  petitioners  may 
at  any  time  enter  their  appearance  and  join  in  the  petition,  or  file 
an  answer  and  be  heard  in  opposition  to  the  prayer  of  the  petition. 

Notice  of  dismissal,  g  A  voluntary  or  involuntary  petition 
shall  not  be  dismissed  by  the  petitioner  or  petitioners  or  for  want 
of  prosecution  or  by  consent  of  parties  until  after  notice  to  the 
creditors. 

Section  60.  Preferred  creditors,  [a  A  person  shall  be  deemed 
to  have  given  a  preference  if,  being  insolvent,  he  has  procured  or 
suffered  a  judgment  to  be  entered  against  himself  in  favor  of  any 
person,  or  made  a  transfer  of  any  of  his  property,  and  the  effect  of 
the  enforcement  of  such  judgment  or  transfer  will  be  to  enable  any 


0  0  gQ  BANKRUPTCY   ACT   OF    1898.  1263 

one  of  his  creditors  to  obtain  a  greater  percentage  of  his  debt  than 
any  other  of  such  creditors  of  the  same  class.] 

a  A  person  shall  he  deemed  to  have  given  a  preference  if,leing 
insolvent,  he  has,  within  four  months  hefore  the  filing  of  the  pet^t^on 
or  after  the  filing  of  the  petition  and  hefore  the  ad3ud^cat^on  p^o^ 
cured  or  su/erJ a  judgment  to  le  entered  agarnst  Umself  ^n  favor 
of  any  person,  or  made  a  transfer  of  any  of  hjs  property^,  and  the 
effect  of  the  enforcement  of  such  judgment  or  transfer  wM  he  to  en- 
able  any  one  of  his  creditors  to  obtain  a  greater  percentage  of  his  dht 
than  an,  other  of  such  creditors  of  the  same  class.  Where  the  prefer 
ence  consists  in  a  transfer,  such  period  of  four  mmths  shall  not  ex- 
pire  until  four  months  after  the  date  of  the  recording  or  registering 
of  the  transfer  if  hij  law  such  recording  or  registering  is  requiied. 
^  PreLrnce?Xn'^  voidable.     [5  If  a  bankrupt  shall  have 

given  a  preference  within  four  months  before  the  ^Img  of  a  peti- 
Ln    or  after  the  filing  of  the  petition  and  before  the  adjudication 
Ld'the  person  receiving  it,  or  to  be  benefited  thereby    or  his  agen 
acting  therein,  shall  have  had  reasonable  cause  to  believe  that  it 
wa    intended  thereby  to  give  a  preference,  it  shall  be  voidable  by 
The  trustee,   and  he  may  recover  the  property  or  its  value  from 

^'''VllTunkrupt  shall  have  given  a  preference,  and  the  person 
receiving  it,  or  to  he  henefded  iherehy,  or  his  agent  acting  therein 
Ml  have  had  reasonahle  cause  to  helieve  that  it  was  upended  t^rehy 
to  give  a  preference,  it  shall  he  voidaUe  hy  the  trustee  and  he  mmj 
recover  the  property  or  its  value  from  such  person.  And,  for  the 
purpose  of  such  recovery,  any  court  of  hankrupfcy,as  heremUfore 
defined,  and  any  state  court  which  would  have  had  ^uri^^  ^f 
hanl-rupfc,  had  not  intervened,  shall  have  concurrent  jurisdiction. 

Preferred  creditor  giving  further  credit ;  set  off  of  new  credit 
cli  a  creditor  has  been  preferred,  and  afterwards  m  good  faith 
aives  the  debtor  further  credit  without  security  of  any  kind  lor 
property  which  becomes  a  part  of  the  debtor's  estates  the  amount 
of  such  new  credit  remaining  unpaid  at  the  time  of  the  adjudica- 
tion  in  bankruptcy  may  be  set  off  against  the  amount  which  would 

otherwise  be  recoverable  from  him.  .       .yf  o  A^htnr 

Payments  to  attorneys,  etc.;  re-exammation  of .    ^If  a  debtor 
shall,  directly  or  indirectly,  in  contemplation   of  the  filing  of  a 
petition  by  or  against  him,  pay  money  or  transfer   property  to  an 
attorney  and  counselor  at  law,  solicitor  in   equity,  ^r   proctor  m 
admiralty  for  services  to  be  rendered,  the  transaction  shall   be     e 
examined  by  the  court  on   petition  of  the  trustee  or  any  credito 
and  shall  only  be  held  valid  to  the  extent  of  a  reasonable  amount 
to  be  determined   by  the  court,  and  the  excess  may  be  recovered 
by  the  trustee  for  the  benefit  of  the  estate. 


1264  BANKEUPTCY  ACT  OF  1898.  §§61 — 63 

CHAPTER  VII. 

Estates. 

Section  6i.  Depositories  for  money.  «  Courts  of  bankruptcy 
shall  designate,  by  order,  banking  institutions  as  depositories  for 
^the  money  of  bankrupt  estates,  as  convenient  as  may  be  to  the 
residences  of  trustees, 

Bond.  And  shall  require  bonds  to  the  United  States,  subject 
to  their  approval,  to  be  given  by  such  banking  institutions,  and 
may  from  time  to  time  as  occasion  may  require,  by  like  order 
increase  the  number  of  depositories  or  the  amount  of  any  bond  or 
change  such  depositories. 

Section  62.  Expenses  of  administering  estates;  report  and 
approval,  a  The  actual  and  necessary  expenses  incurred  by  officers 
in  the  administration  of  estates  shall,  except  where  other  provi- 
sions are  made  for  their  payment,  be  reported  in  detail,  under 
oath,  and  examined  and  approved  or  disapproved  by  the  court. 
If  approved,  they  shall  be  paid  or  allowed  out  of  the  estates  in 
which  they  were  incurred. 

Section  63.  Debts  which  may  be  proved.  ^  Debts  of  the 
bankrupt  may  be  proved  and  allowed  against  his  estate  which  are 

(1)  Fixed  liability.  A  fixed  liability,  as  evidenced  by  a 
judgment  or  an  instrument  in  writing,  absolutely  owing  at  the 
time  of  the  filing  of  the  petition  against  him,  whether  then  pay- 
able or  not,  with  any  interest  thereon  which  would  have  been 
recoverable  at  that  date  or  with  a  rebate  of  interest  upon  such  as 
were  not  then  payable  and  did  not  bear  interest ; 

(2)  Costs  of  suit  due,  etc.  Due  as  costs  taxable  against  an 
involuntary  bankrupt  who  was  at  the  time  of  the  filing  of  the  peti- 
tion against  him  plaintiff  in  a  cause  of  action  which  would  pass 
to  the  trustee  and  which  the  trustee  declines  to  prosecute  after 
notice; 

(3)  Costs  incurred  before  filing  petition.  Founded  upon  a 
claim  for  taxable  costs  incurred  in  good  faith  by  a  creditor  before 
the  filing  of  the  petition  in  an  action  to  recover  a  provable  debt; 

(4)  On  open  account.  Founded  upon  an  open  account,  or 
upon  a  contract  express  or  implied;  and 

(5)  Judgments,  etc.  Founded  upon  provable  debts  reduced 
to  judgments  after  the  filing  of  the  petition  and  before  the  consid- 


§§68,  64  BANKRUPTCY  ACT  OF  1898.  1265 

eration  of  the  bankrupt's  application  for  a  discharge,  less  costs 
incurred  and  interests  accrued  after  the  filing  of  the  petition  and 
tip  to  the  time  of  the  entry  of  such  judgments. 

Allowances  of  unliquidated  claims.  <5  Unliquidated  claims 
against  the  -bankrupt  may,  pursuant  to  application  to  the  court, 
be  liquidated  in  such  manner  as  it  shall  direct,  and  may  thereafter 
be  proved  and  allowed  against  his  estate. 

Section  64.  Debts  which  have  priority;  taxes.  ^  The  court 
shall  order  the  trustee  to  pay  all  taxes  legally  due  and  owing  by 
the  bankrupt  to  the  United  States,  State,  county,  district,  or  munic- 
ipality in  advance  of  the  payment  of  dividends  to  creditors,  and 
upon  filing  the  receipts  of  the  proper  public  officers  for  such  pay- 
ment he  shall  be  credited  with  the  amount  thereof,  and  in  case 
any  question  arises  as  to  the  amount  or  legality  of  any  such  tax 
the  same  shall  be  heard  and  determined  by  the  court. 

Order  of  pa3''ment.  dThe  debts  to  have  priority,  except  as 
herein  provided,  and  to  be  paid  in  full  out  of  bankrupt  estates,  and 
the  order  of  payment  shall  be 

(1)  Cost  of  preserving  estate.  The  actual  and  necessary  cost 
of  preserving  the  estate  subsequent  to  filing  the  petition; 

(2)  Filing  fees.  [The  filing  fees  paid  by  creditors  in  invol- 
untary cases;] 

(2)  The  filing  fees  paid  hy  creditors  in  involuntary  cases,  and^ 
tvhere  property  of  the  bankrupt,  transferred  or  concealed  hy  him 
either  before  or  after  the  filing  of  the  petition,  shall  have  been  re- 
covered for  the  benefit  of  the  estate  of  the  bankrupt  by  the  efforts 
and  at  the  expense  of  one  or  more  creditors,  the  reasonable  expenses 
of  such  recovery. 

(3)  Cost  of  administration,  etc.  The  cost  of  administration, 
including  the  fees  and  mileage  payable  to  witnesses  as  now  or  here- 
after provided  by  the  laws  of  the  United  States,  and  one  reasonable 
attorney's  fee,  for  the  professional  services  actually  rendered,  irre- 
spective of  the  number  of  attorneys  employed,  to  the  petitioning 
creditors  in  involuntary  cases,  to  the  bankrupt  in  involuntary  cases 
while  performing  the  duties  herein  prescribed,  and  to  the  bank- 
rupt in  voluntary  cases,  as  the  court  may  allow ; 

(4)  Wages  of  workmen,  etc.  Wages  due  to  workmen,  clerks, 
travelling  or  city  salesmen'^  or  servants  which  have  been  earned  with- 
in three  months  before  the  date  of  the  commencement  of  proceedings, 
not  to  exceed  three  hundred  dollars  to  each  claimant ;  and 

(i)  The  words  in  italics  were  added  by  the  act  of  June  15,  1906. 


1266  BANKRUPTCY  ACT  OF  1898.  §§64,  65 

(5)  Owing  to  person  entitled  to  priority,  etc.  Debts  owing 
to  any  person  who  by  the  laws  of  the  States  or  the  United  States 
is  entitled  to  priority. 

Payment  of  claims  accruing  after  composition  set  aside  or  dis- 
charge revoked.  ^  In  the  event  of  the  confirmation  of  a  composition 
being  set  aside,  or  a  discharge  revoked,  the  property  acquired  by 
the  bankrupt  in  addition  to  his  estate  at  the  time  the  composition 
was  confirmed  or  the  adjudication  was  made  shall  be  applied  to 
the  payment  in  full  of  the  claims  of  creditors  for  property  sold  to 
him  on  credit,  in  good  faith,  while  such  composition  or  discharge 
was  in  force,  and  the  residue,  if  any,  shall  be  applied  to  the  pay- 
ment of  the  debts  which  were  owing  at  the  time  of  the  adjudica- 
tion. 

Section  65.  Dividends,  declaration  and  payment  on  allowed 
claims,  a  Dividends  of  an  equal  per  centum  shall  be  declared  and 
paid  on  all  allowed  claims,  except  such  as  have  priority  or  are 
secured. 

Declaration  of  first.  C<5The  first  dividend  shall  be  declared 
within  thirty  days  after  the  adjudication,  if  the  money  of  the  estate 
in  excess  of  the  amount  necessary  to  pay  the  debts  which  have 
priority  and  such  claims  as  have  not  been,  but  probably  will  be, 
allowed  equals  five  per  centum  or  more  of  such  allowed  claims. 

Subsequent.  Dividends  subsequent  to  the  first  shall  be  de- 
clared upon  like  terms  as  the  first  and  as  often  as  the  amount  shall 
equal  ten  per  centum  or  more  and  upon  closing  the  estate.  Divi- 
dends may  be  declared  oftener  and  in  smaller  proportions  if  the 
judge  shall  so  order.] 

&  r/ie  ^rst  dividend  shall  he  declared  within  thirty  days  after  the 
adjudication,  if  the  money  of  the  estate  in  excess  of  the  amount 
necessary  to  pay  the  dehts  which  have  priority  and  such  claims  as 
have  not  been,  hut  prohahly  will  he,  allowed  equals  five  per  centum 
or  more  of  such  allowed  claims.  Dividends  subsequent  to  the  first 
shall  he  declared  upon  like  terms  as  the  first  and  as  often  as  the 
amount  shall  equal  ten  per  centum  or  more  and  upon  closing  the 
estate.  Dividends  may  he  declared  oftener  and  in  smaller  propor- 
tions if  the  judge  shall  so  order;  provided,  that  the  first  dividend 
shall  not  include  more  than  fifty  per  centum  of  the  money  of  the 
estate  in  excess  of  the  amount  necessary  to  pay  the  debts  which  have 
priority  amd  such  claims  as  probably  will  be  allowed:  .And  provided 
further,  that  the  final  dividend  shall  not  be  declared  within  three 
months  after  the  first  dividend  shall  be  declared. 


gp5— 07  BANKRUPTCY  ACT   OF    1898.  1267 

Creditors  receiving,  not  affected  by  proof  of  subsequent  claims, 
etc.  rThe  rights  of  creditors  who  have  received  dividends,  or 
in  whose  favor  final  dividends  have  been  declared,  shall  not  be 
affected  by  the  proof  and  allowance  of  claims  subsequent  to  the 
date  of  such  payment  or  declarations  of  dividends;  but  the  cred- 
itors proving  and  securing  the  allowance  of  such  claims  shall  be 
paid  dividends  equal  in  amount  to  those  already  received  by  the 
other  creditors  if  the  estate  equals  so  much  before  such  other  cred- 
itors are  paid  any  further  dividends. 

Preference  of  certain  creditors.  ^Whenever  a  person  shall 
have  been  adjudged  a  bankrupt  by  a  court  without  the  United 
States  and  also  by  a  court  of  bankruptcy,  creditors  residing  within 
the  United  States  shall  first  be  paid  a  dividend  equal  to  that  re- 
ceived in  the  court  without  the  United  States  by  other  creditors 
before  creditors  who  have  received  a  dividend  in  such  courts  shall 
be  paid  any  amounts. 

Limit  to  claimant's  right  to  collect,  e  A  claimant  shall  not  be 
entitled  to  collect  from  a  bankrupt  estate  any  greater  amount  than 
shall  accrue  pursuant  to  the  provisions  of  this  Act. 

Section  66.  Unclaimed  dividends  ;  after  six  months  paid  into 
court,  a  Dividends  which  remain  unclaimed  for  six  months  after 
the  final  dividend  has  been  declared  shall  be  paid  by  the  trustee 

into  court. 

After  one  year,  distributed,  b  Dividends  remaining  unclaimed 
for  one  year  shall,  under  the  direction  of  the  court,  be  distributed 
to  the  creditors  whose  claims  have  been  allowed  but  not  paid  m 
full,  and  aiter  such  claims  have  been  paid  in  full  the  balance  shall 
be  paid  to  the  bankrupt : 

Of  minors.  Provided,  That  in  case  unclaimed  dividends  be- 
long to  minors  such  minors  may  have  one  year  after  arriving  at' 
majority  to  claim  such  dividends. 

Section  67.  Liens;  unrecorded  claims  not.  a  Claims  which 
for  want  of  record  or  for  other  reasons  would  not  have  been  valid 
liens  as  against  the  claims  of  the  creditors  of  the  bankrupt  shall 
not  be  liens  against  his  estate. 


1268  BANKRUPTCY  ACT  OF  1898.  §07 

Trustee  subrogated  to  rights  of  creditor,  b  Whenever  a  cred- 
itor is  prevented  from  enforcing  his  rights  as  against  a  lien  created, 
or  attempted  to  be  created,  by  his  debtor,  who  afterwards  becomes 
a  bankrupt,  the  trustee  of  the  estate  of  such  bankrupt  shall  be 
subrogated  to  and  may  enforce  such  rights  of  such  creditor  for  the 
benefit  of  the  estate. 

Lien,  judgment,  etc.;  created  within  four  months,  to  be  dis- 
solved, c  A  lien  created  by  or  obtained  in  or  pursuant  to  any  suit 
or  proceeding  at  law  or  in  equity,  including  an  attachment  upon 
mesne  process  or  a  judgment  by  confession,  which  was  begun 
against  a  person  within  four  months  before  the  filing  of  a  petition 
in  bankruptcy  by  or  against  such  person  shall  be  dissolved  by  the 
adjudication  of  such  person  to  be  a  bankrupt  if 

(1)  If  defendant  were  insolvent.  It  appears  that  said  lien 
was  obtained  and  permitted  while  the  defendant  was  insolvent  and 
that  its  existence  and  enforcement  will  work  a  preference,  or 

(2)  Knowledge  of.  The  party  or  parties  to  be  benefited  there- 
by had  reasonable  cause  to  believe  the  defendant  was  insolvent  and 
in  contemplation  of  bankruptcy,  or 

(3)  Through  fraud.  That  such  lien  was  sought  and  per- 
mitted in  fraud  of  the  provisions  of  this  Act;  or  if  the  dissolution 
of  such  lien  would  militate  against  the  best  interests  of  the  estate 
of  such  person  the  same  shall  not  be  dissolved, 

Trustee  subrogated,  etc.  But  the  trustee  of  the  estate  of  such 
person,  for  the  benefit  of  the  estate,  shall  be  subrogated  to  the 
rights  of  the  holder  of  such  lien  and  empowered  to  perfect  and 
enforce  the  same  in  his  name  as  trustee  with  like  force-and  effect 
as  such  holder  might  have  done  had  not  bankruptcy  proceedings 
intervened. 

Liens  given  in  good  faith,  etc.  d  Liens  given  or  accepted  in 
good  faith  and  not  in  contemplation  of  or  in  fraud  upon  this  Act, 
and  for  a  present  consideration,  which  have  been  recorded  accord- 
ing to  law,  if  record  thereof  was  necessary  in  order  to  impart 
notice,  shall  not  be  affected  by  this  Act. 

Conveyances,  etc.,  subsequent  to  act  and  within  four  months 
of  petition  ;  to  defraud,  etc.,  void.  ^That  all  conveyances,  trans- 
fers, assignments,  or  incumbrances  of  his  property,  or  any  part 
thereof,  made  or  given  by  a  person  adjudged  a  bankrupt  under  the 
provisions  of  this  Act  subsequent  to  the  passage  of  this  Act  and 


§(37  BANKRUPTCY  ACT   OF    1898.  1269 

within  four  months  prior  to  the  filing  of  the  petition,  with  the 
intent  and  purpose  on  his  part  to  hinder,  delay,  or  defraud  his 
creditors,  or  any  of  them,  shall  be  null  and  void  as  against  the 
creditors  of  such  debtor,  except  as  to  purchasers  in  good  faith  and 
for  a  present  fair  consideration. 

Property  remains  part  of  assets.  And  all  property  of  the 
debtor  conveyed,  transferred,  assigned,  or  encumbered  as  aforesaid 
shall,  if  he  be  adjudged  a  bankrupt,  and  the  same  is  not  exempt 
from  execution  and  liability  for  debts  by  the  law  of  his  domicile, 
be  and  remain  a  part  of  the  assets  and  estate  of  the  bankrupt  and 
shall  pass  to  his  said  trustee,  whose  duty  it  shall  be  to  recover  and 
reclaim  same  by  legal  proceedings  or  otherwise  for  the  benefit  of 
the  creditors. 

Conveyances,  etc.,  within  four  months  of  petition;  void  under 
state  laws;  void  under  this  act.  And  all  conveyances,  trans- 
fers, or  incumbrances  of  his  property  made  by  a  debtor  at  any 
time  within  four  months  prior  to  the  filing  of  the  petition  against 
him,  and  while  insolvent,  which  are  held  null  and  void  as  against 
the  creditors  of  such  debtor  by  the  laws  of  the  State,  Territory,  or 
District  in  which  such  property  is  situate,  shall  be  deemed  null 
and  void  under  this  Act  against  the  creditors  of  such  debtor  if  he 
be  adjudged  a  bankrupt,  and  such  property  shall  pass  to  the  as- 
signee [trustee]  and  be  by  him  reclaimed  and  recovered  for  the 
benefit  of  the  creditors  of  the  bankrupt. 

For  the  purpose  of  such  recovery  any  court  of  hanhriiptcy  as 
hereinbefore  defined,  and  any  state  court  which  would  have  had 
jurisdiction  if  hanJiruptcy  had  not  intervened,  shall  have  concurrent 
jurisdiction. 

Liens,  etc.,  created  through  legal  proceedings;  void,  etc. 
/That  all  levies,  judgments,  attachments,  or  other  liens,  obtained 
through  legal  proceedings  against  a  person  who  is  insolvent,  at 
any  time  within  four  months  prior  to  the  filing  of  a  petition  in 
bankruptcy  against  him,  shall  be  deemed  null  and  void  in  case  he 
is  adjudged  a  bankrupt,  and  the  property  affected  by  the  levy, 
judgment,  attachment,  or  other  lien  shall  be  deemed  wholly  dis- 
charged and  released  from  the  same, 

Property  passes  to  trustee.  And  shall  pass  to  the  trustee  as 
a  part  of  the  estate  of  the  bankrupt,  unless  the  court  shall,  on  due 
notice,  order  that  the  right   under  such  levy,  judgment,  attach- 


l^'^O  BANKRUPTCY   ACT   OF    1898.  §§67—69 

ment,  or  other  lien  shall  be  preserved  for  the  benefit  of  the  estate ; 
and  thereupon  the  same  may  pass  to  and  shall  be  preserved  by  the 
trustee  for  the  benefit  of  the  estate  as  aforesaid. 

Court  may  order  conveyances;  purchaser  for  value.  And  the 
court  may  order  such  conveyance  as  shall  be  necessary  to  carry  the 
purposes  of  this  section  into  effect:  Provided,  That  nothing  herein 
contained  shall  have  the  effect  to  destroy  or  impair  the  title  ob- 
tained by  such  levy,  judgment,  attachment,  or  other  lien,  of  a  bona 
fide  pui chaser  for  value  who  shall  have  acquired  the  same  without 
notice  or  reasonable  cause  for  inquirv. 

Section  68.  Set-offs  and  counterclaims;  allowed.  a\\\  all 
cases  of  mutual  debts  or  mutual  credits  between  the  estate  of  a 
bankrupt  and  a  creditor  the  account  shall  be  stated  and  one  debt 
shall  be  set  off  against  the  other,  and  the  balance  only  shall  be 
allowed  or  paid. 

Not  allowed,  b  h.  set-off  or  counterclaim  shall  not  be  allowed 
in  favor  of  any  debtor  of  the  bankrupt  which  (1)  is  not  provable 
against  the  estate;  or  (2)  was  purchased  by  or  transferred  to  him 
after  the  filing  of  the  petition,  or  within  four  months  before  such 
filing,  with  a  view  to  such  use  and  with  knowledge  or  notice  that 
such  bankrupt  was  insolvent,  or  had  committed  an  act  of  bank- 
ruptcy. 

Section  69.  When  property  may  be  seized;  possession  of 
property,  a  A  judge  may,  upon  satisfactory  proof,  by  affidavit,  that 
a  bankrupt  against  whom  an  involuntary  petition  has  been  filed  and 
is  pending  has  committed  an  act  of  bankruptcy,  or  has  neglected 
or  is  neglecting,  or  is  about  to  so  neglect  his  property  that  it  has 
thereby  deteriorated  or  is  thereby  deteriorating  or  is  about  thereby 
to  deteriorate  in  value,  issue  a  warrant  to  the  marshal  to  seize  and 
hold  it  subject  to  further  orders. 

Bond  of  indemnity.  Before  such  warrant  is  issued  the  peti- 
tioners applying  therefor  shall  enter  into  a  bond  in  such  an  amount 
as  the  judge  shall  fix,  with  such  sureties  as  he  shall  approve,  con- 
ditioned to  indemnify  such  bankrupt  for  such  damages  as  he  shall 
sustain  in  the  event  such  seizure  shall  prove  to  have  been  wrong- 
fully obtained. 

Released  on  giving  bond.  Such  property  shall  be  released,  if 
such  bankrupt  shall  give  bond  in  a  sum  which  shall  be  fixed  by 
the  judge,  with  such  sureties  as  he  shall  approve,  conditioned  to 
turn  over  such  property,  or  pay  the  value  thereof  in  money  to  the 


§70  BANKRUPTCY  ACT  OF  1898.  1271 

trustee,  in  the  event  lie  is  adjudged  a  bankrupt  pursuant  to  such 
petition. 

Section  70.  Title  to  property,  a  The  trustee  of  the  estate  of 
a  bankrupt,  upon  his  appointment  and  qualification,  and  his  suc- 
cessor or  successors,  if  he  shall  have  one  or  more,  upon  his  or  their 
appointment  and  qualification. 

Vested  in  trustee.  Shall  in  turn  be  vested  by  operation  of 
law  with  the  title  of  the  bankrupt,  as  of  the  date  he  was  adjudged 
a  bankrupt,  except  in  so  far  as  it  is  to  property  which  is  exempt, 
to  all 

(1)  Documents.      Documents  relating  to  his  property; 

(2)  Patents,  etc.  Interests  in  patents,  patent  rights,  copy- 
rights, and  trade-marks; 

(3)  Certain  powers.  Powers  which  he  might  have  exercised 
for  his  own  benefit,  but  not  those  which  he  might  have  exercised 
for  some  other  person ; 

(4)  Transferred  in  fraud.  Property  transferred  by  him  in 
fraud  of  his  creditors; 

(5)  Which  might  have  been  transferred,  etc.  Property  which 
prior  to  the  filing  of  the  petition  he  could  by  any  means  have 
transferred  or  which  might  have  been  levied  upon  and  sold  under 
judicial  process  against  him: 

Policy  of  insurance.  Provided^  That  when  any  bankrupt  shall 
have  any  insurance  policy  which  has  a  cash  surrender  value  pay- 
able to  himself,  his  estate,  or  personal  representatives,  he  may, 
within  thirty  days  after  the  cash  surrender  value  has  been  ascer- 
tained and  stated  to  the  trustee  by  the  company  issuing  the  same, 
pay  or  secure  to  the  trustee  the  sum  so  ascertained  and  stated,  and 
continue  to  hold,  own,  and  carry  such  policy  free  from  the  claims 
of  the  creditors  participating  in  the  distribution  of  his  estate  under 
the  bankruptcy  proceedings,  otherwise  the  policy  shall  pass  to  the 
trustee  as  assets;  and 

(6)  Rights  of  action  upon  contracts.  Rights  of  action  aris- 
ing upon  contracts  or  from  the  unlawful  taking  or  detention  of,  or 
injury  to,  his  property. 

Appraisal  of  property,  b  All  real  and  personal  property  be- 
longing to  bankrupt  estates  shall  be  appraised  by  three  disinter- 
ested appraisers;  they  shall  be  appointed  by,  and  report  to,  the 
court. 

Sale  for  not  less  than  seventy-five  per  centum  of  appraised 


1272  BANKRUPTCY    ACT    OF    1 898.  §70 

value.  Real  and  personal  property  bhall,  when  practicable,  be 
sold  subject  to  the  approval  of  the  court;  it  shall  not  be  sold 
otherwise  than  subject  to  the  approval  of  the  court  for  less  than 
seventy-five  per  centum  of  its  appraised  value. 

Trustee  to  convey  title,  c  The  title  to  property  of  a  bankrupt 
estate  which  has  been  sold,  as  herein  provided,  shall  be  conveyed 
to  the  purchaser  by  the  trustee. 

Vesting  title  on;  setting  composition  aside.  <f  Whenever  a 
composition  shall  be  set  aside,  or  discharge  revoked,  the  trustee 
shall,  upon  his  appointment  and  qualification,  be  vested  as  herein 
provided  with  the  title  to  all  of  the  property  of  the  bankrupt  as  of 
the  date  of  the  final  decree  setting  aside  the  composition  or  revok- 
ing the  discharge. 

May  avoid  certain  transfers,  etc.  <?The  trustee  may  avoid 
any  transfer  by  the  bankrupt  of  his  property  which  any  creditor 
of  such  bankrupt  might  have  avoided,  and  may  recover  the  prop- 
erty so  transferred,  or  its  value,  from  the  person  to  whom  it  was 
transferred,  unless  he  was  a  bona  fide  holder  for  value  prior  to  the 
date  ot  the  adjudication. 

Recovery  of  property.  Such  property  may  be  recovered  or  its 
value  collected  from  whoever  may  have  received  it,  except  a  bona 
fide  holder  for  value.  For  the  purpose  of  such  recovery  any  court 
of  lankruptcy  as  hereinbefore  fore  defined,  and  any  state  court  which 
woidd  have  had  jurisdiction  if  hankruptcy  had  not  intervened,  shall 
have  concurrent  jurisdiction. 

Title  revested  on  confirming  composition.  /  Upon  the  confirma- 
tion of  a  composition  offered  by  a  bankrupt,  the  title  to  his  property 
shall  thereupon  revest  in  him. 

The  Time  When  This  Act  Shall  Go  Into  Effect. 
Force  and  effect ;  petition  for  voluntary  bankruptcy ;  involuntary. 

a  This  Act  shall  go  into  full  force  and  effect  upon  its  passage :  Pro- 
vided, however.  That  no  petition  for  voluntary  bankruptcy  shall  be 
filed  within  one  month  of  the  passage  thereof,  and  no  petition  for  in- 
voluntary bankruptcy  shall  be  filed  within  four  months  of  the  passage 
thereof. 

Cases  pending  under  Stat©  laws,  h  Proceedings  commenced 
under  State  insolvency  laws  before  the  passage  of  this  Act  shall  not 
be  affected  by  it. 


§§  71,  72  BANKRUPTCY  ACT  OF  1898.  1273 

Section  71,    Clerks  to  keep  indexes  and  make  searches,  etc.    That 

the  clerks  of  the  several  district  courts  of  the  United  States  shall 
prepare  and  keep  in  their  respective  offices  complete  and  covenient 
indexes  of  all  petitions  and  discharges  in  bankruptcy  heretofore  or 
hereafter  filed  in  the  said  courts,  and  shall,  when  requested  so  to  do, 
issue  certificates  of  search  certifying  as  to  whether  or  not  any  such 
petitions  or  discharges  have  been  filed;  and  said  clerks  shall  be  en- 
titled to  receive  for  such  certificates  the  same  fees  as  now  allowed  by 
laiv  for  certificates  as  to  judgments  in  said  courts;  provided,  that  said 
bankruptcy  indexes  and  dockets  shall  at  all  times  be  open  to  inspec- 
tion and  examination  by  all  persons  or  corporations  without  any  fee 
or  charge  therefor. 

Section  72.  No  additional  fees  to  referees  or  trustees.  That  neither 
the  referee  nor  the  trustee  shall  in  any  form  or  guise  receive,  nor 
shall  the  court  allow  them,  any  other  or  further  compensation  for 
their  services  than  that  expressly  authorized  and  prescribed  in  this 
act. 

Section  19.*  That  the  provisions  of  this  amendatory  act  shall  not 
apply  to  bankruptcy  cases  pending  when  this  act  takes  effect,  hut 
such  cases  shall  be  adjudicated  and  disposed  of  conformably  to  the 
provisions  of  the  said  act  of  July  firsts  eighteen  hundred  and  ninety- 
eight. 

*  This  is  aactjou  19  of  the  amendatory  act  of  Febmaiy  5,  1903,  32  Stat   at  L 
797. 


INDEX  TO  ACT  OF  1898. 


References  to  Sections. 


Abatement — 

Bankruptcy  proceedings,  of,  death  or  insanity  of  bankrupt  doep 

not  cause §8 

Absence- 
Judge's,  in,  case  sent  to  referee i  ,  ?18 

Referee's,  effect, §26 

Acceptance — 
Composition,  of,  by  majority  of  creditors  in  writing §12 

Accounts — 
Books  of,  destruction,  concealment,  etc.,  prevents  discharge    ....  §14 

Debts  founded  upon  open,  allowed §63 

Notice  to  creditors  of  filing  final §58 

Partnership,  insolvent,  kept  by  trustee §5 

Penalty  for  making  false     •    •  §29 

Referee's  punishment  for  refusing  inspection  of §29 

Trustees  to  keep g47 

file  final,  when,      §47 

punishment  for  refusing  inspection  of  ....   , §29 

Act- 
When  to  take  effect      §70 

Action  (see  also  Suits) — 

Bankrupt,  by  and  against §11 

Bonds  of  referees  and  trustees,  on §50 

time  of  bringing §50 

Trustee,  by,  in  what  courts §23 

death  or  removal  not  to  abate §46 

time  of  bringing  by  or  against §11 

Acts  of  bankruptcy- 
Consist  of  what •   • §3 

Adjudication- 
Court  to  make,  when §18 

Definition         §1 

Reference  after §22 

Administration  of  estates  {see  also  Estates) — 

Expenses  of §62 

Administration  of  oaths,  etc. §20 

Admission — 

Of  insolvency,  effect  of §3 

Affidavit 

Arrest  of  bankrupt  for  examination  for §9 

Voluntary  bankrupt,  of,  of  inability  to  pay  fees §51 

1275 


1276  INDEX   TO    ACT    OF    1 898. 

References  to  Sections. 
Agent— 

"  Creditor  "  includes,  under  Act gl 

Penalty  for  use  in  composition  false  claims,  aa  or  by §29 

"  Persons"  include,  of  corporation §1 

Affirmation- 
False,  punishment  for  making §20 

When  may  be  taken  instead  of  oath g20 

Who  may  take §2G 

Alaska — 

"States"  include       §1 

United  States  Courts  in  district  of,  made  courts  of  bankruptcy,  ...  §2 

jurisdiction  of     o  .    .    .  g2 

Allowance — 

Claims,  of,  against  bankrupt's  estate §57 

preferred  claims,  of ^57 

secured  creditors,  of \  §57 

unliquidated §63 

Debts,  subject  of §63 

Widow  and  children,  to,  fiysd  by  state  laws §8 

Amendment — 

Kules,  forms  and  orders,  etc.,  by  U.  S.  Supreme  Court,  of §80 

Schedules  of,  by  referee  if  defective §39 

Amount- 
Appeal  to  TJ.  S.  Supreme  Court §25 

Bonds  of  referee  and  trustee         §50 

Claims  of  creditors  who  file  involuntary  petition §59 

Debts  corporation  owes  to  be  adjudged  bankrupt     §4 

Answer- 
Bankrupt  or  creditor  to  make,  when §18 

Creditor  may  tile  to  petition,  when .  §59 

Appeal — 

Courts  exercising  jurisdiction  on §24 

Trustee  not  required  to  give  bond  on §25 

U.  S.  Circuit  Court  of  Appeals,  to    ...    » §25 

from  what  judgments §25 

time  of  taking §25 

U.  S.  Supreme  Court,  to §25 

when  amount  exceeds  $2,000 §25 

where  question  certified  by  supreme  court  justice §25 

Appearance— 

Of  creditors  after  filing  petition §59 

Appellate  Courts- 
Definition  of §1 

Jurisdiction  of §24 

U.  S.  Circuit  Court  of  Appeals §§24,  25 

TJ.  S.  Supreme  Court §25 

Appointment- 
Arbitrators,  by  court,  when §26 

Keferees §34 

in  case  of  absence  or  disability     §43 

Trustees,  by  creditors §44 

by  court,  when §44 

Apportionment- 
Referee's,  compensation,  of §40 

Trustee's,  compensation,  of §48 

Appraisal- 
Bankrupt's  property,  by  three  appraisers §70 

can  not  be  sold  for  less  than  75%  of §70 


INDEX   TO    ACT    OF    1 898.  12// 

References  to  Sections. 
Approval- 
Compromises,  of,  by  court §27 

Expenses  of  administering  bankrupt  estates |62 

Sale,  of  property  subject  to        IjO 

Trustee  may  prosecut-e  suits  already  commenced,  with,  of  court    •    .    .§11 

Arbitrators- 
Findings,  of,  force  and  effect     ?26 

Sekction  of |26 

Trustees  may  submit  controversy  to §26 

Arrest — 

Bankrupt,  of,  about  to  leave  district  to  avoid  examination ?9 

exemption  from,  of  bankrupt  on  civil  process,  etc |9 

except  in  what  cases |9 

Assets- 
Courts  of  bankruptcy  to  collect  and  distribute §2 

Assignment- 
General,  an  art  of  bankrupt(;y '  .   .    .    §3 

Subsequent  to  act,  etc.,  within  four  months,  to  defraud,  etc.„ 

void ,  .    ,    .  g67 

Attachment— 

Against  insolvent  within  four  months,  etc.,  void §67 

Title  of  bona  fide  purchaser  jirotected ^67 

Attendance- 
Bankrupt  exempt  from  arrest,  attending  court  of  bankruptcy  ....    g9 
Compulsorv,of  bankrupt  and  witnesses  before  referee  or  court  •   •   •  §21 
Jury,  of     .'....    ; §19 

Attorney— 

"  Creditor  "  to  include,  under  Act §1 

Fees  of,  included  in  costs  of  administration,  have  priority §64 

allowance  of,  on  dismissing  petition  when  property  seized    ....    §3 
Payment  or  transfer  to,  by  insolvent  for  services,  etc.,  re-ex- 

amined §60 

Penalty  for  using  false  claim  in  composition,  as  or  by  .    .    .    .    •  .   .    .  §29 
Referee  can  not  practice  as,  in  baiikruptcy  proceedings §39 

Attorney  General— 

Dtity  to  lay  statistical  tables  before  Congress,  etc., §63 

Officers  to  furnish  statistical  information  to §54 

Bail— 
Of  bankrupt  about  to  depart §9 

Banking  institutions— 

As  depositories  lor  moneys,  courts  to  designate    .    . §61 

Bonds  subject  to  courts'  approval §61 

Bankrupt- 
Act  of  bankruptcy,  by,  consists  of  what §3 

admitting  inability  to  pay  debts §3 

general  assignment,  making §3 

permitting  preferences .    .    §3 

transferring,  etc.,  property  to  defraud,  etc §3 

while  insolvent,  to  prefer  creditors •       •    §3 

Answer  to  be  made  when §18 

Bail,  to  secure  release  from  custody,  etc §9 

Bond  to  secure  release  of  property  seized §67 

Claims  against,  allowance  of §57 

disclose  false  to  trustee §7 

false,  penalty  for  i)resenting §29 

one  bankrupt  against  another §57 

proof,  etc.,  of §57 


1278  INDEX   TO    ACT    OF    1898. 

References  to  Sectious. 

Bankrupt  —  Continued. 

Compositions §12 

application  for  confirming gl2 

accepted  nuust  be  in  writing  by  majority,  etc.     gl2 

consideration  to  be  paid  and  costs  deposited,  etc gl2 

date  and  place  of  hearing ^12 

confirmation  of,  discliarges  from  debts |l4 

conditions  of  confirmation      gl2 

distribution  of  consideration     gl2 

set  aside  for  fraud,  may  be §13 

when  may  be  offered  by §12 

must  he  examined  and  file  schedule §12 

Co-debtors' liability  not  affected  by  discharge §16 

Compulsory  attendance  before  court,  referee,  etc §21 

Concealing  property,  penalty  for ^    .  §29 

Corporations  can  not  be  adjudged  voluntary §4 

can  be  adjudged  involuntary  when §4 

Creditors,  number,  etc.,  to  file  petition  against §59 

meetings  of §55 

to  attend  first  §7 

when  not  required  to  attend §7 

expenses  of  attending  paid  when »    .    •    §7 

Death  of,  does  not  abate  proceedings §8 

Debts  which  may  be  proved ?63 

which  have  priority      §64 

not  affected  by  discharge •.    .  §17 

Definition  of §1 

Detention  for  examination §8 

may  be  kept  in  custody  ten  days §10 

released  on  giving  bail §10 

Discharge,  application  for §14 

releases  from  what  debts §17 

when  not  granted §14 

when  revoked        §15 

Domicile  of,  claiming  exemptions §6 

Duties  of , §7 

claims,  to  examine  §7 

disclose  false §7 

examination,  to  submit  to §7 

inform  trustee  of  attempt  to  evade  act §7 

papers,  to  execute      §7 

schedules,  to  prepare    •    .  §7 

Embezzlement  of  property  of,  penalty  for ?29 

Estates ...    etseq.  §61 

Exemption  from  arrest,  etc.  §9 

Exemptions  of,  under  State  laws §6 

Expenses  paid  of  attending  meetings  when §7 

Extradition  of     ...    .  §10 

False  claim  against  estate,  penalty  for  presenting §29 

False  oath  against  estate,  penalty  for  making §29 

Farmers  can  not  be  adjudged  involuntary §4 

Fees,  to  pay 

clerk's §52 

referee's §40 

trustee's j    .  §48 

voluntary,  not  required  to  pay,  when §51 

Insanity  does  not  abate  proceedings       §8 

Involuntary,  who  may  be  adjudged §4 

who  can  not  be  adjudged §4 

Lists  of  creditors,  to  make §7 

Meetings  of  creditors,  to  attend  first §7 

Misappropriating  property  of,  penalty §29 


INDEX   TO    ACT    OF    1 898.  1279 

References  to  Sections. 

Ba,iik.xuT^t— Continued. 

Tartnership  may  be  adjudged |^ 

administration  of  estate      y^ 

where  all  not  bankrupts     •    •    ;  ; p 

jurisdiction  over  one  partner  sufficient •    •    •    ^'? 

payment  of  debts |i? 

Petition  to  be  tiled  in  four  months '<-^ 

bond,  to  be  accompanied  by,  to  take  property |;5 

liability  for  costs '    '    '    t^ 

counsel  fees,  etc.,  fixing  of '    '    '    n 

defense  of  solvency |.^ 

burden  of  proof ^;;'^ 

involuntary,  who  may  file  .    •    -        ^'^^ 

service  of,  manner  of        •  <i^ 

voluntary,  who  may  file ^'j^j:^ 

Preferred  creditors    {^ 

Property  may  be  seized,  when «oJ 

bond  of  indemnity f^^ 

bond  to  release "^g" 

Protection  of ?_ 

Schedule  of  property,  to  prepare y 

make  oath  to,  and  file      ^' 

voluntary,  to  file  with  petition ''■' 

what  to  contain  ....  •    •    |^ 

Secured  creditors •  •  •  ^^'^*^'^, ' 

Service  of  petition |  .q 

Seizure  of  property ^l". 

Suits  by  and  against ||| 

appearance  of  trustee  ^'| 

stay  until  adjudication,  etc '    *    '  311 

further  stay  .  ||r 

time  for  bringing,  by  or  against  trustee     •    •    ■   , j\\ 

trustee  permitted  to  prosecute  suits  commenced |ii 

Time  when  act  takes  effect    •    •  '       '    \  '    '   '   '-^ 5-n 

Title  of  property  revested  in,  on  confirmation  of  composition  .  .    .   .  g^u 

Voluntary,  who  may  be  adjudged |^ 

Widow  and  children,  rights  of 2» 

Bankruptcy—  2q 

Acts  of,  of  what  to  consist |^ 

"Bankruptcy" |^ 

Bankrupts j^ 

"Courts  of  Bankruptcy"  include  what  courts fl 

Creditors .J. 

"  Date  of  bankruptcy,"  etc || 

Definitions J61 

Estates  ^^2 

Jurisdiction  of  courts  of „^„ 

Officers,  their  duties  and  compensation |^^ 

Procedure  in  courts  ....       ^  ® 

Banks—  2p, 

Bond,  to  give  ....  f 

filed  in  clerk's  office f^ 

sued  on,  how L^ 

Depositories  for  money,  court  to  designate 20i 

Board  of  directors—                                   .  2„ 

Courts  of  bankruptcy  have  power  to  punish |^ 

"Persons"  include  members  of ^t 

Bona  fide  purchaser—                       „        ,  pa? 

Titleof,obtainedby  lien,  etc.,  not  affected i^' 


1280 


INDEX  TO   ACT   OF    1 898. 

References  to  Sections. 


Bond- 
Appeal,  trustee  not  required  to  give §25 

Banks  of,  as  depositories  for  money .      gyi 

filed  in  clerk's  office ^50 

sued  on,  how   ...       g50 

Bankrupt,  of,  to  recover  possession  of  property ^69 

condition  of ggg 

Error,  on,  trustee  not  required  to  give §25 

Filt-d,  to  be  in  clerk's  office  g50 

Indemnify  bankrupt,  to,  on  seizing  his  property g69 

condition  of gyg 

Joint  trustees,  of g50 

Petitioner  to  give,  to  hold  property,  etc §3 

condition  of         ^3 

sureties  of ^3 

Referees'       §50 

amount  and  condition  of §.50 

failure  to  give,  creates  vacancy §50 

Release  of  property,  b.y  bankrupt  to  secure §tj9 

Suits  on,  how  brought §50 

referees'  and  trustees',  time  of  bringing '.  §50 

Sureties,  corporations  may  be §50 

two  necessary  .  §50 

value  of  property §50 

Trustees' §50 

amount  and  condition §50 

failure  to  give,  creates  vacancy §,50 

joint  or  several -. §50 

liability §50 

not  required  to  give,  on  appeal  or  for  error §25 

title,  certified  copy  of  order  approving,  evidence  of §21 

Books- 
Account,  of,  destruction  of,  etc.,  prevents  discharge     §14 

Insolvent's  duty  to  appear  in  court  with §3 

Referees  to  keep  separate,  for  each  case §42 

to  certify  and  file,  with  papers  in  court §42 

Burden  of  proof— 
Of  solvency  in  bankruptcy  proceedings §3 

Certification — 

Contempt,  of  facts  constituting,  by  referee §41 

Judge's  absence,  etc.,  by  clerk  authorizing  referee  to  act §38 

Referees'  record,  of §42 

U.  S.  Circuit  Court,  to,  of  case  in  district  court,  when ^19 

U.  S.  Supreme  Court,  to,  from  U.  S.  Circuit  Court  of  Appeals  .  .    .   .  §25 

Certified  copies- 
Composition,  of  order  confirming,  evidence  of  revesting  title   ....  §21 

Referee,  of  proceedings  before,  as  evidence ...  §21 

papers  when  issued  by  clerk  or  referee §21 

to  transmit  to  clerk,  by  mail  when §39 

Trustees'  bond,  of  order  approving,  evidence  of  title §21 

Children— 
Of  deceased  bankrupt,  rights  of §8 

Circuit  Courts  of  Appeals- 
Appellate  jurisdiction  over  courts  of  bankruptcy §24 

Appeals  to,  from  judgments       §25 

adjudging  or  refusing  to  adjudge  bankrupt §25 

allowing,  etc.,  debts  of  $500  or  over §25 

discharge  granting  or  denying §25 

when  appeal  to  be  taken §25 


INDEX   TO    ACT    OF    1 898.  1281 

References  to  Sections. 

Circuit  Courts  of  Appeals— Continued. 

Appeals  to  United  btates  .Supreme  Court  from  decisions  of §25 

wtiL're  amount  is  over  $2,500 ^5 

where  question  is  certified  by  Supreme  Court  Justice ^25 

Concurrent  jurisdiction  of,  with  court  of  bankruptcy g23 

Trustees  not  required  to  give  bond  on  appeal  or  error ^25 

Claims— 

Allowance  of g57 

Amount  necessary  for  filing  involuntary  petition §59 

Bankrupt,  to  examine J7 

Bankrupts,  of,  against  each  other §57 

Debts  which  may  be  proved ^68 

which  have  priority |64 

Discharge  releases  from  what ...  ^17 

does  not  release  from  what ^17 

Dividends  payable  on,  allowed g65 

False,  penalty  for  presenting,  etc ^29 

or  using  in  composition ^29 

Filed  after  being  proved  in  court  or  before  referee ^57 

Hearing  objections  to ^57 

Infants  and  insane,  rights  of      ^57 

Instrument  of  writing,  founded  upon,  to  be  filed  with  proof  of  ....  ^57 

statement  of  loss  filed  under  oath  with ^57 

Jurisdiction  of  courts  of  bankruptcy  as  to §2 

Payment  of,  after  composition  set  apid?,  etc ?(i4 

Penalty  or  forfeiture,  debt  due  as  how  far  allowed 'f^7 

Preferred  creditors,  of,  not  allowed  unless,  etc §57 

Priority,  debts  which  hav^e    .    .  §(54 

not  counted  in  computing  number  of  creditors,  unless,  etc.  .  .  |.56 

Proof  of     .    .    .       .  ....        §57 

when  founded  upon  writing §57 

time  for  proving §57 

Reconsidered,  may  be  reallowed  or  rejected §57 

Referee,  filed  before  if  case  referred .  §56 

Secured  creditors,  of '•     I  •  §§5(j,  57 

allowed  for  what  sums §57 

individual  undertaking,  secured  by •  §57 

not  counted  unless,  etc §56 

not  entitled  to  vote  at  creditors'  meetings §56 

value  of  securities  held  by,  how  determined §57 

Time  for  proving §57 

Unliquidated  may  be  liquidated,  etc §63 

Unscheduled,  discharge  no  release  from §17 

unless  creditors  had  notice,  etc §17 

Withdrawn  from  files,  may  be  when §57 

Clerk- 
Certificate  by,  as  to  Judge's  absence,  etc.,  authorizing  referee  to 

act  §38 

Compensation  of §52 

Definition  of §1 

Duties  of §§  51  and  67 

Fees §52 

account  for §51 

collect,  of  clerk,  referee,  trustee §51 

except  on  affidavit  of  voluntary  bankrupt  of  inability  to  pay  .    •      §51 

pay  to  referee  and  trustee,  when §51 

'Officer"  includes §1 

Petition,  copy  of,  to  be  filed  for §59 

Referee  to  call  and  receive  papers  from  when §39 

transmit  papers  to §39 

certified  copies  of,  by  mail §39 

Schedule,  copy  of,  to  be  furnished  by  bankrupt §7 


1282  INDEX    TO    ACT    OF    1 898. 

References  to  Sections. 

Clerks — 
Wages,  debts  having  priority ^64 

Co-debtor- 

Liabihty  of,  not  aflected  by  bankrupt's  discharge §16 

Commencement  of  proceedings  — 

Detinition §1 

;  Commissioner  of  deeds — 

'     Eeferee,  may  be §35 

Commissions- 
Referees'  §40 

apportionment §40 

Trustees' g48 

apportionment §48 

Commitment- 
Contempt,  for,  before  referee ?41 

Referee  can  not  exercise  power  of .   .  §38 

Compensation- 
Clerics'  §52 

.     Marshals' ^52 

Referees' ,  §40 

when  reference  revoked      §40 

when  case  transferred •      §40 

Stenographers' - §38 

Trustees' '   ' §48 

apportionment  of ► §48 

withholding  of • §48 

Compositions- 
Application  for  confirmation  t^  he  filed  when §12 

accepted  in  writing  by  majority  of  creditors,  etc §12 

consideration  to  be  paid  and  costs  deposited §12 

date  and  place  of  hearing §12 

Certified  copy  of  order  confirming  evidence  of  title §21 

Confirmation  of,  a  discharge  from  debts ^14 

conditions  of §12 

distribution  of  consideration      - §12 

Courts  of  bankruptcy  to  confirm  or  reject §2 

False  claims,  penalty  for  using  in §29 

Notice  to  creditors  of  hearing,  etc §58 

Offer  of,  when  may  be  made .   ^ §12 

Payment  of  claims  accruing  after,  set  aside - §64 

Set  aside,  maybe  when §13 

upon  proof  of  fraud - §13 

Title  revested  in  bankrupt  on  confirmation  of §70 

Compromise- 
Notice  to  creditors  of  proposed ....      §53 

Trustees  may,  with  approval  of  court,  controversies §27 

Computation  of  time — 

In  bankruptcy  proceedings,  or  under  Act §31 

Computing  number  of  creditors— 
To  join  in  involuntary  petition §59 

Concealing— 

Books  of  account,  records  of  bankrupt,  prevents  discharge §14 

Definition  of  "  Conceal  " §1 

Property  of  bankrupt  with  intent  to  defraud,  etc.,  efiect §3 

Punishment  for,  property  by  bankrupt -    .§29 

document  by  trustee J29 


INDEX    TO    ACT    OF    1 898.  1283 

Kefereucos  to  Setftious. 

Confirmation  of  composition  (m;  nho  Composition) — 

(JonditioiiH  of iJ]2 

Discharge  from  debts,  a ^14 

Consent- 
Arbitrators  chosen  by      jJ2(J 

Case  certified  for  trial  to  Circuit  Court,  by ijllj 

Petition  not  to  be  dismissed  by,  until  notice ^59 

Consolidation— 

Ot  eases  in  bankruptcy ^32 

Construction — 

Powers  of  court  not  enumerated g2 

AVords  and  i)hrases gl 

Contract- 
Debts  founded  upon  may  be  proved  and  allowed ^(33 

Trustee  vested  with  title  to  rights  arising  upon ^70 

Contempt- 
Arrest  of  bankrupt  for      ^9 

Court  of  bankruptcy  to  punish  for '^2 

Referee  before,  what  constitutes jJ-11 

certifies  facts  to  judge J41 

judge  hears  evidence,  punishes  or  commits ^41 

Consular  officers — 

Oaths,  etc.,  may  administer g20 

Controversies- 
Arbitration  of ^26 

Certified  to  Circuit  Court .    .   .  ^20 

to  Supreme  Court      ^25 

Compromise  by  trustees  of ^27 

Jurisdiction  of  appellate  courts  of,  in  bankruptcy  proceedings  ....  ?24 

Conveyances- 
Bankrupt  to  execute  to  trustee  of  foreign  property §7 

Subsequent  to  act  within  four  months  to  defraud,  etc.,  void     .    .    .    .  i^(j7 

Trustee  to  execute,  to  purchaser ^70 

Within  four  months  while  insolvent,  void  by  State  laws,  void 

under  Act ?07 

Copy— 


2 


yj 


Bankrupt  to  prepare,  make  oath  to  and  file  in  triplicate     .... 

claim  for  exemptions,  of ^7 

lists  of  creditors,  etc.,  of ^7 

schedule  of  property,  of (/7 

Claims  allowed,  withdrawn  may  be,  on  leaving      ?57 

Order  approving  trustee's  bond,  of,  certified,  evidence  of  title  .      .   .  ^21 

confirming  or  setting  aside  composition,  of  jurisdiction,  etc ^21 

Papers  of,  certified  to  be  transmitted  to  clerk  by  referee  when    •       .  §39 

Petitions  in  duplicate  for  clerk  and  bankrupt  .    .       . §59 

Referee,  certified,  of  proceedings  before,  evidence §21 

Schedule,  of,  bankrupt  to  furnish  clerk,  referee  and  trustee §7 

Corporation- 
Bankrupt,  when  to  be  judged  involuntary §4 

can  not  be  adjudged  voluntary §4 

Debts  owing  by,  to  be  adjudged  involuntary §4 

Definition  of §1 

"Persons"  include §1 

Punishment  of  agents,  etc.,  of,  by  court  of  bankruptcy §2 

Sureties  on  bonds  ot  trustees  and  referees,  may  be 'ir>Q 

Trustees,  may  act  as •  §45 


1284  INDEX    TO    ACT    OF    1 898. 

References  to  Sections. 

Costs— 

Administration,  of,  prior  debts §64 

Allowed  against  involuntary  bankrupt,  plaintiff §63 

incurred  before  filing  petition §63 

on  dismissing  petition  when      ....       §3 

Include  witnesses'  fees,  mileage  and  attorney's  fees, §64 

Judgments  for,  courts  of  bankruptcy  to  render §2 

Penalty  on  recovery  of  .    .    .       §57 

Preserving  estate,  of,  prior  debts .  §64 

Taxation  of,  by  courts  of  bankruptcy §2 

Counselor  at  law  {see  also  Attorney) — 

Fees  of,  included  in  cost  of  administration §64 

allowance  on  dismissing  petition  when     §3 

payable  by  obligors  of  bond §3 

Payments,  transfers  to,  by  insolvent,  when  re-examined       .    ;  .    .    .  §60 

Counter  claims- 
Allowance  of,  between  bankrupt  and  creditor §68 

not  between  bankrupt  and  debtor  when §68 

"  Court  "- 

Definition  of §1 

Referee,  may  include §1 

Courts- 
Appeals  and  writs  of  error §25 

to  U.  S.  Circuit  Court  of  Appeals §25 

to  U.  S.  Supreme  Court      §25 

Arbitration  of  controversies §26 

Creation  of,  of  bankruptcy §2 

Depositions,  laws  governipg §21 

•    Evidence §21 

Jurisdiction  of §23 

of  appellate     §24 

Jury  trials §19 

Newspapers,  designation  of,  for  notices §28 

Oaths  and  affirmations,  administration  of §20 

Process,  jileadings     .    .  §18 

Rules,  forms,  etc.,  U.  S.  Supreme  Court  to  prescribe §30 

Suits  by  trustees ^ §23 

Courts  of  bankruptcy- 
Adjudge  person,  etc.,  bankrupt §2 

Appeal  to  U.  S.  Circuit  Court  of  Appeals §25 

to  U.  S.  Supreme  Court       §25 

Arbitrator,  appoint,  when §26 

Assets,  collect  and  distri-bute §2 

Banking  institutions,  designate  as  depositories §61 

Business  of  bankrupt,  permit  temporary  transaction  of §2 

Claims,  allow  and  reject §2 

Confirm  or  reject  compositions ■ §2 

Contempt,  punish  for §2 

Creation  of         §2 

Costs,  tax §2 

Definition  of §1 

Discharge  bankrupts §2 

District,  of  bankruptcy §2 

District  of  Columbia,  Supreme  Court  of §2 

Exemptions,  determine       §2 

Extradite  bankrupts §2 

Jurisdiction  of §§2,  23 

appellate ...  §24 

Supreme  Court  of  United  States §25 

U.  S.  Circuit  Court  of  Appeals .24,  25 

U.  S.  Circuit  Courts §>:'3 

concurrent  with  courts  of  bankruptcy §23 


INDEX    TO    ACT    OF    1898.  1285 

References  to  Sections 

Courts  of  bankruptcy— Co?ih?n<«7. 

3Iarshiils,  aiii)oint  wlieii      • f^ 

MeetiiiKS  of  creditors  when  to  call  §-'>5 

Newspapers  to  publish  notices,  designate     g28 

Orders,  make  and  enforce f^ 

Powers  unspecified f- 

Punish  bankrupts- ^- 

Receivers  appoint      f.'^ 

Referees,  appoint  and  remove 234 

confirm,  etc.,  records  and  findings '& 

Reference  after  adjudication .......  ^22 

Substitute  additional  persons  or  parties §2 

Transfer  cases,  etc f2 

Trv  bankrupts        J2 

Trustees  when  to  appoint H^ 

United  States,  of i~ 

Credit—  _^ 

Set-ofl"of  new,  by  preferred  creditor ?dU 

Creditors- 
Answer  to  petition  to  make  when i^o 

Appearance  of ?18 

Claims,  allowance  of «57 

filing  after  proof i^ 

bearing  objections |57 

lost  or  destroyed,  how  proved §o7 

of  one  bankrupt  against  another §57 

penaltv,  due  as  how  far  allowed f57 

preferred,  not  allowed  unless,  etc ?57 

proof  of  .    .    • '^^1 

when  founded  on  instrument  of  writing §57 

reconsideration  of •  p7 

rejected,  dividend  may  be  recovered io7 

secured,  of,  allowed  for  what .^57 

claims  not  counted  unless,  etc.      'io6 

not  entitled  to  vote  at  meetings §56 

value  of  securities,  bow  determined §57 

secured  by  individual  undertaking,  bow  proved §57 

subrogation  to  extent  of  creditors'  rights §57 

time  for  proving §57 

of  infants,  etc §57 

w'ithdrawn,  on  leaving  copy      §56 

writing  when  founded  upon,  bow  proved §57 

Computing  number  of,  to  file  petition §59 

employees  not  counted §59 

relatives  not  counted §59 

Debts  due  as  penalty,  how^  far  allowed •  §57 

Definition  of  §|^ 

Dividends  paid  first  to  certain  resident §<j5 

limit  to  right  to  collect §^5 

payment  on  allowed  claims • §65 

recovery  of,  when  claim  rejected §57 

Include  agents,  attorneys,  proxies       |1 

Involuntary  petition,  number,  etc.,  necessary  to  file §59 

amount  of  claims      §59 

notice   to  those  not  joined,  etc §59 

Lists  of,  bankrupt  to  make §' 

referee  to    examine §^''^ 

to  prepare  and  file  when §39 


1286  INDEX   TO    ACT    OF    1 898. 

References  to  Sections. 
Creditors — Continued. 

Meetings,  first  hold  when  and  where g55 

bankrupt  to  attend  first =    .........        §7 

call  of,  by  court,  when ^55 

final ^'55 

notice  of ^58 

place  of ^55 

presiding  officer,  duties  of ^55 

subsequent ^55 

voters  at ^5q 

Notice  to,  of  compromise  of  controversy g58 

dismissal  of  proceedings ••.....  §58 

of  petition §59 

dividends,  of  declaration  and  time  of  payment g58 

examinations  of  bankrupt ^58 

final  account,  of  filing     ^53 

hearing,  on  application  for  confirmation,  etc §58 

meetings,  of  ...    .  I58 

referee  to  give ^58 

sales  of  property g58 

time  of ...  §58 

waiver  of g58 

Number  necessary  to  join  in  petition ^59 

employees  and  relatives  not  counted ^59 

necessary  for  court  to  call  meeting ^'5,5 

at  designated  place ^55 

Penalty,  debts  due  as  how  far  allowed  .....' §57 

Petition,  filed  in    duplicate §59 

number  necessary  to  join  in ^59 

Preferred,   who  are g60 

clainas  not  allowed  unless,  etc ^.57 

Priority,  entitled  to  can  not  vote,  etc §56 

Proof  of  claims  of §57 

Proxy,  included  under §1 

Referee  to  give  notices  to §,58 

Relatives  not  counted  in  petition  when §,59 

Secured,  defined ^1 

claims  allowed  for  what  sums .  ^57 

value  of  securities  held  by,  how  determined §57 

Set-off's  between  bankrupt  and g68 

Time  for  proving  claims , .    r §57 

Criminal  proceeding- 
Testimony  of  bankrupt  can  not  be  ofi'ered  against  him  in §7 

Crimes  and  offenses- 
Concealing   property  while  bankrupt , §29 

Contempt  before  referee §41 

Courts  of  bankruptcy  to  punish  for §2 

Embezzlement  by  trustee §29 

Extorting  money,  etc §29 

False  claims,  presenting  under  oath §29 

using  in  composition §29 

False  oath  or  account,  making §29 

Indictment  or  information,  limitation  of §29 

Misappropriation  of  property  ....  §29 

Receiving  property  from  bankrupt  with  intent  to  defraud,  etc.  .    .    .  §29 

Referee  acting  when  interested §29 

purchasing   property  of  bankrupt .  §29 

refusing  to  permit  inspection  of  accounts,  etc .  §29 

Trustee  refusing  to  permit  inspection  of  accounts §29 

misappropriating,  etc.,  property  ....  ...  §29 

secreting  or  destroying  document §29 


INDEX    TO    ACT    OF    1 898.  1287 

Refereuces.to  Sections. 
Damages- 
Allowance  of,  on  dismissinf^  petition,  for  seizure  of  property     ....    g;i 

"  Date  of  bankruptcy  "— 

Delinition  of gl 

Days- 
Computation  of  time  by      ^Ijl 

Death- 
Bankrupt's,  does  not  abate  proceedings §8 

Trustee's,  does  not  abate  suits §46 

Widow's  and  children's  rights .    .    .    gg 

Debts- 
Allowable  against  estate ^63 

account  or  contract,  founded  on  |(53 

costs  taxable  against  involuntary  bankrupt,  plaintiff jiGS 

costs  of  suits  incurred  before  filing  petition ^03 

fixed  liability,  as  shown  by  judgment,  etc ^G3 

provable,  founded  on,  reduced  to  judgment  after  filing  peti- 
tion      >^63 

unliquidated  claims  .    .        ^G3 

Any  person  owing  may  become  voluntary  bankrupt §4 

Claims,  proof  and  allowance  of  {see  Claims) §57 

Contract,  founded  on,  allowed §G3 

Coporation  owing  SilOOO  or  over  may  be  adjudged  bankrupt   .  .    .    .    g4 

Definition  of , gl 

Discharge  does  not  release  from  what §17 

Fixed  liability,  having,  may  be  allowed §63 

Judgments  may  be  allowed §(j3 

Payment   of,  having  priority §64 

accruing  after  composition  set  aside,  etc §64 

Penalty  or  forfeiture,  owing  as  how  far  allowed §.37 

Priority,  having ■ §64 

costs  of  administration,  etc §64 

fees,  attorneys' • §64 

filing,  by  creditor  .    .    •   .    .    .    .    • §64 

witnesses',  including  mileage §64 

order  of  payment .      §64 

owing  to  person  entitled  to  priority §64 

taxes §64 

wages  of  workmen,  etc.,  when §64 

Proved,  what  may  be §63 

Provable,  discharge  releases  from §17 

reduced  to  judgment  have  priority §63 

Released  from,  by  discharge,  except §17 

claims  not  scheduled      §17 

defalcation  as  officer  created  by §17 

embezzlement,  for §17 

false  pretenses,  etc.,  judgment  in  action  for ^17 

fiduciary  capacity,  created  while  acting  in, §17 

fraud,  created  by  §17 

jradgments  in  actions  for  fraud §17 

false  pretenses,  etc  ,  obtaining  property  by §17 

willful  injury  to  person  or  property ■  §17 

misappropriation,  etc §17 

taxes  .    .  §17 

Set-offs  allowed  between  bankrupt  and  creditor §67 

Taxes  payable  in  advance  of  dividends .  :J64 

trustee  credited  with,  on  filing  receipt,  etc «      •   •  ?64 


•* 


Decision — 

When  pleadings  not  filed J18 


1288  INDEX   TO    ACT    OF    1 898. 

References  to  Sections. 
Defense- 
Solvency  a  complete §3 

Trustee  may  be  ordered  to  make §11 

Definitions — 

"A  person  against  whom  a  petition  has  been  filed" § 

*' Adjudication" } 

"Appellate  courts" | 

"Bankrupt" | 

"Bankruptcy" ,    .  I 

"Clerk" § 

"Commmencement  of  proceedings"     i 

"Conceal" g 

"Corporations"  .       § 

"Court" ,....§ 

"Courts  of  bankruptcy"     \ 

'Creditor" g 

'Date  of  bankruptcy" § 

Debt § 

"Discharge" g 

"Document" § 

"Holiday" g 

Insolvent,  when  person  deemed g 

"Judge"    g 

"Oath" § 

"Officer" § 

"Persons" § 

"Petition" g 

"Referee" § 

"Secured  creditor" g 

"States" § 

"Time  of  bankruptcy" I 

"Transfer" g 

Trustee     § 

"Wage  earner" • g 

Words  importing  masculine  gender - § 

plural  number § 

singular  number               -.  I 

Departure— 

Of  bankrupt  as  cause  for  detention §9 

Deposition — 

Notice  of  taking,  to  be  filed  with  referee §21 

when  to  be  served  on  claimant §21 

when  to  be  served  on  bankrupt g21 

United  States  laws  to  govern  right  to  take §21 

Depositories- 
Bond  to  give •    • , §61 

filed  in  clerk's  office §50 

Designation  by  courts  of  banks  as,  for  bankrupt's  money §61 

Detention- 
Bankrupt,  of,  for  examination §9 

length  of §9 

Property  of,  on  petitioner  giving  bond §3 

Disability- 
Infant's,  etc.,  rights g57 

Referee's,  effect  of §43 

Discharge- 
Application  for  ...  §14 

hearing  of §14 

time  of  filing §14 

Books  of  account,  concealing,  etc.,  prevents §14 


INDEX   TO    ACT    OF    1 898.  1289 

References  to  Sections. 

Discharge — Continued. 

Co-debtor's  liability  not  affected  by gl6 

Composition,  condrmation  of  operates  as Jlti 

Debts  not  affected  by      ^17 

claims  not  scheduled gl7 

fraud,  embezzlement,  etc.,  created  by ^17 

judgments  in  actions  for  fraud,  etc ^17 

Definition  of §1 

Fraud,  may  be  revoked  for glo 

Granted  wlieu ^14 

when  not  granted ^14 

Guarantor's  liability  not  affected  by |l6 

Offen.se  punisliabln  by  imprisonment  prevents ^14 

Paym-^nt  of  claims  accruing  after  revocation  of ^64 

Records,  destroying,  etc.,  by  fraud,  prevents §14 

Releases  from  what  debts  |l7 

Revoke  I  when  obtained  by  fraud ^15 

application,  when  to  be  filed |l5 

payment   of  claims  ?fter §64 

title  vented  in  trustee      |70 

Surety's  liability  not  affected  by §16 

Dismissal- 
Cost,  fees,  etc.,  allowed  respondent  on,  of  petition  when ?3 

Notice  to  creditors  of,  of  proceedings §58 

of  petition §59 

Petition  of,  by  referee, §38 

by  petitioners     . • §59 

Diplomatic  officers  of  United  States- 
Oaths,  etc.,  may  administer ?20 

Disobedience— 
Of  referee's  orders,  punishment  for §41 

Distribution- 
Consideration,  of,  on  confirmation  of  composition ?12 

Court  of  bankruptcy  to  make §2 

Dividends,  of  unclaimed §66 

Districts- 
Referee's,  designation  of  limits  of,  by  court §34 

District  Courts  of  United  States — 

Courts  ot  bankruptcy §2 

Jurisdiction  of §2 

District  of  Columbia— 

"States"  to  include §1 

Supreme  court  of,  a  court  of  bankruptcy §2 

Dividends- 
Commissions  of  referees  on  sums  to  be  paid  as  .  §40 

Creditors  receiving  not  affected  by  proof  of  subsequent  claims    .    •    •  §65 

residing  within  United  States  entitled  to  preference §65 

Declaration  and  payment  on  allowed  claims §65 

first,  declaration  of §65 

subsequent §65 

Limit  to  right  to  collect §65 

Notice  to  creditors  of  declaration  and  time  of  payment §58 

Payment  of  when i;47 

Recovery  of,  when  claims  rejected §57 

Referees  to  declare ?;W 

commissions  on  sums  to  be  paid  as         HO 

deliver  to  trustees,  sheets 'i'^9 

Trustee  to  pay  when §47 

Unclaimed  after  six  months,  disposition  of ?()6 

after  one  year     §66 

of  minors §66 


1290  INDEX  TO  ACT  OF  1898. 

References  to  Sections. 

Document— 

Definition  of ?1 

Destroying  or  secreting,  penalty  for §29 

Referee  may  require  production  of §38 

Trustee  vested  with  title  to §70 

Domicile- 
Bankrupt,  of,  claiming  exemptions §6 

I  Dower— 

I     Widow  entitled  to,  as  fixed  by  state  laws §8 

Duplicate — 
Petitions  to  be  filed  in §59 

Duties- 
Attorney  General's §53 

Bankrupt's   . §7 

Clerk's §51 

Creditors',  at  meetings §55 

Referee's ^^39 

Trustee's H7 

Embezzlement- 
Debts  created  by,  not  released  by  discharge    §17 

Penalty  for §29 

Employees- 
Creditors,  as,  not  counted  in  petition     §59 

Equity- 
Appeals  taken  as  in  cases  in      .    .  §25 

Process  served  as  suit  in §18 

Records  of  referees  kept  as  in  cases  in §42 

Estates- 
Claims,  allowance  and  proof  of §57 

Debts  which  may  be  proved §63 

which  have  priority «    .  §64 

which  can  not  be  released §17 

Depositories  for  money §61 

Dividends,  declaration  and  payment,  etc §65 

unclaimed  after  six  months,  paid  into  court •    .        •  §66 

after  one  year  distributed • §66 

rights  of  minors §66 

Liens §67 

created  within  four  months,  dissolved  when §67 

subsequent  to  Act,  within  four  months,  to  defraud,  etc.,  void    .    .    .  §67 

within  four  months,  void  by  state  law,  void §67 

Property  of  bankrupt,  when  may  be  seized •  §69 

when  released •       §69 

Set-offs  and  counter  claims  allowed §68 

Title  vested  in  trustee • §70 

revested  in  bankrupt  on  confirming  composition §70 

Trustee  to  convey  title §70 

Evidence— 

.    Certified  copies  of  proceedings  before  referee  as §21 

order  approving  trustee's  bond,  of  title ?21 

confirming  or  setting  aside  composition,  of  jurisdiction,  etc.  .    .    .  §21 

confirming  composition,  of  revesting  title §21 

papers  issued  by  clerk  or  referee,  as §21 

Claims,  proof  of  .    .    .       §57 

instrument  of  writing  to  be  filed  with §57 

when  lost  or  destroyed §57 

Compulsory  attendance  of  witnesses §21 

Criminal  proceedings,  testimony  of  bankrupt  can  not  be  oflfered 

in,  against  him §7 


INDEX   TO    ACT    OF    1898.  1291 

References  to  Sections. 
Evidence — Continued. 

Depositions,  laws  governing ?21 

notice  of  taking ^21 

Referee  to  preserve  when (Jo9 

Surety's  property,  of  value  of j/oO 

Title  of  bankrupt      ^21 

of  trustee ^21 

Examination—  , 

Bankrupt  to  submit  to ^7 

compulsory  attendance  for iJ2l\ 

creditors  to  have  notice  • jjoS 

proofs  of  claims,  of,  make ^7 

Detention  of  bankrupt  about  to  depart,  for ^9 

Expenses  of,  of  administering  estates ?62 

of  bankrupt  attending,  when §7 

Notice  to  creditors  of,  of  bankrupt ?58 

Referee  may  make,  of  witnesses iJ38 

Schedule,  of,  by  referee i;39 

Stenographers  employed  for,  of  bankrupt,  etc ir39 

Witnesses  in  contempt  for  refusing,  etc ii40 

Exemptions- 
Claim  for,  bankrupt  to  prepare  copies  of,  make  oath  to,  and  file 

in  triplicate,  etc.     .    . §7 

Court  of  bankruptcy  to  determine  claims  for ^2 

State  laws  to  prescribe ^6 

Trustees  to  set  apart,  etc ?47 

Expenses- 
Administering  bankrupt's  estate,  of       ^G2 

Bankrupt,  of,  paid  attending  examination,  when g7 

Dismissal  of  petition,  on §3 

Partnership  bankrupt,  of,  how  paid §5 

Extortion — 

Punishment  for g29 

Extradition- 
Jurisdiction  of  courts  of  bankruptcy  in §2 

Manner  of glO 

False  account- 
Penalty  for  making §29 

False  claims- 
Bankrupt  to  disclose  proof  of,  to  trustee §7 

Penalty  for  presenting  under  oath 09 

using  in  composition ?29 

False  pretenses- 
Judgments  in  actions  for  obtaining  property  by,  not  affected 

by  discharge ,  ?17 

False  representations- 
Judgment  in  actions  for  obtaining  property  by,  not  affected  by 

discharge      ' §17 

Farmers- 
Involuntary  bankrupts,  can  not  be  adjudged  .    .  §4 

Fees- 
Attorney's,  included  in  costs  of  administration ?64 

one  paid  irres|)ective  of  number  §64 

on  dismissal  of  petition  when  property  seized §3 

Clerk's  ....  §52 

Filing  fees  by  creditors  in  involuntary  cases §64 

Marshal's      g52 

Priority  in  payment  of  certain §64 


• 


1292  INDEX   TO    ACT    OF    1898. 

References  to  Sections. 

Fees — Continued. 
Referee's ?40 

when  reference  revoked HO 

when  case  transferred Hu 

Stenographer's ?38 

Trustee's x    .  ?48 

apportionment  of ?48 

Voluntary  bankrupt  not  required  to  pay,  when ^51 

,     AVitnesses  included  in  costs  of  administration §64 

first  paid  or  tendered  when §41 

Fiduciary  capacity- 
Debt  created  while  acting  in,  not  affected  by  discharge ?17 

Filing- 
Arbitrators'  findings §26 

Bonds,  referees',  trustees'  and  designated  depositories §50 

Claims  for  exemptions  by  bankrupt ?39 

Claims  before  referee  or  in  court     §o7 

Disctiarge,  application  for ^14 

application  to  revoke  . §15 

Information,  time  of §-9 

Jury,  of  application  for §19 

List  of  creditors  by  bankrupt §7 

by  referee  when §39 

Notice  to  take  depositions  with  referee §21 

Schedule  of  property,  of,  by  bankrupt §7 

by  referee  when §39 

Finding- 
Arbitrators',  eflfect,  etc.,  of §26 

Referees',  transmitted  with  records  to  judges  when §39 

Fines— (st'^  also  Crimes  and  Offenses) — 

Orders  of  court  enforced  by  ....,;    §2 

Referee,  of,  acting  when  interested §29 

purchasing  property  of  estate §29 

refusing  inspection  of  accounts §29 

Trustee  refusing  inspection  of  accounts,  etc §29 

Foreign  country— 

Bankru^jt  to  transfer  property  in,  to  trustee §7 

Forfeiture- 
Debts  due  as,  how  far  allowed §59 

Referee,  by,  of  office,  acting  in  case  when  interestea i'29 

purchasing  property  while,  etc §29 

refusing  inspection  of  accounts §29 

Trustee,  by,  of  office,  refusing  inspection  of  accounts §29 

Forms  of  procedure- 
United  States  Supreme  Court  to  prescribe,  for  courts  of  bank 

ruptcy §30 

Fraud- 
Books  of  account  concealed,  etc.,  by,  prevents  discharge §14 

Composition  after  confirmation  set  aside  for §13 

Concealing  of  property  by,  punishment §29 

Debts  created  by,  not  affected  by  discharge §17 

Discharge  revoked  when  obtained  by §15 

Judgment  inactions  for,  not  affected  by  discharge -§17 

Lien  sought  and  permitted,  in,  of  bankrupt  Act,  dissi^^ved.  etc.  •    •    -  §67 
Trustee  vested  with  title  to  property  transferred  in  .    .       §67 

General  assignment— 

Effect  of,  an  act  of  bankruptcy §3 

Gender- 
Words  importing  masculine,  etc.,  include,  etc -    §1 


INDEX   TO    ACT    OF    1898.  1293 

References  to  Sections. 

Good  faith- 
Liens  given  in,  etc.,  not  affected  by  Act,  etc., lG7 

Guarantor — 

Liability  of,  not  affected  l)y  bankrupt's  discharge ?16 

Hearings 

Appeal  to  Circuit  Court,  of        ^25 

Bankrupt  to  attend,  on  application  for  discharge U 

Claims,  of  objections  to  allowance  of ?57 

Confirmation  of  composition,  application  for ?12 

notice  to  creditors ^58 

Contempts,  for,  summary g4l 

Discharge,  of  application  for      ?L4 

notice  to  creditors ?58 

Insolvency,  on  question  of 'i'6 

Petition,  voluntary,  of     .    , §18 

Holiday- 
Definition  of §1 

Time,  in  computing j  .  ?31 

Imprisonment- 
Bankrupt  subject  to,  for  what  offenses  ?29 

Bankrupt  in  custody  of  marshal  for  examination  not  to  be  sub- 
jected to 'i^ 

Courts  of  bankruptcy  to  enforce  orders  by  'i2 

Discharge  prevented  by  offense  punishable  by H-4 

Offenses  punishable  by    ...    .        *   .  r29 

Referee  can  not  exercise  power  of <'^S 

Trustee  subject  to,  for  what  offenses ^29 

Incumbrances — {see  aho  Liens)— 
Subsequent  to  act,  etc.,  within  four  months,  to  defraud,  etc., 

void §67 

Within  four  months,  void  under  State  laws,  void  under  Act     .  •    .    •  §67 

Indemnity- 
Bond  of,  by  petitioner,  on  seizure  of  bankrupt's  property    .....  §69 

Indian  Territory— 

'•States"  include §1 

United  States  Courts  in,  made  courts  of  bankruptcy §2 

Indictments- 
Limitation  of  time  as  to  finding §29 

Infants— 

Claims  against  bankrupts,  time  for  proving §57 

Unclaimed  dividends,  time  for  claiming §66 

Information- 
Limitation  of  time  as  to  filing ' §29 

Injuries- 
Discharge  does  not  release  judgments  in  actions  for  willful,  to 

person  or  property §17 

Insane  person- 
Claims  against  bankrupts,  time    for  ])roving §57 

Insolvency — 

Admission  of,  in  writing,  an  act  of  bankruptcy §3 

Person  denying  to  testify,  etc §3 

Question  of,  triable  by  jury §19 

State  laws,  proceedings  under,  not  affected  by  Act,  etc §70 


1294  INDEX   TO    ACT   OF    1 898. 

References  to  Sections. 

Insolvent- 
Definition  of ?1 

Filing  of  petition  against,  when ,     ^3 

Jury  trial,  entitled  to ^19 

Liens  created  while,  to  be  dissolved,  etc ,  |67 

State  laws  relating  to,  not  afiected  by  bankrupt  Act ilO 

When  person  deemed H 

Inspection — 

Penalty  against  referee  and  trustee  refusing,  of  accounts ?29 

Trustee's  accounts  and  papers  open  to |49 

Instrument  of  writing  — 

Debts  evidenced  by,  allowed,  etc ?63 

Filed  with  proof  of  claim ?57 

Lost  or  destroyed,  statements,  etc.,  to  be  filed  with  claim  under 

oath ib7 

Insurance  policy- 
Bankrupt  may  pay  cash  surrender  value  to  trustee  and  retain     .    ,    .  ?70 
otherwise  policy  to  pass  to  trustee .  i?70 

Interest- 
Judgments  as  debts  proved  and  allowed,  include ?63 

Penalty,  on  recovery  of ,    •  §57 

Keferees,  of,  in  case  disqualifies ■    •  ^39 

Trustees  to  account  for  and  pay |47 

Intent- 
Conveying  laroperty,  etc.,  with  fraudulent,  etc.,  effect ?3 

Destroying  books  of  account  with  fraudulent  effect •  H-i 

Receiving  property  from  bankrupt  with,  to  defeat  Act,  effect   ....  |29 

Involuntary  bankrupt— 

Who  may  be  adjudged H 

Who  may  not  be  adjudged ,    •    .    ?4 

Involuntary  petition- 
Bankrupt  entitled  to  jury  trial,  on  hearing  of §19 

Issues- 
Court  to  determine,  when  facts  controverted §18 

Joint  trustees  — 

Bonds  of ?50 

Suits,  may  prosecute  or  defend,  in  case  of  death §46 

Judge- 
Absence  of,  in,  clerk  to  send  case  to  referee •  -  §18 

Definition  of ^  .   .    .    §1 

Referee  may  exercise  certain  powers  of  or,  i^feuaflCe  of  certJl- 

cate  by  clerk,  etc ,    •    .  §38 

powers  subject  to  review  by §38 

transfer  of  cases  by,  from  one  reteiec  to  anolher §22 

Judgments- 
Debts  reduced  to,  allowed  .    .   , §63 

Discharge  does  not  release  from  what §17 

Fraud,  in  actions  for.  not  affected  by  discharge §17 

Lien,  created  by,  within  four  monchs,  etc.,  when  dissolved, §67 

Preference,  when  deemed  to  cretite §60 

Jurisdiction- 
Appellate  courts,  of §24 

Certified  copy  of  order  confirming  composition,  etc.,  evidence  of  .   ,    .  §12 
Circuit  Courts  of  U.  S.  of,  of  suits  between  trustees  and  adverse 

claimants      §23 

of  Appeal  of  U.  S.  to  superintend  and  revise  proceedings  of 
courts  of  bankruptcy §24 


INDEX    TO    ACT    OF    1 898.  1295 

References  to  Sections. 

Jurisdiction — Continued. 
Cuiicurrent,  between  circuit  courts  and  courts  of  bankruptcy  of 

offenses J23 

Courts  of  bankruptcy,  of '§2 

Partnershii),of  courts  of  bankruptcy,  over  one  member  sufficient .    .   .    §4 

Referee's ^^^^22, ...    38 

State  courts,  of,  of  suits  by  trustees ^23 

Jury— 

Application  for,  when  to  be  filed ?19 

Circuit  court,  case  certified  for  trial  by,  to 'il9 

Insolvent  entitled  to  trial  by     .    .    .    ."       ijl9 

Issues,  court  to  determine  without,  when {jl8 

Offenses,  for,  right  to  trial  by       J 19 

'Special,  summoned  if  one  not  in  attendance ^19 

United  States  laws  as  to  trials,  applicable ^19 

Waiver  of  right      J19 

Justice  of  the  peace— 
Keferee,  may  be g.3.5 

Laches- 
Discharge,  in  filing  application  to  revoke gl5 

Levies  — 

Obtained  against  insolvent  within  four  months,  etc.,  void §67 

Liability- 
Debts  which  are  a  fixed,  allowed,  etc §63 

Discharge  does  not  affect  co-debtors',  guarantors',  or  surety's  ....  §16 

Petitioner's  bond,  on,  to  hold  property §3 

Trustees,  of     §50 

Lien- 
Created  by  suit  within  four  months  of  filing  petition,  to  be  dis- 
solved by  adjudication  in  bankruptcy §67 

if  defendant  was  insolvent §67 

believed  to  be  insolvent §67 

permitted  in  fraud  of  Bankrupt  Act §67 

trustee  subrogated  to  rights  of  holder •  .    .    .  §67 

Conveyance,  incumbrance,  etc.,  by  bankrupt  after  Act  and  with- 
in four  months,  etc.,  to  defraud,  etc.,  void §67 

except  as  to  purchasers  in  good  faith  for  consideration §67 

property  assets,  and  passes  to  trustee §67 

void  under  State  law,  void  under  Bankrupt  Act §67 

property  passes  to  trustee  to  be  recovered  for  creditors §67 

Given  or  accepted  in  good  faith  for  consideration  not  affected, 

etc §67 

Obtained  through  legal  proceedings  against  insolvent  within 

four  months,  etc.,  void §67 

property  passes  to  trustee  as  part  of  estate §67 

unless  court  otherwise  orders §67 

court  may  order  conveyance §67 

bona  fide  purchaser  for  value  protected §67 

Trustee  suVjrogated  to  rights  of  creditor §67 

Unrecorded  claims  not §67 

Limitation- 
Actions,  of,  on  bonds  of  referees  and  trustees ?oO 

by  or  against  trustees  . §11 

Claims,  time  for  proving §57 

rights  of  infants,  etc §57 

Indictment,  of  finding,  for  offenses -•    •    -§29 

Information,  of  filing,  etc §29 

Prosecution,  of,  for  offenses §29 


1296  INDEX   TO    ACT    OF    1 898. 

References  to  Sections. 

Lists  of  creditors- 
Bankrupt  to  prepare  and  file,  in  triplicate §7 

Keferee  to  examine  . l\i\} 

to  prepare  and  file,  when I'S^ 

"When  tiled  with  answer g59 

Mail  - 

Notice  of  creditors'  meetings  by J58 

Referee  to  transmit  certified  copies  of  papers  by,  to  cleric  when   .    .    .  'i?>9 

Marshaling  assets- 
Insolvent  partnership,  of §5 

Marshals- 
Courts  of  bankruptcy  to  appoint §2 

Custody  of  bankrupt  in,  for  examination     ^9 

Fees  of g52 

"Officer"  to  include gl 

Warrant  issued  to,  to  seize  property  when g69 

Masculine  gender- 
Words  importing,  how  construed §1 

Master  in  chancery — 

Referee,  may  be §35 

Meaning — {See  Definition) — 

Words  and  phrases,  of §1 

Meetings  of  creditors- 
Bankrupt  to  attend  first §7 

when  not  compelled  to  attend g7 

expenses  of  attending,  paid  when ^7 

Court  to  call,  when §55 

Final,  when  ordered         .  §55 

First,  time  and  place  of §55 

Notice  of,  ten  days  by  mail §58 

Presiding  othcer  of  first  §55 

Secured  claims,  holders  of,  not  entitled  to  vote §5(j 

Subsequent,  time  and  place §55 

Trustees  to  lay  detailed  statements  before  final §47 

Voters  at §55 

Mileage- 
Witnesses  before  referees,  of,  when  to  be  first  paid  or  tendered   .    .    .  §41 

Minors — (See  also  Infants) — 

Unclaimed  dividends,  time  for  claiming §66 

Misappropriation — 

Debts  created  by,  not  affected  l)y  discharge §17 

Moneys- 
Depositories  designated  for    . , .  §61 

Trustee  to  collect,  deposit,  etc <■    •  H7 

to  disburse  how §47 

National  bank— 

Involuntary  bankrupt,  can  not  be  adjudged §4 

Newspapers- 
Designation  of,  by  court  for  publication  of  notices,  etc §28 

when  additional  paper  may  be  designated §28 


INDEX    TO    ACT    OF    1898.  129/ 

Refereuces  to  Sectious. 

Notice — 

Composition,  certified  copy  of  order  confirming,  imparts,  when    .    .    .  ?21 

Creditors,  to ^08 

compromise,  proposed     .    .     •  .        goS 

declaration  and  time  of  payment  of  dividends g58 

dismissals,  proposed  .    . g58 

examinations  of  bankrupt g58 

filing  final  accounts  of  trustee §58 

heanngs  on  application  to  confirm,  etc.,  or  discharge g58 

meetings g58 

publication  of  first  meeting ^5S 

sales,  proposed ^58 

ten  days  by  mail §58 

waiver  of  notice §58 

Depositions,  of  taking  to  be  filed  with  referee §21 

Discharge   does  not  release  from  unscheduled  claims  unless 

creditor  had ]17 

Newspapers  to  publish,  court  to  designate §28 

Petition  not  be  dismissed  without  §59 

Publication,  by,  when  personal  service  can  not  be  made §18 

of  first  meeting  of  creditors §58 

Referee  to  give,  to  creditors §39 

Trustee's  bond,  certified  copy  of  order  approving,  recorded  im- 
parts   §21 

Number- 
Arbitrators,  of §26 

Creditors,  of,  who  may  file  involuntary  petition 34,  §59 

employees  can  not  be  counted §59 

nor  relatives  within  third  degree §59 

Referees,  of,  to  be  appointed ^37 

Trustees,  of §44 

Words  importing  singular  and  plural §2 

Oath- 
Administered  by  whom §20 

Bankrupt  to  make  to  schedule  of  property,  list  of  creditors,  and 

claims  for  exemptions,  filed,  etc §7 

Claim  founded  on  lost  writing,  proof  of  under -    .    .    .  ?57 

presenting  false,  under,  penalty ^29 

Definition  of        .  ....". §1 

Pleadings  verified  under §18 

Referee,  of §36 

Witness  in  contempt  for  refusal  to  take ^41 

Offenses  (see  also  Crimes  and  Offenses) — 

Concealing  property §29 

Contempt  before  referee HI 

Embezzlement §29 

Extorting  money §29 

False  oath  or  account,  making §29 

False  claim,  presenting  under §29 

using  in  composition §29 

Indictment  or  information,  time  of  finding,  etc §29 

Jury  trial,  accused  entitled  to §19 

Jurisdiction  of  U.  S.  Circuit  Courts §23 

Receiving  property  from  bankrupt  to  defeat  Act §29 

Referee,  acting  when  interested .  §29 

purchasing  property  of  bankrupt     .    .       ....  §29 

refusing  to  permit  inspection  of  accounts     §29 

Trustee  refusing,  etc.,  inspection  of  accounts §29 

United  States  laws  applicable  as  to  jury  trials  for §19 

Offer- 
Composition,  of,  when  made §12 


1298  INDEX    TO    ACT    OF    1 898. 

Rcl'erences  to  Sections. 
Office- 
Referee  can  not  hold  any  other,  except,  etc §35 

must  have,  in,  or  be  resident  of  district §35 

term  of §34 

Trustee  must  have,  iu,  or  be  resident  of  district §45 

Officers- 
Attorney  General §53 

■     Clerk      §51 

Definition  of    .       §1 

Marshal §2 

Oaths,  authorized  to  administer ,    .   .  .   .      §20 

"  Persons  "  include §1 

Receiver §2 

Referee     §34 

Trustee §44 

Orders- 
Bankrupt  to  comply  with  lawful §7 

Certified  copies  of,  as  evidence §21 

approving  trustee's  bond §21 

confirming,  etc.,  composition §21 

Court  of  bankruptcy,  to  enforce §2 

Precedure,  as  to,  U.  S.  Supreme  Court  to  prescribe §30 

Transferring  cases  in  bankruptcy §32 

Papers- 
Bankrupt  to  execute  and  deliver §7 

Certified  copies  of,  before  referee  as  evidence     §21 

Penalty  for  refusing  inspection  of,  by  referee  and  trustee §29 

Referees  to  receive  from  clerks §39 

secure  return  of     §39 

transmit  to  clerks §39 

Trustees,  of,  open  to  inspection ....  §49 

Parties- 
Additional,  courts  may  substitute  in  bankruptcy  proceedings  .  ...    §2 

Evidence  to  be  preserved  by  referee  on  application  of §39 

Referee  to  furnish  information  to §39 

Partnership— 

Adminstration  of  estate  of     §5 

when  all  are  not  bankrupt §5 

Bankrupt,  may  be  adjudged  when §5 

Claims  of,  against  individual  estates,  etc §5 

"  Corporations"  include  what §1 

Creditors  of,  appoint  trustee  .    .    .  ' §5 

Expenses,  payment  of §5 

Jurisdiction  over  one  partner  sufficient .    .  ,    .    .  §5 

Payment  of  debts  of §5 

Surplus  of,  property §5 

Transfer  of  cases  against  diflferent  members  of §32 

Trustee's  duty §5 

Words  importing  masculine  gender  include §1 

Payment- 
Attorneys,  to,  in  contemplation  of  insolvency,  re-examination  of,  .   .    . §60 

Delits,  of,  which  have  priority c   .  §64 

order  of «.   ,  §64 

Dividends,  of,  on  allowed  claims ,    .    .§65 

notice  to  creditors  of §58 

unclaimed  dividends §66 

Patents- 
Trustee  invested  with  title  to §70 


INDEX   TO    ACT    OF    1 898.  1299 

References  to  Sectious. 

Penalties — (see  also  Offenses) — 

Concealing  property ^29 

Debts  due  as,  how  far  allowed !    .    .  357 

Document,  for  secreting  or  destroying mq 

Embezzlement g29 

Extorting  money,  etc mq 

False  oath,  making X29 

False  claims,  presenting *   '  ^29 

Receiving  property  from  bankrupt,  to  defeat  Act §29 

Trustees  not  liable  for,  etc '.   '.    .  i50 

Personal  Property 

Not  to  be  sold  for  less  than  75%  of  appraised  value -.  .  ?70 

Persons— 

"A  person  against  whom  a  petition  has  been  filed  " gl 

Definition  of *.    .    .  jjl 

Involuntary  bankrupts,  who  may  be  adjudged '.   .   .  U 

Voluntary  bankrupts,  who  may  be  adjudged §4 

Petition- 
Answer  to,  when «jg 

Definition  of '.    '.    H 

Duplicate,  to  be  filed  in '  359 

Filed  within  four  months  after  act  of  bankruptcy     •    •    §3 

when  time  expires «3 

Hearing  of ..'.'.  §18 

Involuntary  bankrupt,  against,  who  may  file 359 

Notice  to  creditors  not  joined  in .   .  259 

Referee  to  consider,  etc ••.....!.!  §38 

Service  of      .'   .    !  3 18 

Voluntary  bankrupt,  who  may  file,  as !    !    !  359 

Petitioner- 
Bond,  by,  on  taking  property 23 

Place- 
Creditors'  meetings,  of 355 

when  bankrupt  required  to  attend ]    g7 

Pleadings  and  practice- 
Appeals     ^25 

Appellate  courts'  jurisdiction g24 

Arbitration  of  controversies [    .226 

Compromises 227 

Decision  where  pleadings  not  filed gig 

Evidence  ^21 

certified  copies  of  proceedings,  etc 221 

compulsory  attendance  of  witnesses '•   •  §21 

depositions,  laws  governing ^21 

Forms  to  be  prescribed  by  Supreme  Court §30 

Involuntary  bankruptcy,  petition  for ,  gjg 

adjudication  when  to  be  made 218 

appearance  and  pleading,  time  of gig 

determination  of  issues 218 

jury  trial,  application  for gl9 

when  to  be  filed     219 

waiver  of  right '219 

petition  for,  number  of  creditors  to  file g59 

service  of  petition '    *  gig 

subpcjena,  service gig 

return  of       .'   !    ^  §18 

verification '.   .    .  §18 

Issues,  court  to  determine  when  facts  controverted !    .    .  §18 

Jurisdiction  of  United  States  Courts ....    §2 

Jury  trial,  application  for §19 


1300  INDEX    TO    ACT    OF    1 898. 

References  to  Sections. 

Pleadings  and  practice— Conimwed. 

United  States  laws  api)licable  to J] 9 

Notices,  how  published    • |l8 

Oaths  and  affirmations ^20 

Reference  of  cases  after  adjudication ^22 

Rules  and  orders,  etc.,  to  be  prescribed  by  Supreme  Court g30 

Service  of  petition  with  subpoena  as  process,  etc |l8 

Suits  by  trustees  where  brought , §23 

Time,  computation  of §31 

pleading  to  petition §18 

Transfer  of  cases §32 

Verification  of  pleadings §18 

Voluntary  petition,  hearing  on  filing     .    .    ,    , §18 

Plural  number- 
Construction  of  words  in §1 

Policy  of  insurance- 
Bankrupt's,  how  retained §70 

Possession- 
Bankrupt's  property,  of,  pending  hearing,  etc §3 

petitioner  to  give  bond  §3 

when  bankrupt  is  neglecting  property,  etc §69 

petitioner  to  give  bond  of  indemnity §69 

bankrupt  to  give  bond  to  release §(19 

Preference- 
Creditors,  of,  residing  within  United  States §65 

Insolvent  permitting,  effect §3 

transferring  property  while  insolvent  to  give ^3 

What  deemed  a « §60 

Preferred  creditors- 
Claims  of,  not  allowed  unless,  etc §57 

Set  off  of  further  credit  by §60 

When  preference  voidable §60 

Who  are §60 

Procedure- 
United  States  Supreme  Court  to  prescribe  rules,  etc §30 

Process- 
Bankrupt  exempt  from  arrest  upon  civil ■ .    .    .    §8 

Service  of,  as  in  equity  cases,  etc §18 

Proof- 
Burden  of,  of  solvency  §3 

Claims,  of,  of  what  to  consist §57 

founded  upon  instrument  of  writing §57 

when  instrument  lost ^57 

time  of §57 

rights  of  infants,  insane  persons,  etc §57 

Partnership  of,  against  individual  estates §5 

Property— ((See  also  Estates)— 

Concealing,  embezzling,  etc.,  penalty  for §29 

Conveying  with  intent  to  defraud,  etc.,  effect §3 

Judgments  in  actions  for  willful  injuries  to,  not  released,  etc §17 

Possession  of,  of  bankrupt,  when  taken ;?§3,  67 

Referee  purchasing  when  interested,  penalty §29 

to  take  possession  and  release  when  §38 

Sold,  can  not  be,  for  less  than  75%  of  appraised  value n  .  §70 

Title  to,  vests  in  trustee  when §70 

revests  in  bankrupt  when §70 

Trustee  to  convey     §70 

Value  of  surety's §50 


INDEX    TO    ACT    OF    1 898.  1301 

References  to  Sections. 

Prosecution- 
Limitation  of  - §29 

Protection— 

Oi'  l>aiikrupt  from  arrest gl) 

Proxy— 

"Creditor"  includes      (Jl 

Penalty  for  using  false  claim  in  composition,  as  or  by     .......  ^2!) 

Publication- 
Newspapers  for,  etc.,  courts  to  designate 228 

Notice  to  defendant  by,  when ^18 

Punishment- 
Bankrupts,  of,  by  courts  of  bankruptcy    ^   .§29 

Concealing,  embezzling  property,  etc.,  by  trustee     g29 

Contempt,  for,  manuer  of J41 

Offenses,  for,  period  and  enumeration .  J29 

Eeferees,  for  acting  while  interested  in  case ^29 

purchasing  property,  etc ^29 

Trustees  and  referees,  for  refusing  inspection  of  accounts ^29 

Purchaser— 

Bona  tide,  for  value,  etc.,  title  by  levy,  lien,  etc.,  not  impaired    .    .    .  §67 
Penalty  against  referee  as §29 

Real  property— 

Not  to  be  sold  for  less  than  75%  of  appraised  value »  .  §70 

Receiver- 
Courts  of  bankruptcv  to  appoint §2 

"Officer"  to  include"' §1 

Re-consideration— 

Of  allowed  claims,  recovery  of  dividends  on «   ....  ^57 

Record- 
Bankrupt's  destruction  of,  prevents  discharge §1-1 

Notice  imparted  by,  of  order  confirming  composition ^21 

approving  trustee's  bond §21 

Referees  to  keep,  how  ...  §42 

to  constitute  records  in  each  case §42 

to  make  up  and  send  to  judge  with  findings,  when §39 

Recovery- 
Dividends,  of,  on  reconsidered  daims §57 

Property,  of,  etc.,  transferred  to  attorney,  when §60 

Re-examination— 

Of  payments,  etc.,  made  to  attorneys,  when §60 

Referee- 
Accounts,  penalty  for  refusing  inspection  of §29 

Absence  or  disability  of §43 

Adjudication,  reference  after §22 

Administration  of  oaths  by r  ■    §§20,  38 

Appointment  of     .    . §34 

Attendance  of  witnesses  before §41 

Attorney  in  bankrupt  cases,  can  not  act  as §39 

Bond  of §50 

amount  of §50 

.ailure  to  give,  creates  a  vacancy     §50 

filed  of  record  in  clerk's  office §50 

sureties  on  §50 

value  of  property §50 

suits  on,  how  and  when  brought §50 

Books  containing  record,  etc.,  to  keep       ....  §42 

certify  and  transmit  to  court §42 

Certified  copies  of  proceedings  before,  evidence §21 


1302  INDEX   TO   ACT    OF    1 898. 

References  to  Sections. 
Referee — Continued. 

Claim  for  exemptions,  bankrupt  to  file  copy  of,  for gg 

Claims  filed  before,  when  case  referred §57 

Clerk  to  collect  fees j(51 

except  when g51 

pay  when j}51 

Commissioner  of  deeds  may  be ^';-;5 

Commissions  on  dividends         ^^S^  40  and  72 

Commitment,  can  not  exercise  power  of {^38 

Compensation  of g40 

when  case  transferred      |40 

when  reference  revoked      jj4() 

Contempt  before g41 

proceedings  to  punish  for  ■  g41 

Counselor  at  law  can  not  act  as,  in  bankruptcy  cases ^39 

"  Court "  may  include ^i 

Creditors'  lists,  to  make  and  file,  when ^39 

Definition  of \ ^\ 

Depositions,  notice  to  take,  filed  with •    •  •    •    •  ?21 

Disability,  effect  of       JJ43 

Districts  of,  court  to  designate      jJ34 

Dividends,  to  declare • I39 

Duties  of g39 

Evidence,  to  preserve,  when ^39 

to  make  up  record  embodying,  etc I39 

Fees  of |40 

apportionment  of g40 

clerk  to  collect §51 

Fined,  for  what  ofiensea     §29 

Findings,  to  transmit,  etc.,  to  judges  when §39 

Forfeit  office,  when §2!) 

Information  to  furnish,  when §39 

Interested,  penalty  for  acting,  when g3) 

"Judge"  does  not  include g| 

Jurisdiction  of g?;^ 

administer  oaths §,"iB 

consider  petitions g3B 

examine  witnesses .   .    .   ,   = §3H 

perform  certain  duties,  etc §38 

stenographers,  employ §38 

take  possession  of  and  release  property §38 

Justice  of  the  peace,  may  be  ....    .' »  .    .    .  §35 

Limitation  of  action  on  bond        §50 

Lists  of  creditors,  bankrupt  to  file  copy,  for §7 

when  to  prepare  and  file §39 

Master  in  chancery,  may  be §39 

Meetings  of  creditors,  presides  at  first §55 

Notices  to  creditors,  given  by §39 

to  take  depositions,  filed  with §jl 

Number  of : §37 

Oath  of  office  by §30 

to  administer §36 

not  in  court ,  .   g20,  38 

OfTen.ses •. §29 

acting  when  interested §29 

purchasing  property  while         §29 

refusing  inspection  of  accounts,  etc §29 

Office,  can  not  hold,  except     •    ■  §35 

must  be  in  district,  unless  resident  of §35 

term  of ■    • §34 

"Officer"  includes §1 

Papers  to  receive  from  clerks  when        ....       §39 

penalty  for  refusing  inspection  of §29 

to  transmit  to  clerk,  when §39 


INDEX    TO    ACT    OF    1 898.  1303 

References  to  Sections. 

iieieree—  Continued. 

Parlies  in  interest,  to  furnish  information  to 239 

Payment  of  tees  to,  by  clerk '.    !  !    "      lol 

Petition,  to  consider,  etc '.    '.    '  '         ms 

dismiss,  etc ^38 

Possession  of  bankrupt's  property,  to  take,  wiien  ......'  fss 

Punisliment  for  contempt  before m 

for  oflfenses  by ~ (J2t» 

Purchaser,  can  not  be,  of  bankrupt's  property,  when   .......    .  m) 

QuaUfications '    '  j-A 

Records,  to  keep  and  transmit  to  clerks ■    !    .    !  ^39 

to  make  up  and  send  to  judges '.'.'.'...■  i30 

penalty  for  refusing  inspection  of .'.".".*..      a-'<) 

Reference  of  cases  after  adjudication !  .    .    .  ?22 

Related  to  judges  of  courts,  etc.,  can  not  be 


>. 


Release  property  of  bankrupt,  when .'.'.'.'....    .tss 

Remove,  court  may 'i'^i 

Resident  of,  must  be,  or  hold  office  in  district    ...........  ?/So 

Review,  powers  subject  to ."...'  238 

.Schedule,  to  examine,  and  amend §39 

copy  of,  to  be  filed  for ...!.!  §7 

to  prepare  and  file,  if  bankrupt  neglects,  etc ?39 

Stenographer,  to  employ *       '  p.og 

Term  of m 

Time  of  bringing  suit  on  bond  25O 

Transfer  of  cases  to '.'.'.'.  UO 

^apportionment  of  fees .'.'.'.'.'.'.  HO 

Vacancy,  filling '.'.'.'.'..  H3 

failure  to  give  bond  creates '.'.'.'.;!  250 

Witnesses  attendance  before     '.'.'.'.'.  HI 

examination  of      '■■'.'.''  Hi 

when  not  required  to  attend ...'.*.*.*..  §41 

Reference — 

Absence  of  judge,  etc.,  in •.  ^g 

After  adjudication ".'.'!,"     222 

Relative — 

Creditor,  of  bankrupt,  can  not  be  counted  in  petition,  etc §59 

Referee,  not  to  be,  of  judges  of  United  States  courts,  etc §35 

Release — 

Bankrupt's  property  of,  on  giving  bond §69 

Referee,  by,  of  property,  when !   !    !  §38 

Removal- 
Property  of  bankrupt  of,  with  intent  to  defraud,  etc.,  effect  ....       §3 
Referee,  of m^ 

Trustee,  of,  effect ••..'.'!.*.'.'  246 

on  healing  and  notice !.*.'!.".  §2 

Report- 
Officers,  by,  of  expenses  of  administering  estates §62 

examined  and  approved,  etc.,  by  court J62 

Trustee,  by,  of  condition  of  estate,  when '.   '.  .U7 

final,  when •   •  ■ 

Representations — 
Judgment  iu  action  for  false,  not  released  by  discliarge ?17 

Residence- 
Banking  institutions,  depositories,  etc.,  convenient  to  trustees   ...  §61 

Departure  of  bankrupt  from,  cause  for  detention §9 

Dower  fixed  by  the  laws  of  bankrupt's '.   *.    ?8 

Expenses  of  bankrupt,  attending  examination  from    .....*.'.'.    §7 

List  of  creditors  filed  by  bankrupt  to  show 27 

Persons  adjudged  bankrupt,  of .  §2 


1304       '  INDEX   TO    ACT    OF    1 898. 

References  to  Sections. 

Residence — Continued. 

Keferee's,  in  district,  etc ^35 

Sureties',  on  bond,  when  property  taken      §3 

Taxes  of,  bankrupt  not  released  by  discharge §17 

Trustee's,  in  district,  etc §45 

Respondent- 
Costs,  counsel  fees,  etc.,  allowed  on  dismissal  of  petition §3 

Return — 

Subpoena,  of  within  fifteen  days §18 

Revesting— 

Of  title  in  bankrupt  when g70 

Revocation — 

Discharge  of  bankrupt,  of  when  may  be  made §15 

Title  vested  in  trustee,  on,  of  discharge §70 

Rules- 
Supreme  Court  of  U.S.  to  prescribe,  in  bankruptcy  proceedings  .    .    .  §30 
may  amend  from  time  to  time " §30 

Sale- 
Appraised  value,  for  not  less  than  75  percent  of ^,  .  §7C^ 

Approval  of  court,  subject  to |70 

Notice  to  creditors,  ten  days  by  mail §58 

Real  and  personal  property,  of ,  .  §70 

Trustee  to  convey  title  on §70 

Schedule — 

Bankrupt  to  make  oath  to  and  file,  when §7 

Composition  can  not  be  offered  before  filing §12 

Copies  in  triplicate  to  be  filed  by  bankrupt §7 

Discharge  does  not  release  from  unscheduled  claims §17 

unless  creditors  had  notice §17 

Referee  to  examine  and  amend    .       §."9 

prepare  and  file  when §39 

Voluntary  bankrupt  to  file,  with  petition §7 

What  to  contain §7 

Secured  creditor- 
Allowance  of  claims,  for  what  sums ^   .  §57 

Claims  secured  by  individual  undertaking §57 

subrogation  of  obligor  discharging §57 

Definition  of  §1 

Meetings  of  creditors,  not  entitled  to  vote  at §56 

claims  not  counted,  etc.,  unless,  etc.  • §56 

Value  of  securities  held  by,  determined  how §57 

amount  of  value  credited  on  claims §57 

Seizure- 
Bankrupt's  property,  of,  to  prevent  deterioration,  etc §69 

bond  to  indemnify  bankrupt §69 

to  secure  rtjlease §69 

Servant — 

Wages  due,  etc.,  have  priority §64 

Service- 
Notice  to  take  depositions,  of «• §21 

upon  bankrupt,  when §21 

upon  claimant,  when §21 

Petition,  of,  with  subpoena  for  involuntary  bankrupt gl8 

manner  of §18 

Subpoena  of,  etc §18 

manner  of    .    .       §21 

return  of §18 


INDEX    TO    ACT    OF    1898.  1305 

Refereuces  to  Sections. 
Set-off— 

AUowR'.'  between  creditor  and  bankrupt,  -when      ?GS 

not  between  debtor  and  bankrupt,  when      2^8 

Preferred  creditor,  bvj  giving  further  credit,  etc ^00 

Sickness  — 
Judge,  of,  referee's  powers  when  exercised ^38 

Singular  number — 

Construction  of  words  importing H 

Solicitor — (See  also  Attorxeys)  — 
Payments,  etc.,  to,  by  insolvent  for  services  to  be  rendered,  re- 
examined, etc.     ...  .  ]60 

Solvency — 

Burden  of  proof  of ?3 

Defense,  a  complete,  etc ?3 

Statements- 
Trustee  to  lay  detailed,  before  final  meeting  of  creditors ?47 

States- 
Arrest  under  process  of  courts  of,  exemption  of  bankrupt  from  ...    §9 

Banks  of,  can  not  be  adjudged  involuntary  l)ankrupts ?3 

Debts  owing  to,  as  penaltit^s,  etc.,  how  far  allowed ?57 

Definition  of §1 

Dower  of  widow,  fixed  by  laws  of ^8 

Exemptions  under  laws  of     .    .  |6 

Include  Territories,  Indian  Territory,  Alaska,  District  of  Co- 
lumbia    ?1 

Jurisdiction  of  courts  of  .    .  .    ., ?23 

Liens,  etc.,  void  under  laws  of,  void  under  bankrupt  Act ?07 

Proceedings  commenced  under  insolvency  laws  of,  not  afi'ected   •    •    •  i*"0 

Taxes  of,  no  discharge  from  .    .  ?17 

Trustees  may  bring  suits  in  what  courts  of ?23 

Statistics — 

Attornej^  General  to  lay  tables  of,  annually  before  Congress     ....  ?53 
Officers  to  furnish,  to  Attorney  General  on  request 253 

Stay— 
Of  action  pending  against  bankrupt  at  time  of  filing  petition  ....  §11 

Stenographer- 
Fees  of  .   .  . §38 

Referee  to  authorize  employment  of §38 

Subpoena- 
Service  of  with  petition §18 

Successor- 
Duties  imposed  upon  officer  include §1 

Title  to  property  vests  in  trustee  and      §70 

Trustee,  of,  may  prosecute  or  defend  suits §46 

Subrogation— 

Chiinis  secured  by  individual  undertaking,  of  person  discharg- 
ing      ■    •    • §-^7 

Trustee,  of,  to  rights  of  creditor  or  holder  of  lien §67 

Suits- 
Bankrupt,  by  and  against  .    .  §11 

appearance  of  trustee §11 

commenced  by,  prior  to  adjudication §11 

stay  of §11 

Bond  on,  to  take  bankrupt's  property,  etc §3 

to  indemnify  bankrupt  on  seizure  of  property §69 

to  release  property §69 


1306  INDEX    TO    ACT    OF    1 898. 

References  to  Sectious. 
Suits —  Continued. 

Bonds  of  referees  and  trustees,  on g50 

in  name  of  United  States,  etc.,     §50 

limitation  of  action  on .  g50 

Lien  created  pursuant  to,  etc.,  when  dissolved g67 

Referee,  on  bond  of g50 

Trustee,  on  bond  of §50 

by,  brought  in  what  courts g23 

death  or  removal  not  to  abate g46 

time  of  bringing,  by  or  against |ll 

on  bond  of §50 

Sunday— 
In  computation  of  time >    .  »  .  §31 

Supreme  Court  of  District  of  Columbia- 
Appeals  from X   .  §24 

A  court  of  bankruptcy §2 

Jurisdiction  of §2 

Supreme  Court  of  United  States- 
Appellate  jurisdiction  of     .   . g24 

Appeals  to,  from  Circuit  Court  of  Appeals §25 

when  amount  exceds  $2,000 §25 

when  question  certified  by  Supreme  Court  Justice >    .    ,  J25 

Rules,  forms  and  orders  for  courts  of  bankruptcy,  etc.,  to  pre- 
scribe      §30 

Sureties — 

Bonds  of  referee  and  trustee,  on §50 

corporations  may  be §50 

two  necessary  on  each §50 

value  of  property §50 

Liability  of,  not  affected  by  bankrupt's  discharge .§16 

Taxation  of  costs— 
By  courts  of  bankruptcy fS 

Taxes- 
Discharge  of  bankrupt  not  to  affect  . §17 

Priority  in  payment  of §(i4 

Term- 
Referee's  office •  §34 

Territories- 
District  Courts  of,  made  courts  of  bankruptcy §2 

Jurisdiction  of §2 

appellate,  of  Supreme  Courts -  §24 

States  include §1 

Testimony- 
Bankrupt  to  give,  as  to  estate      §7 

Criminal  proreeding,  in,  can  not  be  offered  against  bankrupt  .   ...  §7 

Person  denving  insolvency  to  give §3 


to' 


Time- 
Accounts,  by  trustee,  of  filing §47 

Actions,  of  bringing  by  and  against  trustees §11 

on  bonds  of  referees  and  trustees §50 

Appeals,  of  taking  to  Circuit  Court  of  Appeals §25 

Bankrupt  Act,  of  taking  elect §70 

Bonds  of  referees  and  trustees,  of  givuig  §50 

of  bringing  suits  on      §50 

Claims,  of  proving §57 

hearing  objections  to §.57 

Composition,  of  filing  application  to  set  aside §13 

Computation  of,  in  bankruptcy  proceedings,  etc.  §31 

Creditors'  meetings,  of ■  .    .    .  §55 


INDEX    TO    ACT    OF    1898.  1307 

References   to  Sectious. 
Time — Continued. 

i>iscl)arge,  of  filing  application  to  revoke §15 

Dividends,  of  declaring • |65 

of  paying 1-17 

unclaimed  dividends  §(]() 

Involuntary  petition,  to  file  under  Act §70 

Jury  trial,  of  filing  application  for §19 

Notice  to  creditors,  of  giving ■ §58 

Petition  against  insolvent,  of  filing §3 

Pleading  to  petition,  of  §18. 

Publication  of  notices  to  creditors      §50 

when  personal  service  can  not  be  had §18 

Subpoena,  of  return  of §18 

"Time  of  bankruptcy  " §1 

Trustees,  when  to  give  bond §50 

accounts,  to  file  final       §47 

limitation  of  actions  by  and  against  . §11 

on  bond §50 

report,  to  make  final    •    • §47 

Voluntary  petiton,  to  file  under  Act §70 

Title- 
Revests  in  bankrupt  when ^70 

certified  copy  of  order  confirming  composition,  evidence  of  .  .    .    .  §21 
Trustee  to  convey      §70 

certified  copy  of  order  approving  bond,  evidence  of §21 

Tests  in  trustee  and  successor §70 

when  composition  set  aside,  etc §70 

Transfer- 
Act  of  bankruptcy,  when §3 

Attorneys,  to,  re-examination,  etc.,  when     §60 

Bankrupt  to  execute,  to  trustee  of  foreign  property §7 

Cases,  of,  by  court  of  bankruptcy §2 

when  petition  filed  against  member  of  partnership §32 

Definition  of §1 

Preference,  when  given  by §60 

Subsequent  to  Act,  within  four  months,  etc.,  void ?67 

Within  four  manths,  void  under  State  laws,  void  under  Act     .  .   .      §67 

Trial— 

By  courts  of  bankruptcy,  of  bankrupts §2 

By  jury,  in  involuntary  bankruptcy  cases §19 

Trustee 

Accounts,  etc.,  open  to  inspection §49 

to  keep §47 

file  final,  when §47 

Appeal  bond,  not  required  to  give §25 

Appointment §2 

creditors  to  make  when §44 

court  to  make  when §44 

Arbitration,  trustee  to  submit  to,  etc §26 

Bankrupt,  to  inform,  of  attempt  to  evade  Act §7 

Banks  as  depositories,  etc.,  to  deposit  money  in §47 

Bonds  of §50 

amount §50 

creditors  to  fix §50 

court  to  fix,  when §50 

appeal,  not  required  to  give §25 

evidence  of  title,  certified  copy  of  order  approving,  etc §21 

failure  to  give,  effect §50 

filed  where §50 

joint  or  several,  etc §50 

liability  on §50 

suits  on §50 


1308  INDEX   TO   ACT   OF    1 898. 

References  to  Sections. 

Trustee — Continued. 

sureties  approved  by  court    .... g50 

corporations  may  "be ^50 

number  of   .    .' ^50 

A^alue  of  })roperty,  etc ,   .    .    .  g50 

court  to  require  evidence ^50 

time  of  giving ^50 

Commissions  of g48 

Compensation  of g48 

apportionment  of §48 

withholding g48 

Compromise  controversies,  may,  when g27 

Concurrence  of  two  necessary g47 

Condition  of  estate,  to  report  when i!47 

Convey  title |70 

Corporations  authorized  to  act  as ^45 

Created  by  Act g33 

Creditors  to  appoint,  when §44 

Creditors'  meetings,  to  make  detailed  statements,  at  final §47 

Court  to  appoint,  when §44 

Death  or  removal,  effect  . g46 

Depositories,  deposit  money  in §47 

disburse  by  check,  etc.,  on §47 

Dividends  to  pay,  when §47 

Document,  punishment  for  secreting,  destroying,  etc g29 

Duties  of " §47 

Embezzlement  by §29 

Error,  not  required  to  givB  bond  on §25 

Estates  to  close  up,  etc .-.....,,...  §47 

Exemptions  to  set  apart ^47 

File  order  of  adjudication  with  recorder §46 

Final  accounts  to  file,  when §47 

reports  to  make §47 

Forfeitures  incurred  by  bankrupt,  etc.,  not  liable  for §50 

Information  to  furnish    .    .    .  ' §47 

Inspection  of  papers,  etc.,  penalty  for  refusing §29 

Interest  to  pay §47 

Joint,  may  prosecute  or  defend  suits .  §45 

Liability  of  . §50 

Lien,  subrogated  to  rights  of  holder  of §67 

Meetings  of  creditors,  make  statements  before  final §47 

Money,  deposit  in  designated  depository §47 

disburse  by  check,  etc.,  on g47 

Number  of §44 

Offenses  by §29 

Office  of,  where §45 

"Officer"  includes §1 

Partnership  creditors  to  appoint §4 

Payments  to  attorneys,  etc.,  re-examined  by,  when §60 

Penalty  incurred  by  bankrupt,  not  liable  personally  for §50 

Property  of  bankrupt,  to  collect,  etc §47 

Punishment  for  offenses,  etc ,    ,  §29 

Qualifications  of §45 

Recovery  of  property  by §70 

Removal  of,  effect     §46 

on  hearing  and  notice    i  .    .       §2 

Reports,  to  make ^47 

final,  when §47 

Residents  of,  mu.st  be,  or  have  office  in  district ....  §45 

Schedule,  copy  of,  to  be  filed  for ^7 

Subrogation  to  rights  of  lienholder §67 

Successor  may  prosecute  or  defend  suits §46 

Suits  by,  in  what  courts  to  be  brought      §23 

limitation  of,  by  or  against   .    .       §11 

on  bond §50 


INDEX   TO   ACT   OF    1 898.  1309 

References  to  Sections. 
TiVLstee— Continued. 

Taxes,  credited  with,  on  receipt  filed,  for  payment  oi      2G4 

Title  to  property  vested  in ^^q 

on  setting  composition  aside,  etc ,  .   .      -ajq 

to  convey .-q 

Transfer  by,  penalty  for  unlawful jj^g 

Vacancy,  appointment  in  case  of ,  u^ 

by  failure  to  give  bond !    !  ^50 

Validity  of  act  requires  concurrence  of  two .  .   .   !  I47 

Unclaimed  dividends- 
Disposition  of  ^gg 

Unincorporated  company— 
.May  be  adjudged  involuntary  bankrupt g4 

United  States- 
Jury  trials,  laws  of,  applicable  to xjg 

Penalties,  owing,  allowance  of '.   !    !  ^57 

Taxes,  of,  discharge  not  to  afiect '.'.'.'.'.  (n 

United  States  Courts— (&e  also  Courts,  Courts  op  Bankruptcy;)— 

Appeals  and  writs  of  error  when  taken  in ^05 

Courts  of  bankruptcy '.    .   '.    /,-> 

Jurisdiction  of    .    .    ^ ...'.'.'.'.'.'.    -f). 

of  appellate  courts '.*.'!.'.'!!.*  994 

circuit  court  of  appeals .'.'!.".'.'  m 

United  States  Circuit  Court  of  Appeals- 
Appeals  to 29- 

Jurisdiction .*.'!!,."!  >9\ 

appellate  .    .       '.'.'.'.'.'.   '.p>^ 

concurrent,  etc !!.*!.'  y^\^ 

United  States  Supreme  Court- 
Appeals,  etc.,  to 225 

Jurisdiction '.'.'.  ?->4 

appellate '.'..'.'  \   '.   '.P>-^ 

Vacancy- 
Referee's  office,  in ?43 

Trustee's  or  referee's  office,  in,  by  failure  to  give  bond  .'.'.!  '.    .'    '.  ^30 

Value- 
Sale  of  property  for  not  less  than  75  percent  of ^70 

Securities,  of,  held  by  secured  creditor  how  determined ^'57 

Surety's  property,  of,  evidence  required §50 

Venue- 
Transfer  of  cases,  to  other  courts  of  bankruptcy zo 

Trustee's  suits,  of X23 

Verification— 

Of  pleadings,  when  required     gl3 

Voluntary  bankrupt- 
Corporation  can  not  be  adjudged u 

Who  may  be  adjudged *    L 

Who  may  file  petition '.!!!.*!  ?59 

Voluntary  petition— 

Who  may  file a^g 

Voters— 

At  creditors'  meetings ^^q 

holders  of  secured  claims  can  not  be,  etc '.   ,    .    .  §56 

Wage-earner— 

Definition  of ^^ 

Involuntary  bankrupt,  can  not  be  adjudged .*.*,*..'.'   §4 


1310  INDEX   TO    ACT    OF    1898. 

References  to  Sections. 
Wages- 
Priority  in  payment  of §g4 

Waiver — 

Of  right  to  jury  trial gl9 

Warrant- 
Departure  of  bankrupt,  on,  when  to  issue    g9 

Seizure  of  bankrupt  property,  on,  to  prevent  deterioration g69 

Widow- 
Dower  of,  fixed  by  laws  of  State,  etc g8 

Witnesses- 
Attendance  before  referee •    • §41 

Compulsory  attendance  for  examination  , §21 

Contempt  for  refusal  to  appear,  etc.    .       '§41 

Fees  and  mileage  of,  to  be  first  paid  or  tendered,  when §41 

Women— 

"Persons"  to  include §1 

Words — {see  Definition) — 

Meaning  of ^  ^i 

Workmen — 

Wages  of,  priority  in  payment ?64 

Writing- 
Debts  evidenced  by,  allowed  and  proved §67 

Filed  to  be,  with  proof  of  claim §57 

Writ  of  Error- 
Trustees  not  required  to  give  bond  when  suing  out    ........  §25 


THE  ACT  OF   1867. 


1311 


The  Bankruptcy  Law  of  1867/ 


CHAPTER  ONE. 

COURTS   OP   BANKRUPTCY,  THEIR   JURISDICTION,    ORGANIZATION,  ANt 

POWERS. 

Scope  of  the  jurisdiction  of  courts  of  bankruptcy.  Sec.  4972.  The 
jurisdiction  conferred  upon  the  district  courts  as  courts  of  bankruptcy 
shall  extend : 

First.  To  all  cases  and  controversies  arising  between  the  bankrupt 
and  any  creditor  or  creditors  who  shall  claim  any  debt  or  demand 
under  the  bankruptcy. 

Second.  To  the  collection  of  all  the  assets  of  the  bankrupt. 

Third,  To  the  ascertainment  and  liquidation  of  the  liens  and  other 
specific  claims  thereon. 

Fourth.  To  the  adjustment  of  the  various  priorities  and  conflicting 
interests  of  all  parties. 

Fifth.  To  the  marshaling  and  disposition  of  the  ditFerent  funds  and 
assets,  so  as  to  secure  the  rights  of  all  parties  and  due  distribution  of 
the  assets  among  all  the  creditors. 

Sixth.  To  all  acts,  matters,  and  things  to  be  done  under  and  in 
virtue  of  the  bankruptcj',  until  the  final  distribution  and  settlement 

^  The  text  is  taken  from  the  the  statutes  of  1878  and  will 
Revised  Statutes  of  the  United  therefore  be  included  in  the  text. 
States,  edition  of  1878.  Theorig-  (See  preface  to  edition  of  1878). 
inal  act  of  1867  was  passed  INIarch  The  effect  of  passing  the  amend- 
2,  1867  (14  Stat,  at  L.  517)  and  ment  and  the  revised  statutes  on 
the  principal  amendment  to  this  the  same  day  caused  some  con- 
act  was  passed  June  22,  1874  (18  fusion  in  construing  them.  See 
Stat,  at  L.  178).  Contempora-  In  re  Oregon  Bui.  Printing  &  Pub. 
neously  with  the  passage  of  the  Co.  No.  10558  Fed,  Cas.,  S.  C. 
amendatory  act  of  June  22,  1874,  13  N.  B.  R.  199;  In  re  Townsend 
amending  by  specific  reference  2  Fed.  Rep.  559;  Brown  v.  White 
the  bankrupt  act  of  1867,  con-  16  Fed.  Rep.  200.  A  list  of  all 
gress  enacted  a  complete  substi-  the  amendatory  acts  may  be 
tute  for  the  act,  as  Title  sixty-  found  on  Page  12  ante. 
one  of  the  statutes,  and  repealed  This  statute  was  repealed  by 
the  act  in  common  with  other  the  act  of  June  7,  1878,  to  take 
general  and  permanent  acts.  The  effect  Sept.  i,  1878,  20  Stat,  at  L. 
amendatory  act  has  been  incor-  99. 
porated  iu  the  revised  edition  of  1313 


1314  THit   LAW   OI^    1867. 

of  the  estate  of  the  bankrupt,   and  the  close  of  the  proceedings  in 
bankruptc3^ 

Authority  of  district  courts  and  judges.  Sec.  4973.  The  district 
courts  shall  be  always  open  fur  the  transaction  of  business  in  the  ex- 
ercise of  their  jurisdiction  as  courts  of  bankruptcy;  and  their  powers 
and  jurisdiction  as  such  courts  shall  be  exercised  as  well  in  vacation 
as  in  term  time;  and  a  judge  sitting  at  chambers  shall  have  the  same 
powers  and  jurisdiction,  including  the  power  of  keeping  order  and 
of  punishing  any  contempt  of  his  authority,  as  when  sitting  in  court. 

Sessions  of  the  district  courts.  Sec.  4974.  A  district  court  may 
sit  for  the  transaction  of  business  in  bankruptcy,  at  any  place  within 
the  district,  of  which  place  and  of  the  time  of  commencing  session 
the  court  shall  have  given  notice,  as  well  as  at  the  places  designated 
by  law  for  holding  sessions  of  such  court. 

Power  of  district  courts  to  compel  obedience.  Sec.  4975.  The  dis- 
trict courts  as  courts  of  bankruptcy  shall  have  full  authority  to  com- 
pel obedience  to  all  orders  and  decrees  passed  by  them  in  bankruptcy, 
by  process  of  contempt  and  other  remedial  process,  to  the  same  extent 
that  the  circuit  courts  now  have  in  any  suit  pending  therein  in  equitj-. 

Powers  of  circuit  judge  during  absence,  sickness,  or  disability  of  dis- 
trict judge.  Sec.  4976.  In  case  of  a  vacancy  in  the  ofl&ce  of  district 
judge  in  any  district,  or  in  case  any  district  judge  shall,  from  sick- 
ness, absence,  or  other  disability,  be  unable  to  act,  the  circuit  judge 
of  the  circuit  in  which  such  district  is  included  may  make,  during 
such  disability  or  vacancy,  all  necessary  rules  and  orders  preparatory- 
to  the  final  hearing  of  all  causes  in  bankruptcy,  and  cause  the  same 
to  be  entered  or  issued,  as  the  case  may  require,  by  the  clerk  of  the 
district  court. 

Powers  of  the  supreme  court  for  the  District  of  Columbia.  Sec.  4977. 
The  same  jurisdiction,  power,  and  authority  which  are  hereby  con- 
ferred upon  the  district  courts  in  cases  of  bankruptcy  are  also  con- 
ferred upon  the  supreme  court  of  the  District  of  Columbia,  when  the 
bankrupt  resides  in  that  District. 

Powers  of  the  supreme  courts  for  the  Territories.  Sec  4978.  The 
same  jurisdiction,  power,  and  authority  which  are  hereby  conferred 
upon  the  district  courts  in  cases  of  bankruptcy  are  also  conferred  upon 
the  supreme  courts  of  the  several  Territories  when  the  bankrupt  re- 
sides in  either  of  the  Territories.  This  jurisdiction  may  be  exercised, 
upon  petitions  regularly  filed  in  such  courts,  by  either  of  the  justices 
thereof  while  holding  the  district  court  in  the  district  in  which  the 
petitioner  or  the  alleged  bankrupt  resides. 

Jurisdiction  of  actions  between  assignees  and  persons  claiming  ad- 
verse int^ests.  Sec.  4978.  The  several  circuit  courts  shall  have 
within  each  district  concurrent  jurisdiction  with  the  district  court, 
whether  the  powers  and  jurisdiction  of  a  circuit  court  have  been  con- 
ferred on  such  district  court  or  not,  of  all  suits  at  law  or  in  equity 
brought  by  an  assignee  in  bankruptcy  against  any  person  claiming 


THE    LAW   OP    1867.  1315 

an  adverse  interest,  or  by  any  such  person  against  an  assignee^  touch- 
ing any  property'  or  rights  of  the  bankrupt  transferable  to  or  vested 
in  such  assignee. 

Appeals  to  circuit  court.  Sec.  4980.  Appeals  may  be  taken  from 
the  district  to  the  circuit  courts  in  all  cases  in  equity,  and  writs  of 
error  from  the  circuit  courts  to  the  district  coxirts  may  be  allowed  in 
cases  at  law,  arising  under  or  authorized  by  this  Title,  when  tlie  debt 
or  damages  claimed  amount  to  more  than  five  hundred  dollars;  and 
any  supposed  creditor,  whose  claim  is  wholly  or  in  part  rejected,  or 
an  assignee  who  is  dissatisfied  with  the  allowance  of  a  claim,  may 
appeal  from  the  decision  of  the  district  court  to  the  circuit  court  for 
the  same  district. 

How  taken.  Sec.  4981.  No  appeal  shall  be  allowed  in  any  case 
from  the  district  to  the  circuit  court  unless  it  is  claimed,  and  notice 
given  thereof  to  the  clerk  of  the  district  court,  to  be  entered  with  the 
record  of  the  proceedings,  and  also  to  the  assignee  or  creditor,  as  the 
case  may  be,  or  to  the  defeated  party  in  equity,  within  ten  days  after 
the  entry  of  the  decree  or  decision  appealed  from;  nor  unless  the 
appellant  at  the  time  of  claiming  the  same  shall  give  bond  in  the 
manner  required  in  cases  of  appeals  in  suits  inequity;  nor  shall  any 
writ  of  error  be  allowed  unless  the  party  claiming  it  shall  comply 
with  the  provisions  of  law  regulating  the  granting  of  such  writs. 

How  entered.  Sec.  4982.  Such  appeal  shall  be  entered  at  the  term 
of  the  circuit  court  which  shall  be  held  within  the  district  next  after 
the  expiration  of  ten  daj^s  from  the  time  of  claiming  the  same. 

Waiver  of  apseal.  Sec.  4983.  If  the  appellant,  in  writing,  waives 
his  appeal  before  any  decision  thereon,  proceedings  may  be  had  in 
the  district  cou^  as  if  no  appeal  had  been  taken. 

Appeal  from  decision  rejecting  claim.  Sec.  4984.  A  supposed  cred- 
itor who  takes  an  appeal  to  the  circuit  court  from  the  decision  of  the 
district  court,  rejecting  his  claim  in  whole  or  in  part,  shall,  upon  en- 
tering his  appeal  in  the  circuit  court,  file  in  the  clerk's  office  thereof 
a  statement  in  writing  of  his  claim,  setting  forth  the  same,  substan- 
tially, as  m  a  declaration  for  the  same  cause  of  action  at  law,  and  the 
assignee  shall  plead  or  answer  thereto  in  like  manner,  and  like  pro- 
ceeding shall  thereupon  be  had  in  the  pleadings,  trial,  and  determina- 
tion of  the  cause,  as  in  actions  at  law  commenced  and  prosecuted,  in 
the  usual  manner,  in  the  courts  of  the  United  States,  except  that  no 
execution  shall  be  awarded  against  the  assignee  for  the  amount  of  a 
debt  found  due  to  a  creditor. 

Costs.  Sec.  4985.  The  final  judgment  of  the  circuit  court,  ren- 
dered upon  any  appeal  provided  for  in  the  preceding  section,  shall  be 
conclusive,  and  the  list  of  debts  shall,  if  necessary,  be  altered  to  con- 
form thereto.  The  party  prevailing  in  the  suit  shall  be  entitled  to 
costs  against  the  adverse  part}',  to  be  taxed  and  recovered  as  in  suits 
at  law;  if  recovered  against  the  assignee,  they  are  to  be  allowed  out 
of  the  estate. 


1316  THE   LAW   OF    1867. 

Power  of  general  superintendence  conferred  on  circuit  court.  Sec. 
4986.  The  circuit  court  for  each  district  shall  have  a  general  vSuperin- 
tendence  and  jurisdiction  of  all  cases  and  questions  arising  in  the 
district  court  for  such  district  when  sitting  as  a  court  of  bankruptcy, 
whether  the  powers  and  jurisdiction  of  a  circuit  court  have  been  con- 
ferred on  such  district  court  or  not;  and  except  when  special  provision 
is  otherwise  made,  may,  upon  bill,  petition,  or  other  proper  process, 
of  any  party  aggrieved,  hear  and  determine  the  case  as  in  a  court  of 
equity  ;  and  the  powers  and  jurisdiction  hereby  granted  may  be  exer- 
cised either  by  the  court  in  term  time,  or,  in  vacation,  by  the  circuit 
justice  or  by  the  circuit  judge  of  the  circi;it. 

Superintendence  by  supreme  courts  of  Territories.  Sec.  4987.  The 
several  supreme  courts  of  the  Territories  shall  have  the  same  general 
superintendence  and  jurisdiction  over  the  acts  and  decisions  of  the 
justices  thereof  in  cases  of  bankruptcy  as  is  conferred  on  the  circuit 
courts  over  proceedings  in  the  district  courts. 

Power  of  district  judge  in  a  district  not  within  any  organized  circuit. 
Sec.  4988.  In  districts  which  are  not  within  any  organized  circuit  of 
the  United  States,  the  power  and  jurisdiction  of  a  circuit  court  in 
bankruptcy  may  be  exercised  by  the  district  judge. 

Appeal  and  writ  of  error  to  Supreme  Court.  Sec.  4989.  No  appeal 
or  writ  of  error  shall  be  allowed  in  any  case  arising  under  this  Title 
from  the  circuit  court  to  the  Supreme  Court,  unless  the  matter  in 
dispute  iii  such  case  exceeds  two  thousand  dollars. 

Supreme  Court  may  prescribe  rules.  Sec.  4990.  The  general  orders 
in  bankruptcy  heretofore  adopted  by  the  justices  of  the  Supreme 
Court,  as  now  existing,  may  be  followed  in  proceedings  under  this 
Title  ;  and  the  justices  may,  from  time  to  time,  subject  to  the  provis- 
ions of  this  Title,  rescind  or  vary  any  of  those  general  orders,  and 
may  frame,  rescind,  or  vary  other  general  orders,  for  the  following 
purposes: 

First.  For  regulating  the  practice  and  procedure  of  the  district 

courts  in  bankruptcy,  and  the  forms  of  petitions,   orders,  and  other 

proceedings  to  be  used  in  such  courts  in  all  matters  under  this  Title. 

Second.  For  regulating  the  duties  of  the  various  officers  of  such 

courts. 

Third.  For  regulating  the  fees  payable  and  the  charges  and  costs  to 
be  allowed,  except  such  as  are  established  by  this  Title  or  by  law, 
with  respect  to  all  proceedings  in  bankruptcy  before  such  courts,  not 
exceeding  the  rate  of  fees  now  allowed  by  law  for  similar  serv^ices  in 
other  proceedings. 

Fourth.  For  regulating  the  practice  and  procedure  upon  appeals. 
Fifth.  For  regulating  the  filing,  custody,  and  inspection  of  records. 
Sixth.  And  generally  for  carrying  the  provisions  of  this  Title  into 
effect. 

All  such  general  orders  shall  from  time  to  time  be  reported  to  Con- 
gress, with  such  suggestions  as  the  justices  may  think  proper. 


the;  law  of  1867.  1317 

What  constitutes  commencement  of  proceedings.  Sec.  4991.  The 
filing  of  the  petition  for  an  adjudication  in  bankruptcy,  either  by  a 
debtor  in  his  own  behalf,  or  by  any  creditor  against  a  debtor,  shall  be 
deemed  to  be  the  commencement  of  proceedings  in  bankruptcy. 

Records  of  bankruptcy  proceedings.  Sec.  4992.  The  proceedings  in 
all  cases  of  bankruptcy  shall  be  deemed  matters  of  record,  but  the 
same  shall  not  be  required  to  be  recorded  at  large,  but  shall  be  care- 
fully filed,  kept,  and  numbered  in  the  office  of  the  clerk  of  the  court, 
and  a  docket  onh',  or  short  memorandum  thereof,  kept  in  books  to 
be  provided  for  that  purpose,  which  shall  be  open  to  public  inspec- 
tion. Copies  of  such  records,  duly  certified  under  the  seal  of  the 
court,  shall  in  all  cases  be  presumptive  evidence  of  the  facts  therein 
stated. 

Registers  in  bankruptcy.  Sec.  4993.  Each  district  judge  shall  ap- 
point, upon  the  nomination  and  recommendation  of  the  Chief  Justice 
of  the  Supreme  Court,  one  or  more  registers  in  bankruptcy,  when 
any  vacancy  occurs  in  such  office,  to  assist  him  in  the  performance  of 
his  duties,  under  this  Title,  unless  he  shall  deem  the  continuance  of 
the  particular  office  unnecessary. 

Who  are  eligible.  Sec.  4994.  No  person  shall  be  eligible  for  ap- 
pointment as  register  in  bankruptcy,  unless  he  is  a  counselor  of  the 
district  court  for  the  district  in  which  he  is  appointed,  or  of  some  one 
of  the  courts  of  record  of  the  State  in  w  liich  he  resides. 

Qualification.  Sec.  4995.  Before  entering  upon  the  duties  of  his 
office,  every  person  appointed  a  register  in  bankruptcy  shall  give  a 
bond  to  the  United  States,  for  the  faithful  discharge  of  the  duties  of 
his  office,  in  a  sum  not  less  than  one  thousand  dollars,  to  be  fixed  by 
the  district  judge,  with  sureties  satisfactory  to  such  judge;  and  he 
shall,  in  open  court,  take  and  subscribe  the  oath  prescribed  in  section 
seventeen  hundred  and  fiftj^-six.  Title,  "Provisions  applicable  to 
several  CLASSES  OP  officers,  "  and  also  an  oath  that  he  will  not, 
during  his  continuance  in  office,  be,  directly  or  indirecth',  interested 
in  or  benefited  by  the  fees  or  emoluments  arising  from  any  suit  or 
matter  pending  in  bankruptc}',  in  either  the  district  or  circuit  court 
in  his  district. 

Restrictions  upon  registers.  Sec.  4996.  No  register  shall  be  coun- 
sel or  attorne}-,  either  in  or  out  of  court,  in  any  suit  or  matter  pend- 
ing in  bankruptcy  in  either  the  circuit  or  district  court  of  his  district, 
nor  in  an  appeal  therefrom  ;  nor  shall  he  be  executor,  administrator, 
guardian,  commissioner,  appraiser,  divider,  or  assignee  of  or  upon 
any  estate  within  the  jurisdiction  of  either  of  those  courts  as  courts 
of  bankruptcy,  nor  shall  he  be  interested  in  the  fees  or  emoluments 
arising  from  anj'  such  trUvSts. 

Removal  of  registers.  Sec.  4997.  Registers  are  subject  to  removal 
from  office  by  the  judge  of  the  district  court. 

Powers  of  registers.  Sec.  4998.  Every  register  in  bankruptcy  has 
power : 


1318  THE  LAW  OP   1867. 

First.  To  make  adjudication  of  bankruptcy  in  cases  unopposed. 

Second.  To  receive  the  surrender  of  any  bankrupt. 

Third.  To  administer  oaths  in  all  proceedings  before  him. 

Fourth.  To  hold  and  preside  at  meetings  of  creditors. 

Fifth.  To  take  proof  of  debts. 

Sixth.  To  make  all  computations  of  dividends,  and  all  orders  of 
distribtition. 

Seventh.  To  furnish  the  assignee  with  a  certified  copy  of  such 
orders,  and  of  the  schedules  of  creditors  and  assets  filed  in  each  case. 

Eighth.  To  audit  and  pass  accounts  of  assignees. 

Ninth.  To  grant  protection. 

Tenth.  To  pass  the  last  examination  of  any  bankrupt  in  cases 
whenever  the  assignee  or  a  creditor  do  not  oppose. 

Eleventh.  To  sit  in  chambers  and  dispccch  there  such  part  of  the 
administrative  business  of  the  court  and  such  uncontested  matters  as 
shall  be  defined  in  general  rules  and  orders,  or  as  the  district  judge 
shall  in  any  particular  matter  direct. 

Limitations  upon  powers  of  registers.  Sec.  4999.  No  register  shall 
have  power  to  commit  for  contempt,  or  to  make  adjudication  of  bank- 
ruptcy when  opposed  ;  or  to  decide  upon  the  allowance  or  suspension 
of  an  order  of  discharge. 

Registers  to  keep  memoranda  of  proceedings.  Sec.  5000.  Every  regis- 
ter shall  make  short  memoranda  of  his  proceedings  in  each  case  in 
which  he  acts,  in  a  docket  to  be  kept  by  him  for  that  purpose,  and 
shall  forthwith,  as  the  proceedings  are  taken,  forward  to  the  clerk  of 
the  district  court  a  certified  copy  of  these  memoranda,  which  shall  be 
entered  by  the  clerk  in  the  proper  minute-book  to  be  kept  in  his  ofiice. 

Registers  to  attend  at  place  directed  by  judge.  Sec.  5001.  The 
judge  of  the  district  court  may  direct  a  register  to  attend  at  any  place 
within  the  district  for  the  purpose  of  hearing  such  voluntary  appli- 
cations under  this  Title  as  may  not  be  opposed,  of  attending  any  meet- 
ing of  creditors,  or  receiving  any  proofs  of  debts,  and,  generally,  for 
the  prosecution  of  anj'  proceedings  under  this  Title. 

Power  to  summon  witnesses.  Sec.  5002.  Every  register,  so  acting, 
shall  have  and  exercise  all  powers,  except  the  power  of  commitment, 
vested  in  the  district  court  for  the  summoning  and  examination  of 
persons  or  witnesses,  anl  for  requiring  the  production  of  books, 
papers,  and  documents. 

Mode  of  taking  evidence.  Sec.  5003.  Evidence  or  examination  in 
any  of  the  proceedings  under  this  Title  may  be  taken  before  the  court, 
or  a  register  in  bankruptcy,  viva  voce  or  in  writing,  before  a  commis- 
sioner of  the  circuit  court,  or  by  affidavit,  or  on  commission,  and  the 
court  may  direct  a  reference  to  a  register  in  bankrviptcy,  or  other  suit- 
able person,  to  take  and  certify  such  examination,  and  may  compel 
the  attendance  of  witnesses,  the  production  of  books  and  papers,  and 
the  giving  of  testimony  in  the  same  manner  as  in  suits  in  equity  in 
•"he  circuit  court. 


THE    LAW   OP    1867.  1319 

Depositions  and  acts  to  be  reduced  to  writing.  Sec.  5004.  All  depo- 
sitions of  persons  and  witnesses  taken  before  a  register,  and  all  acts 
done  by  him,  shall  be  reduced  to  writing,  and  be  signed  b}^  him,  and 
shall  be  filed  in  the  clerk's  ofiice  as  part  of  the  proceedings.  He  shall 
have  power  to  administer  oaths  in  all  cases  and  in  relation  to  all  mat- 
ters in  which  oaths  may  be  administered  by  commissioners  of  circuit 
courts. 

Witnesses  must  attend.  Sec.  5005.  Parties  and  witnesses  sum- 
moned before  a  register  shall  be  bound  to  attend  in  pursuance  of  such 
summons  at  the  time  and  place  designated  therein,  and  shall  be  en- 
titled to  protection,  and  be  liable  to  process  of  contempt  in  like  man- 
ner as  parties  and  witnesses  are  now  liable  thereto  in  case  of  default 
in  attendance  under  any  writ  of  subpoena. 

Contempt  before  register.  Sec.  5006.  Whenever  any  person  exam- 
ined before  a  register  refuses  or  declines  to  answer,  or  to  swear  to  or 
sign  his  examination  when  taken,  the  register  shall  refer  the  matter 
to  the  judge,  who  shall  have  power  to  order  the  person  so  acting  to 
pay  the  costs  thereby  occasioned,  and  to  punish  him  for  contempt,  if 
such  person  be  compellable  by  law  to  answer  such  question  or  to  sign 
such  examination. 

Registers  may  act  for  each  other.  Sec.  5007.  Any  register  may  act 
in  the  place  of  any  other  register  appointed  by^  and  for  the  same  dis- 
trict court. 

Payment  of  fees  of  registers.  Sec.  5008.  The  fees  of  registers,  as 
established  by  law  or  by  rules  and  orders  framed  pursuant  to  law, 
shall  be  paid  to  them  by  the  parties  for  whom  the  services  may  be 
rendered. 

Contested  issues  to  be  decided  by  judge.  Sec.  5009.  In  all  matters 
where  an  issue  of  fact  or  of  law  is  raised  and  contested  by  any  party 
to  the  proceedings  before  any  register,  he  shall  cause  the  question  or 
issue  to  be  stated  by  the  opposing  parties  in  writing,  and  he  shall 
adjourn  the  same  into  court  for  decision  by  the  judge. 

Certificates  of  matters  to  be  decided  by  judge.  Sec.  5010.  Any  party 
shall,  during  the  proceedings  before  a  register,  be  at  liberty  to  take 
the  opinion  of  the  district  judge  upon  any  point  or  matter  arising  in 
the  course  of  such  proceedings,  or  upon  the  result  of  such  proceedings, 
which  shall  be  stated  by  the  register  in  the  shape  of  a  short  certificate 
to  the  judge,  who  shall  sign  the  same  if  he  approve  thereof ;  and  such 
certificate,  so  signed,  shall  be  binding  on  all  the  parties  to  the  pro- 
ceeding ;  but  every  such  certificate  may  be  discharged  or  varied  by 
the  judge  at  chambers  or  in  open  court. 

Appeal  from  judge's  decision  upon  questions  submitted.  Sec.  501  i. 
In  any  proceedings  within  the  jurisdiction  of  the  court,  under  this 
Title,  the  parties  concerned,  or  submitting  to  such  jurisdiction,  may 
at  any  stage  of  the  proceedings,  by  consent,  state  any  questions  in  a 
special  case  for  the  opinion  of  the  court,  and  the  judgment  of  the 
court  shall  be  final  unless  it  is  agreed  and  stated  in  the  special  case 


1320  THE   LAW  OF   1867. 

that  either  party  may  appeal,  if,  in  such  case,  an  appeal  is  allowed  by 
this  Title.  The  parties  may  also,  if  they  think  fit,  agree,  that  upon 
the  questions  raised  by  such  special  case  being  finally  decided,  a  sum 
of  money,  fixed  by  the  parties,  or  to  be  ascertained  by  the  court,  or 
in  such  manner  as  the  court  may  direct,  or  any  property,  or  the 
amount  of  any  disputed  debt  or  claim,  shall  be  paid,  delivered,  or 
transferred  by  one  of  such  parties  to  the  other  of  them,  either  with  or 
without  costs. 

Penalties  against  officers.  Sec.  5012.  If  any  judge,  register,  clerk, 
marshal,  messenger,  assignee,  or  any  other  ofiicer  of  the  several 
courts  of  bankruptcy  shall,  for  anything  done  or  pretended  to  be 
done  under  this  Title,  or  under  color  of  doing  anything  thereunder, 
wilfully  demand  or  take,  or  appoint  or  allow  any  person  whatever  to 
take  for  him  or  on  his  account,  or  for  or  on  account  of  any  other 
person,  or  in  trust  for  him  or  for  any  other  person,  any  fee,  emolu- 
ment, gratuity,  sum  of  money,  or  anything  of  value  whatever,  other 
than  is  allowed  by  law,  such  person  shall  forfeit  and  pay  a  sum  not 
less  than  three  hundred  dollars  and  not  more  than  five  hundred  dol- 
lars, and  be  imprisoned  not  exceeding  three  years. 

Meaning  of  terms  and  computation  of  time.  Sec.  5013.  In  this 
Title  the  word  "assignee,"  and  the  w^ord  "creditor,"  shall  include 
the  plural  also  ;  and  the  word  "messenger, "  shall  include  his  assist- 
ant or  assii>tants,  except  in  the  provision  for  the  fees  of  that  officer. 
The  word  "marshal, "  shall  include  the  marshal's  deputies  ;  the  word 
"person  '^  rt,"!;^ll  also  include  "corporation;  "  and  the  word  "oath  " 
shall  include  "•  affirmation."  And  in  all  cases  in  which  any  particular 
number  of  days  is  prescribed  by  this  Title,  or  shall  be  mentioned  in 
any  rule  or  order  of  court  or  general  order  which  shall  at  any  time  be 
made  under  this  Title,  for  the  doing  of  any  act,  or  for  any  other  pur- 
pose, the  same  shall  be  reckoned,  in  the  absence  of  any  expression  to 
the  contrary,  exclusive  of  the  first  and  inclusive  of  the  last  day, 
unless  the  last  day  shall  fall  on  Sunday,  Christmas  Day,  or  on  any 
day  appointed  by  the  President  of  the  United  States  as  a  day  of 
public  fast  or  thanksgiving,  or  on  the  Fourth  of  July,  in  which  case 
the  time  shall  be  reckoned  exclusive  of  that  day  also. 

CHAPTER  TWO. 

VOLUNTARY   BANKRUPTCY. 

Petition  and  schedules.  Sec.  5014.  If  any  person  residing  within 
the  jurisdiction  of  the  United  States,  and  owing  debts  provable  in 
bankruptcy  exceeding  the  amount  of  three  hundred  dollars,  shall 
apply  by  petition  addressed  to  the  judge  of  the  judicial  district  in 
which  such  debtor  has  resided  or  carried  on  business  for  the  six 
months  next  preceding  the  time  of  filing  such  petition,  or  for  the 
longest  period  during  such  six  months,  setting  forth  his  place  of  res- 


THE   LAW   OF    1867.  1321 

idence,  his  inability  to  pay  all  his  debts  in  full,  his  willingness  to 
surrender  all  his  estate  and  effects  for  the  benefit  of  his  creditors,  and 
his  desire  to  obtain  a  discharge  from  his  debts,  and  shall  annex  to 
his  petition  a  schedule  and  inventory,  in  compliance  with  the  next 
two  sections,  the  filing  of  such  petition  shall  be  an  act  of  bankruptcy, 
and  such  petitioner  shall  be  adjudged  a  bankrupt. 

Schedule  of  debts.  Sec.  5015.  The  said  schedule  must  contain  a 
full  and  true  statement  of  all  his  debts,  exhibiting,  as  far  as  possible, 
to  whom  each  debt  is  due,  the  place  of  residence  of  each  creditor,  if 
known  to  the  debtor,  and  if  not  known  the  fact  that  it  is  not  known; 
also  the  sum  due  to  each  creditor ;  the  nature  of  each  debt  or  demand, 
whether  founded  on  written  securit}',  obligation,  or  contract,  or 
otherwise ;  the  true  cause  and  consideration  of  the  indebtedness  in 
each  case,  and  the  place  where  such  indebtedness  accrued  ;  and  also  a 
statement  of  any  existing  mortgage,  pledge,  lien,  judgment,  or  collat- 
eral or  other  security  given  for  the  payment  of  the  same. 

Inventory  of  property.  Sec,  5016.  The  said  inventory  must  con- 
tain an  accurate  statement  of  all  the  petitioner's  estate,  both  real  and 
personal,  assignable  under  this  Title,  describing  the  same  and  stating 
«'here  it  is  situated,  and  whether  there  are  any,  and,  if  so,  what  in- 
cumbrances thereon. 

Oath  to  petition  and  schedule.  Sec.  5017.  The  schedule  and  inven- 
tory must  be  verified  by  the  oath  of  the  petitioner,  which  may  be 
taken  either  before  the  district  judge,  or  before  a  register,  or  before  a 
commissioner  of  the  circuit  court. 

Oath  of  allegiance.  Sec.  5018.  Every  citizen  of  the  United  States 
petitioning  to  be  declared  bankrupt  shall,  on  filing  his  petition,  and 
before  any  proceedings  thereon,  take  and  subscribe  an  oath  of  alle- 
giance and  fidelity  to  the  United  States,  which  oath  may  be  taken 
before  either  of  the  officers  mentioned  in  the  preceding  section,  and 
shall  be  filed  and  recorded  with  the  proceedings  in  bankruptcj% 

Warrant  to  marshal.  Seg.  5019.  Upon  the  filing  of  such  petition, 
schedule,  and  inventory,  the  judge  or  register  shall  forthwith,  if  he 
is  satisfied  that  the  debts  due  from  the  petitioner  exceed  three  hun- 
dred dollars,  issue  a  warrant,  to  be  signed  by  such  judge  or  register, 
directed  to  the  marshal  for  the  district,  authorizing  him  forthwith,  as 
messenger,  to  publish  notices  in  such  newspapers  as  the  warrant 
specifies  ;  to  serve  written  or  printed  notice,  by  mail  or  personally,  on 
all  creditors  upon  the  schedule  filed  with  the  debtor's  petition,  or 
whose  names  may  be  given  to  him  in  addition  by  the  debtor ;  and  to 
give  such  personal  or  other  notice  to  any  persons  concerned  as  the 
warrant  specifies. 

Amendment  of  schedule.  Sec.  5020.  Every  bankrupt  shall  be  at 
libert}',  from  [time]  to  time,  upon  oath  to  amend  and  correct  his  sched- 
ule of  creditors  and  property,  so  that  the  same  shall  conform  to  the 
facts. 

Acts  of  bankruptcy.     Sec  5021.    Any  person  residing  within  the 


1322 


THB  i:,AW  oi*  1867. 


jurisdiction  of  the  United  States  and  owing  debts  provable  in  bank, 
ruptcy  exceeding  the  amount  of  three  hundred  dollars  : 

First,  Who  departs  from  the  State,  district,  or  Territory  of  which 
he  is  an  inhabitant  with  intent  to  defraud  his  creditors,  or,  being  ab- 
sent, remains  absent  with  such  intent ;  or, 

Second.  Who  conceals  himself  to  avoid  the  service  of  legal  process 
in  any  action  for  the  recovery  of  a  debt  or  demand  provable  in  bank- 
ruptcy ;  or. 

Third.  Who  conceals  or  removes  any  of  his  property  to  avoid  its 
being  attached,  taken,  or  sequestered  on  legal  process  ;  or. 

Fourth.  Who  makes  any  assignment,  gift,  sale,  conveyance,  or 
transfer  of  his  estate,  property,  rights,  or  credits,  either  within  the 
United  States  or  elsewhere,  with  intent  to  delay,  defraud,  or  hinder 
his  creditors ;  or. 

Fifth.  Who  has  been  arrested  and  held  in  custody  under  or  by 
virtue  of  mesne  process  or  execution,  issued  out  of  any  court  of  any 
State,  district,  or  Territory  within  which  such  debtor  resides  or  has 
property,  founded  upon  a  demand  in  its  nature  provable  against  a 
bankrupt's  estate,  and  for  a  sum  exceeding  one  hundred  dollars,  if 
such  process  is  remaining  in  force  and  not  discharged  by  payment, 
or  in  some  other  manner  provided  by  the  law  of  such  State,  district, 
or  Territory  appl  icable  thereto,  for  a  period  of  seven  days  ;  or. 

Sixth.  Who  has  been  actually  imprisoned  for  more  than  seven  days 
in  a  civil  action  founded  on  contract,  for  the  sum  of  one  hundred  dol- 
lars or  upward ;  or. 

Seventh.  Who,  being  bankrupt  or  insolvent,  or  in  contemplation 
of  bankruptcy  or  insolvency,  makes  any  payment,  gift,  grant,  sale, 
conveyance,  or  transfer  of  money  or  other  property,  estate,  rights,  or 
credits,  or  gives  any  warrant  to  confess  judgment ;  or  procures  or  suf- 
fers his  property  to  be  taken  on  legal  process,  with  intent  to  give  a 
preference  to  one  or  more  of  his  creditors,  or  to  any  person  or  persons 
who  are  or  may  be  liable  for  him  as  indorsers,  bail,  sureties,  or  other- 
wise, or  with  the  intent  by  such  disposition  of  his  property,  to  defeat 
or  delay  the  operation  of  this  act ;  or. 

Eighth.  Who,  being  a  banker,  broker,  merchant,  trader,  manufac- 
turer, or  miner,'has  fraudulently  stopped  payment,  or  who  has  stopped 
or  suspended  and  not  resumed  payment  of  his  commercial  paper,  within 
a  period  of  fourteen  days,  shall  be  deemed  to  have  committed  an  act 
of  bankruptcy,  and  to  have  become  liable  to  be  adjudged  a  bankrupt. 
And  if  such  person  shall  be  adjudged  a  bankrupt,  the  assignee,  may 
recover  back  the  money  or  other  property  so  paid,  conveyed,  sold, 
assigned,  or  transferred  contrary  to  this  Title,  provided  the  persoi, 
receiving  such  payment  or  conveyance  had  reasonable  cause  to  believe 
that  a  fraud  on  this  Title  was  intended,  and  that  the  debtor  was  in- 
solvent, and  such  creditor  shall  not  be  allowed  to  prove  his  debt  iii 
bankruptcy. 

Prior  acts  of  bankruptcy.    SEC  5022.  Any  act  of  bankruptcy  com- 


the;  law  op  1867.  1323 

mitted  since  the  second  day  of  March,  eighteen  hundred  and  sixty- 
seven,  may  be  the  foundation  of  an  adjudication  of  involuntary  bank- 
ruptcy, upon  a  petition  filed  within  the  time  prescribed  by  law, 
equally  with  one  committed  hereafter. 

"Who  may  file  petition.  Sec.  5023.  An  adjudication  of  bankruptcy 
may  be  made  on  the  petition  of  one  or  more  creditors,  the  aggregate 
of  whose  provable  debts  amounts  to  at  least  two  hundred  and  fifty 
dollars,  provided  such  petition  is  brought  within  six  months  after 
the  act  of  bankruptcy  shall  have  been  committed. 

Proceedings  after  filing  the  petition.  Sec.  5024.  Upon  the  filing  of 
the  petition  authorized  by  the  preceding  section,  if  it  appears  that 
sufficient  grounds  exist  therefor,  the  court  shall  direct  the  entry  of  an 
order  requiring  the  debtor  to  appear  and  show  cause,  at  a  court  of 
bankruptcy  to  be  holden  at  a  time  to  be  specified  in  the  order,  not 
less  than  five  days  from  theser^nce  thereof,  why  thepraj^er  of  the  peti- 
tion should  not  be  granted.  The  court  may  also,  by  injunction  re- 
strain the  debtor,  and  any  other  person,  in  the  mean  time,  from  making 
any  transfer  or  disposition  of  any  part  of  the  debtor's  property  not  ex- 
cepted by  this  Title  from  the  operation  thereof  and  from  any  interfer- 
ence therewith;  and  if  it  shall  appear  that  there  is  probable  cause  for 
believing  that  the  debtor  is  about  to  leave  the  district,  or  to  remove 
or  conceal  his  goods  and  chattels  or  his  evidence  of  property,  or  to 
make  any  fraudulent  conveyance  or  disposition  thereof,  the  court  may 
issue  a  warrant  to  the  marshal  of  the  district,  commanding  him  to 
arrest  and  safely  keep  the  alleged  debtor,  unless  he  shall  give  bail  to 
the  satisfaction  of  the  court  for  his  appearance  from  time  to  time,  as 
required  by  the  court,  until  its  decision  upon  the  petition,  or  until 
its  further  order,  and  forthwith  to  take  possession  provisionally  of  ail 
the  property  and  effects  of  the  debtor,  and  safely  keep  the  same  until 
the  further  order  of  the  court. 

Service  of  order  to  show  cause.  Sec.  5025.  A  copy  of  the  petition 
and  order  to  show  cause  shall  be  served  on  the  debtor  by  delivering 
the  same  to  him  personally,  or  leaving  the  same  at  his  last  or  usual 
place  of  abode;  or,  if  the  debtor  can  not  be  found,  and  his  place  of  resi- 
dence can  not  be  ascertained,  service  shall  be  made  by  publication  in 
such  manner  as  the  judge  may  direct.  No  further  proceedings,  unless 
the  debtor  appears  and  consents  thereto,  shall  be  had' until  proof  has 
been  given,  to  the  satisfaction  of  the  court,  of  such  service  or  publica- 
tion ;  and  if  such  proof  is  not  given  on  the  return  day  of  such  order, 
the  proceedings  shall  be  adjourned  and  an  order  made  that  the  notice 
be  forthwith  so  served  or  published. 

Proceedings  on  return  day.  Sec.  5026.  On  such  return  day  or  ad- 
journed day,  if  the  notice  has  been  duly  served  or  published,  or  is 
waived  by  the  appearance  and  consent  of  the  debtor,  the  court  shall 
proceed  summarily  to  hear  the  allegations  of  the  petitioner  and  debtor, 
and  may  adjourn  the  proceedings  from  time  to  time,  on  good  cause 
shown,  and  shall,  if  the  debtor  on  the  same  day  so  demands,  in  writ- 


1324  THE   LAW   OF    1 86/. 

ing,  order  a  trial  by  jury  at  the  first  term  of  the  court  at  which  a  jury 
shall  be  in  attendance,  to  ascertain  the  fact  of  the  alleged  bankruptcy. 
If  the  petitioning  creditor  does  not  appear  and  proceed  on  the  return 
da)',  or  adjourned  day,  the  court  may  upon  the  petition  of  any  other 
creditor,  to  the  required  amount,  proceed  to  adjudicate  on  such  peti- 
tion, without  requiring  a  new  service  or  publication  of  notice  to  the 
debtor. 

Costs  at  trial.  Sec.  5027.  If  upon  such  hearing  or  trial  the  debtor 
proves  to  the  satisfaction  of  the  court  or  of  the  jury,  as  the  case  may 
be,  that  the  facts  set  forth  in  the  petition  are  not  true,  or  that  the 
debtor  has  paid  and  satisfied  all  liens  upon  his  property,  in  case  the 
existence  of  such  liens  was  the  sole  ground  of  the  proceeding,  the 
proceedings  shall  be  dismissed  and  the  respondent  shall  recover  costs. 

Warrant.  Sec  5028.  If  upon  the  hearing  or  trial  the  facts  set 
forth  in  the  petition  are  found  to  be  true,  or  if  upon  default  made  by 
the  debtor  to  appear  pursuant  to  the  order,  due  proof  of  service  thereof 
is  made,  the  court  shall  adjudge  the  debtor  to  be  a  bankrupt,  and 
shall  forthwith  issue  a  warrant  to  take  possession  of  his  estate. 

Distribution  of  property  of  debtor.  Sec.  5029.  The  warrant  shall  be 
directed,  and  the  property  of  the  debtor  shall  be  taken  thereon,  and 
shall  be  assigned  and  distributed  in  the  same  manner  and  with  simi- 
lar proceedings  to  those  \Jiereinbefore\  [hereinafter]  provided  for  the 
taking  possession,  assignment,  and  distribution  of  the  property  of 
the  debtor  upon  his  own  petition. 

Schedule  and  inventory.  Sec.  5030.  The  order  of  adjudication  of 
bankruptcy  shall  require  the  bankrupt  forthwith,  or  within  such  num- 
ber of  days  not  exceeding  five  after  the  date  of  the  order  or  notice 
thereof,  as  shall  by  the  order  be  prescribed,  to  make  and  deliver,  or 
transmit  by  mail,  postpaid,  to  the  messenger,  a  schedule  of  the  cred- 
itors and  an  inventory  of  his  estate  in  the  form  and  verified  in  the 
manner  required  of  a  petitioning  debtor. 

Proceedings  when  debtor  is  absent.  Sec.  5031.  If  the  debtor  has 
failed  to  appear  in  person,  or  by  attorney,  a  certified  copy  of  the  adju- 
dication shall  be  forthwith  served  on  him  by  deliver}'  or  publication 
in  the  manner  provided  for  the  service  of  the  order  to  show  cause ;  and 
if  the  bankrupt  is  absent  or  can  not  be  found,  such  schedule  and  in- 
ventory shall  be  prepared  b}'  the  messenger  and  the  assignee  from 
the  best  information  they  can  obtain. 

CHAPTER  FOUR. 

proceedings  to  realize  the  estate  for  creditors. 

Contents  of  notice  to  creditors.  Sec.  5033.  The  notice  to  creditors 
under  warrant  shall  state  : 

First.  That  a  warrant  in  bankruptcy  has  been  issued  against  the 
estate  of  the  debtor. 


THE    LAW   OP    1867.  1325 

Second.  That  the  payment  of  any  debts  and  the  delivery  of  any 
property  belonging  to  such  debtor  to  him  or  -for  his  use,  and  the  trans- 
fer of  any  property  by  him,  are  forbidden  by  law. 

Third.  That  a  meeting  of  the  creditors  of  the  debtor,  giving  the 
names,  residences,  and  amounts,  so  far  as  known,  to  prove  their  debts 
and  choose  one  or  more  assignees  of  his  estate,  will  be  held  at  a  court 
of  bankruptcy,  to  be  holden  at  a  time  and  place  designated  in  the 
warrant,  not  less  than  ten  nor  more  than  ninety  days  after  the  issuing 
of  the  same. 

Marshal's  return.  Sec  5033.  At  the  meeting  held  in  pursuance  of 
the  notice,  one  of  the  registers  of  the  court  shall  preside,  and  the  mes- 
senger shall  make  return  of  the  warrant  and  of  his  doings  thereon ; 
and  if  it  appears  that  the  notice  to  the  creditors  has  not  been  given  as 
required  in  the  warrant,  the  meeting  shall  forthwith  be  adjourned, 
and  a  new  notice  given  as  required. 

Choice  of  assignee.  Sec,  5034.  The  creditors  shall,  at  the  first  meet- 
ing held  after  due  notice  from  the  messenger  in  presence  of  the  regis- 
ter designated  by  the  court,  choose  one  or  more  assignees  of  the  estate 
of  the  debtor  ;  the  choice  to  be  made  by  the  greater  part  in  value  and 
in  number  of  the  creditors  who  have  proved  their  debts.  If  no  choice 
is  made  by  the  creditors  at  the  meeting,  the  judge,  or  if  there  be  no 
opposing  interest,  the  register,  shall  appoint  one  or  more  assignees. 
If  an  assignee,  so  chosen  or  appointed,  fails  within  five  days  to  ex- 
press in  w^riting  his  acceptance  of  the  trust,  the  judge  or  register  may 
fill  the  vacanc3\  All  elections  or  appointments  of  assignees  shall  be 
subject  to  the  approval  of  the  judge  ;  and  when  in  his  judgment  it  is 
for  any  cause  needful  or  expedient,  he  may  appoint  additional  assign- 
ees, or  order  a  new  election. 

"Who  are  disqualified.  Sec.  5035.  No  person  who  has  received  any 
preference  contrary  to  the  provisions  of  this  Title  shall  vote  for  or  be 
eligible  as  assignee ;  but  no  title  to  property,  real  or  personal,  sold, 
transferred,  or  conveyed  by  an  assignee,  shall  be  affected  or  impaired 
by  reason  of  his  ineligibility. 

Bond  of  assignee.  Sec,  5036.  The  district  judge  at  any  time  may, 
and  upon  the  request  in  writing  of  any  creditor  who  has  proved  his 
claim  shall,  require  the  assignee  to  give  good  and  sufiicient  bond  to 
the  United  States,  with  a  condition  for  the  faithful  performance  and 
discharge  of  his  duties ;  the  bond  shall  be  approved  by  the  judge  or 
register  by  his  indorsement  thereon,  shall  be  filed  with  the  record  of 
the  case,  and  inure  to  the  benefit  of  all  creditors  proving  their  claims, 
and  may  be  prosecuted  in  the  name  and  for  the  benefit  of  any  injured 
party.  If  the  assignee  fails  to  give  the  bond  within  such  time  as  the 
judge  or  register  orders,  not  exceeding  ten  days  after  notice  to  him 
of  such  order,  the  judge  shall  remove  him  and  appoint  another  in  his 
place. 

Assignee  liable  for  contempt.  Sec,  5037.  Any  assignee  who  refuses 
or  unreasonably  neglects  to  execute  an  instrument  when  lawfully  re- 


1326  the;  law  op  1867. 

quired  by  the  court,  or  disobeys  a  lawful  order  or  decree  of  the  court 
in  the  premises,  may  be  punished  as  for  a  contempt  of  court. 

Resignation  of  the  trust.  Sec.  5038.  An  assignee  may,  with  the 
consent  of  the  judge,  resign  his  trust  and  be  discharged  therefrom. 

Removal  of  assignee.  Sec.  5039.  The  court,  after  due  notice  and 
hearing,  ma}-  lemove  an  assignee  for  any  cause  which,  in  its  judgment, 
renders  such  removal  necessary  or  expedient.  At  a  meeting  called  for 
the  purpose  by  order  of  the  court,  in  its  discretion,  or  called  upon  the 
application  of  a  majority  of  the  creditors  in  number  and  value,  the 
creditors  ma}-,  with  consent  of  the  coiut,  remove  any  assignee  by  such 
a  vote  as  is  provided  for  the  choice  of  assignee. 

Effect  of  resignation  or  removal.  Sec.  5040.  The  resignation  or  re- 
moval of  an  assignee  shall  in  no  way  release  him  from  performing  all 
things  requisite  on  his  part  for  the  proper  closing  up  of  his  trust  and 
the  transmission  thereof  to  his  successors,  nor  shall  it  affect  the  liabil- 
ity of  the  principal  or  surety  on  the  bond  given  by  the  assignee. 

Filling  vacancies.  Sec.  5041.  Vacancies  caused  by  death  or  other- 
wise in  the  ofFice  of  assignee  may  be  filled  by  appointment  of  the 
court,  or  at  its  discretion  by  an  election  by  the  creditors,  in  the  same 
manner  as  in  the  original  choice  of  an  assignee,  at  a  regular  meeting, 
or  at  a  meeting  called  for  the  purpose,  with  such  notice  thereof  in 
writing  to  all  known  creditors,  and  by  such  person  as  the  court  shall 
direct. 

Vesting  estate  in  remaining  assignee.  Sec.  5042.  When,  by  death* 
or  otherwise,  the  number  of  assignees  is  reduced,  the  estate  of  the 
debtor  not  lawfully  disposed  of  shall  vest  in  the  remaining  assignee 
or  assignees,  and  in  the  persons  selected  to  fill  vacancies,  if  any,  with 
the  same  powers  and  duties  relative  thereto  as  if  they  were  originally 
chosen. 

Former  assignee  to  execute  instruments.  Sec.  5043.  An3^  former  as- 
signee, his  executors  and  administrators,  upon  request,  and  at  the  ex- 
pense of  the  estate,  shall  make  and  execute  to  the  new  assignee  all 
deeds,  conveyances,  and  assurances,  and  do  all  other  lawful  acts 
requisite  to  enable  him  to  recover  and  receive  all  the  estate.  And  the 
court  may  make  all  orders  which  it  may  deem  expedient  to  secure  the 
proper  fulfillment  of  the  duties  of  any  former  assignee,  and  the  rights 
and  interests  of  all  persons  interested  in  the  estate. 

Assignment.  Sec.  5044.  As  soon  as  an  assignee  is  appointed  and 
qualified,  the  judge,  or  where  there  is  no  opposing  interest,  the  regis- 
ter, shall  by  an  instrument  under  his  hand,  assign  and  convey  to  the 
assignee  all  the  estate,  real  and  personal,  of  the  bankrupt,  with  all 
his  deeds,  books,  and  papers  relating  thereto,  and  such  assignment 
shall  relate  back  to  the  commencement  of  the  proceedings  in  bank- 
ruptcy, and  by  operation  of  law  shall  vest  the  title  to  all  such  prop- 
erty and  estate,  both  real  and  personal,  in  the  assignee,  although  the 
same  is  then  attached  on  mesne  process  as  the  property  of  the  debtor, 


THE  I.AW  OP   1867.  1327 

and  shall  dissolve  any  such  attachment  made  within  four  months 
next  preceding  the  commencement  of  the  bankruptcy  proceedings. 

Exemptions.  Sec.  5045.  There  shall  be  exempted  from  the  oper- 
ation of  the  conveyance  the  necessary  household  and  kitchen  furni- 
ture, and  such  other  articles  and  necessaries  of  the  bankrupt  as  the 
assignee  shall  designate  and  set  apart,  having  reference  in  the  amount 
to  the  family,  condition,  and  circumstances  of  the  bankrupt,  but 
altogether  not  to  exceed  in  value,  in  anj'  case,  the  sum  of  five  hun- 
dred dollars  ;  also  the  wearing  apparel  of  the  bankrupt,  and  that  of 
his  wife  and  children,  and  the  uniform,  arms,  and  equipments  of  any 
person  who  is  or  has  been  a  soldier  in  the  militia,  or  in  the  service  of 
the  United  States ;  and  such  other  property  as  now  is,  or  hereafter 
shall  be,  exempted  from  attachment,  or  seizure,  or  levy  on  execution 
by  laws  of  the  United  States,  and  such  other  property  not  included 
in  the  foregoing  exceptions  as  is  exempted  from  le\'y  and  sale  upon 
execution  or  other  process  or  order  of  any  court  by  the  laws  of  the 
State  in  which  the  bankrupt  has  his  domicile  at  the  time  of  the  com- 
mencement of  the  proceedings  in  bankruptc}^  to  an  amount  allowed 
by  the  constitution  and  law^  in  each  State,  as  existing  in  the  year 
eighteen  hundred  and  sevent3'-one ;  and  such  exemptions  shall  be 
valid  against  debts  contracted  before  the  adoption  and  passage  of  such 
State  constitution  and  laws,  as  well  as  those  contracted  after  the 
same,  and  against  liens  by  judgment  or  decree  of  any  State  court, 
any  decision  of  any  such  court  rendered  since  the  adoption  and  pas- 
sage of  such  constitution  and  laws  to  the  contrary  notwithstanding. 
These  exceptions  shall  operate  as  a  limitation  upon  the  conveyance 
of  the  property  of  the  bankrupt  to  his  assignee  ;  and  in  no  case  shall 
the  property  hereby  excepted  pass  to  the  assignee,  or  the  title  of  the 
bankrupt  thereto  be  impaired  or  affected  by  any  of  the  provisions  of 
this  Title  ;  and  the  determination  of  the  assignee  in  the  matter  shall, 
on  exception  taken,  be  subject  to  the  final  decision  of  the  said  court. 

What  property  vests  in  assignee.  Sec.  5046.  All  property  con- 
veyed by  the  bankrupt  in  fraud  of  his  creditors  ;  all  rights  in  equity, 
choses  in  action,  patent-rights,  and  copy-rights ;  all  debts  due  him, 
or  any  person  for  his  use,  and  all  liens  and  securities  therefor ;  and 
all  his  rights  of  action  for  propert}^  or  estate,  real  or  personal;  and 
for  any  cause  of  action  which  he  had  against  any  person  arising  from 
contract  or  from  the  unlawful  taking  or  detention,  or  injury  to  the 
property  of  the  bankrupt ;  and  all  his  rights  of  redeeming  such  prop- 
erty or  estate ;  together  with  the  like  right,  title,  power  and  authority 
to  sell,  manage,  dispose  of,  sue  for,  and  recover  or  defend  the  same, 
as  the  bankrupt  might  have  had  if  no  assignment  had  been  made, 
shall,  in  virtue  of  the  adjudication  of  bankruptcy  and  the  appoint- 
ment of  his  assignee,  but  subject  to  the  exceptions  stated  in  the  pre- 
ceding section,  be  at  once  vested  in  such  assignee. 

Right  of  action  of  assignee.  Sec.  5047.  The  assignee  shall  have 
the  like  remedy  to  recover  all  the  estate,  debts,  and  effects  in  his  own 


1328  run  law  op  1867. 

name,  as  the  debtor  might  have  had  if  the  decree  in  bankruptcy  had 
not  been  rendered  and  no  assignment  had  been  made.  If  at  the  time 
of  the  commencement  of  the  proceedings  in  bankruptcy,  an  action  is 
pending  in  the  name  of  the  debtor  for  the  recovery  of  a  debt  or  other 
thing  which  might  or  ought  to  pass  to  the  assignee  by  the  assign- 
ment, the  assignee  shall,  if  he  requires  it,  be  admitted  to  prosecute 
the  action  in  his  own  name,  in  like  manner  and  with  like  effect  as  if 
it  had  been  originally  commenced  by  him.  And  if  any  suit  at  law  or 
in  equity,  in  which  the  bankrupt  is  a  party  in  his  own  name,  is  pend- 
ing at  the  time  of  the  adjudication  of  bankruptcy,  the  assignee  may 
defend  the  same  in  the  same  manner  and  with  the  like  sffect  as  it 
might  have  been  defended  by  the  bankrupt. 

No  abatement  by  death  or  removal.  Sec.  5048.  No  suit' pending  in 
the  name  of  the  assignee  shall  be  abated  by  his  death  or  removal  ; 
but  upon  the  motion  of  the  surviving  or  remaining  or  new  assignee, 
as  the  case  may  be,  he  shall  be  admitted  to  prosecute  the  suit  in  like 
manner  and  with  like  effect  as  if  it  had  been  originally  commenced 
by  him. 

Copy  of  assignment  conclusive  evidence  of  title.  Se;c.  5049.  A  copy 
duly  certified  by  the  clerk  of  the  court,  under  the  seal  thereof,  of 
the  assignment,  shall  be  conclusive  evidence  of  the  title  of  the  as^ 
signee  to  take,  hold,  sue  for,  and  recover  the  property  of  the  bank- 
rupt. 

Bankrupt's  books  of  account.  Sec.  5050.  No  person  shall  be  en- 
titled,  as  against  the  assignee,  to  withhold  from  him  possession  of 
any  books  of  account  of  the  bankrupt,  or  claim  any  lien  thereon. 

Debtor  must  execute  instruments.  Sec.  5051.  The  debtor  shall,  at 
the  request  of  the  assignee  and  at  the  expense  of  the  estate,  make 
and  execute  any  instruments,  deeds,  and  writings  which  may  be 
proper  to  enable  the  assignee  to  possess  himself  fully  of  all  the  as- 
sets of  the  bankrupt. 

Chattel  mortgages.  Sec.  5052.  No  mortgage  of  any  vessel  or  of 
any  other  goods  or  chattels,  made  as  security  for  any  debt,  in  good 
faith  and  for  a  present  consideration  and  otherwise  valid,  and  duly 
recorded  pursuant  to  any  statute  of  the  United  States  or  of  any  State, 
shall  be  invalidated  or  affected  by  an  assignment  in  bankruptcy. 

Trust  property.  Sec.  5053.  No  property  held  by  the  bankrupt  in 
trust  shall  pass  by  the  assignment. 

Notice  of  appointment  of  assignee  and  record  of  assignment.  Sec. 
5054.  The  assignee  shall  immediately  give  notice  of  his  appointment, 
by  publication  at  least  once  a  week  for  three  consecutive  weeks  in 
such  newspapers  as  shall  for  that  purpose  be  designated  by  the  court, 
due  regard  being  had  to  their  general  circulation  in  the  district  or 
in  that  portion  of  the  district  in  which  the  bankrupt  and  his  credi- 
tors shall  reside,  and  shall,  within  six  months,  cause  the  assignment 
to  him  to  be  recorded  in  every  registry  of  deeds  or  other  office  within 
the  United  States  where  a  conveyance  of  any  lands  owned  by  the 


THE   LAW   OF    1867.  1329 

L^nkrupt  ouj^ht  by  law  to  be  recorded.  [And  the  record  of  such  as- 
signment, or  of  a  duly  certified  copy  thereof,  shall  be  evidence 
thereof  in  all  courts.] 

Assignee  to  demand  and  receive  all  assigned  estate.  Sec.  5055.  The 
assignee  shall  demand  and  receive,  from  all  persons  holding  the  same, 
all  the  estate  assigned  or  intended  to  be  assigned. 

Notice  prior  to  suit  against  assignee.  Sec.  5056.  No  person  shall 
be  entitled  to  maintain  an  action  against  an  assignee  in  bankruptcy 
for  anything  done  by  him  as  such  assignee,  without  previously  giv- 
ing him  twenty  days'  notice  of  such  action,  specifying  the  cause 
thereof,  to  the  end  that  such  assignee  may  have  an  opportunity  of 
tendering  amends,  should  he  see  fit  to  do  so. 

Time  of  commencing  suits.  Sec.  5057.  No  suit,  either  at  law  or  in 
equity,  shall  be  maintainable  in  any  court  between  an  assignee  in 
bankruptcy  and  a  person  claiming  an  adverse  interest,  touching  any 
property  or  rights  of  property  transferable  to  or  vested  in  such  as- 
signee, unless  brought  within  two  years  from  the  time  when  the 
cause  of  action  accrued  for  or  against  such  assignee.  And  this  pro- 
vision shall  not  in  any  case  revive  a  right  of  action  barred  at  the  time 
when  an  assignee  is  appointed. 

Assignee's  accounts  of  money  received.  Sec.  5058.  The  assignee 
shall  keep  a  regular  account  of  all  money  received  by  him  as  assignee, 
to  which  every  creditor  shall,  at  reasonable  times,  have  free  resort. 

Assignee  to  keep  money  and  goods  separate.  Sec.  5059.  The  as- 
signee shall,  as  soon  as  may  be  after  receiving  any  money  belonging 
to  the  estate,  deposit  the  same  in  some  bank  in  his  name  as  assignee, 
or  otherwise  keep  it  distinct  from  all  other  money  in  his  possession; 
and  shall,  as  far  as  practicable,  keep  all  goods  and  effects  belonging 
to  the  estate  separate  from  all  other  goods  in  his  possession,  or  desig- 
nated by  appropriate  marks,  so  that  they  may  be  easily  and  clearly 
distinguished,  and  may  not  be  liable  to  be  taken  as  his  property  or 
for  the  payment  of  his  debts. 

Temporary  investment  of  money.  Sec.  5060.  When  it  appears  that 
the  distribution  of  the  estate  may  be  delayed  by  litigation  or  other 
cause,  the  court  may  direct  the  temporary  investment  of  the  money 
belonging  to  such  estate  in  securities  to  be  approved  by  the  judge  or 
register,  or  may  authorize  it  to  be  deposited  in  any  convenient  bank, 
upon  such  interest,  not  to  exceed  the  legal  rate,  as  the  bank  may  con- 
tract with  the  assignee  to  pay  thereon. 

Arbitration.  Sec.  5061.  The  assignee,  under  the  direction  of  the 
court,  may  submit  any  controversy  arising  in  the  settlement  of  de- 
mands against  the  estate,  or  of  debts  due  to  it,  to  the  determination 
of  arbitrators  to  be  chosen  by  him  and  the  other  party  to  the  contro- 
versy, and,  under  such  direction,  may  compound  and  settle  any  such 
controversy,  by  agreement  with  the  other  party,  as  he  thinks  proper 
and  most  for  the  interest  of  the  creditors. 

Assignee  to  sell  property.    Sec.  5062.  The  assignee  shall  sell  ali 


1330  THE   LAW   OF"    1867. 

such  unincumbered  estate,  real  and  personal,  wliich  conies  into  his 
hands,  on  such  terms  as  he  thinks  most  for  the  interest  of  the  credit- 
ors; biit  upon  petition  of  any  person  interested,  and  for  cause  shown, 
the  court  may  make  such  order  concerning  the  time,  place,  and  man- 
ner of  sale  as  will,  in  its  opinion,  prove  to  the  interest  of  the  creditors. 

Sale  of  disputed  property.  Sec.  5063.  Whenever  it  appears  to  the 
satisfaction  of  the  court  that  the  title  to  any  portion  of  an  estate,  real 
or  personal,  which  has  come  into  possession  of  the  assignee,  or  which 
is  claimed  by  him,  is  in  dispute,  the  court  may,  upon  the  petition  of 
the  assignee,  and  after  such  notice  to  the  claimant,  his  agent  or  attor- 
ney, as  the  court  shall  deem  reasonable,  order  it  to  be  sold,  under  the 
direction  of  the  assignee,  who  shall  hold  the  funds  received  in  place 
of  the  estate  disposed  of;  and  the  proceeds  of  the  sale  shall  be  consid- 
ered the  measure  of  the  value  of  the  property  in  any  suit  or  contro- 
versy between  the  parties  in  any  court.  But  this  provision  shall  not 
prevent  the  recovery  of  the  property  from  the  possession  of  the  as- 
signee by  any  proper  action  commenced  at  any  time  before  the  court 
orders  the  sale. 

Sale  of  uncollectable  assets.  Sec.  5064.  The  assignee  may  sell  and 
assign,  under  the  direction  of  the  court  and  in  such  manner  as  the 
court  shall  order,  any  outstanding  claims  or  other  property  in  his 
hands,  due  or  belonging  to  the  estate,  which  can  not  be  collected  and 
received  by  hini  without  unreasonable  or  inconvenient  delay  or  expense. 

Sale  of  perishable  property.  Sec.  5065.  When  it  appears  to  the  sat- 
isfaction of  the  court  that  the  estate  of  the  debtor,  or  any  part  thereof, 
is  of  a  perishable  nature,  or  liable  to  deteriorate  in  value,  the  court 
may  order  the  same  to  be  sold,  in  such  manner  as  may  be  deemed 
most  expedient,  under  the  direction  of  the  messenger  or  assignee,  as 
the  case  may  be,  who  shall  hold  the  funds  received  in  place  of  the 
estate  disposed  of. 

Discharge  of  liens.  Sec.  5066.  The  assignee  shall  have  authority, 
vmder  the  order  and  direction  of  the  court,  to  redeem  or  discharge 
any  mortgage  or  conditional  contract,  or  pledge  or  deposit,  or  lien 
upon  any  property,  real  or  personal,  whenever  payable,  and  to  tender 
due  performance  of  the  condition  thereof,  or  to  sell  the  same  subject 
to  such  mortgage,  lien,  or  other  incumbrance. 

Provable  debts.  Sec.  5067.  All  debts  due  and  payable  from  the 
bankrupt  at  the  time  of  the  commencement  of  proceedings  in  bank- 
ruptcy, and  all  debts  then  existing  but  not  payable  until  a  future 
day,  a  rebate  of  interest  being  made  when  no  interest  is  payable  by 
the  terms  of  the  contract,  may  be  proved  against  the  estate  of  the 
bankrupt.  All  demands  against  the  bankrupt  for  or  on  account  of 
any  goods  or  chattels  wrongfully  taken,  converted,  or  withheld  by 
him  may  be  proved  and  allowed  as  debts  to  the  amount  of  the  value 
of  the  property  so  taken  or  withheld,  with  interest.  When  the  bank- 
rupt is  liable  for  unliquidated  damages  arising  out  of  any  contract  or 
promise,  or  on  account  of  any  goods  or  chattels  wrongfully  taken, 


THB  LAW  OP   1867.  1331 

converted,  or  withheld,  the  court  may  cause  such  damages  to  be  as- 
sessed in  such  mode  as  it  may  deem  best,  and  the  sum  so  assessed 
may  be  proved  againt  the  estate. 

Contingent  debts.  Sec.  5068.  In  all  cases  of  contingent  debts  and 
contingent  liabilities  contracted  by  the  bankrupt,  and  not  herein 
otherwise  provided  for,  the  creditor  may  make  claim  therefor,  and 
have  his  claim  allowed,  with  the  right  to  share  in  the  dividends,  if 
the  contingency  happens  before  the  order  for  the  final  dividend  ;  or  he 
maj^  at  any  time,  apply  to  the  court  to  have  the  present  value  of  the 
debt  or  liability  ascertained  and  liquidated,  which  shall  then  be  done 
in  such  manner  as  the  court  shall  order,  and  he  shall  be  allowed  to 
prove  for  the  amount  so  ascertained. 

Liability  of  bankrupt  as  surety.  Sec.  5069.  When  the  bankrupt  is 
bound  as  drawer,  indorser,  suret5%  bail,  or  guarantof  upon  any  bill, 
bond,  note,  or  any  other  specialty  or  contract,  or  for  any  debt  of  an- 
other person,  but  his  liability  does  not  become  absolute  until  after 
the  adjudication  of  bankruptcy,  the  creditor  may  prove  the  same  after 
such  liability  becomes  fixed,  and  before  the  final  dividend  is  declared. 

Sureties  for  bankrupt.  Sec.  so/y.  Any  person  liable  as  bail, 
suretj',  guarantor,  or  otherv\'ise  for  the  bankrupt,  who  shall  have  paid 
the  debt,  or  any  part  thereof,  in  discharge  of  the  whole,  shall  be  en- 
titled to  prove  such  debt  or  to  stand  in  the  place  of  the  creditor  if 
the  creditor  has  proved  the  same,  although  such  payments  shall 
have  been  made  after  the  proceedings  in  bankruptcy  were  commenced. 
And  any  person  so  liable  for  the  bankrupt,  and  who  has  not  paid  the 
whole  of  such  debt,  but  is  still  liable  for  the  same  or  any  part  thereof, 
may,  if  the  creditor  fails  or  omits  to  prove  such  debt,  prove  the  same 
either  in  the  name  of  the  creditor  or  otherwise,  as  may  be  provided 
by  the  general  orders,  and  subject  to  such  regulations  and  limitations 
as  may  be  established  by  such  general  orders. 

Debts  falling  due  at  stated  periods.  Sec.  5071.  Where  the  bank- 
rupt is  liable  to  pa}^  rent  or  other  debt  falling  due  at  fixed  and  stated 
periods,  the  creditor  may  prove  for  a  proportionate  part  thereof  up  to 
the  time  of  the  bankruptcy,  as  if  the  same  grew  due  from  day  to  day, 
and  not  at  such  fixed  and  stated  periods. 

No  other  debts  provable.  Sec.  5072.  No  debts  other  than  those 
specified  in  the  five  preceding  sections  shall  be  proved  or  allowed 
against  the  estate. 

Set-offs.  Sec.  5073.  In  all  cases  of  mutual  debts  or  mutual  credits 
between  the  parties,  the  account  between  them  shall  be  stated,  and 
one  debt  set  off  against  the  other,  and  the  balance  only  shall  be  al- 
lowed or  paid;  but  no  set-off  shall  be  allowed  in  favor  of  an}'^  debtor 
to  the  bankrupt  of  a  claim  in  its  nature  not  provable  against  the  es- 
tate, or  of  a  claim  purchased  by  or  transferred  to  him  after  the  filing 
of  the  petition. 

Distinct  liabilities.  Sec.  5074.  When  the  bankrupt,  at  the  time  of 
adjudication,  is  liable  upon  any  bill  of  exchange,  promissory  note,  or 


1332  THE  LAW   OF   1 867. 

other  obligation  in  respect  of  distinct  contracts  as  a  member  of  two 
or  more  firms  carrjdng  on  separate  and  distinct  trades,  and  having 
distinct  estates  to  be  wound  up  in  bankruptcy,  or  as  a  sole  trader  and 
also  a  member  of  a  firm,  the  circumstance  that  such  firms  are  in  whole 
or  in  part  composed  of  the  same  individuals,  or  that  the  sole  con- 
tractor is  also  one  of  the  joint  contractors,  shall  not  prevent  proof  and 
receipt  of  dividend  in  respect  of  such  distinct  contracts  against  the 
estates  respectively  liable  upon  such  contracts. 

Secured  debts.  Sec.  5075.  When  a  creditor  has  a  mortgage  or 
pledge  of  real  or  personal  property  of  the  bankrupt,  or  a  lien  thereon 
for  securing  the  paj^ment  of  a  debt  owing  to  him  from  the  bankrupt, 
he  shall  be  admitted  as  a  creditor  only  for  the  balance  of  the  debt 
after  deducting  the  value  of  such  property,  to  be  ascertained  by 
agreement  between  him  and  the  assignee,  or  by  a  sale  thereof,  to  be 
made  in  such  manner  as  the  court  shall  direct;  or  the  creditor  may 
release  or  convey  his  claim  to  the  assignee  upon  such  propert}^  and 
be  admitted  to  prove  his  whole  debt.  If  the  value  of  the  property 
exceeds  the  sum  for  which  it  is  so  held  as  security,  the  assignee  may 
release  to  the  creditor  the  bankrupt 's  right  of  redemption  therein  on 
receiving  such  excess;  or  he  may  sell  the  property  subject  to  the  claim 
of  the  creditor  thereon  ;  and  in  either  case  the  assignee  and  creditor, 
respectivel}'-,  shall  execute  all  deeds  and  writings  necessary  or  proper 
to  consummate  the  transaction.  If  the  property  is  not  so  sold  or  re- 
leaised  and  delivered  up,  the  creditor  shall  not  be  allowed  to  prove 
any  part  of  his  debt. 

Proof  of  debt.  Sec.  5076.  Creditors  residing  within  the  judicial 
district  where  the  proceedings  in  bankruptcy  are  pending  shall  prove 
their  debts  before  one  of  the  registers  of  the  court,  or  before  a  com- 
missioner of  the  circuit  court,  within  the  said  district.  Creditors  re- 
siding without  the  district,  but  within  the  United  States,  may  prove 
their  debts  before  a  register  in  bankruptcy,  or  a  commissioner  of  a 
circuit  court,  in  the  judicial  district  where  such  creditor,  or  either 
one  of  joint  creditors,  reside;  but  proof  taken  before  a  commissioner, 
shall  be  subject  to  revision  by  the  register  of  the  court. 

Creditor's  oath.  Sec.  5077.  To  entitle  a  claimant  against  the  es- 
tate of  a  bankrupt  to  have  his  demand  allowed,  it  must  be  verified  by  a 
deposition  in  writing,  under  oath,  and  signed  by  the  deponent,  set- 
ting forth  the  demand,  the  consideration  thereof,  whether  an}'-  and 
what  securities  are  held  therefor,  and  whether  any  and  what  pay- 
ments have  been  made  thereon  ;  that  the  sum  claimed  is  justly  due 
from  the  bankrupt  to  the  claimant ;  that  the  claimant  has  not,  nor 
has  any  other  person,  for  his  use,  received  any  security  or  satisfac- 
tion whatever  other  than  that  by  him  set  forth  ;  that  the  claim  was 
not  procured  for  the  purpose  of  influencing  the  proceedings  in  bank- 
ruptcy ;  and  that  no  bargain  or  agreement,  express  or  implied,  has 
been  made  or  entered  into,  by  or  on  behalf  of  such  creditor,  to  sell, 
transfer,  or  dispose  of  the  claim,  or  any  part  thereof,  or  to  take  or 


THE  LAW  OP  1867.  1333 

receive,  directly  or  indirectl)',  any  monej',  property,  or  consideration 
whatever,  whereby  the  vote  of  such  creditor  for  assignee,  or  any  ac- 
tion on  the  part  of  such  creditor,  or  any  other  person  in  the  proceed- 
ings, is  or  shall  be  in  any  way  affected,  influenced  or  controlled.  No 
claim  shall  be  allowed  unless  all  the  statements  set  forth  in  such 
deposition  shall  appear  to  be  true. 

Oath,  by  whom  made.  Sec.  5078.  Such  oath  shall  be  made  by  the 
claimant,  testifying  of  his  own  knowledge,  unless  he  is  absent  from 
the  United  States  or  prevented  by  some  other  good  cause  from  testi- 
fying, in  which  case  the  demand  may  be  verified  by  the  attorney  or 
authorized  agent  of  the  claimant,  testifying  to  the  best  of  his  knowl- 
edge, information,  and  belief,  and  setting  forth  his  means  of  knowl- 
edge. Corporations  may  verify  their  claims  by  the  oath  of  their 
president,  cashier,  or  treasurer.  The  court  may  require  or  receive 
further  pertinent  evidence  either  for  or  against  the  admission  of  any 
claim. 

Oath,  before  whom  taken;  proof  sent  to  register.  Sec.  5079.  Such 
oath  may  be  taken  in  any  district  before  any  register  or  any  commis- 
sioner of  the  circuit  coiirt  authorized  to  administer  oaths  ;  or,  if  the 
creditor  is  in  a  foreign  countrj',  before  any  minister,  consul,  or  vice- 
consul  of  the  United  States.  "When  the  proof  is  so  made  it  shall  be 
delivered  or  sent  by  mail  to  the  register  having  charge  of  the  same. 

Proof  to  be  sent  to  assignee.  Sec.  5080.  If  the  proof  is  satisfactory 
to  the  register  it  shall  be  delivered  or  sent  by  mail  to  the  assignee, 
who  shall  examine  the  same  and  compare  it  with  the  books  and  ac- 
counts of  the  bankrupt,  and  shall  register,  in  a  book  to  be  kept  by 
him  for  that  purpose,  the  names  of  creditors  who  have  proved  their 
claims,  in  the  order  in  which  such  proof  is  received,  stating  the  time 
of  receipt  of  siich  proof,  and  the  amount  and  nature  of  the  debts. 
Such  books  shall  be  open  to  the  inspection  of  all  the  creditors.  The 
court  may  require  or  receive  further  pertinent  evidence  either  for  or 
against  the  admission  of  any  claim. 

Examination  by  court  into  proof  of  claims.  Sec.  5081.  The  court 
ma}',  on  application  of  the  assignee,  or  of  any  creditor,  or  of  the 
bankrupt,  or  without  any  application,  examine  upon  oath  the  bank- 
rupt, or  any  person  tendering  or  who  has  made  proof  of  a  claim,  and 
may  summon  any  person  capable  of  giving  evidence  concerning  such 
proof,  or  concerning  the  debt  sought  to  be  proved,  and  shall  reject  all 
claims  not  duly  proved,  or  where  the  proof  shows  the  claim  to  be 
founded  in  fraud,  illegality  or  mistake. 

"Withdrawal  of  papers.  Sec.  5082.  A  bill  of  exchange,  promissory 
note,  or  other  instrument,  used  in  evidence  upon  the  proof  of  a  claim, 
and  left  in  court  or  deposited  in  the  clerk's  office,  may  be  delivered, 
by  the  register  or  clerk  having  the  custody  thereof,  to  the  person 
who  used  it,  upon  his  filing  a  copy  thereof,  attested  by  the  clerk  of 
the  court,  who  shall  indorse  upon  it  the  name  of  the  party  against 


1334  the;  law  of  1867. 

whose  estate  it  lias  been  proved,  and  the  date  and  amount  of  any 
dividend  declared  thereon. 

Postponement  of  proof.  SiiC.  5083.  When  a  claim  is  presented  for 
proof  before  the  election  of  the  assignee,  and  the  judge  or  register 
entertains  doubts  of  its  validity  or  of  the  right  of  the  creditor  to 
prove  it,  and  is  of  the  opinion  that  such  validity  or  right  ought  to  be 
investigated  by  the  assignee,  he  may  postpone  the  proof  of  the  claim 
until  the  assignee  is  chosen. 

Surrender  of  preferences.  Sec.  50S4.  Any  person  who,  since  the 
second  da}^  of  March,  eighteen  hundred  and  sixty-seven,  has  ac- 
cepted any  preference,  having  reasonable  cause  to  believe  that  the 
same  was  made  or  given  by  the  debtor,  contrary  to  any  provisions  of 
the  act  of  ^larch  two,  eighteen  hundred  and  sixty-seven,  chapter 
one  hundred  and  seventy-six,  to  establish  a  uniform  system  of  bank- 
ruptcy, or  to  any  provisions  of  this  Title,  shall  not  prove  the  debt  or 
claim  on  account  of  which  the  preference  is  made  or  given,  nor  shall 
he  receive  any  dividend  therefrom  until  he  shall  first  surrender  to 
the  assignee  all  property,  money,  benefit,  or  advantage  received  by 
him  under  such  preference. 

Allowance  and  list  of  debts.  Sec.  5085.  The  court  shall  allow  all 
debts  duly  proved,  and  shall  cause  a  list  thereof  to  be  made  and  cer- 
tified by  one  of  the  registers. 

Examination  of  bankrupt.  Sec  5086.  The  court  may,  on  the  ap- 
plication of  the  assignee,  or  of  any  creditor,  or  without  any  applica- 
tion, at  all  times  require  the  bankrupt,  upon  reasonable  notice,  to  a1^ 
tend  and  submit  to  an  examination,  on  oath,  upon  all  matters  relat- 
ing to  the  disposal  or  condition  of  his  property,  to  his  trade  and 
dealings  with  others,  to  his  accounts  concerning  the  same,  to  all 
debts  due  to  or  claimed  from  him,  and  to  all  other  matters  concerning 
his  property  and  estate  and  the  due  settlement  thereof  according  to 
law.  Such  examination  shall  be  in  writing,  and  shall  be  signed  by 
the  bankrupt  and  filed  with  the  other  proceedings. 

Examination  of  witness.  Sec.  5087.  The  court  may,  in  like  man- 
ner, require  the  attendance  of  any  other  person  as  e.  witness,  and  if 
such  person  fails  to  attend,  on  being  summoned  thereto,  the  court 
may  compel  his  attendance  by  warrant  directed  to  the  marshal,  com- 
manding him  to  arrest  such'  person  and  bring  him  forthwith  before 
the  court,  or  before  a  register  in  bankruptcy,  for  examination  as  a 
witness. 

Examination  of  bankrupt's  wife.  Sec.  5088.  For  good  cause  shown, 
the  wife  of  any  bankrupt  may  be  required  to  attend  before  the  court 
to  the  end  that  she  may  be  examined  as  a  witness  ;  and  if  she  does 
not  attend  at  the  time  and  place  specified  in  the  order,  the  bankrupt 
shall  not  be  entitled  to  a  discharge  unless  he  proves  to  the  satisfaction 
of  the  court  that  he  was  unable  to  procure  her  attendance. 

Examination  of  imprisoned  or  disabled  bankrupt.  Sec.  5089.  If  the 
bankrupt  is  imprisoned,  absent,  or  disabled  from  attendance,   the 


the;  law  oi^  1867.  1335 

court  ma}'  order  him  to  be  produced  by  the  jailer,  or  any  officer  in 
whose  custody  he  may  be,  or  ma}'  direct  the  examination  to  be  had, 
taken,  and  certified  at  such  time  and  place  and  in  such  manner  as  the 
court  may  deem  proper,  and  with  like  eiTect  as  if  such  examination 
had  been  had  in  court. 

No  abatement  upon  death  of  debtor.  Sec.  5090.  If  the  debtor  dies 
after  the  issuing  of  the  warrant,  the  proceedings  may  be  continued 
and  concluded  in  like  manner  as  if  he  had  lived. 

Distribution  of  bankrupt's  estate.  Sec.  5091.  All  creditors  whose 
debts  are  duly  proved  and  allowed  shall  be  entitled  to  share  in  the 
bankrupt's  property  and  estate,  pro  rata,  without  any  priority  or 
preference  whatever,  except  as  allowed  by  section  fifty-one  hundred 
and  one.  No  debt  proved  by  any  person  liable,  as  bail,  surety, 
guarantor,  or  othem^ise,  for  the  bankrupt,  shall  be  paid  to  the  person 
so  proving  the  same  until  satisfactory  evidence  shall  be  produced  of 
the  payment  of  such  debt  by  such  person  so  liable,  and  the  share  to 
which  such  debt  would  be  entitled  may  be  paid  into  court,  or  other- 
wise held  for  the  benefit  of  the  party  entitled  thereto,  as  the  court 
maj'  direct. 

Second  meeting  of  creditors.  Sec.  5092.  At  the  expiration  of  three 
months  from  the  date  of  the  adjudication  of  bankruptcy  in  any  case, 
or  as  much  earlier  as  the  court  may  direct,  the  court,  upon  request  of 
the  assignee,  shall  call  a  general  meeting  of  the  creditors,  of  which 
due  notice  shall  be  given,  and  the  assignee  shall  then  report,  and 
exhibit  to  the  court  and  to  the  creditors  just  and  true  accounts  of  all 
his  receipts  and  paj-ments,  verified  by  his  oath,  and  he  shall  also 
produce  and  file  vouchers  for  all  payments  for  which  vouchers  are 
required  by  any  rule  of  the  court  ;  he  shall  also  submit  the  schedule 
of  the  bankrupt's  creditors  and  property  as  amended,  duly  verified 
by  the  bankrupt,  and  a  statement  of  the  whole  estate  of  the  bankrupt 
as  then  ascertained,  of  the  property  recovered  and  the  property  out- 
standing, specifying  the  cause  of  its  being  outstanding,  and  showing 
what  debts  or  claims  are  5'et  undetermined,  and  what  sum  remains  in 
his  hands.  The  majority  in  value  of  the  creditors  present  shall 
determine  whether  any  and  what  part  of  the  net  proceeds  of  the  estate, 
after  deducting  and  retaining  a  sum  sufficient  to  provide  for  all  undeter- 
mined claims  which,  by  reason  of  the  distant  residence  of  the  creditor, 
or  for  other  sufficient  reason,  have  not  been  proved,  and  for  other 
expenses  and  contingencies,  shall  be  divided  among  the  creditors  ;  but 
unless  at  least  one-half  in  value  of  the  creditors  attend  the  meeting, 
either  in  person  or  by  attorney,  it  shall  be  the  duty  of  the  assignee  so 
to  determine. 

Third  meeting  of  creditors.  Sec.  5093.  Like  proceedings  shall  be 
had  at  the  expiration  of  the  next  three  months,  or  earlier,  if  practica- 
ble, and  a  third  meeting  of  creditors  shall  then  be  called  by  the  court, 
and  a  final  dividend  then  declared,  unless  any  suit  at  law  or  in  equity 
is  pending,  or  unless  some  other  estate  or  effects  of  the  debtor  after- 


1336  '  the;  law  of  1867. 

ward  come  to  the  hands  of  the  assignee  in  the  case  of  the  assignee 
shall,  as  soon  as  naay  be,  convert  such  estate  and  effects  into  money, 
and  within  two  months  after  the  same  are  so  converted  they  shall  be 
divided  in  manner  aforesaid.  Further  dividends  shall  be  made  in  like 
manner  as  often  as  occasion  requires,  and  after  the  third  meeting  of 
creditors  no  further  meeting  shall  be  called,  unless  ordered  by  the 
court. 

Notice  of  meetings.  Sec.  5094.  The  assignee  shall  give  such 
notice  to  all  known  creditors,  by  mail  or  otherwise,  of  all  meetings, 
after  the  first,  as  maj^  be  ordered  by  the  court. 

Creditor  may  act  by  attorney.  Sec.  5095.  Any  creditor  may  act 
at  all  meetings  by  his  duly  constituted  attorney  the  same  as  though 
personally  present. 

Set'^xcment  of  assignee's  account.  Sec.  5096.  Preparatory  to  the 
final  dividend,  the  assignee  shall  submit  his  account  to  the  court  and 
file  the  same,  and  give  notice  to  the  creditors  of  such  filing,  and  shall 
also  give  notice  that  he  will  apply  for  a  settlement  of  his  account,  and 
for  a  discharge  from  all  liability  as  assignee,  at  a  time  to  be  specified 
in  such  notice,  and  at  such  time  the  court  shall  audit  and  pass  the 
accounts  of  the  assignee,  and  the  assignee  shall,  if  required  by  the 
court,  be  examined  as  to  the  truth  of  his  account,  and  if  it  is  found 
correct  he  shall  thereby  be  discharged  from  all  liability  as  assignee  to 
any  creditor  of  the  bankrupt.  The  court  shall  thereupon  order  a 
dividend  of  the  estate  and  effects,  or  of  such  part  thereof  as  it  sees  fit, 
among  such  of  the  creditors  as  have  proved  their  claims,  in  proportion 
to  the  respective  amount  of  their  debts. 

Dividend  not  to  be  disturbed.  Sec.  5097.  No  dividend  already 
declared  shall  be  disturbed  by  reason  of  debts  being  subsequently 
proved,  but  the  creditors  proving  such  debts  shall  be  entitled  to  a 
dividend  equal  to  those  already  received  by  the  other  creditors  before 
any  further  payment  is  made  to  the  latter. 

Omission  of  assignee  to  call  meetings.  Sec.  5098.  If  by  accident, 
mistake,  or  other  cause,  without  fault  of  the  assignee,  either  or  both 
of  the  second  or  third  meetings  should  not  be  held  within  the  times 
limited,  the  court  may,  upon  motion  of  an  interested  party,  order  such 
meetings,  with  like  effect  as  to  the  validity  of  the  proceedings  as  if 
meeting  had  been  duly  held. 

Compensation  of  assignee.  Sec  5099.  The  assignee  shall  be  allowed, 
and  may  retain  out  of  money  in  his  hands,  all  the  necessary  disburse- 
ments made  by  him  in  the  discharge  of  his  dut}-,  and  a  reasonable 
compensation  for  his  services,  in  the  discretion  of  the  court. 

Commissioners.  Sec  5100.  In  addition  to  all  expenses  necessarily 
incurred  by  him  in  the  execution  of  his  trust,  ifl  any  case,  the 
assignee  shall  be  entitled  to  an  allowance  for  his  services  in  such  case 
on  all  mone5'S  received  and  paid  out  by  him  therein,  for  any  sum  not 
exceeding  one  thousand  dollars,  five  per  centum  thereon;  for  any 
larger  sum,  not  exceeding  five  thousand  dollars,  two  and  a  half  per 


THS  I.AW  OP  1867.  1337 

centum  on  the  excess  of  over  one  thousand  dollars;  and  for  any  larger 
sum,  one  per  centum  on  the  excess  over  five  thousand  dollars.  If,  at 
any  time,  there  is  not  in  his  hands  a  sufficient  amount  of  money  to 
defray  the  necessary  expenses  required  for  the  further  execution  of 
his  trust,  he  shall  not  be  obliged  to  proceed  therein  until  the  necessary 
funds  are  advanced  or  satisfactorily  secured  to  him. 

Debts  entitled  to  priority.  Sec.  5101.  In  the  order  for  a  dividend, 
the  following  claims  shall  be  entitled  to  priority,  and  to  be  first  paid 
in  full  in  the  following  order: 

First,  The  fees,  costs,  and  expenses  of  suits,  and  of  the  several 
proceedings  in  bankruptc}'  under  this  Title,  and  for  the  custody  of 
property,  as  herein  provided. 

Second.  All  debts  due  to  the  United  States,  and  all  taxes  and 
assessments  under  the  laws  thereof. 

Third.  All  debts  due  to  the  State  in  which  the  proceedings  in 
bankruptcy  are  pending,  and  all  taxes  and  assessments  made  under 
the  laws  thereof. 

Fourth.  Wages  due  to  any  operative,  clerk,  or  house-servant,  to 
an  amount  not  exceeding  fifty  dollars,  for  labor  performed  within  six 
months  next  preceding  the  first  publication  of  the  notice  of  the  pro- 
ceedings in  bankrupt c}-. 

Fifth.  All  debts  due  to  any  person  who,  by  the  laws  of  the  United 
States,  are,  or  may  be,  entitled  to  a  priority,  in  like  manner  as  if  the 
provisions  of  this  Title  had  not  been  adopted.  But  nothing  contained 
in  this  Title  shall  interfere  with  the  assessment  and  collection  of  taxes 
by  the  authority  of  the  United  States  or  any  State. 

Notice  of  dividend  to  each  creditor.  Sec.  5102.  Whenever  a  divi- 
dend is  ordered,  the  register  shall,  within  ten  days  after  the  meeting, 
prepare  a  list  of  creditors  entitled  to  dividend,  and  shall  calculate  and 
set  opposite  to  the  name  of  each  creditor  who  has  proved  his  claim 
the  dividend  to  which  he  is  entitled  out  of  the  net  proceeds  of  the 
estate  set  apart  for  dividend,  and  shall  forward,  by  mail,  to  every 
creditor  a  statement  of.  the  dividend  to  which  he  is  entitled,  and  such 
creditors  shall  be  paid  by  the  assignee  in  such  manner  as  the  court 
may  direct. 

Settlement  of  bankrupt  estates  by  trustees.  Composition  with  credi- 
tors. Sec.  5103.  If  at  the  first  meeting  of  creditors,  or  at  any  meet- 
ing of  creditors  specially  called  for  that  purpose,  and  of  which 
previous  notice  shall  have  been  given  for  such  length  of  time  and  in 
such  manner  as  the  court  may  direct,  three-fourths  in  value  of  the 
creditors  whose  claims  have  been  proved  shall  resolve  that  it  is  for 
the  interest  of  the  general  body  of  the  creditors  that  the  estate  of  the 
bankrupt  shall  be  settled  by  trustees,  under  the  inspection  and  direc- 
tion of  a  committee  of  the  creditors,  the  creditors  may  certify  and 
report  such  resolution  to  the  court,  and  may  nominate  one  or  more 
trustees  to  take  and  hold  and  distribute  the  estate,  under  the  direction 
of  such  committee.     If  it  appears,  after  hearing  the  bankrupt  and 


1338  THE  LAW   OF   1867. 

such  creditors  as  desire  to  be  heard,  that  the  resolution  was  duly 
passed,  and  that  the  interest  of  the  creditors  will  be  promoted  thereby, 
the  court  shall  confirm  it;  and  upon  the  execution  and  filing,  by  or 
on  behalf  of  three-fourths  in  value  of  all  the  creditors  whose  claims 
have  been  proved,  of  a  consent  that  the  estate  of  the  bankrupt  shall 
be  wound  up  and  settled  by  trustees,  according  to  the  terms  of  such 
resolution,  the  bankrupt,  or,  if  an  assignee  has  been  appointed,  the 
assignee,  shall,  under  the  direction  of  the  court,  and  under  oath, 
convey,  transfer,  and  deliver  all  the  property  and  estate  of  the  bank- 
rupt to  the  trustees,  who  shall,  upon  such  conveyance  and  transfer, 
have  and  hold  the  same  in  the  same  manner,  and  with  the  same 
powers  and  rights,  in  all  respects,  as  the  bankrupt  would  have  had 
or  held  the  same  if  no  proceedings  in  bankruptcy  had  been  taken,  or 
as  the  assignee  in  bankruptcy  would  have  done,  had  such  resolution 
not  been  passed.  Such  consent  and  the  proceedings  under  it  shall  be 
as  binding  in  all  respects  on  any  creditor  whose  debt  is  provable,  who 
has  not  signed  the  same,  as  if  he  had  signed  it,  and  on  any  creditor 
whose  debt,  if  provable,  is  not  proved,  as  if  he  had  proved  it.  The 
court,  by  order,  shall  direct  all  acts  and  things  needful  to  be  done  to 
carry  into  effect  such  resolution  of  the  creditors,  and  the  trustees 
shall  proceed  to  wind  up  and  settle  the  estate  under  the  direction 
and  inspection  of  such  committee  of  the  creditors,  for  the  equal  ben- 
efit of  all  such  creditors;  and  the  winding  up  and  settlement  of  any 
estate  under  the  provisions  of  this  section  shall  be  deemed  to  be  pro- 
ceedings in  bankruptcy;  and  the  trustees  shall  have  all  the  rights 
and  powers  of  assignees  in  bankruptcy.  The  court,  on  the  applica- 
tion of  such  trustees,  shall  have  the  power  to  summon  and  examine, 
on  oath  or  otherwise,  the  bankrupt,  or  any  creditor,  or  any  person 
indebted  to  the  estate,  or  known  or  suspected  of  having  any  of  the 
estate  in  his  possession,  or  any  other  person  whose  examination  may 
be  material  or  necessary  to  aid  the  trustees  in  the  execution  of  their 
trust,  and  to  compel  the  attendance  of  such  persons  and  the  produc- 
tion of  books  and  papers  in  the  same  manner  as  in  other  proceedings 
in  bankruptcy;  and  the  bankrupt  shall  have  the  like  right  to  apply 
for  and  obtain  a  discharge  after  the  passage  of  such  resolution  and 
the  appointment  of  such  trustees  as  if  such  resolution  had  not  been 
passed,  and  as  if  all  the  proceedings  had  continued  in  the  manner 
provided  in  the  preceding  sections  of  this  Title.  If  the  resolution  is 
not  duly  reported,  or  the  consent  of  the  creditors  is  not  dulj  filed,  or 
if,  upon  its  filing,  the  court  does  not  think  fit  to  approve  thereof,  the 
bankruptcy  shall  proceed  as  if  no  resolution  had  been  passed,  and  the 
court  may  make  all  necessary  orders  for  resuming  the  proceedings. 
And  the  period  of  time  which  shall  have  elapsed  between  the  date  of 
the  resolution  and  the  date  of  the  order  for  resuming  proceedings 
shall  not  be  reckoned  in  calculating  periods  of  time  prescribed  by 
this  Title. 


the;  law  of*  1867.  1339 

CHAPTER  FIVE. 

PROTECTION    AND    DISCHARGE    OF    BANKRUPTS. 

Bankrupt  subject  to  orders  of  court.  Syc.  5104.  The  bankrupt 
shall  at  all  times,  until  his  discharge,  be  subject  to  the  order  of  the 
court,  and  shall,  at  the  expense  of  the  estate,  execute  all  proper 
writings  and  instruments,  and  do  all  acts  required  by  the  court  touch- 
ing the  assigned  property  or  estate,  and  to  enable  the  assignee  to 
demand,  recover,  and  receive  all  the  property  and  estate  assigned, 
wherever  situated.  For  neglect  or  refusal  to  obey  any  order  of  the 
court,  the  bankrupt  may  be  committed  and  punished  as  for  a  contempt 
of  court.  If  the  bankrupt  is  without  the  district,  and  unable  to  return 
and  personally  attend  at  any  of  the  times  or  do  any  of  the  acts  which 
may  be  required  pursuant  to  this  section,  and  it  appears  that  such 
absence  was  not  caused  by  willful  default,  and  if,  as  soon  as  may 
be  after  the  removal  of  such  impediment,  he  offers  to  attend  and  sub- 
mit to  the  order  of  the  court  in  all  respects,  he  shall  be  permitted  so 
to  do,  with  like  effect  as  if  he  had  not  been  in  default. 

Waiver  of  suit  by  proof  of  debt.  Sec.  5105.  No  creditor  proving 
his  debt, or  claim  shall  be  allowed  to  maintain  any  suit  at  law  or  in 
equity  therefor  against  the  bankrupt,  but  shall  be  deemed  to  have 
waived  all  right  of  action  against  him ;  and  all  proceedings  already 
commenced  or  unsatisfied  judgments  alreadj''  obtained  thereon  against 
the  bankrupt  shall  be  deemed  to  be  discharged  and  surrendered 
thereby. 

Stay  of  suits.  Sec.  5106.  No  creditor  whose  debt  is  provable 
shall  be  allowed  to  prosecute  to  final  judgment  any  suit  at  law  or  in 
equity  therefor  against  the  bankrupt,  until  the  question  of  the  debt- 
or's discharge  shall  have  been  determined  ;  and  any  such  suit  or  pro- 
ceedings shall,  upon  the  application  of  the  bankrupt,  be  stayed  to 
await  the  determination  of  the  court  in  bankruptcy  on  the  question 
of  the  discharge,  provided  there  is  no  unreasonable  delay  on  the  part 
of  the  bankrupt  in  endeavoring  to  obtain  his  discharge,  and  provided, 
also,  that  if  the  amount  due  the  creditor  is  in  dispute,  the  suit,  by 
leave  of  the  court  in  bankruptcy,  may  proceed  to  judgment  for  the 
purpose  of  ascertaining  the  amount  due,  which  amount  may  be 
proved  in  bankruptcy,  but  execution  shall  be  stayed. 

Exemption  from  arrest.  Sec  5107.  No  bankrupt  shall  be  liable 
during  the  pendency  of  the  proceedings  in  bankruptcy  to  arrest  in  any 
civil  action,  unless  the  same  is  founded  on  some  debt  or  claim  from 
which  his  discharge  in  bankruptcy  would  not  release  him. 

Application  for  discharge.  Sec.  5108.  (^At  any  time  after  the  expir- 
ation of  six  montlis  from  the  adjudication  of  banhmptcy,  or  if  710  debts 
have  been  proved  against  the  bankrupt,  or  if  7io  assets  have  come  to  the 
hajids  of  the  assignee,  at  any  time  after  the  expiration  of  sixty  days, 
and  within  ojie  year  from  the  adjudication  of  bankruptcy,  the  ba?ikrupi 


1340  THE  IvAW  OP  1867, 

may  apply  to  the  court  for  a  discharge  from  his  debts. ^  (At  any  time 
after  the  expiration  of  vsix  months  from  the  adjudication  of  bank- 
ruptcy, or  if  no  debts  have  been  proved  against  the  bankrupt,  or  if  no 
assets  have  come  to  the  hands  of  the  assignee,  at  any  time  after  the 
expiration  of  sixty  days,  and  before  the  final  disposition  of  the  cause, 
the  bankrupt  may  apply  to  the  court  for  a  discharge  from  his  debts. 
This  section  shall  apply  in  all  cases  heretofore  or  hereafter  com- 
menced.) 

Notice  to  creditors.  Sec.  5109.  Upon  application  for  a  discharge 
being  made  the  court  shall  order  notice  to  be  given  by  mail  to  all  cred- 
itors who  have  proved  their  debts,  and  by  publication  at  least  once  a 
week  in  such  newspapers  as  the  court  shall  designate,  due  regard  be- 
ing had  to  the  general  circulation  of  the  same  in  the  district,  or  in 
that  portion  of  the  district  in  which  the  bankrupt  and  his  creditors 
shall  reside  to  appear  on  a  day  appointed  for  that  purpose,  and  show 
cause  why  a  discharge  should  not  be  granted  to  the  bankrupt. 

Grounds  for  opposing  discharge.  Sec.  5 no.  No  discharge  shall  be 
granted,  or,  if  granted,  shall  be  valid,  in  any  of  the  following  cases : 

First.  If  the  bankrupt  has  willfully  sworn  falsely  in  his  affidavit 
annexed  to  his  petition,  schedule,  or  inventory,  or  upon  any  examina- 
tion in  the  course  of  the  proceedings  in  bankruptcy,  in  relation  to  any 
material  fact. 

Second.  If  the  bankrupt  has  concealed  any  part  of  his  estate  or 
effects,  or  any  books  or  writings  relating  thereto,  or  has  been  guilty 
of  any  fraud  or  negligence  in  the  care,  custody,  or  delivery  to  the 
assignee  of  the  property  belonging  to  him  at  the  time  of  the  presen- 
tation of  his  petition  and  inventorj^  excepting  such  property  as 
he  is  permitted  to  retain  under  the  provisions  of  this  Title,  or  if  he 
has  caused,  permitted,  or  suffered  any  loss,  waste,  or  destruction 
thereof. 

Third.  If,  within  four  months  before  the  commencement  of  such 
proceedings,  the  bankrupt  has  procured  his  lands,  goods,  money,  or 
chattels  to  be  attached,  sequestered,  or  seized  on  execution. 

Fourth,  If,  at  an}'-  time  after  the  second  day  of  March,  eighteen 
hundred  and  sixty-seven,  the  bankrupt  has  destroyed,  mutilated,  al- 
tered, or  falsified  any  of  his  books,  documents,  papers,  writings,  or 
securities,  or  has  made  or  been  privy  to  making  of  any  false  or  fraud- 
ulent entry  in  any  book  of  account  or  other  document,  with  intent  to 
defraud  his  creditors  ;  or  has  removed  or  caused  to  be  removed  any 
part  of  his  property  from  the  district,  with  intent  to  defraud  his 
creditors. 

Fifth.  If  the  bankrupt  has  given  any  fraudulent  preferences  con- 
trary to  the  provisions  of  the  act  of  March  two,  eighteen  hundred  and 
sixty-seven,  to  establish  a  uniform  system  of  bankruptcy,  or  to  the 
provisions  of  this  Title,  or  has  made  any  fraudulent  pa5'-ment,  gift, 
transfer,  conveyance,  or  assignment  of  any  part  of  his  property,  or 


THR   LAW  OP    1867.  1341 

has  lost  any  part  thereof  in  gaming,  or  has  admitted  a  false  or  ficti- 
tious debt  against  his  estate. 

Sixth.  If  the  bankrupt,  having  knowledge  that  any  person  has 
proved  such  false  and  fictitious  debt,  has  not  disclosed  the  same  to 
his  assignee  within  one  month  after  such  knowledge. 

Seventh.  If  the  bankrujit,  being  a  merchant  or  tradesman,  has 
not,  at  all  times  after  the  second  day  of  March,  eighteen  hundred  and 
sixty-seven,  kept  proper  books  of  account. 

Eighth,  If  the  bankrupt,  or  any  person  in  his  behalf,  has  pro- 
cured the  assent  of  any  creditor  to  the  discharge,  or  influenced  the 
action  of  any  creditor  at  any  stage  of  the  proceedings,  by  any  pecu- 
niary consideration  or  obligation. 

Ninth.  If  the  bankrupt  has,  in  contemplation  of  becoming  bank- 
rupt, made  any  pledge,  payment,  transfer,  assignment,  or  convej'ance 
of  any  part  of  his  property,  directly  or  indirectly,  absolutely  or  con- 
ditionally, for  the  purpose  of  preferring  any  creditor  or  person  having 
a  claim  against  him,  or  who  is  or  may  be  tinder  liability  for  him,  or 
for  the  purpose  of  preventing  the  property  from  coming  into  the 
hands  of  the  assignee,  or  of  being  distributed  in  satisfaction  of  his 
debts. 

Tenth.  If  the  bankrupt  has  been  convicted  of  any  misdemeanor 
under  this  Title. 

Specification  of  grounds  of  opposition.  Sec.  5111.  Any  creditor 
opposing  the  discharge  of  any  bankrupt  may  file  a  specification  in 
writing  of  the  grounds  of  his  opposition,  and  the  court  may  in  its 
discretion  order  any  question  of  fact  so  presented  to  be  tried  at  a 
stated  session  of  the  district  court. 

Assets  equal  to  fifty  per  cent,  required.  Sec.  5112.  In  all  proceed- 
ings in  bankruptcy  commenced  after  the  first  day  of  January,  eighteen 
hundred  and  sixty-nine,  no  discharge  shall  be  granted  to  a  debtor 
whose  assets  shall  not  be  equal  to  fifty  per  centum  of  the  claims 
proved  against  his  estate  upon  which  he  shall  be  liable  as  the  prin- 
cipal debtor,  unless  the  assent  in  writing  of  a  majority  in  number  and 
value  of  his  creditors  to  whom  he  shall  have  become  liable  as  princi- 
pal debtor,  and  who  shall  have  proved  their  claims,  as  filed  in  the 
case  at  or  before  the  time  of  the  hearing  of  the  application  for  dis- 
charge; but  this  provision  shall  not  apply  to  those  debts  from  which 
the  bankrupt  seeks  a  discharge  which  were  contracted  prior  to  the 
first  day  of  January,  eighteen  hundred  and  sixty-nine. 

Final  oath  of  bankrupt.  Sec.  51 13.  Before  any  discharge  is  granted, 
the  bankrupt  must  take  and  subscribe  an  oath  to  the  effect  that  he 
has  not  done,  suffered,  or  been  privy  to  any  act,  matter,  or  thing 
specified  as  a  ground  for  withholding  such  discharge,  or  as  invalidat- 
ing such  discharge  if  granted. 

Discharge  of  bankrupt.  Sec.  51 14.  If  it  shall  appear  to  the  court 
that  the  bankrupt  has  in  all  things  conformed  to  his  duty  under  this 
Title,  and  that  he  is  entitled,  under  the  provisions  thereof,  to  receive 


1342  THE  ivAw  OP  1867. 

a  discharge,  the  court  shall  grant  him  a  discharge  from  all  his  debts 
except  as  hereinafter  provided,  and  shall  give  him  a  certificate  thereof 
under  the  seal  of  the  court. 

Form  of  certificate  of  discharge.     vSec.  5 115.     The  certificate  of  a 
discharge  in  bankruptcy  shall  be  in  substance  in  the  following  form  : 
District  court  of  the  United  States,  district  of 

Whereas  has  been  duly  adjudged  a  bankrupt  under 

the  Revised  Statutes  of  the  United  States,  Title  "  Bankruptcy,  "  and 
appears   to   have  conformed  to   all  the  requiraments  of  law  in  that 
behalf,  it  is  therefore  ordered  by  the  court  that  said 
be  forever  discharged  from  all  debts  and  claims  which  by  said  Title 
are  made  provable  against  his  estate,  and  which  existed  on  the 
day  of  ,  on  which  day  the  petition  for  adjudication  w^as  filed 

by  (or  against)  him ;  excepting  such  debts,  if  any,  as  are  by  law 
excepted  from  the  operation  of  a  discharge  in  bankruptcy.  Given 
under  my  hand   and   the  seal   of  the  court  at  ,  in  the  said 

district,  this  day  of  , 

(Seal.)  ,  Judge. 

Second  bankruptcy.  Sec.  51 16.  No  person  who  has  been  discharged, 
and  afterwards  becomes  bankrupt  on  his  own  application,  shall  be 
again  entitled  to  a  discharge  whose  estate  is  insufficient  to  pay 
seventy  per  centum  of  the  debts  proved  against  it,  unless  the  assent 
in  writing  of  three-fourths  in  value  of  his  creditors  who  have  proved 
their  claims  is  filed  at  or  before  the  time  of  application  for  discharge  ; 
but  a  bankrupt  who  proves  to  the  satisfaction  of  the  court  that  he 
has  paid  all  the  debts  owing  by  him  at  the  time  of  any  previous 
bankruptcy,  or  who  has  been  voluntarily  released  therefrom  by  his 
creditors,  shall  be  entitled  to  a  discharge  in  the  same  manner  and 
with  the  same  effect  as  if  he  had  not  previously  been  bankrupt. 

Certain  debts  not  released.  Sec.  51 17.  No  debt  created  by  the 
fraud  or  embezzlement  of  the  bankrupt,  or  by  his  defalcation  as  a 
public  officer,  or  while  acting  in  any  fiduciary  character,  shall  be  dis- 
charged by  proceedings  in  bankruptcj^;  but  the  debt  may  be  proved, 
and  the  dividend  thereon  shall  be  a  payment  on  account  of  such  debt. 

Liability  of  other  persons  not  released.  Sec.  51 18.  No  discharge 
shall  release,  discharge,  or  affect  any  person  liable  for  the  same  debt 
for  or  with  the  bankrupt,  either  as  partner,  joint  contractor,  indorser, 
surety,  or  otherwise. 

Effect  of  discharge.  Sec.  51 19.  A  discharge  in  bankruptcy  duly 
granted  shall,  subject  to  the  limitations  imposed  by  the  two  preceding 
sections,  release  the  bankrupt  from  all  debts,  claims,  liabilities,  and 
demands  which  were  or  might  have  been  proved  against  his  estate  in 
bankruptcy.  It  may  be  pleaded  by  a  simple  averment  that  on  the 
day  of  its  date  such  discharge  was  granted  to  the  bankrupt,  setting  a 
full  copy  of  the  same  forth  in  its  terms  as  a  full  and  complete  bar  to  all 
suits  brought  on  any  such  debts,  claims,  liabilities,  or  demands.    The 


the;  law  of  1867.  1343 

certificate  shall  be  conclusive  evidence  in  favor  of  such  bankrupt  of 
the  fact  and  the  regularity  of  such  discharge. 

Application  to  annul  discharge.  Sec.  5120.  Any  creditor  of  a 
bankrupt,  whose  debt  was  proved  or  provable  against  the  estate  in 
bankruptcy,  who  desires  to  contest  the  validity  of  the  discharge  on 
the  ground  that  it  was  fraudulently  obtained,  maj-,  at  any  time  within 
two  years  after  the  date  thereof,  apply  to  the  court  which  granted  it 
to  annul  the  same.  The  application  shall  be  in  writing,  and  shall 
specify  which,  in  particular,  of  the  several  acts  mentioned  in  section 
fifty-one  hundred  and  ten  it  is  intended  to  prove  against  the  bankrupt, 
and  set  forth  the  grounds  of  avoidance ;  and  no  evidence  shall  be 
admitted  as  to  any  other  such  acts  ;  but  the  application  shall  be  sub- 
ject to  amendment  at  the  discretion  of  the  court.  The  court  shalF 
cause  reasonable  notice  of  the  application  to  be  given  to  the  bankrupt, 
and  order  him  to  appear  and  answer  the  same,  within  such  time  as  to 
the  court  shall  seem  proper.  If,  upon  the  hearing  of  the  parties,  the 
court  finds  that  the  fraudulent  acts,  or  any  of  them,  eet  forth  by  the 
creditor  against  the  bankrupt,  are  proved,  and  that  the  creditor  had 
no  knowledge  of  the  same  until  after  the  granting  of  the  discharge, 
judgment  shall  be  given  in  favor  of  the  creditor,  and  the  discharge 
of  the  bankrupt  shall  be  annulled.  But  if  the  court  finds  that  the 
fraudulent  acts  and  all  of  them  so  set  forth  are  not  proved,  or  that 
they  were  known  to  the  creditors  before  the  granting  of  the  discharge, 
judgment  shall  be  rendered  in  favor  of  the  bankrupt,  and  the  validity 
of  his  discharge  shall  not  be  affected  by  the  proceedings. 


CHAPTER  SIX. 

PROCEEDINGS   PECULIAR   TO   PARTNERSHIPS   AND    CORPORATIONS. 

Bankruptcy  of  partnerships.  Sec.  5 121.  Where  two  or  more  per- 
sons who  are  partners  in  trade  are  adjudged  bankrupts,  either  on  the 
petition  of  such  partners  or  of  any  one  of  them,  or  on  the  petition  of 
any  creditor  of  the  partners,  a  warrant  shall  issue,  in  the  manner 
provided  by  this  Title,  upon  which  all  the  joint  stock  and  property  of 
the  copartnership,  and  also  all  the  separate  estate  of  each  of  the 
partners,  shall  be  taken,  excepting  stich  parts  thereof  as  are  herein- 
before excepted.  All  the  creditors  of  the  company,  and  the  separate 
creditors  of  each  partner,  may  prove  their  respective  debts.  The 
assignee  shall  be  chosen  b}'  the  creditors  of  the  company.  He  shall 
keep  separate  accounts  of  the  joint  stock  or  property  of  the  copart- 
nership and  of  the  separate  estate  of  each  member  thereof;  and  after 
deducting  out  of  the  whole  amount  received  by  the  assignee  the 
whole  of  the  expenses  and  disbursements,  the  net  proceeds  of  the 
joint  stock  shall  be  appropriated  to  pay  the  creditors  of  the  copart- 
nership, and  the  net  proceeds  of  the  separate  estate  of  each  partner 
shall  be  appropriated  to  pay  his  separate  creditor^.     If  there  is  any 


1344  THE  LAW  OP   1867. 

balance  of  the  separate  estate  of  any  partner,  after  the  payment  of 
his  separate  debts,  such  balance  shall  be  added  to  the  joint  stock  for 
the  paj^ment  of  the  joint  creditors;  and  if  there  is  any  balance  of  the 
joint  stock  after  payment  of  the  joint  debts,  such  balance  shall  be 
appropriated  to  and  divided  among  the  separate  estates  of  the  several 
partners  according  to  their  respective  right  and  interest  therein,  and 
as  it  would  have  been  if  the  partnership  had  been  dissolved  without 
any  bankruptc}-;  and  the  sum  so  appropriated  to  the  separate  estate 
of  each  partner  shall  be  applied  to  the  payment  of  his  separate  debts. 
The  certificate  of  discharge  shall  be  granted  or  refused  to  each  part- 
ner as  the  same  would  or  ought  to  be  if  the  proceedings  had  been 
against  him  alone.  In  all  other  respects  the  proceedings  against 
■  partners  shall  be  conducted  in  the  like  manner  as  if  they  had  been 
commenced  and  prosecuted  against  one  person  alone.  If  such  co- 
partners reside  in  different  districts,  that  court  in  which  the  petition 
is  first  filed  shall  retain  exclusive  jurisdiction  over  the  case. 

Of  corporations  and  joint-stock  companies.  Sec.  5122.  The  pro- 
visions of  this  Title  shall  applj'  to  all  monej-ed  business  or  commercial 
corporations  and  joint-stock  companies,  and  upon  the  petition  of  any 
officer  of  any  such  corporation  or  company,  duly  authorized  by  a  vote 
of  a  majority  of  the  corporators  at  any  legal  meeting  called  for  the  pur- 
pose, or  upon  the  petition  of  any  creditor  of  such  corporation  or  com- 
pany, made  and  presented  in  the  manner  provided  in  respect  to 
debtors,  the  like  proceedings  shall  be  had  and  taken  as  are  provided 
in  the  case  of  debtors.  All  the  provisions  of  this  Title  which  apply  to 
the  debtor,  or  set  forth  his  duties  in  regard  to  furnishing  schedules 
and  inventories,  executing  papers,  submitting  to  examinations,  dis- 
closing, making  over,  secreting,  concealing,  conveying,  assigning,  or 
pa5nng  away  his  money  or  propert}^,  shall  in  like  manner,  and  with 
like  force,  effect,  and  penalties,  apply  to  each  and  every  officer  of  such 
corporations  or  company  in  relation  to  the  same  matters  concerning 
the  corporation  or  company,  and  the  money  and  property  thereof.  All 
payments,  conveyances,  and  assignments  declared  fraudulent  and  void 
by  this  Title  when  made  by  a  debtor,  shall  in  like  manner,  and  to  the 
like  extent,  and  with  like  remedies,  be  fraudulent  and  void  when 
made  by  a  corporation  or  company.  Whenever  any  corporation  by 
proceedings  under  this  Title  is  declared  bankrupt,  all  its  property  and 
assets  shall  be  distributed  to  the  creditors  of  such  corporations  in  the 
manner  provided  in  this  Title  in  respect  to  natural  persons.  But  no 
allowance  or  discharge  shall  be  granted  to  any  corporation  or  joint- 
stock  company,  or  to  any  person  or  officer  or  member  thereof. 

Authority  of  State  courts  in  proceedings  against  corporations,  &c. 
Sec.  5123.  Whenever  a  corporation  created  by  the  laws  of  any  State, 
whose  business  is  carried  on  wholly  within  the  State  creating  the 
same,  and  also  any  insurance  company  so  created,  whether  all  its 
business  shall  be  carried  on  in  such  State  or  not,  has  had  proceedings 
duly  commenced  against  such  corporation  or  company  before  the 


THE   LAW   OP    1867.  1345 

courts  of  such  State  for  the  purpose  of  winding  up  the  affairs  of  such 
corporation  or  company  and  dividing  its  assets  ratably  among  its 
creditors  and  lawfully  among  those  entitled  thereto  prior  to  proceedings 
having  been  commenced  against  such  corporation  or  company  under 
the  bankrupt  laws  of  the  United  States,  any  order  made,  or  that  shall 
be  made,  bj'such  court  agreeably  to  the  State  law  for  the  ratable  distri- 
bution or  paj-ment  of  any  dividend  ot  assets  to  the  creditors  of  such 
corporation  or  compan}^  while  such  State  court  shall  remain  actually 
or  constructively  in  possession  or  control  of  the  assets  of  such  cor- 
poration or  company  shall  be  deemed  valid  notwithstanding  proceed- 
ings in  bankruptcy  may  have  been  commenced  and  be  pending  against 
such  corporation  or  compan3\ 

CHAPTER   SEVEN. 

FEES    AND    COSTS. 

Fees.  Sec.  5124.  In  each  case  there  shall  be  allowed  and  paid, 
in  addition  to  the  fees  of  the  clerk  of  the  court  as  now  established  by 
law,  or  as  may  be  established  by  general  order  for  fees  in  bankruptcy, 
the  following  fees,  which  shall  be  applied  to  paying  for  the  services 
of  the  registers  : 

First.     For  issuing  every  warrant,  two  dollars. 

Second.     For  each  day  in  which  a  meeting  is  held,  three  dollars. 

Third.     For  each  order  for  a  dividend,  three  dollars. 

Fourth.  For  every  order  substituting  an  arrangement  by  trust- 
deed  for  bankruptcy,  two  dollars. 

Fifth.     For  every  bond  with  sureties,  two  dollars. 

Sixth.  For  everj^  application  for  any  meeting  in  any  matter  under 
this  lacf,']  [Title,]  one  dollar. 

Seventh.  For  every  day's  service  while  actuall}'  employed  under  a 
Bpecial  order  of  the  court,  a  sum  not  exceeding  five  dollars,  to  be 
allowed  by  the  court. 

Eighth.     For  taking  depositions,  the  fees  now  allowed  by  law. 

Ninth.  For  every  discharge  when  there  is  no  opposition,  two 
dollars. 

Such  fees  shall  have  priority  of  payment  over  all  other  claims  out 
of  the  estate,  and,  before  a  warrant  issues,  the  petitioner  shall  deposit 
with  the  clerk  of  the  court  fiftj^  dollars  as  security  for  the  pa5-ment 
thereof;  and  if  there  are  not  sufficient  assets  for  the  payment  of  the 
fees,  the  person  upon  whose  petition  the  warrant  is  issued  shall  pay 
the  same,  and  the  court  may  issue  an  execution  against  him  to  compel 
payment  to  the  register. 

Traveling  and  incidental  expenses.  Sec.  5125.  The  traveling  and 
incidental  expenses  of  the  register,  and  of  any  clerk  or  other  officer 
attending  him,  shall  be  settled  by  the  court  in  accordance  with  the 
rules  prescribed  by  the  justices  of  the  Supreme  Court,  and  paid  out  of 


1346  THE   LAW   OF    1 867. 

the  assets  of  the  estate  in  respect  of  which  such  register  has  acted; 
or  if  there  are  no  such  assets,  or  if  the  assets  are  insufficient,  such 
expenses  shall  form  a  part  of  the  costs  in  the  case  in  which  the 
register  acts,  to  be  apportioned  by  the  judge. 

Marshal's  fees.  Sec.  5126.  Before  any  dividend  is  ordered,  the 
assignee  shall  pay  out  of  the  estate  to  the  messenger  the  following 
fees,  and  no  more  : 

First.     For  service  of  warrant,  two  dollars. 

Second.  For  all  necessary  travel,  at  the  rate  of  five  cents  a  mile 
each  wa}-. 

Third.     For  each  written  note  -to  creditor  named  in  the  schedule, 

ten  cents. 

Fourth.  For  custody  of  property,  publication  of  notices,  and 
other  services,  his  actual  and  necessary  expenses  upon  returning  the 
same  in  specific  items,  and  making  oath  that  they  have  been  actually- 
incurred  and  paid  by  him,  and  are  just  and  reasonable,  the  same  to  be 
taxed  or  adjusted  by  the  court,  and  the  oath  of  the  messenger  shall 
not  be  conclusive  as  to  the  necessity  of  such  expenses. 

For  cause  shown,  and  upon  hearing  thereon,  such  further  allow- 
ance may  be  made  as  the  court,  in  its  discretion,  may  determine. 

Justices  of  Supreme  Court  may  change  tariff  of  fees.  Sec.  5127. 
The  enumeration  of  the  foregoing  fees  shall  not  prevent  the  justices 
of  the  Supreme  Court  from  prescribing  a  tariff  of  fees  for  all  other 
services  or  the  officers  of  courts  of  bankruptcy,  or  from  reducing  the 
fees  prescribed  in  the  three  preceding  sections,  in  classes  of  cases  to 
be  named  in  their  general  orders. 


CHAPTER  EIGHT. 

PROHIBITED   AND   FRAUDULENT   TRANSFERS. 

Preferences  by  insolvent.  Sec.  5128.  If  any  person,  being  insol- 
vent, or  in  contemplation  of  insolvency,  within  four  months  before 
the  filing  of  the  petition  by  or  against  him,  with  a  view  to  give  a 
preference  to  any  creditor  or  person  having  a  claim  against  him,  or 
who  is  under  any  liability  for  him,  procures  or  suffers  any  part  of  his 
property  to  be  attached,  sequestered,  or  seized  on  execution,  or  makes 
any  payment,  pledge,  assignment,  transfer,  or  conveyance  of  any 
part  of  his  property,  either  directly  or  indirectly,  absolutely  or  con- 
ditionally, the  person  receiving  such  payment,  pledge,  assignment, 
transfer,  or  conveyance,  or  to  be  benefited  thereby,  or  by  such  attach- 
ment, having  reasonable  cause  to  believe  such  person  is  insolvent,  and 
that  such  attachment,  payment,  pledge,  assignment,  or  conveyance  is 
made  in  fraud  of  the  provisions  of  this  Title,  the  same  shall  be  void, 
and  the  assignee  may  recover  the  property,  or  the  value  of  it,  from 
the  person  so  receiving  it,  or  so  to  be  benefited. 


THE   LAW   OF    1 867.  1347 

Fraudulent  transfers  of  property.  Sec.  5129.  If  any  person,  being 
insolvent,  or  in  contemplation  of  insolvency  or  bankruptcy,  within 
six  months  before  the  filing  of  the  petition  by  or  against  him,  makes 
any  payment,  sale,  assignment,  transfer,  convej'ance,  or  other  dispo- 
sition of  any  part  of  his  property  to  any  person  who  then  has  reason- 
able cause  to  believe  him  to  be  insolvent,  or  to  be  acting  in  contem- 
plation of  insolvency,  and  that  such  paj'ment,  sale,  assignment, 
transfer,  or  other  conveyance  is  made  with  a  view  to  prevent  his 
propertj^  from  coming  to  his  assignee  in  bankruptcy,  or  to  prevent  the 
same  from  being  distributed  under  this  [rtr/]  [Title,]  or  to  defeat  the 
object  of,  or  in  any  way  impair,  hinder,  impede,  or  delaj^the  operation 
and  effect  of,  or  to  evade  any  of  the  provisions  of  this  Title,  the  sale, 
assignment,  transfer,  or  conveyance  shall  be  void,  and  the  assignee 
may  recover  the  property,  or  the  value  thereof,  as  assets  of  the  bank- 
rupt. 

Presumptive  evidence  of  fraud.  Sec.  5130.  The  fact  that  such  a 
paj-ment,  pledge,  sale,  assignment,  transfer,  conveyance,  or  other 
disposition  of  a  debtor's  property  as  is  prescribed  in  the  two  preceding 
sections,  is  not  made  in  the  usual  and  ordinary'  course  of  business  of 
the  debtor,  shall  be  prima  facie  evidence  of  fraud. 

Fraudulent  agreements.  Sec.  5 131.  Any  contract,  covenant,  or 
security'  made  or  given  by  a  bankrupt  or  other  person  with,  or  in 
trust  for,  any  creditor,  for  securing  the  payment  of  any  money  as  a 
consideration  for  or  with  intent  to  induce  the  creditor  to  forbear 
opposing  the  application  for  a  discharge  of  the  bankrupt,  shall  be 
void;  and  any'  creditor  who  obtains  any  sum  of  money  or  other  goods, 
chattels,  or  security  from  any  person  as  an  inducement  for  forbearing 
to  oppose,  or  consenting  to  such  application  for  discharge,  shall 
forfeit  all  right  to  any  share  or  dividend  in  the  estate  of  the  bankrupt, 
and  shall  also  forfeit  double  the  value  or  amount  of  such  money, 
goods,  chattels,  or  security  so  obtained,  to  be  recovered  by  the  assignee 
for  the  benefit  of  the  estate. 

Penalties  against  fraudulent  bankrupt.  Sec.  5132.  Every  person 
respecting  whom  proceedings  in  bankruptcy  are  commenced,  either 
upon  his  own  petition  or  upon  that  of  a  creditor: 

First.  Who  secretes  or  conceals  any  property  belonging  to  his 
estate;  or, 

Second.  Who  parts  with,  conceals,  destroys,  alters,  mutilates,  or 
falsifies,  or  causes  to  be  concealed,  destro3'ed,  altered,  mutilated,  o; 
falsified,  any  book,  deed,  document,  or  writing  relating  thereto;  or. 

Third.  Who  removes  or  causes  to  be  removed  any  such  property 
or  book,  deed,  document,  or  writing  out  of  the  district,  or  otherwise 
disposes  of  any  part  thereof,  with  intent  to  prevent  it  from  coming 
into  the  possession  of  the  assignee  in  bankruptcy,  or  to  hinder, 
impede,  or  delay  him  in  recovering  or  receiving  the  vSame;  or, 

Fourth.     Who  makes  any  payment,  gift,  sale,  assignment,  trans- 


134S  THE   LAW   OP    1867. 

fer,  or  conveyance  of  any  property  belonging  to  his  estate  with  the 
like  intent;  or, 

Fifth.  Who  spends  any  property  belonging  to  his  estate  in  gam- 
ing; or, 

Sixth.  Who,  with  intent  to  defraud,  wilfully  and  fraudulently  con- 
ceals  from  his  assignee  or  omits  from  his  inventory  any  property  or 
effects  required  by  this  Title  to  be  described  therein;  or. 

Seventh.  Who,  having  reason  to  suspect  that  any  other  person 
has  proved  a  false  or  fictitious  debt  against  his  estate,  fails  to  disclose 
the  same  to  his  assignee  within  one  month  after  coming  to  the  knowl- 
edge or  belief  thereof;  or. 

Eighth.  Who  attempts  to  account  for  any  of  his  property  by 
fictitious  losses  or  expenses;  or, 

Ninth.  Who,  within  three  months  before  the  commencement  of 
proceedings  in  bankruptcy,  under  the  false  color  and  pretense  of 
carrying  on  business  and  dealing  in  the  ordinary  course  of  trade, 
obtains  on  credit  from  any  person  any  goods  or  chattels  with  intent 
to  defraud;  or, 

Tenth.  Who,  within  three  months  next  before  the  commencement 
of  proceedings  in  bankruptcy,  with  intent  to  defraud  his  creditors, 
pawns,  pledges,  or  disposes  of,  otherwise  than  by  transactions  made 
in  good  faith  in  the  ordinary  way  of  his  trade,  any  of  his  goods  or 
chattels  which  have  been  obtained  on  credit  and  remain  unpaid  for. 

Shall  be  punishable  by  imprisonment,  with  or  without  hard  labor, 
for  not  more  than  three  years. 


TABLE  OF  CASES, 


1349 


TABLE    OF   CASES 


References  are  to  pages. 


Abbe,  In  re   (2  N.  B.  R.  75),  323. 
Abbey  Press,  In  re  (134  Fed.  Rep. 

51),  630,  633,  635,  037. 
Abbott  V.  Burbage   (2  Scott,  65G), 

553. 
Abbott   V.    Hicks    (5   Bing.,   N.    C. 

578),  377,  378. 
Abelman  v.  Booth   (31  How,  500), 

941. 
Ablowich,  In  re  (99  Fed.  Rep.  81), 

681. 
Ablowich   V.    Stursberg    (105   Fed. 

Rep.   751),   805,   806. 
Abendroth   v.   VanDolsen    (131   U. 

S.,  66),  850,  859. 
Abraham,    In    re     (93    Fed.    Rep. 

767),   105,   290,   869,   870,   872, 

900,   905,   910. 
Abrahams,    In    re     (5    Law    Rep. 

328),  240. 
Abraham    v.    Plestoro    (3    Wend., 

N.   Y.,   538),   461. 
Abraham    Steers    Co.,   In   re    (112 

Fed.  Rep.  406),  398,  399,  570, 

577,  905. 
Abram,  In  re  (103  Fed.  Rep.  272), 

159,  102,  422. 
Adams,  In  re   (3  Ben.  7),  628. 
Adams,  In  re  (29  Fed.  Rep.  843), 

315,  862. 
Adams,  In  r<    (104  Fed.  Rep.  72), 

680,  681.   682,  797. 
Adams,  In  r,f  (130  Fed.  Rep.  788), 

82,  90,  VOO. 
Adams,  In  re  (134  Fed.  Rep.  142), 

422,  48?. 
Adams  v.  Collier   (122  U.  S.,  382), 

469,  557. 
Adams  v.  Law  (16  How.  148),  932. 
Adams    v.    Merchants    Nat.    Bank 

(2  Fed.  Rep.  174),  603,  605. 
Adams    v.    Meyers    (1    Saw.    306), 

454. 
Adams    Sartorial   Co.,   In  re    (101 

Fed.  Rep.  215),  156,  157,  255; 
'Adams    v.    Terrell     (4    Fed.    Rep. 

802),  171,  297. 
Adler,  In  re   (2  Woods,  571),  425. 
Adler  In  re   (103  Fed.  Rep.  444), 

914. 
Adler,  In  re  (144  Fed.  Rep.  659), 

841,  843. 


Adler    v.    Jones     (109    Fed.    Rep. 

907),   710,   717,  718. 
Aflalo    V.    Fourdrinier     (6    Bing., 

306),  341. 
Ager  V.  Murray   (105  U.  S.,  131), 

463. 
Akins  V.  Stradley  (51  la.  414),  91. 
Ala.  &  C.  R.  Co.  V.  Jones  (7  N.  B. 

R.  145),  907,  910. 
Alaska,   The    (35   Fed.  Rep.   555), 

920. 
Alaska  United   Gold.   Min.   Co.   v. 

Keating   (116  Fed.  Rep.  561), 

918. 
Albany  Exch.  Bank  v.  Johnson   (5 

Law  Rep.   313),  10,  296. 
Albreacht,   In   re    (104    Fed.    Rep. 

974),    790. 
Alcott   V.    Avery    (1    Barb.    Chan., 

N.   Y.,   347),   861. 
Alden  Electric  Co.,  In  re  (123  Fed. 

Rep.  415),  919,  921,  940,  941. 
Alder    v.    Keighley    (15    M.    &   W. 

117),  627. 
Alderdice      v.      State     Bank      (1 

Hughes,   47),   580. 
Alderson,  In  re  (98  Fed.  Rep.  588), 

347,   769,   834. 
Alexander,   In   re    (1    Low.    470), 

194. 
Alexander,  In  re  (Chase,  295),  903, 

906. 
Alexander,   In  re    (102   Fed.   Rep. 

464),  557. 
Alexander   v.    Gait    (9    Fed.   Rep. 

149),  555,  567. 
Alexander  v.  McCullough  (32  Leg. 

Int.   336),   437. 
Alexander     v.     Union     Surety     & 

Guaranty  Co.    (11  Am.   B.   R. 

32),  430. 
Alfred  V.  Constable   (4  Ad.  &  El. 

N.  S.  674),  553. 
Aling  V.  Egan  (11  Rob.,  La.,  244), 

835. 
Alison    Lumber    Co.,    In   re    (137 

Fed.  Rep.  643),  613,  748,  756, 

766,  772,  775. 
Allen,  In  re  (13  Blatch.  271),  693. 
Allen,  In  re   (95  Fed.  Rep.   512), 

34L 

1351 


1352 


TABLE   OF   CASES. 


References  are  to  pages. 


Allen,  In  re    (96   Fed.   Rep.   512), 

360,    773,    772,    774,    776,    780, 

781. 
Allen  &  Co.,  In  re   (134  Fed.  Rep. 

620),  533,  534. 
Allen   V.    Ferguson    (18   Wall.    1), 

856,  857. 
Allen    V.    Hartley    (4    Doug.    20), 

182,  299. 
Allen  V.  Hollander   (128  Fed.  Rep. 

159),   446,   454. 
Allen    V.   Massey    (17   Wall.    351), 

467. 
Allen  V.  Massey  (4  N.  B.  R.  231), 

478. 
Allen    &    Co.    v.    Montgomery    (48 

Miss.  101),  614,   619,  467,  469. 
Allen  V.  Thompson    (10  Fed.  Rep. 

116),  211,  862. 
Allendorf,   In    re    (129    Fed,    Rep. 

981),  807,   808,  810. 
Alloway  v.  Steere  (10  Q.  B.  D.  22), 

376. 
Alpliin  &  Lake  Cotton  Co.,  In  re 

(131  Fed.  Rep.  824),  649,  804. 
Alsagar    v.    Currie    (12    M.    &   W. 

751),  372. 
Alsberg,  In  re   (16  N.  B.  R,  116), 

660,   666. 
Alston  V.  Robinett    (37  Tex.   56), 

862. 
Altenberg  v.  Grant   (83  Fed.  Rep. 

980),  922,  933,  934,  935,  941. 
Altman,  In  re  (95  Fed.  Rep.  263), 

30L 
Alvord,  In  re  (135  Fed.  Rep.  236), 

805,  807,  808. 
Am.  Bell  Tel.  Co.  v.  Pan  Electric 

Tel.   Co.    (28   Fed.   Rep.    625), 

250. 
American  Brewing  Co.,  In  re  (112 

Fed.  Rep.  752),  280,  283. 
American      Construction      Co.      v. 

Railroad    Co.     (52    Fed.    Rep. 

937),  700. 
Amer.    Const.    Co.    v.    Jacksonville 

Ry.  Co.    (148  U.  S.,  380),  887, 

889,  890.  892,  893. 
American  File  Co.  v.  Garrett  (110 

U.  S.,  288),  443,  492,  493,  508. 
American    Lumber    Co.    v.    Taylor 

(137  Fed.  Rep.  321),  453,  454. 
American     Trust     Co.     v.     Wallis 

(126  Fed.  Rep.  464),  86,  696 
Ames,  Ex  parte  (1  Low.  561),  480, 

489,  586. 
Amory  v.  Lawrence  (3  Cliff.  523), 

443. 


Amory  &  Leeds,  In  re  (Betts  Scr. 

Bk.  97),  865. 
Amoskeag  Mfg.  Co.  v.  Barnes   (49 

N.   H.,   312),   847. 
Amsinck  v.  Bean    (22  Wall.  395), 

292,  503. 
Amy  V.  Watertown    (No.   2)    (130 

U.  S.,  320),  43L 
Anders  Push  Button  Tel.  Co.,  In  re 

(136  Fed.  Rep.  995),  432. 
Anderson,  Ex  parte   (14  Q.  B.   D. 

606),   347,   349. 
Anderson,    In    re    (23    Fed.    Rep. 

482),  96,  247,  263,  384. 
Anderson,    In   re    (103    Fed.    Rep. 

854),  165. 
Anderson,    In   re    (134    Fed.    Rep. 

319),  790. 
Anderson    v.    Anderson     (65    Ga. 

518),  351. 
Anderson    v.    Hampton    (1    B.    & 

Aid.  308),  658. 
Anderson  v.  Miller   (15  Smedes  & 

M.)    (Miss.  286),  505. 
Anderson    v.    Wheeler    (25    Conn. 

603),   827. 
Andrae  Co.,  In  re   (117  Fed.  Rep. 

561),  592,  595,  596,  606. 
Andrews,    In    re    (130    Fed.    Rep. 

383),  630,  631,  633. 
Andrews,    In    re    (135    Fed.    Rep. 

599),  574,  580. 
Andrews  v.  Graves    (1  Dill.  108), 

478. 
Andrews  v.  Mather  (134  Ala.  358), 

614,  618,  624.  _ 
Andrews    v.    National    Foundry   & 

Pipe    Works     (77    Fed.    Rep. 

774),  896. 
Andrews   v.   Thum    (64   Fed.  Rep. 

149),  941. 
Andrews  v.   Thum    (72   Fed.  Rep. 

290),  949. 
Angler,  In  re  (4  N.  B.  R.  619),  460, 

482,   531. 
Anibal    v.    Heacock    (2    Fed.    Rep. 

169),  555. 
Ankeny,    In    re     (100    Fed.    Rep. 

614),  352,  409,  412,  654. 
Anniston    Iron    &    Supply    Co.    v. 

Rolling    Mill    Co.     (125    Fed. 

Rep.  974),  195,  201. 
Anon  (1  Atk.  262),  832. 
Anon    (1   N.   B.   R.   122),  215,  416, 

335. 
Anon    (1   N.   B.  R.   216),   212,   236, 

331. 
Anon    (2  N.   B.  R.   141),  215. 
Anonymous     (1     Pac.     Law    Rep. 

173),  191,  192. 


Ansell    V.    Robson    (2    Crompt 

Jerv.  610),  483,  486,  487. 
Anshutz    V.    Hoerr    (1    Fed.    Rep. 

594),  627. 
Anson,  In  re  (101  Fed.  Rep.  698), 

778. 
Anson,  Bangs  &  Co.  v.  Blue  Ridge 

R.   Co.    (23   How.   1),   930. 
Antigo    Screen    Door    Co.,    In    re 
(123    Fed.   Rep.    249),    78,    86, 

120,  455,   586,  590,   593,  879. 
Appel,  In  re   (103  Fed.  Rep.  931), 

240,  249. 
Apperson    v.     Steward     (27    Ark. 

619),  855,  856. 
Apple  V.  Crawford  Co.  (105  Pa.  St. 

300),   129. 
Appold,  In   re    (1   N.   B.   R.    621), 

484. 
Archenbrown,  l7i  re   (12  N.  B.  R. 

17),  177. 
Archer  v.  Duval  (1  Fla.  219),  431. 
Armour  Packing  Co.  v.  Brown  (76 

Minn.  465),  31. 
Armstrong,  In  re    (145  Fed.  Rep. 

202),  466,  476. 
Armstrong  v.  Chemical  Bank   (41 

Fed.  Rep.  234),  580. 
Arnett,  In  re  (112  Fed.  Rep.  770), 

419,  693. 
Arnold  &  Co.,  In  re  (133  Fed.  Rep. 

789),  341. 
Arnold  V.  Leonard  (20  Miss.  258), 

752. 
Arnstein,    In    re    (101    Fed.    Rep. 

706),  366,  367,  483,  488. 
Arrington,  In   re    (113   Fed.   Rep. 

498),   717. 
Arrington    v.    Arrington    (10   Am. 

B.  R.  103),  348. 
Arrington  v.  Arrington    (132  Fed. 

Rep.  200),  862. 
Ashby  V.   Steere    (2  Woodb.  &  M, 

347),  552. 
Ashcroft  V.  Walworth   (1  Holmes, 

132),  463. 
Ashley  v.  Kell  (2  Stra.  1207),  506. 
Ashuelot  Sav.   Bank  v.   Frost    (19 

Fed.  Rep.  237),  580. 
Ashworth,  Ex  parte  (18  L.  R.  Eq. 

705),  289. 
Aspen  Min.   &   Smelt.   Co.  v.  Bill- 
ings  (150  U.  S.,  31),  924,  942. 
Aspinwall,  In  re  (7  Ben.  433),  646. 
Aspinwall  v.  Pickford    (3  B.  &  P. 

44n),  606. 
Asten,  In  re  (8  Ben.  350),  724. 
Atkins   V.   Wilcox    (105   Fed.  Rep. 

595),  364.  365,  366,  406,  483. 


TABLE  OF  CASES. 
References  are  to  pages 

& 


1353 


Atkinson  v.  Brindall   (2  Bing.,  N. 

C.  225),  553. 

Atkinson  v.  Elliott  (7  T.  R.  378) 

372. 
Atkinson  v.  Elmore  (103  Mo.  App. 

403),  840. 
Atkinson  v.  Farmers'  Bank  (Crab- 
be,  529),  10. 
Atkinson  v.  Fortinberry  (15  Miss. 

302),  859. 
Atkinson  v.  Purdy   (Crabbe,  551), 

126. 
Atlantic     Giant     Powder     Co.     v. 

Dittmar     Co.     (9     Fed.     Rep. 

318),  652,  695. 
Audubon   v.    Shufeldt    (181   U.    S., 

575),    112,    339,   348,   830,   835, 

884. 
Auffm'ordt  v.   Raisin    (102   U.    S., 

620),  572,  590. 
Augenstein,  In  re    (2  MacArthur, 

D.  C.   322),  864. 

Auriol  V.  Mills   (4  T.  R.  60),  487. 
Ayers,  In  re   (123  U.  S.,  456),  701. 
Ayres  v.  Cone  (138  Fed.  Rep.  778), 
384,  407. 


B 


Baber,  In  re  (119  Fed.  Rep.  520), 

422,  619. 
Babbitt  v.  Burgess    (2   Dill.   169), 

244. 
Babbitt   v.    Kelley    (9    Am.    B.   R. 

335),  564,  567. 
Babbitt  v.    Walbrun    (6   N.   B.   R. 

359),  125. 
Bachman  v.  Packard  (2  Saw.  264), 

125. 
Backhouse  v.  Jett  (1  Brock,  500), 

510. 
Bacon,  In  re  (132  Fed.  Rep.  157), 

583. 
Bacon  v.  Hart  (1  Black,  39),  934. 
Baden    v.    Bertenshaw     (68    Kan. 

32),  622. 
Badger  v.  Gilmore  (33  N.  H.  361), 

855. 
Badham    v.    Lee    (7    Bing.,    695), 

464. 
Baer  v.  Grell   (6  Am.  B.  R.  428), 

830. 
Baerncopf,   In  re    (117   Fed.   Rep. 

975),   798,   799,   815,   816. 
Bailey,    In    re    (1    Woodlw.    422), 

672. 
Bailey  v.  Finch  (7  L.  R.  Q.  B.  34), 

375. 


1354 


TABLE   OF   CASES. 
References  are  to  pages. 


Bailey's  Admx.  v.  Gleason  (76  Vt. 

115),  860. 
Bailey  v.   Glover    (21   Wall.    342), 

431. 
Sainton  v.  Ward  (7  Ves.  503),  466. 
Baird,  In  re  (8  Am.  B.  R.  649),  91. 
Baird  In  re   (112  Fed.  Rep.  900), 

409,  422. 
Baird,  In  re   (126  Fed.  Rep.  845), 

551. 
Bagnall  v.  Ableman  (4  Wis.  184), 

671,  675. 
Bagnall  v.  Viller  (12  Cli.  Div.  812), 

489. 
Baker,  In  re    (96  Fed.  Rep.  954), 

340,  348,  835. 
Baker,  In  re  (104  Fed.  Rep.  287), 

907,  908,  910. 
Baker-Ricketson    Co.,    In    re     (97 

Fed.   Rep.   489),   191,   203. 
Balfour  v.  Wheeler   (18  Fed.  Rep. 

893),  552. 
Baldwin,    In    re    (119    Fed.    Rep. 

796),  799,  816. 
Baldwin  v.  Bank  of  Newberry    (1 

Wall.  234),  23,  827. 
Baldwin    v.    Hale    (1    Wall.    223), 

19,  20,  22,  23,  827. 
Baldwin  v.  Rosseau   (1  N.  Y.  Leg. 

Obs.   391),   10,   194. 
Ball,  In  re    (118   Fed.   Rep.   672), 

105,  106,  110. 
Ball,  In   re    (123    Fed.  Rep.   164), 

387,  396,  593. 
Ball    &    Socket    Fastener    Co.    v. 

Kraetzer  (150  U.  S.,  Ill),  949. 
Ball  V.  United   States    (140  U.   S., 

118),   128. 
Ballance     v.     Forsyth.     (21     How. 

389),  923. 
Ballantine     v.      Golding      (Cook's 

Bk.  Law,  419),  825. 
Balliett   v.    Seeley    (34    Fed.    Rep. 

300),   837. 
Ballin  v.  Ferst   (55  Ga.  546),  308. 
Bank    v.    Cooper    (20    Wall,    171),' 

125. 
Bank  v.  Franciscus    (10  Mo.   27), 

861. 
Bank  v.  Hatch  (57  N.  H.  460),  658. 
Bank  v.  Herbert    (8  Cranch,   36), 

606,  609. 
Bank  v.  Hunt  (11  Wall.  391),  478. 
Bank  v.  Massey   (192  U.  S.,  138), 

373. 
Bank  v.  Onion  (16  Vt.  470),  861. 
Bank  v.  Sherman  (101  U.  S.  403), 

85,  431,  436,  572. 


Bank  of  Augusta  v.  Earl   (13  Pet. 

585),   517. 
Bank    of    Comm.    v.    Elliott     (109 

Wis.  648),  545,  550. 
Bank     of     Commerce     v.     Russell 

(2  Dill.  215),  502. 
Bank  of  Dearborn  v.  Matney  T132 

Fed.  Rep.  75),  170. 
Bank    of    Leavenworth    v.     Hunt 

11   Wall.  "391),   591,  592. 
Bank  of  Madison,  In  re    (5  Biss. 

515),  502. 
Bank   of  N.    Y.   v.    Southern   Nat. 

Bank  (170  N.  Y.  1),  559,  625. 
Bank   of   Ravenswood   v.    Johnson 

(143   Fed.   463),  139,  638,  639, 

692. 
Banque-Franco       Egyptienne       v. 

Brown     (24    Fed.    Rep.    106), 

114,  859. 
Banks   v.    Manchester    (128   U.    S. 

244),  274. 
Banks  v.  Ogden  (2  Wall.  57),  481. 
Barber,  In  re   (97  Fed.  Rep.  547), 

150,  432. 
Barber    v.    Coit     (118    Fed.    Rep. 

272),  939. 
Barbour  v.  Priest  (103  U.  S.,  293), 

552,  625. 
Bard,  In  re    (108  Fed.  Rep.  208), 

641,  649. 
Barden,  In  re  (101  Fed.  Rep.  553), 

217,  303,  305. 
Bardes    v.    First   Nat.    Bank    (122 

la,  443),  563. 
Bardes    v.    Hawarden    Bank    (175 

U.  S.,  526),  874,  875,  877,  880, 

92L 
Bardes    v.    Hawarden    Bank    (178 

U.  S.,  524),  76,  78,  83,  88,  90, 

91,  97,  101,  102,  616. 
Barker,  In  re  (111  Fed.  Rep.  501), 

150,  151. 
Barker  v.  Franklin    (8  Am.  B.  R. 

468),  619. 
Barkley  v.  Barkley   (184  HI.  375), 

835. 
Barned's   Banking  Co.,  7n  re    (10 

L.  R.   Ch.  Ap.   198),  405. 
Barnes  v.  Billington    (1  Wash.  C. 

C.   29),  7. 
Barnes  v.  United  States   (12  N.  B.. 

R.  526),  350. 
Barnett,  In  re  (3  Pitts.  Rep.  559), 

489,  506,  507. 
Barnett  v.  Pool  (23  Tex.  517),  437, 

461,  480,  654. 
Barrett,   In   re    (2    Hughes,    444), 

417. 


TABLE   OF   CASES. 
References  are  to  pages. 


1355 


Barrett,  In  re  (132  Fed.  Rep.  362), 

254,   G19. 
Barrett  v.  Prince    (143  Fed.  Rep. 

302),  G56. 
Barrett  v.  U.  S.    (169  U.  S.,  218), 

62. 
Barron  v.  Benedict    (44  Vt.   518), 

856. 
Barron  v.  Newberry  (1  Biss.  149), 

•  480,  746. 
Barrow,  In  re  (98  Fed.  Rep.  582), 

488,  489,  507. 
Barstow  v.  Hensen   (2  Hun,  N.  Y. 

Supr.   333),   860. 
Bartenbach,   In   re    (11    N.    B.   R. 

61),  346,  358. 
Bartenbach,   In   re    (11    N.    B.    R. 

61),  531,  532. 
Bartholomew     v.     West     (2     Dill. 

290),  527,  529. 
Bartholow  v.  Bean  (18  Wall.  635), 

472,  565,  575. 
Bartlett  v.  Peck  (5  La.  Ann.  669), 

857. 
Bartlett  v.  United  States  (106  Fed. 

Rep.  884),  684,  689. 
Bartley  v.  Hodges  (1  B.  &  S.  375), 

826. 
Barton's   Estate,  In  re    (144    Fed. 

Rep.   540),   230,   786. 
Barton    v.    Barbour     (104    U.    S., 

126),  817. 
■Barton  v.   Petit    (7   Cranch,  288), 

887. 
Barton  v.  Tower  (5  Law  Rep.  214), 

10. 
Barton    Bros.    v.    Texas    Produce 

Co.    (136  Fed.  Rep.  355),  944. 
Bartusch,  In  re  (9  N.  B.  R.  478), 

32.6. 
Basch,  In  re   (97  Fed.  Rep.  761), 

107,  846. 
Bashinski    v.    Talbott     (119    Fed. 

Rep.  337),  519,  529,  903. 
Bassett,  In  re   (8  Fed.  Rep.  266), 

177. 
Bassett  v.  Thackara  (72  N.  J.  81), 

82*^ 
Batchelder   v.   Low    (43   Vt.    662), 

862. 
Bates,  In  re   (27  Fed.  Rep.   604), 

865. 
Bates,  In  re  (100  Fed.  Rep.  263), 

307. 
Bates  V.  Tappan    (99  Mass.  376), 

823,  824. 
Bates  Machine  Co.,  In  re  (91  Fed. 

Rep.   625),   203,  26L 


Batt  V.  Proctor  (45  Fed.  Rep.  515), 

249. 
Baudouine,  In  re    (96   Fed.   Rep. 

536),  461. 
Baughman,  In  re   (138   Fed.  Rep. 

742),  85,  86,  92,  94. 
Baum,  In  re  (1  Ben.  274),  794. 
Bauman   v.   Feist    (107   Fed.   Rep. 

83),  684,  806. 
Baumann,    In    re    (96    Fed.    Rep. 

946),   187,   275. 
Bauserman    v.    Blunt    (147    U.    S., 

652),  382. 
Baxter,    Ex   parte    (12    Fed.    Rep. 

72),   405. 
Baxter,  In  re    (18  N.  B.  R.  378), 

315. 
Baxter,  In  re   (25  Fed.  Rep.  703), 

552. 
Baxter,  In  re   (28  Fed.  Rep.  452), 

577. 
Bay  City  Irrigation  Co.,  In  re  (135 

Fed.  Rep.  850),  176. 
Bayly    v.    University    (106    U.    S., 

11),  725. 
Bayne  v.  U.  S.  (93  U.  S.,  642),  833. 
Bayonne,    The    (159    U.    S.,    687), 

895. 
Beach  v.  Macon  Grocery  Co.   (116 

Fed.  Rep.  143),  253,  254,  256, 

735. 
Beach  v.  Macon  Grocery  Co.    (120 

Fed.  Rep.  736),  169,  237,  285, 

904,  907. 
Beach  v.  Macon  Grocery  Co.    (125 

Fed.  Rep.  513),  291. 
Beach  v.  Mosgrove    (16  Fed.  Rep. 

305),  249. 
Reals,  In  re   (116  Fed.  Rep.  530), 

545,  550. 
Bean,  In  re   (100  Fed.  Rep.  262), 

497,  528,  536. 
Bean   v.   Brookmire    (1   Dill.    25), 

567. 
Bean-Chamberlain     Mfg.     Co.     v. 

Standard  Spoke  &  Nipple  Co. 

(131  Fed.  Rep.  215),  191,  276. 
Bear,  In  re  (5  Fed.  Rep.  53),  240. 
Bear  v.  Chase  (99  Fed.  Rep.  920), 

106,   108,   110. 
Beardsley  v.  Hall   (36  Conn.  270), 

862. 
Beasley  v.  Coggins   (48  Fla.  215), 

614,  618. 
Beattie  v.  Gardner   (4  Ben.  479), 

564. 
Beauchamp,  In  re   (101  Fed.  Rep. 

106),  538. 


1356 


TABLE  OF  CASES. 
References  are  to  pages. 


Beaver  Coal  Co.,  In  re   (107  Fed. 

Rep.  98),  290,  341,  780,  781. 
Beaver  Coal  Co.,  In  re   (110  Fed. 

Rep.  630),  545,  550. 
Beaver  Coal  Co.,  In  re   (113  Fed. 

Rep.  889),  112,  781,  905. 
Beavers    v.    Haubert    (198    U.    S., 

77),  672. 
Beavers  v.  Henkel  (194  U.  S.,  73), 

672. 
Beck,  In  re  (1  N.  B.  R.  588),  566. 
Beck,   In   re    (31   Fed.   Rep.   554), 

863. 
Beck,   In  re    (92    Fed.   Rep.    889), 

161,  166. 
Beck,  In  re   (110  Fed.  Rep.  140), 

323,  324. 
Becker,  In  re   (98  Fed.  Rep.  407), 

254,  495,  734,  735,  750. 
Becker,  In  re   (106  Fed.  Rep.  54), 

497,  679. 
Beckerford,  In  re  (1  Dill.  45),  19, 

479,  518,  609. 
Becket,  In  re  (2  Woods,  173),  719, 

724. 
Beckham  v.  Drake   (2  H.  L.  579), 

509,  511. 
Beckham    v.    Drake    (8   M.   &   W. 

846),  510. 
Beckwith  &  Co..  m  re   (130  Fed. 

Rep.   475),  296. 
Bedingfield,   In  re    (96   Fed.   Rep. 

190),   237,   241,   261,   262,    285, 

288. 
Beebe,  In  re   (116  Fed.  Rep.  48), 

678,  683. 
Beecher    v.    Bininger     (7    Blatch. 

170),  125. 
Beede,  In  re   (138  Fed.  Rep.  441), 

582,  586,  592,  594,  596,  615. 
Beerman,    In    re    (112    Fed.    Rep. 

663),  557. 
Beers    v.    Hanlin     (99    Fed.    Rep. 
'  695),    185,   191,    224,   225,   269, 

381. 
Beisenthal,  In  re  (14  Blatch.  146), 

27. 
Belcher    v.     Burnett     (126    Mass. 

230),  480. 
Belden,  In  re    (4   N.   B-   R.   194), 

636. 
Belden,  In  re  (4  Ben.  225),  792. 
Belden,  In  re  (120  Fed.  Rep.  524), 

754,  755. 
Belfast,   The    (7   Wall.    624),    611. 
Bell  V.   Dawson  Grocery  Co.    (120 

Ga.   628),   527,   544,   829. 
Bell  V.  Leggett  (7  N.  Y.  178),  686. 


Bellah,  In  re   (116  Fed.  Rep.  69), 

169,  236,  285,  287. 
Bellis,  In  re  (3  Ben.  386),  646. 
Bellis,  In  re  (4  Ben.  53),  80V. 
Belknap,    In    re    (129    Fed.    Rep. 

646),  190,  199. 
Belton   V.   Hodges    (9    Bing.   365), 

172. 
Bemis,  In  re  (104  Fed.  Rep.  672), 

679,  806,  807.  • 

Benedict,  In  re    (75   N.  Y.   Supp. 

165),  845. 
Benedict,  In  re  (8  Am.  B.  R.  463), 

548. 
Benedict,  In  re  (140  Fed.  Rep.  55), 

92,  103,  104,  253,  617. 
Benedict    v.    The    Union    Cloak   & 

Suit  Co.   (177  N.  Y.  1),  561. 
Benham,  In  re    (8   N.   B.  R.   94), 

265. 
Benjamin,   In  re    (136   Fed.   Rep. 

175),   752. 
Benjamin,   In   re    (140   Fed.   Rep. 

320),  109. 
Benjamin,   In   re    (140    Fed.    Rep. 

320),  134,  475,  476. 
Bennett,  Ex  parte  (1  Pa.  L.  Jour. 

145),  222. 
Bennett,  In  re    (2  N.  B.  R.  181), 

497. 
Bennett,  In  re   (8  Ben.  561),  720. 
Bennett  Shoe  Co.,  In  re  (140  Fed. 

Rep.  687),  202. 
Bennet  v.  Avant    (2  Sneed,  Tenn. 

152),  662. 
Bennett  v.  Everett   (3  R.  I.  152), 

857,  858. 
Benson,  In  re    (8  Biss.  116),  506, 

507. 
Benson  v.  Henkel    (198  U.   S.  1), 

Bentley'v.  Wells   (61  111.  59),  747. 
Berkowitz,   In   re    (143   Fed.   Rep. 

598),  134. 
Berman,  In  re  (140  Fed.  Rep.  761), 

525. 
Berriam,  In  re  (6  Ben.  297),  313. 
Berry  v.  Jackson  (Ga.  8  Am.  B.  R. 

485),  823. 
Berry  &  Co.,  In  re  (146  Fed.  Rep. 

G23),  476,  812. 
Besette  v.  Conkey  Co.    (194  U.  S., 

324),  692,   698,  705. 
Belts    V.    Bagley    (12    Pick.    572), 

351. 
Bidwell,  In  re   (2  N.  B.  R.   229), 

318. 
Bielby,  Ex  parte  (12  Ves.  70),  405. 
Bigelow,  In  re   (2  Ben.  480),  397. 


TABLE   OF   CASES. 


1357 


References  are  to  pages. 


Bigler   v.   Waller    (12   Wall.    142), 

930,  932,  934. 
Big  Meadows  Gas  Co.,  In  re  (113 

Fed.  Rep.   974),  269,  337. 
Bilborough    v.    Holmes    (5    Chan. 

Civ.  255),  317. 
Billings,  In  re  (145  Fed.  Rep.  395), 

240,  243,  279,  280. 
Bills    V.    Schliep    (127    Fed.    Rep. 

103),  455,  502,  503. 
■Bimberg,    In    re    (121    Fed.    Rep, 

942),  34,   792,  862. 
Bingham,    In    re     (94    Fed.    Rep. 

796),    337,    355,   356,    363,   372. 
Bingham  v.  Morris  (7  Cranch,  99), 

941. 
Bininger,   In   re    (7   Blatch.    262), 

198,  283. 
Binns,  In  re   (4  Ben.  152),  258. 
Birck,  In  re   (142  Fed.  Rep.  438), 

591,  592,  594. 
Birkett    v.    Columbia    Bank    (195 

U.  S.  345,  839,  840. 
Bishop    V.    Church    (3    Atk.    691), 

375. 
Bissell  Carpet  Sweeper  Co.  v.  Go- 
shen   Sweeper    Co.     (72    Fed. 

Rep.  519),  950. 
Black,  In  re   (97  Fed.  Rep.  493), 

821. 
Black,  In  re   (104  Fed.  Rep.  289), 

527. 
Black  V.  Black  (77  Fed.  Rep.  785), 

751. 
Black    V.    Blazo    (117    Mass.    17), 

862. 
Black  V.  McClelland   (12  N.  B.  R. 

481),  347. 
Black  V.   Zacharie    (3   How.  483), 

10. 
Blackburn    v.    Stannard     (5    Law 

Rep.  250),  257. 
Blackman,    In    re     (6     Chi.    Leg. 

News,   18),   777. 
Blackmore,   In   re    (11    Fed.   Rep. 

412),  725. 
Blagden,  Ex  parte   (19  Ves.  465), 

376. 
Blain,  Ex  parte  (12  Ch.  Div.  522), 

172,   182. 
Blair,  In  re  (99  Fed.  Rep.  76),  188, 

284,   286,   296,   300,   302. 
Blair,  In  re   (102  Fed.  Rep.  987), 

86,   102,   117,   473,  548,   623. 
Blair,  In  re   (108  Fed.  Rep.  529), 

543,   545,   546,   547,   550. 
Blair  v.  Turtle  (5  Fed.  Rep.  394), 

246. 


Blake,  Ex  parte  (11  Ch.  Div.  572), 

487. 
Blake  v,  Bigelow  (5  Ga.  437),  834. 
Blake    v.    Nesbet    (14    Fed.    Rep. 

279),  619,  697. 
Blake  v.  Williams   (6  Pick.  286), 

461. 
Blake,  Moflitt  &  Towne  v.  Francis- 
Valentine   Co.    (89    Fed.    Rep. 

691),  24,  105,  256,  257. 
Blalock,  In  re  (118  Fed.  Rep.  679), 

678,   683,   684,  797,  800,  804. 
Blanc  V.  Banks  (10  Rob.  La.  115), 

855. 
Blanchard    v,    Russell    (13    Mass. 

1),  20,  22,  23,  26,  461. 
Blankfein,    In    re    (97    Fed.    Rep. 

191),  323. 
Blankfein  &  Deitz,  In  re  (2  N.  B. 

N.  49),  159. 
Blanford  v.  Foote   (1  Cowp.  138), 

350. 
Blankenbaker  v.  Charleston  Statei 

Bank  (111  111.  App.  393),  561. 
Blasdel  v.  Fowle  (120  Mass.  447), 

726. 
Blease  v.  Garlington  (92  U,  S.,  1), 

937. 
Blennerhassett    v.    Sherman    (105 

U.  S.,  100),  567,  572,  591,  592, 

597. 
Blight's  Estate  (1  Pa.  Law  J.  225), 

784. 
Blight  V.  Ashley  (Pet.  C.  C.  15),  7. 
Blight  V.   Fisher    (Pet.   C.   C.   41), 

692. 
Blin  V.  Pierce  (20  Vt.  25),  501. 
Blitz  V.  Brown   (7  Wall.  693),  938. 
Bloch,  In  re   (109  Fed.  Rep.  790), 

186,   187,   189,   193,   195. 
Bloch,  In  re   (142  Fed.  Rep.  674), 

398,  475,  476. 
Blodgett,  In  re   (5  N.  B.  R.  472), 

425. 
Blodgett,  In  re  (10  N.  B.  R.  145), 

538. 
Bloomingdale    v.    Empire    Rubber 

Co.  (114  Fed.  Rep.  1016),  446, 

451,  452,  483. 
Bloss,  In  re  (4  N.  B.  R.  427),  257. 
Bloss,  In  re  (4  N.  B.  R.  147),  401, 

405. 
Blount,  In  re  (142  Fed.  Rep.  263), 

226,  227. 
Blue  Mt.  Iron  &  Steel  Co.  v.  Port- 

ner    (131   Fed.   Rep.   57),   202, 

276. 


1358 


TABLE   OF  CASES. 


References  are  to  pages. 


Blue    Ridge    Packing    Co.,    In    re 

(125  Fed.  Rep.  619),  323,  392, 

395     415     417. 
Blnm  v!  Ellis   (73  N.  C.  293),  823. 
Blum  V.  Ricks   (39  Tex.  112),  840. 
Blum  V.  State    (94  Md.  375),  689. 
Blumberg,    In    re    (94    Fed.    Rep. 

476),   547,   837. 
Blumberg,   In   re    (133    Fed.   Rep. 

845,  238. 
Blumer,  In  re  (12  Fed.  Rep.  489), 

307,  309. 
Blumer,  In  re  (13  Fed.  Rep.  623), 

353. 
Boardman,   In   re    (103   Fed.   Rep. 

783),  497,  498,  499. 
Boas  V.  Hetzel   (3  Pa.  298),  860. 
Boatman's  Savings  Bank  v.   State 

Savings    Association    (114    U. 

S.,  265),  882. 
Boese  v.  King  (108  U.  S.,  379),  26, 

30,   746. 
Bogart  v.  Supply  Co.  (27  Fed.  Rep. 

722),  693,  704. 
Bogen,  In  re  (134  Fed.  Rep.  1019), 

204. 
Bogen  &  Trummel  v.  Protter  (129 

Fed.  Rep.  533),  186,  196,  198. 
Boise  County  v.  Gorman  (19  Wall. 

662),   919. 
•Boland  v.  Nash    (8  B.  &  C.  105), 

374. 
Bolinger,    In    re    (108    Fed.    Rep. 

374),   526,   527,   535,  536. 
Boiling,  In  re  (147  Fed.  Rep.  786), 

603. 
Bolton,    Ex   parte    (2   Rose,  '389), 

405. 
Bonesteel,  In  re  (2  N.  B.  R.  440), 

642. 
Bonnet,  In  re   (1  N.  Y.  Leg.  Obs. 

310),  10. 
Book,  In  re  (3  McLean,  317),  172, 

381. 
Book's  Case  (3  McLean,  317),  792. 
Boonville    Nat.    Bank    v.    Blakey 

107    Fed.    Rep.    891),    87,    104, 

253,  254,  874,  879,  919. 
Boorstin,    In    re    (114    Fed.    Rep. 

696),  523. 
Booth,  In  re    (96  Fed.  Rep.  943), 

110,  144,  746. 
Booth  v.  Clark  (17  How.  338),  104. 
Booth    v.    Hutchinson     (15    L.    R. 

Eq.   30),   371. 
Boothroyd,  In  re  (14  N.  B.  R.  223), 

537,  538. 
Bostick  V.  Jordan    (7  Tenn.  370), 

482. 


Boston  Dry  Goods  Co.,  In  re  (125 

Fed.   Rep.   226),   908,   909. 
Boston,  H.  &  B.  R.  Co.,  In  re   (9 

Blatch.  409),  272,  279. 
Boston  &  Fair  Haven  Iron  Works, 

In  re  (29  Fed.  Rep.  783),  382. 
Bostwick    V.    Burnett    (74    N.    Y. 

317),  25,  27. 
Botts  V.  Hammond    (99  Fed.  Rep. 

916),  548. 
Bourlier   Cornice  Co.,  In  re    (133 

Fed.  Rep.   958),  767,  775. 
Bourne,   Ex   parte    (2    (Jlyn   &   J. 

137),  2S9. 
Bousfield  &  Poole  Mfg.  Co.,  In  re 

(17  N.  B.  R.  153),  388. 
Boutelle,  In  re    (2  N.  B.  R.  129), 

'792. 
Bowden   v.    Johnson    (107    U.    S., 

251),  939. 
Bowen  v.  Christian   (16  Fed.  Rep. 

730),  250. 
Bov^^er    v.    Holzvv'orth     (138    Fed. 

Rep.    28),    913,    917. 
Bowers,   Ex   parte    (2    Deac.    99), 

179. 
Bowery   Savingr   Bank  v.   Clinton 

(2   Sandf.,  N.  Y.   113),  850. 
Bowes    V.    Howes    (5    Taunt.    30), 

496. 
Bowie,  In  re  (IN.  B.  R.  628),  125, 

746. 
Bowman  v.  Harding  (56  Me.  559), 

823,  824. 
Bowyer's  Appeal   (21  Pa.  St.  210), 

527. 
Boyd  V.  Glucklich   (116  Fed.  Rep. 

131),    89,    652,    692,    696,    699, 

701,  705. 
Boyden,  In  re  (132  Fed.  Rep.  991), 

684. 
Boyd  V.  Lemon  &  Gale    (114  Fed. 

Rep.   647),  190,   195. 
Boyd  v.  United  States    (116  U.   S. 

616),  689. 
Boylan,  In  re  (1  Ben.  266),  295. 
Boyle  V.  Zacharie  (6  Pet.  348),  22, 

827. 
Boynton  v.  Ball    (121  U.   S.   457), 

114,   351,   428,   836,   859. 
Bracken  v.  Milner   (104  Fed.  Rep. 

522),   845. 
Bracken  v.  Union  Pac.  Ry.  Co.  (56 

Fed.  Rep.  447),  249. 
Brackett    v.    Watkins    (21    Wend. 

[N.  Y.]  68),  527,  537. 
Bradbury,    In    re    (11    Jur.    189), 

640. 


TABLE   OF   CASES. 
References  ai-e  to  pages. 


1359 


Bradford  v.  Rice   (102  Mass.  472), 

350. 
Bradley,  Ex  parte   (7  Wall.  372), 

704. 
Bradley,  In  re   (2  Blss.  515),  315. 
Bradley,    Clark    &    Co.    v.    Benson 

(13   Am.   B.  R.   170),   449. 
Bradley  Timber  Co.  v.  White  (121 

Fed.  Rea  779),  197,  198,  199, 

238,  2G7. 
Bradsliaw  v.  Jones  (20  L.  T.  781), 

486. 
Bradshaw   v.   Klein    (2    Biss.   20), 

125,  419,  467. 
Bradstreet  Co.  v.  Higgins   (114  U. 

S.,  262),  948,  949. 
Bragasa,    In    re     (103    Fed.    Rep. 

936),  681. 
Bragasa    v.    St.    Louis    Cycle    Co. 

(107  Fed.  Rep.  77),  151,  679, 

820. 
Bragg,  In  re    (5   Law  Rep.   323), 

637. 
Brake  v.  Callison    (129  Fed.  Rep. 

196),  195. 
Brand,  In  re  (2  Hughes,  344),  401. 
Brandies  v.  Cochi'ane    (105  U.   S., 

262),  922. 
Brandon  v.  Pate   (H.  Black,  308), 

509. 
Brandon    v.     Sands     (2    Ves.,    Jr. 

514),  509. 
Brandt,   In  re    (2   N.   B.  R.   215), 

634,  642. 
Bray  v.  Cobb   (91  Fed.  Rep.  102), 

128,    131,    136,    148,    154,    233, 

244,  275. 
Bray  v.  Cobb  (100  Fed.  Rep.  270), 

345,    383,    362,    366,    389,    483, 

484. 
Breck,  In  re   (8  Ben.  93),  489. 
Breiner,  In  re  (129  Fed.  Rep.  155), 

681. 
Breitling,    In    re    (133    Fed.    Rep. 

146),  681. 
Breneman,    In    re    (Crabbe,    456), 

29. 
Breslauer,   In   re    (121   Fed.   Rep. 

910),  86,  548. 
Brett,  In  re   (130  Fed.  Rep.  981), 

237,  285. 
Brett  V.  Brown   (13  Abb.  Prac.  N. 

S.  [N.  Y.l  295),  246. 
Brewer  v.  Dew  (11  M.  &  W.  625), 

512. 
Brewster   v.   Wakefield    (22    How. 

118),  927. 


Brice,  In  re    (93   Fed.  Rep,   942), 

172,   209,   210. 
Brice,  In  re    (96   Fed.  Rep.   611), 

792. 
Brice,  In  re   (102  Fed.  Rep.  114), 

804. 
Brick,   In  re    (4    Fed.   Rep.    804), 

303,  318,  323,  512. 
Bridges  v.   Sheldon    (7  Fed.  Rep. 

45),   652,   693. 
Bridgman,  In  re  (2  N.  B.  R.  252), 

782. 
Briggs,    Ex   parte    (2    Low.    389), 

864. 
Briggs    V,    McCulIough     (36    Cal. 

542),  514. 
Brinckman,  In  re   (102  Fed.  Rep. 

65),  185,  225,  269,  381. 
Brinker,  In  re  (128  Fed.  Rep.  634), 

770,   77L 
Brinkley  v.  Smith   (126  Fed.  Rep. 

686),  274. 
Brinkman,  In  re  (6  N.  B.  R.  541), 

746. 
Briskman,   In   re    (132    Fed.   Rep. 

201),  86. 
Bristol    V.    Sandford     (12    Blatch. 

341),  419. 
Briswalter  v.  Long   (14  Fed.  Rep. 

153),  297,  298. 
Brittain  Dry  Goods  Co.  v.  Berten- 

shaw  (68  Kan.  734),  560,  577. 
Broach  v.  Powell  (79  Ga.  79),  91. 
Broadway  Trust  Co.   v.   Manheim 

(14  Am.  B.  R.  122),  725,  726, 

727. 
Brobst  V.  Brobst  (2  Wall.  96),  930. 
Brock  V.  Hoppock   (2  N.  B.  R.  7), 

277. 
Brockett  v.  Brockett  (2  How.  238), 

923,   930,   932. 
Brockway,    In    re    (12    Fed.    Rep. 

69),  807. 
Brockway,    In    re    (23    Fed.    Rep. 

583),  791. 
Brodbine,    In    re     (93    Fed.    Rep. 

643)   495. 
Bromley,  In  re    (3   N.  B.  R.   86), 

634,  63.5. 
Bromley   v.    Smith    (2   Biss.   511), 

438,  509. 
Brooke,  In  re  (100  Fed.  Rep.  432), 

135,  331,  416. 
Brooke  v.  Hewitt  (3  Ves.  253),  509. 
Brooke  v.  McCracken  (10  N.  B.  R. 

461),    125. 
Brooks,   In  re    (2  N.   B.  R.   466), 

607. 


1360 


TABLE   OF   CASES. 
References 


Brooks,  In  re  (91  Fed.  Rep.  508), 

120,  441. 
Brooks    V.    Farwell    (4    Fed.    Rep. 

1G7),  246. 
Brooks  V.  Norris    (11  How.  204), 

918. 
Brooks  V.  Paine  (25  Ky.  Law  Rep. 

1125),  856. 
Brooks  V.  Scroggins   (11  N.  B.  R. 

258),   490,   571. 
Broom,  In  re  (123  Fed.  Rep.  639), 

769. 
Broome  v.  Robinson  (7  East,  339), 

486. 
Brown,  In  re  (4  Ben.  142),  777. 
Brown,  in  re   (5  Ben.  1),  350. 
Brown,  In  re  (3  N.  B.  R.  250),  523, 

535. 
Brown,  In  re    (19   N.  B.  R.  312), 

863. 
Brown,  In  re   (5  Law  Rep.  121), 

215. 
Brown,  In  re  (91  Fed.  Rep.  358), 

490. 
Brown,  In  re  (100  Fed.  Rep.  441), 

536. 
Brown,  In  re  (111  Fed.  Rep.  979), 

226, 
Brown,  In  re   (112  Fed.  Rep.  49), 

798,  799,  902. 
Brown  In  re  (-l23  Fed.  Rep,  336), 

390,  727. 
Brown,  In  re  (132  Fed.  Rep.  70G), 

170. 
Brown,  In  re  (140  Fed.  Rep,  383), 

811. 
Brown  v.  Case  (6  Am.  B.  R.  744), 

543. 
Brown  v.  Case  (185  Mass.  45),  551. 
Brown    v.    Cuming    (2    Caines,   N. 

Y.  33),  371. 
Brown  v.  Farmers'  Bank  (6  Bush, 

Ky.   198),  381. 
Brown   v.    Gibbons    (37    la.    654), 

747. 
Brown  v.  Guichard    (7  Am.  B.  R. 

515),  473,  562,  623. 
Brown  v.  Lunt  (37  Me.  423),  128. 
Brown   v.    McConnell    (124    U.    S., 

489),  922,  929. 
Brown    v.    New    Bedford    Savings 

Inst.   (137  Mass.  262),  375. 
Browne,  In  re  (104  Fed.  Rep.  762), 

113,  604. 
Brownsville  Mfg.  Co.  v.  Lockwood 

(11  Fed.  Rep.  705),  726. 
Bruce,  In  re    (6   Ben.   515),   348, 

352. 


are  to  pages. 

Brumbaugh,  In  re   (128  Fed.  Rep. 

971),  522,  811,  812,  820. 
Brumby  v.   Jones    (141   Fed.  Rep. 

318),   76   78. 
Brumelkamp,  In  re   (95  Fed.  Rep. 

814),  159,  222. 
Brundage,   In   re    (100   Fed.   Rep. 

613),  642. 
Brundin,    In    re    (112    Fed.    Rep. 

306),  162, 
Brunquest,,   In   re    (7    Biss,    208), 

383,  606,  609, 
Bruss-Ritter   Co.,   In   re    (90    Fed. 

Rep.  651),  17,  23,  24,  26,  27. 
Bryan,  Ex  parte  (2  Hughes,  273), 

754,  755, 
Bryan,  In  re  (3  N.  B.  R.  110),  607. 
Bryan  v.  Bernheimer    (175   U.   S., 

724),   889. 
Bryan  v.  Bernheimer    (181  U.   S., 

188),  30,  31,  32,  81,  82,  85,  87, 

90,  99,  101,  103,  108,  117,  620, 

734,  870,  872,  873. 
Bryant,  In  re  (104  Fed.  Rep.  789), 

682. 
Bryant   v.    Small    (35    Wis.    205), 

609,  610. 
Buchan   v.    Sumner    (2   Barb.   Ch. 

165),  310. 
Buchanan    v.   Alexander    (4    How. 

20),   783. 
Buchanan  v.  Smith  (16  Wall.  277), 

472,  552,  561,   566. 
Bucher  v.  Cheshire  R.  R.  Co.   (125 

U.   S.,   582),  014. 
Buckingham,  In  re  (102  Fed.  Rep. 

972),  531. 
Buckingham    v.    Estes     (128    Fed. 

Rep.  584),  389,  404. 
Buckingham    v.    First    Nat.    Bank 

(131  Fed.  Rep.  192),  296,  315. 
Buckingham  v.  McLean   (13  How. 

150),   935,   419,   552,   805. 
Buckland  v.  Papillon  (1  L,  R.  Eq. 

477),   487,   488. 
Buckner  v.  Calcote  (28  Miss.  432), 

308. 
Buckner  v.  Jewell  (2  Woods,  220), 

484. 
Bucyrus    Machine    Co.,    In   re    (5 

N.   B.  R.   303),   313,   314. 
Buder  v,   Columbia   Dist,  Co,    (96 

Mo.  App.  558,  620. 
Buerk  v.  Imhaeuser    (8  Fed.  Rep, 

457),  244. 
Buelow,  In  re   (98  Fed.  Rep.  86), 

499,  515. 
Buffington    v.    Harvey    (95    U.    S., 

99),  620, 


TABLE   OF   CASES. 


1361 


References  are  to  pages. 


Bugbee,  In  re    (9   N.  B.  R.   258), 

480. 
Bullis,  In  re   (73  N.  Y.  Sup.  Ct. 

1047),  S44. 
Bullis  V.  O'Beirne  (195  U.  S.,  606), 

837,   841,   842,   843,   845. 
Bullock,    In    re     (116    Fed.    Rep. 

667),  399. 
Bullock  Elec.  &  Mfg.  Co.  v.  West- 
inghouse     Elec.     &    Mfg.     Co. 
129  Fed.  Rep.  105),  705. 
Bullwinkle,  In  re    (HI  Fed.  Rep. 

364),  681. 
Bullymore    v.    Cooper    (46    M.    Y. 

236),  519. 
Burbank    v.    Bigelow     (92    U.    S., 
179),  92,  97,  104,  124,  125,  126, 
617. 
Burchell,  In  re  (4  Fed.  Rep.  406), 

353,  725. 
Burdock  v.  Jackson   (15  N.  B.  R. 

318),  586,  588. 
Burk,    In    re    (Deady,    425),    792, 

815. 
Burk  V.  Winters  (28  Ark.  6),  437. 
Burka,  In  re  (104  Fed.  Rep.  326), 

338,   479,   490,   507,   830. 
Burka,  In  re   (107  Fed.  Rep.  674), 

173,  676. 
Burke   v.    Guarantee   T.   &   T.   Co. 

(134    Fed.   Rep.    562),   533. 
Burkhardt,    In    re    (33    Fed.   Rep. 

25),  670,  674. 
Burkhart     v.     German     American 
■Bank  (137  Fed.  Rep.  958),  170, 
175,  296. 
Burkholder  v.  Stump   (4  N.  B.  R. 

597),  626. 
Burkle,  In  re  (116  Fed.  Rep.  766), 

451. 

Burleigh    v.    Foreman     (125    Fed. 

Rep.    217),    77,    868,    869,    874, 

877,  880. 

Burlington     Malting     Co.,     In     re 

(109  Fed.  Rep.  777),  225,  230. 

Burnliam  v.  Pidcock  (5  Am.  B.  R. 

590),  348,  837. 
Burnham    v.    Street    Ry.    Co.    (87 

Fed.  Rep.  168),  936,  937. 
Burnhisel    v.    Firman     (22    Wall. 

170),  503,  586. 
Burns,  In  re  (1  N.  B.  R.  174),  349. 
Burns  v.  Allen  (67  N.  C.  140),  538. 
Burnside    v.    Brigham    (49    Mass. 

75),  840. 
Burnstine,   In  re    (131   Fed.   Rep. 

828),   512; 
Burow  V.  Grand  Lodge,  etc.    (133 
Fed.   Rep.    708),   915. 


Burpee  v.  National  Bank  (5  Biss. 

405),  552. 
Burr   V.    Kimbark    (29    Fed.   Rep. 

432),  652,  695. 
Burrell,  In  re  (123  Fed.  Rep.  414), 

201. 
Burrell    v.    Montana    (194    U.    S., 

572),   643,   684,   815. 
Burrows  v.  Jemino   (2  Stra.  733), 

825. 
Burrus,  In  re  (97  Fed.  Rep.  926), 

161,  166. 
Burt,   In  re    (27   Fed.   Rep.    548), 

421. 
Burton   v.   Lockert    (9   Ark.   411), 

462. 
Burton  Bros.  Mfg.  Co.,  In  re  (134 

Fed.  Rep.  157),  778. 
Busby,  In  re  (124  Fed.  Rep.  469), 

398,  413. 
Bush,  In  re  (6  Ben.  179),  280. 
Bush,  In  re   (126  Fed.  Rep.  878), 

4S? 
Bush  V."  Cooper  (18  How.  82),  830. 
Bush  V.  Crawford  (7  N.  B.  R.  299), 

312. 
Bush   V.   Elliott    (292   U.    S.    477), 

123,   124,   126,   127,   617. 
Bush  V.  Export  Storage  Co.    (136 

Fed.  Rep.  918),  469,  470,  601, 

615,  620. 
Bush  V.  Lester   (55  Ga.  579),  519. 
Bushnell  v.  Crooke  Min.  &  Smelt. 

Co.    (150  U.   S.  83),  945. 
Buskirk,  Ex  parte    (72  Fed.  Rep. 

14),    697. 
Butcher,  Ex  parte   (13  Chan.  Div. 

465),  317. 
Butcher  v.  Forman  (6  Hill  [N.  Y.] 

583),  340. 
Butler,  In  re  (6  N.  B.  R.  501),  484, 
Butler,  In  re  (120  Fed.  Rep.  100), 

528. 
Butler  V.   Fayerweather    (91  Fed. 

Rep.  458),  705. 
Butler  V.  Goreley  (146  U.  S.  303), 

20,   23. 
Butler  Paper  Co.  v.  Goembel   (143 

Fed.  Rep.  295),  187,  558,  563. 
Butterwich,  In  re   (131  Fed.  Rep. 

971),  446. 
Butterwick,  In  re  (131  Fed.  Rep. 

371),  449,  450,  491,  580,  581. 
Butterworth    v.    Hill     (114    U.    S. 

128),  244,  248. 
Butts,  In  re   (120  Fed.  Rep.  966), 

106,  111,  841,  844. 
Buxbaum,  In  re   (2  Hughes,  339), 
794. 


1362 


TABLE  OF  CASES. 
References  are  to  pages. 


Bybee,  In  re  (124  Fed.  Rep.  1911), 

831. 
Byerly,  In  re  (128  Fed.  Rep.  637), 

1G3. 
Byers  v.  McAuley  (149  U.  S.  608), 

115. 
Byrne.    In  re    (1    N.   B.   R.    464), 

309,  311. 
Byrne,  In  re   (97  Fed.  Rep.  762), 

744,  779. 


Cadogan     v.     Kennett     (2     Cowp. 

434),  4G8,  475,  477. 
Cady    V.    Whaling    (7    Biss.    430), 

467. 
Cake  V.  Lewis  (8  Penn,  493),  355. 
Calahan  v.  Bank  of  Kentucky  (82 

Ky.   231),  496. 
California   Pac.   R.   Co.,  In   re    (3 

Saw.   240),  17,   18,  270,   287. 
Callahan  v.  Israel  (186  Mass.  383), 

619. 
Callan  v.  Wilson   (127  U.  S.  540), 

674. 
Callison,    In    re     (129    Fed.    Rep. 

201),  224. 
Callison,    In    re    (130    Fed.    Rep. 

987),  236. 
Cambridge  Inst.  v.  Littlefield    (60 

Mass.  210),  858. 
Cambridge     Lumber     Co.,     In     re 

136   Fed.   Rep.   983),   255,   433. 
Camden    Rolling   Mill    Co.,  In   re 

(3  N.  B.  R.   590),  288. 
Cameron,  etc.,  Ins.  Co.,  In  re  (96 

Fed.  Rep.  756),  181. 
Camp,  In  re   (91  Fed.  Rep.  745), 

520,  521,  522,  527,  538,  539. 
Camp    V.    Gifford    (7    Hill,    N.    Y. 

169),   854. 
Camp  V.  Young  (119  Ga.  981),  547. 
Campbell,  In  re  (1  Abb.  U.  S.  185), 

552. 
Campbell,   In   re    (102    Fed.   Rep. 

686),  777. 
Campbell,    In    re    (124    Fed.    Rep. 

417),  528,  534. 
Campbell's  Case  (1  N.  B.  R.  165), 

76. 
Campbell's    Case     (1    Abb.    U.    S. 

185),  349. 
Campbell  v.  Foster  (35  N.  Y.  361), 

505. 
Campbell  v.  Haverhill   (155  U.  S. 

610),  267. 


Campbell  v.  Perkins  (8  N.  Y.  430), 

840. 
Canfield,  In  re   (5  Law  Rep.  415), 

207. 
Cannon,  In  re  (121  Fed.  Rep.  582), 

596, 
Cannon,  In  re  (133  Fed.  Rep.  837), 

407,  408. 
Cannon  v.  Dexter   (120  Fed.  Rep. 

657),  528. 
Cannon     v.     Wellford     (22     Grat. 

[Va.]   195),  461. 
Capelle  v.  M.  E.  Church  (11  N.  B. 

R.  536),  360. 
Capital    Nat.    Bank    v.    Wilkerson 

(72  N.  B.  R.  247),  625. 
Capot,  Ex  parte  (1  Atk.  218),  405. 
Capper,  Ex  parte  (4  Chan.  D.  724), 

351. 
Carey  v.  Hess  (112  Ind.  398),  726. 
Carey  v.  Nagel  (2  Biss.  244),  509. 
Carleton,    In    re    (115    Fed.    Rep. 

246),   168. 
Carleton,    In    re    (115    Fed.    Rep. 

246),  219,  300,  303. 
Carleton,    In    re    (131    Fed.    Rep. 

146),  813. 
Carley,  In  re  (106  Fed.  Rep.  862), 

410. 
Carley,  In  re  (106  Fed.  Rep.  862), 

632,   641,   644,  645,   648,   649. 
Carley,  In  re  (117  Fed.  Rep.  130), 

799,  902,  904. 
Carlir  V.  Carlin  (8  Bush,  Ky.  141), 

847. 
Carling   v.    Seymour    Lumber    Co. 

(113  Fed.  Rep.  483),  904. 
Carman  v.  Emerson  (71  Fed.  Rep. 

264),  693. 
Carmichael,  In  re    (96   Fed.  Rep. 

594),   314,   340,    804.' 
Carolina  Cooperage  Co.,  In  re  (96 

Fed.  Rep.  604),  143,  290. 
Carolina  Cooperage  Co.,  In  re  (96 

Fed.  Rep.  950),  163,  166,  434, 

774,  776,  777. 
Carow,  In  re  (41  How.  Prac.  112), 

141. 
Carpenter,  In  re  (1  N.  B.  R.  299), 

652,  694. 
Carpenter,    In    re    125    Fed.    Rep. 

831),   446,   447,   451,   581,    593. 
Carpenter  v.   Marnell    (3  B.  &  P. 

40),  500. 
Carpenter   v.    Turrell    (100   Mass. 

450),  850. 
Carpenter   Bros.   v.   O'Connor    (16 

O.   C.    C.    526),   107,   118,   119, 

422,  435,  436. 


TABLE   OF  CASES. 
References  are  to  pages 


1363 


Carr,  In  re   (116  Fed.  Rep.   5oG), 

88,   784. 
Carr,  In  re    (117  Fed.  Rep.   572), 
161,    163,    165,    421,    759,    700, 
774. 
Carr  v.  Gale   (2  Ware,  330),  12.5, 

510. 
Carrier,  In  re  (47  Fed.  Rep.  438), 

806. 
Carroll    Co.    v.    Young    (119    Fed. 

Rep.  576),  736,  742. 
Carroll  &  Bros.  Co.  v.  Young  (119 

Fed.   Rep.   576),   743,   744. 
Carson  v.  Osborn  (10  B.  Mon.  Ky. 

155),   855,    858. 
Carter,  In  re  (138  Fed.  Rep.  836), 

391,  395,   406,  407. 
Carter  v.  Goodrich    (1  How,  Prac. 

N.   Y.  239),   861. 
Carter    v.    Hobbs     (92    Fed.    Rep. 

594),   620,   746. 
Carter    v.    Hobbs     (94    Fed.    Rep. 

108),  560. 
Carter   v.    People's   Nat.   Bank    (4 

Am.  B.  R.  211),  107. 
Carter  v.  Warne  (4  Car.  &  P.  191), 

483,  486,  4S7. 
Carton  v.  Booze  (68  N.  J.  Ch.  771), 

590. 
Carver,  In  re   (7  Am.  B.  R.  539), 

32. 
Carver  In  re  (113  Fed.  Rep.  138), 

102,  143,  144. 
Carver    v.    Mfg.     Co.     (2     Storey, 

432),  340. 
Carey,  In  re   (10  Fed.  Rep.  622), 

697. 
Cary  Mfg.   Co.    v.   Acme  Co.    (108 

Fed.  Rep.  873),  705. 
Case  V.  Dunmore   (23  Pa.  St.  93), 

527. 
Casey  v.  Cavaroc    (96  U.   S.  467), 

599,   602,   603,   605. 
Casey    v.     La     Societie,     etc.     (2 

Woods,  77),  580. 
Casey  v.  Schneider  (96  U.  S.  496), 

599. 
Cashman,    In    re    (103    Fed.    Rep. 

67),  681,  807. 
Castle   V.   Lee    (11    N.    B.   R.    80), 

552,  565. 
Castle  Braid  Co.,  In  re   (145  Fed. 

Rep.  244),  406,  407. 
Castleberry,  In  re   (143  Fed.  Rep. 

1021),  775. 
Caswall,   Ex   parte    (1    Atk.    559), 

466. 
Cathcart,    In    re    (not    reported), 
401,  .404,  405. 


Catlin  V.  Foster  (1  Saw.  37),  370, 

372. 
Catlin   V.   Hoffman    (2    Saw.   486), 

580. 
Cavagnaro,  In  re    (143   Fed.  Rep. 

068),  580,  596. 
Cavanna  v.   Bassett    (3  Fed.  Rep. 

215),  726. 
Caj-lus,  In  re  (1  Low.  550),  370. 
Central   Trust   Co.    v.    Continental 

Trust  Co.   (86  Fed.  Rep.  517), 

930,   935. 
Chad  wick  v.  Starrett  (27  Me.  138), 

659. 
Chamberlin,  In  re    (9   Ben.   149), 

707,  714. 
Chamberlain,  In  re  (125  Fed.  Rep, 

629),   809,   818,  821. 
Chamberlain      v.      Cleveland       (1 

Black,    419),    924. 
Chamberlain  v.  Perkins  (51  N.  H. 

340),  24,  27. 
Chambers,    In    re    (98    Fed.    Rep. 

865),  443. 
Chambers,  Calder  &  Co.,  In  re   (6 

Am.  B.  R.  709),  142. 
Chambers,  Calder  &  Co.,  In  re  (98 

Fed.    Rep.    865),    79,    93,    107, 

111,  119,  121,  430,  483,  484. 
Chambers    v.    Neal     (13    B.    Mon. 

Ky.  256),  861. 
Chambers  v.  Prince  (75  Fed.  Rep. 

176),  209. 
Champion,    In    re    (7    Am.    B.    R. 

•     560),  576. 
Chandler,    In    re    (138    Fed.    Rep. 

637),   791,  797,   862. 
Chandler    v.    Windship     (6    Mass. 

310),  337. 
Chapman,  In  re  (9  Ben.  311),  179, 
Chapman,    In    re     (99    Fed.    Rep. 

395),  199. 
Chapman,   In   re    (105    Fed.   Rep, 

901),  386. 
Chapman    v.    Brewer    (114    U.    S. 

158),   106,   279. 
Chapman  v.  Forsyth  (2  How.  202), 

10,    845,    846. 
Chapman    v.    Pickersgill     (2    Wil- 
son, 145),  289.^ 
Chappell,    In    re    (113    Fed.    Rep. 

545),   189,  558,  62.?. 
Chase,  In  re   (124  Fed.  Rep.  753), 

163,   773,   781. 
Chase,  In  re   (133  Fed.  Rep.  79), 

481. 
Chase   v.    Cannon    (47    Fed.    Rep. 

674),  118. 


1364 


TABLE   OP   CASES. 
References  are  to  pages. 


Chateaugay    Ore    &    Iron    Co.    v. 

Blake  (35  Fed.  Rep.  804),  930. 
Chatfield    v.    O'Dwyer     (101    Fed. 

Rep.   797),   409,   915,   916,   924, 

925. 
Chattanooga    v.     Hill     (139     Fed. 

Rep.  GOO),  7G8,  770. 
Chattanooga   Nat.    Bank   v.   Rome 

Iron  Co.   (102  Fed.  Rep.  755), 

586,  598,  600,  605,  607. 
Chauncey  v.  Dyke  Bros.   (119  Fed. 

Rep.   1),   86,  610,  93,  736,  742, 

744,  745. 
Cheney,  In  re    yo   Law  Rep.  19), 

658. 
Cheney,  In  re    (19  N.  B.  R.  iC), 

711. 
Chequassat    Lumber    Co.,     In    re 

(112  Fed.  Rep.   56),  159,  239. 
Chesapeake    Oyster    &    Fish    Co., 

In    re    (112    Fed.    Rep.    960), 

178,   179. 
Chesapeake    Shoe    Co.    v.    Seldner 

(122  Fed.  Rep.  593),  438,  439, 

449,    450,    491,    581,    595,    606, 

872,    900. 
Chetwood,  In  re   (165  U.  S.  443), 

887. 
Chicago-Joplin    Lead    &    Zinc    Co., 

In  re  (104  Fed.  Rep.  67),  178. 
Chicago     Motor     Vehicle     Co.     v. 

Leather    Co.     (141    Fed.    Rep. 

518),  284. 
Chicago   &   Northwestern  Ry.    Co. 

V.    Osborne    (146    U.    S.    35^), 

890,   892. 
Chicago  &  P.  R.  Co.  v.  Blair   (100 

U.  S.  661),  933,  934. 
Chicago  Title  &  Trust  Co.  v.  Roeb- 

ling's  Sons  Co.  (107  Fed.  Rep. 

71),   185,   187,   197,   550. 
Chiles,  In  re   (22  Wall.  157),  696, 

698. 
Chilton  V.  Cabiness  (14  Ala.  447), 

508,  510. 
Chism    V.    Bank    of   Friar's    Point 

(5  Am.  B.  R.   56),  619,  622. 
Chism  V.  Citizens  Bank   (77  Miss. 

599),  619. 
Chisholm,  In  re  (4  Fed.  Rep.  526), 

782. 
Christensen,  In  re   (101  Fed.  Rep. 

243),  188,  275. 
Christensen    Engineering    Co.,    In 

re   (194  U.  S.  458),  698. 
Christy,  Ex  parte    (3   How.   292), 

109. 
Christy,  Ex  parte  (2  Dea.  &  Chit. 

155),  317. 


Chubb  V.  Upton  (95  U.  S.  665),  419, 

493. 
Church  V.  Winkley  (73  Mass.  460), 

856),  857. 
Citizens  Bank  v.  Ober    (1  Woods, 

80),  752. 
Citizens  Nat.  Bank  v.  DePauw  Co. 

(105  Fed.  Rep.  926),  191. 
City  Bank,  In  re   (6  N.  B.  R.  71), 

372,   378. 
City  Bank,   Petitioner    (153  U.   S. 

246),  950. 
City   Bank  v.   Hunter    (152   U.    S. 

512),  950. 
City  Bank  v.  Walton    (5  Rob.  La. 

158),  823. 
City  Nat.  Bank  v.  Bruce  (109  Fed. 

Rep.  69).  585,  588. 
City  Nat.  Bank  v.  Hunter  (129  U. 

S.  557),  927. 
City  Nat.  Bank  of  Dallas  v.  Doo- 

little  (107  Fed.  Rep.  236),  716, 

729. 
City    Bank    of    New    Orleans,    Ex 

parte  (3  How.  292),  10. 
City    of    Lincoln    v.     Sun    Vapor 

Street  Light  Co.  (59  Fed.  Rep. 

756),  942. 
City  of  Milwaukee  v.    Schailer   & 

Schnlglau   Co.    (91    Fed.   Rep. 

858),  942. 
City   Trust   Co.,   In   re    (121    Fed. 

Rep.  706),  778,  779. 
Claff,  In  re    (111  Fed.  Rep.  506), 

791,  814,  821,  828,  831. 
Claflin   V.   Cogan    (48  N.   H.   411), 

854. 
Claflin    V.    Houseman     (93    U.    S. 

130),  92,  126. 
Claflin    V.    Houseman     (93    U.    S. 

134),  428. 
Claiborne,   In   re    (109    Fed.    Rep. 

74),   658,   668,  705. 
Clairmont,  In  re  (1  N.  B.  R.  276), 

417. 
Clapp  V.  Thomas  (5  Allen  [Mass.] 

158),  527. 
Clarion  Bank  v.   Jones    (21  Wall. 

325),  555.  559,  625,  627. 
Clark,  In  re  (4  Ben.  88),  312,  654. 
Clark,  In  re  (4  N.  B.  R.  237),  462. 
Clark,  In  re   (9  N.  B.  R.  67),  783. 
Clark,  In  re   (118  Fed.  Rep.  358), 

780. 
Clark  V.  American  Mfg.  Co.    (101 

Fed.  Rep.  962),  282. 
Clark  V.  Binninger  (38  How.  Prac. 

341),  76. 


TABLE   OF   CASES. 
References  are  to  pages. 


1365 


Clark  V.  Binninger  (39  How.  Prac. 

363),  654. 
Clark  V.   Calvert    (8   Taunt.   742), 

508. 
Clark  V.  Clark  (17  How.  315),  126, 

511.  755. 
Clark  &  Dougherty,  In  re   (10  N, 

B.  R.  21),  5G5. 
Clark  V.  Ewing  (3  Fed.  Rep.  83), 

92. 
Clark    V.    Iselin    (21    Wall.    3C0), 

195,    444,    503,    552,    574,    5SG, 

G02. 
Clark  V.  Henne  &  Meyer  (127  Fed. 

Rep.  2SS),  228,  238. 
Clark   V.    Hume    (Ryan   &  Moody, 

207),  483,  486,  487. 
Clarke    v.    Larremore    (188    U.    S. 

486),    86,    102,    105,    106,    111, 

117,    439,    547,    548,    549,    550, 

892. 
Clark   V.    Pidcock    (129   Fed.  Rep. 

745),  331,   416,  907. 
Clark  V.  Rowling    (3  N.   Y.  216), 

350. 
Clark  V.  Shaw  (28  Fed.  Rep.  356), 

783. 
Clark    V.     Sparhawk     (2    Weekly 

Notes,  Cas.   115),  372,  376. 
Clark   Thread   Co.   v.   Willimantic 

Linen  Co.  (140  U.  S.  481),  937. 
Claster  v.  Soble  (22  Pa.  Super.  Ct. 

631),  345,  829,   840. 
Clay,  Ex  parte  (6  Ves.  813a),  307. 
Clay  V.  Smith  (3  Pet.  411),  23,  96, 

247. 
Clayton    v.    Exchange    Bank    (121 

Fed.  Rep.  630),  567,  584,  585, 

597. 
Clements    v.    Hall    (2    DeG.    &    J. 

172),  310. 
Clements  v.  Moore   (6  Wall.  312), 

468,  477. 
demons   v.   Brinn    (7   Am.   B.   R. 

714),  830. 
Cleveland  Ins.  Co.,  In  re  (22  Fed. 

Rep.  204),  384,  385,  407. 
Cleveland  Ins.  Co.  v.  Globe  Ins.  Co. 

(98  U.   S.   366),  27. 
Cliffe,  In  re    (94   Fed.  Rep.  354), 

238,   266,    284. 
Cliffe,  In  re    (97   Fed.  Rep.   540), 

641,  645. 
Clifford,  In  re   (2  Saw.  428),  490. 
Clifford,  In  re  (136  Fed.  Rep.  475), 

585,  586,  588. 
Clifton  V.  P^oster  (103  Mass.  233), 

609,  610. 


Clisdell,  In  re  (101  Fed.  Rep.  246). 

802. 
Clopton  V.  Spratt   (52  Miss.  251), 

850. 
Clothier,    In    re    (108    Fed.    Rep. 

199),  796. 
Cobb,  In  re  (7  Am.  B.  R.  104),  638. 
Cobb,  In  re    (96   Fed.   Rep.    821), 

574. 
Cobb,  In  re   (112  Fed.  Rep.  655). 

421,  759,  783. 
Cobb  V.   Overman    (109  Fed.  Rep. 

65),  343,  345,  362. 
Cobb  V.  Symonds  (5  B.  &  A.  516), 

178. 
Coburn,  In  re  (126  Fed.  Rep.  218), 

288. 
Coddington,  In  re   (118  Fed.  Rep. 

281),  186,  269. 
Coddington,  In  re   (126  Fed.  Rep. 

891),  530. 
Coe-Powers   Co.,   In  re    (109   Fed. 

Rep.   550),  609. 
Cohen,  In  re  (131  Fed.  Rep.  391), 

Cohen,  In  re  (136  Fed.  Rep.  999), 

663. 
Cohn,  In  re  (6  N.  B.  R.  370).  627. 
Cogley,  In  re   (107  Fed.  Rep.  73), 

143,    443,    613,    739,    741.    747, 

748.  775. 
Cogswell,  In  re   (1  Ben.  388),  327, 

416. 
Coffman,  In  re  (93  Fed.  Rep.  422), 

488,  516. 
Colaluca,    In    re    (133    Fed.    Rep. 

255),  206,  222. 
Colby  V.  Coates    (6  Cush.   [Mass.] 

558),  782. 
Cole,  In  re    (106  Fed.   Rep.   837), 

112,  841,  842. 
Cole,   In  re    (133   Fed.  Rep.   414), 

138,  636,  647,  648. 
Cole,  In  re    (144   Fed.   Rep.   392), 

652,  653,  696,  699. 
Cole  V.  Duncan    (58  111.  176),  746. 
Coleman,  In  re   (2  N.  B.  R.  562), 

565. 
Coleman,    In    re    (136    Fed.    Rep. 

818),  498. 
Coleman  v.   Davies    (45  Ga.   489), 

847. 
Collector  v.  United  States   (96  U. 

S.   594),  948. 
Coller,  In  re  (111  Fed.  Rep.  503), 

516. 
Collier,  In  re    (12  N.  B.  R.   266), 

292,  308,  316,  317. 


1366 


TABLE 
References 


Collier,  In  re   (93  Fed.  Rep.  191), 

218,    528. 
Collins,  In  re  (3  Biss.  415),  174, 
Collins  V.  Hood    (4  McLean,  186), 

292,  311,  580. 
Collins  V.  Jones  (10  B.  &  C.  777), 

374. 
Collins  V.  Marshall  (10  Rob.  [La.] 

llz),  429. 
Colton  Export  &  Import  Co.,  In  re 

(21  Fed.  Rep.  663),  574. 
Collumb  V.  Read    (24  N.  Y.  505), 

310. 
Columbia   Iron   Wks.,   In  re    (127 

Fed.  Rep.  99),  176,  177. 
Columbia  Iron  Wks.  v.  Nat.  Lead 

Co.    (127   Fed.   Rep.   99),   921, 

922,  923,  933. 
Columbia   Iron   Wks.,  In  re    (142 

Fed.  Rep.  234),  159,  163,  323, 

325,    419,    420,    422,    425,    535, 

752. 
Columbia    Ins.    Co.,   Ex   parte    (2 

Low.  5),  347. 
Columbia  Real   Estate  Co.,  In  re 

(101    Fed.    Rep.    965),    33,    85, 

247,   265,  279,   280. 
Columbia  Real   Estate  Co.,  In  re 

(112  Fed.  Rep.  643),  262,  912, 

913,  925. 
Columbus   Buggy  Co.,  In  re    (143 

Fed.  Rep.  859),  446,  448. 
Columbus    Watch    Co.    v.    Robbins 

(148  U.  S.  266),  896,  897. 
Colvin  V.  Jacksonville    (158  U.   S. 

456),  895. 
Colwell   V.    Tinker    (6   Am.   B.   R. 

434),   348. 
Colwell   V.   Tinker    (35   Misc.    [N. 

Y.]    330),  835. 
Comegys  v.  McCord   (11  Ala.  932), 

431. 
Comegys  v.  Vasse  (1  Pet.  193),  7, 

511. 
Comfort  V.  Eisenbeis   (11  Pa.  13), 

857. 
Comingor,  Ex  parte  (107  Fed.  Rep. 

898),  32,  90,  98,  100,  101,  102, 

652.  696. 
Comly  V.  Fisher  (Taney,  121),  627. 
Commonwealth  v.  Hutchinson   (10 

Pa.  St.  466),  833. 
Commonwealth    v.    Shoe    Ins.    Co. 

(112  Mass.  131),  373. 
Commonwealth     v.     Walker     (108 

Mass.  309),  640,  677. 
Commercial    Bank   of   Manchester 

V.    Buckner    (20    How.    108), 

862. 


OF  CASES, 
are  to  pages. 

Comm.    V.    Erisman    (21   Pitts.   L. 

Jour.  69),  340,  835. 
Compton   V.   Jesup    (68   Fed.  Rep, 

263),   116,   896. 
Comstock,  In  re  (3  Saw.  517),  411, 

637. 
Comstock,  In  re  (22  Vt.  642),  381, 

834. 
Comstock  V.  Bechtel  (63  Wis.  656), 

537. 
Comstock  V.   Grout   (17  Vt.   512), 

664,  834. 
Conant,   Ex   parte    ill   Me.   275), 

178. 
Conard   v.   Insurance  Co.    (6  Pet. 

274),  627. 
Conboy   v.    First  Nat.   Bank    (203 

U.   S.  141),  885,  921. 
Conhaim,  In  re  (97  Fed.  Rep.  923), 

559. 
Conhaim,    In   re    (100    Fed.    Rep. 

268),  771. 
Conley,  In  re  (120  Fed.  Rep.  42), 

806. 
Conn,  In  re  (108  Fed.  Rep.  525), 

682. 
Connecticut  v.   Shelton   (47  Conn. 

400),  833. 
Connell,  Ex  parte  (3  M.  &  A.  581), 

310. 
Connell,  In  re  (120  Fed.  Rep.  846), 

774. 
Connell   &   Sons,  In  re    (120  Fed. 

Rep.  846),  162,  165. 
Conner,  In  re  (146  Fed.  Rep.  998), 

504,  528. 
Conner,  In  re  (1  Low.  532),  612. 
Conner  v.   Long    (104   U.   S.   228), 

435. 
Connolly,    In    re    (100    Fed.    Rep. 

620),  98. 
Connor  v.  Scott  (4  Dill.  242),  126. 
Conqueror,   The    (166   U.    S.   110), 

890,   891. 
Continental    Nat.    Bank    v.    Katz 

(1  Am.  B.  R.  19),  94,  106,  107, 

112. 
Conrad,  In  re   (6  A.  M.  Law  Rev. 

385),  358. 
Conrader  v.  Cohen  (121  Fed.  Rep. 

801),  308. 
Conroy,  In  re   (134  Fed.  Rep.  764), 

683,  792. 
Copeland    v.    Barnes     (147    Mass. 

388),  571,  599,  600. 
Copeland  v.   Stephens    (1  B.  &  A. 

393),  484. 
Copper  King,  In  re  (143  Fed.  Rep. 

649),    781. 


TABLE   OF   CASES. 
References  are  to  pages. 


1367 


Copper  King,  In  re  (144  Fed.  Rep. 

689),   290. 
Cook,  Ex  parte  (2  P.  Wms.  500), 

292. 
Cook,  In  re  (3  Biss.  122),  182,  183, 

299,  300,  311,  746. 
Cook    V.    Farrington     (104    Mass. 

212),  401. 
Cook  V.  Moffat   (5  How.  295),  19, 

22. 
Cook  V,  Rogers  (31  Mich.  391),  27. 
Cook  V.  Scovil   (53  Atl.  Rep.  692), 

102. 
Cook  V.  Tullis  (18  Wall.  332),  444, 

503,   542,   572,   586. 
Cook  V.  Whipple    (55  N.  Y.  150), 

92. 
Cook  Inlet  Coal  Fields  Co.  v.  Cald- 
well (147  Fed.  Rep.  475),  787, 

869,  935. 
Cooke,  In  re  (109  Fed.  Rep.  631), 

649. 
Cooper,  In  re  (135  Fed.  Rep.  196), 

159. 
Cooper,  Ex  parte   (39  L,  T.  260), 

422. 
Cooper  Grocery  Co.  v.  Bryan   (127 

Fed.  Rep.  815),  771. 
Cooper  V.  Slight  (27  L.  R.  Ch.  Div. 

565),  464. 
Corbett,  In  re  (104  Fed.  Rep.  872), 

93,   120,   121,   166,  430,  575. 
Corbett,  In  re    (5  Saw.  206),  538. 
Corey  v.  Ripley   (57  Me.  69),  862. 
Corn,  In  re    (106  Fed.  Rep.   143), 

683,   807. 
Cornell,  In  re   (97  Fed.  Rep.  29), 

67-9. 
Cornell  v.  Dakin    (38  N.  Y.  263), 

861. 
Corn   Exchange   Bank,  In  re    (15 

N.  B.  R.  216),  386. 
Cornwall,   In  re    (9   Blatch.    114), 

270,  383. 
Corwin,  In  re   (1  Fed.  Rep.  847), 

863. 
Cosgrove  v.  Cosby    (86  Ind.  511), 

372,  377. 
Cosmopolitan    Power    Co.,    In    re 

(137  Fed.  Rep.  858),  769. 
Cotton,  In  re  (3269  Fed.  Cas.),  340. 
Cotton,  In  re    (2  N.  Y.  Leg.   Obs. 

370),    835. 
Cotton,  In  re   (6  Law  Rep.  546), 

172. 
Cotton  V.   James    (M.  &  M.   273), 

182. 
Counselman  v.  Hitchcock   (142  U. 

S.   562),   643. 


Couriei'-Journal    Job   Printing  Co. 

V.  Brewing  Co.  (101  Fed.  Rep. 

699),  903,  944. 
Courtney   v.   Beale    (84   Va,   692), 

848. 
Couts  V.  Townsend  (126  Fed.  Rep. 

249),  170. 
Cove  V.  Purcell  (56  N.  Y.  649),  437. 
Covell  V.  Heyman  (111  U.  S.  176), 

116. 
Covington,   In   re    (110   Fed.   Rep. 

143),  144,  820. 
Covington    Stock    Yards    v.    Keith 

(121  U.  S.  248),  932. 
Cowen,  Ex  parte  (2  L.  R.  Cn.  App. 

326),  718. 
Cox  V.  State  Bank  (126  Fed.  Rep. 

654),   439,   456. 
Cox  V.  Wall    (99  Fed.  Rep.  546), 

620. 
Cox   V.   Wilder    (2    Dill.   45),   482, 

529,    530. 
Cox  V.   Wilder    (5  N.  B.  R.   443), 

532. 
Coxe  V.  Hale  (10  Blatch.  56),  580. 
Crabb,  Ex  parte  (8  De  G.  M.  &  G. 

277),  178. 
Craft,  In  re  (2  Ben.  214),  283,  552. 
Crafts  V.  Mott  (5  Barb.  N.  Y.  305), 

36. 
Cragen    v.    Carmichael     (2     Dill. 

519),  125. 
Cragin  v.  Thompson  (2  Dill.  513), 

627. 
Craig,  In  re   (4  N.  B.  R.  50),  462. 
Cram,  In  re  (1  Hask.  89),  325. 
Cramer  v.  Wilson  (195  U.  S.  408), 

735,    736,    741,    754,    882. 
Cramond,    In    re    (145    Fed.    Rep. 

566),  433. 
Crandall  v.  Coats    (113  Fed.  Rep. 

965),  557,  574. 
Crandall  v.  Nevada   (6  Wall.  35), 

939. 
Crapo  V.  Kelly  (16  Wall.  610),  21, 

461. 
Craufurd     v.     Attorney     Gen.     (7 

Price,  5),  832. 
Crawford,  In  re  (3  N.  B.  R.  698), 

350. 
Crawford,  In  re  (5  N.  B.  R.  301), 

353. 
Crawford    v.    Burke     (195    U.    S. 

176),   361,   382,   725,   837,   841. 

845,   846,   849. 
Crawford  v.  Burke   (201  111.  581), 

841,   844. 
Crawford  v.  Dunbar   (52  Cal.  36), 

129. 


1368 


Credit   Co.    v.    Arkansas    Cent.    R. 

Co.    (128  U.   S.  260),  918,  921, 

923. 
Creditors  v.  Cozzens   (3  N.  B.  R. 

281),   256,   700. 
Creditore  v.  Williams   (4  N.  B.  R. 

579),  794,   795,   796. 
Crim  V.  Woodford    (136  Fed.  Rep. 

34),    142,    582,    584,    585,    925, 

927. 
Crisfield    v.    State    (55    Md.    192), 

846. 
Crist,  In  re  (116  Fed.  Rep.  1007), 

679,  793,  815. 
Crittenden  v.  Barton  (5  Am.  B.  R. 

775),   473,   561. 
Crockett,  In  re   (2  Ben.  514),  297, 

512. 
Croft,  In  re  (8  Biss.  188),  538. 
Crofton  V.  Poole  (1  B.  &  Ad.  568), 

506. 
Gronin,  In  re  (98  Fed.  Rep.  584), 

288. 
Crooks  V.  People's  Nat.   Bank    (3 

Am.  B.  R.  238),  559,  574,  623. 
Crooks    V.    Stuart     (7    Fed.    Rep. 

800),  423,  469,  593. 
Crosbie  v.  Tooke  (1  M.  &  K.  421), 

487. 
Crosby    v.    Miller,    Vaughn    &    Co. 

(25  R.  I.  172),  845,  846. 
Crosby  v.  Spear   (98  Me.  542),  85, 

120,  456. 
Crosby    v.    Wentworth    (48    Mass. 

10),   823. 
Cross  V.  Evans  (167  U.  S.  60),  897. 
Crouch  V.  Gridley   (6  Hill  [N.  Y.] 

250),  347,  835. 
Crow,  In  re   (116  Fed.  Rep.  110), 

780. 
Crystal    Springs   Bottling   Co.,   In 

re    (96    Fed.    Rep.    945),    493, 

494. 
Crystal    Springs   Bottling   Co.,   In 

re  (100  Fed.  Rep.  265),  372. 
Cuddy,  Petitioner  (131  U.  S.  281), 

703,  705. 
Cullen  V.  Dawson   (24  Minn.  66), 

507. 
Cumming  v.  Clegg   (52   Ga.   605), 

523. 
Cunningham,  In  re   (19  N.  B.  R. 

276),  782. 
Cunningham  v.  German  Ins.  Bank 

(101  Fed.  Rep.  977),  362,  915. 
Cunningham  v.  German  Nat.  Bank 

(103  Fed.  Rep.  932),  142,  903, 

936,  937,  938. 


TABLE   OF   CASES. 
References  are  to  pages. 

Curran  v.  Munger  (6  N.  B.  R.  33) 

194. 
Curry  v.  McCauley   (20  Fed.  Rep. 

583),    590. 
Curtis,  In  re   (91  Fed.  Rep.  737), 

24,  27. 
Curtis,  In  re   (94  Fed.  Rep.  630), 

228. 
Curtis,  In  re  (100  Fed.  Rep.  784), 

161,    162,   165,   774,   915. 
Curtis,  In  re  109  La.  Ann.   171), 

364. 
Curtis  V.  Slosson  (6  Pa.  265),  861. 
Cushman,  In  re  (7  Ben.  482),  215. 
Custard  v.  Wigderson    ( Wis. 

),  840. 

Cutter  V.   Evans    (115   Mass.   27), 

350. 
Cutter  V.  Folsom   (17  N.  H.  139), 

18,  17L 
Cutting,  In  re  (145  Fed.  Rep.  388), 

195. 
Cuxon  V.  Chadley  (1  C.  &  P.  174), 

377. 


Daggett,  In  re   (8  N.  B.  R.  433), 

171. 
Dailey  v.  State   (8  Blackf.   [Ind.] 

329),  129. 
Dallas  V.  Flues    (19  Pitts.  Leg.  J. 

173),  413. 
Dally    V.    Smith    (4    Burr,    2148), 

177. 
Dambmann  v.  White  (48  Cal.  439), 

437. 
Damon,  In  re  (104  Fed.  Rep.  775), 

156. 
Dana,  In  re   (68  Fed.  Rep.   886), 

670,  674. 
Danforth,    In    re    (1    Pa.    Law    J. 

148),  645. 
Daniels,  In  re  (110  Fed.  Rep.  745), 

780,   781. 
Daniels,  In  re  (130  Fed.  Rep.  597), 

151,  774,  776. 
Daniels  v.  Lazarus    (65  Fed.  Rep. 

718),  118. 
Daniels  v.  Palmer  (35  Minn.  347), 

177. 
Dann,  In  re  (129  Fed.  Rep.  495), 

463. 
Danville    v.    Brown     (128    U.    S. 

503),  932. 
Danville   Rolling   Mill    Co.,    In   re 

(121  Fed.  Rep.  432),  364,  769. 
Darling   v.    Berry    (13    Fed.    Rep. 

668),   19,   479,   518,   609. 


TABLE   OF   CASES. 
References  are  to  pages. 


1369 


Darwin,  In  re  (117  Fed.  Rep.  407), 

545,   54G,   547,   548,   549. 
Daubenny,   Ex   parte    (3    Mont.    & 

Ayr.  18),  178. 
Daubner,  In  re  (96  Fed.  Rep.  805), 

488. 
Dauchy,  In  re  (122  Fed.  Rep.  688), 

679,  803,  804,  812,  818. 
Davenport,  In  re   (3  N.  B.  R.  77), 

756. 
Davenport,  Ex  parte  (1  Low.  384), 

387. 
Davenport    v.    Fletcher    (16    How. 

142),  930. 
David  V.   Ellice    (5  B.   &  C.   196), 

316. 
Davidson,  In  re   (4  Ben.  10),  207. 
Davidson,    In    re    (109    Fed.    Rep. 

882),  585,  586. 
Davidson   v.   Friedman    (140   Fed. 

Rep.  853),  165,  872,  900,  915. 
Davidson  v.  Lanier  (4  Wall.  447), 

918,  933. 
Davis,  In  re  (2  N.  B.  R.  391),  384, 

746. 
Davis,  In  re  (112  Fed.  Rep.  294), 

452,  843,  844. 
Davis    V.    Anderson    (6    N.    B.    R. 

145),  384,  627,  746. 
Davis  V.  Bohle  (92  Fed.  Rep.  325), 

32,   905. 
Davis   V.    Friedlander    (104    U.    S. 

570),  428. 
Davis  V.  Geisler   (162  U.  S.  290), 

895. 
Davis  V.  Ham  (3  Mass.  33),  342. 
Davis   V.    Jewett    Bros.    (17   S.    D. 

410),  548. 
Davis  V.  R.  R.  Co.  (1  Woods,  661), 

755. 
Davis   V.    Stevens    (104    Fed.   Rep. 

235),  170,  188,  296,  300. 
Davis    V.    Turner    (120   Fed.    Rep. 

605),  584. 
Davis  V.  Wakelee  (156  U.  S.  684), 

931. 
Davison,    In    re    1143    Fed.    Rep. 

673),  653,  696,  699. 
Davy,  Ex  parte  (Ridge,  289),  317. 
Dawes  v.  Boylston   (9  Mass.  337), 

461. 
Dawson    v.    Hartsfield    (79    N.    C. 

334),  351. 
Day  V.  Beck  &  Gregg  Hardw.  Co. 

(114  Fed.  Rep.  834),  200,  233. 
Day  V.  Bardell  (97  Mass.  246),  24. 
Day  V.  Laflin  (47  Mass.  280),  429. 
Day    V.    Superior    Court    (61    Cal. 

489),  506. 


Dayton    v.    Lash    (94    U.    S.    112), 

934. 
Dayville  Woolen   Co.,  In   re    (114 

Fed.  Rep.   674),   135,  330,  415. 
Deacon  v.  Sewing  Machine  Co.  (14 

Reporter,  43),  244. 
Dean  v.  Justices   (173  Mass.  453), 

831. 
Deane     v.     Caldwell     (127     Mass. 

244),  343. 
Dearing   v.    Moffitt    (6    Ala.    776), 

857. 
Deckert,    In   re    (2    Hughes    183) 

518. 
Deere  Plow  Co.  v.  McDavid    (137 

Fed.  Rep.   802),  448,  454,   502. 
Deeze,  Ex  parte  (1  Atk.  228),  370, 

606. 
De  Forest,  In  re  (9  N,  B.  N.  278), 

278,   280. 
De  Gottardi,  In  re  (114  Fed.  Rep. 

328),  144,  639,  702. 
De  Graff  v.  Lang  (87  N.  Y.  Supp. 

78),   189,   588,  625. 
Deland  v.  Miller  &  Cheney  Bank 

(119   la.   368),  586. 
Deland   v.   Miller  &  Cheney  Bank 

(93  N.  W.  R.  304),  622. 
De  Lany  &  Co.,  In  re    (124   Fed. 

Rep.  280),  106. 
Delavergue    v.    Farrand    (1    Mich. 

(N.   P.)    90),    107. 
Dell,  7n  re   (5  Saw.  344),  314. 
Delling,  In  re  (124  Fed.  Rep.  852), 

399. 
Delta    Nat.    Bank    v.    Easterbrook 

(133  Fed.  Rep.  521),  618,  878 

879,   880. 
Demarest,   In   re    (110    Fed.    Rep. 

638),  538. 
DeMetz,    In    re     (No.     3781    Fed. 

Cas.),  393. 
Denning,    In    re    (114    Fed.    Rep. 

801),    308. 
Denny  v.  Bennett  (128  U.  S.  489), 

21. 
Denny  v.  Pironi    (141  U.  S.  121), 

939. 
Denver   First   Nat.   Bank   v.   Klug 

(186  U.  S.  202),  869,  875,  889, 

894,   895. 
Derby,   In   re    (6   Ben.    232),    172 

270,    280. 
Desmare  v.  United   States    (93  U. 

S.    610),    516. 
Des  Moines  Saving  Bank  v.  Mor- 
gan Jewelry  Co.  (123  la.  432), 

561. 


1370 


TABLE   OF   CASES. 
References  are  to  pages. 


Desobry    v.    Morange    (18    Johns., 

N.  Y.  33G),  836. 
Detert,  In  re    (11   N.   B.  R.   293), 

402,  471,  482,  529. 
Devoe,  In  re    (1   Low.   251),   660, 

665. 
Devoe  Mfg.  Co.  Ex  parte  (108  U. 

S.    401),   34. 
Devries    v.    Shanahan     (122    Fed. 

Rep.   629),   936,   938. 
Diack,  In  re  (100  Fed.  Rep.  770), 

497,  498,  499. 
Dial  V.  Reynolds    (96  U.  S.  340), 

105. 
Dibblee,  In  re   (3  Ben.  283),  194, 

574,   732,   757. 
Dick  V.  Powell   (2  Swan  [Tenn.], 

632),  351,  859. 
Dickas  v.   Barnes    (140  Fed.  Rep. 

849),    171,    296,   298,   301,   303, 

306,  872,  900. 
Dickenson  v.  Lockyer  (4  Ves.  36), 

316. 
Dickinson    v.    Central    Nat.    Bank 

(129  Mass.  729),  493. 
Dickinson  v.   Security  Bank    (110 

Fed.   Rep.   353),   574. 
Dickson,    In    re     (111    Fed.    Rep. 

726,  899,  905,  912. 
Dickson  v.  Wyman  (111  Fed.  Rep. 

726),  398,  399,  560,  576. 
Dietz,  In  re    (97   Fed.  Rep.   563), 

816. 
Diggles,  In   re    (8   Ben.    36),   729. 
Dight  V.  Chapman    (44  Ore.  265), 

361,   835. 
Dillard,    In    re    (2    Hughes    190), 

514,  515. 
Dillard  v.  Collins  (25  Grat.  [Va.], 

343),  512. 
Diller,  In  re   (100  Fed.  Rep.  931), 

536. 
Dillon,  In  re  (100  Fed.  Rep.  627), 

314,  340,  377,  763,  850. 
Dimock  v.  Revere  Copper  Co.   (117 

U.   S.  559),  428,  836,  859,  860, 

883. 
Dingee    v.    Becker     (9    N.    B.    R. 

508),  822. 
Dinsdale  v.  Eames  (4  Moore,  350), 

351. 
Dismal   Swamp  Const.   Co.,  In  re 

(135  Fed.  Rep.  415),  572,  585, 

586,   588,   589. 
Distler  v.  McCauley  (6  Am.  B.  R. 

491),  348. 
Distler  v.  McCauley   (35  Misc.,  N. 

Y.,  411),  835. 


Dixon,  In  re   (114  Fed.  Rep.  675) 

151. 
Dixon's    Case    (3    Atty.    Gen.    Op. 

622),  705. 
Doan  V.  Compton  (2  N.  B.  R.  607), 

195. 
Docker,    Foster    Co.,    In    re    (123 

Fed.  Rep.  190),  189,  398,  409, 

559,  625. 
Doddy,  Jourdan  &  Co.,  In  re  (127 

Fed.   Rep.    771),   274. 
Dodge,    In    re     (No.     3946a    Fed. 

Cas.),  215. 
Dodge  V.  Kaufman  (91  N.  Y.  Supp. 

727),   835. 
Dodge  V.  Knowles  (114  U.  S.  430), 

921,  923,  930. 
Dodge   V.    Norlin    (133    Fed.    Rep. 

363),  878,  879,  936,  938. 
Doe  V.  Britian    (2  B.  &  Aid.  93), 

464,  465. 
Doe  V.  Childress    (21  Wall.   642), 

824. 
Doe  V.  Mining  Co.    (70  Fed.  Rep. 

455),    942. 
Doherty,    In    re     (135    Fed.    Rep. 

432),  492. 
Doig,    In    re    (4    Fed.    Rep.    193), 

674. 
Dokken    v.    Page    (147    Fed.    Rep. 

438),   459,   477. 
Dole,  In  re   (11  Blatch.  499),  657. 
Dole,  In  re    (110   Fed.  Rep.  1)26), 

481. 
Dolle    v.    Cassell     (135    Fed.    Rep. 

52),  581,  879. 
Domenig,    In    re    (128    Fed.    Rep. 

146),  386. 
Donaldson    v.    Farwell    (93    U.    S. 

631),   451,   453,   444,   446. 
Donnell  v.  Savings  Bank   (80  Mo. 

165),  496. 
Donnelly,  In  re  (5  Fed.  Rep.  783), 

239,  287. 
Dormire     v.     Cogley     (8     Blackf. 

[Ind.],  177),  429. 
Doroshow   v.    Ott    (134    Fed.   Rep. 

740),  77,  869,  877,  878,  879. 
Dorsey  v.  Kyle   (30  Md.  512),  209. 
Doscher,    In    re     (120    Fed.    Rep. 

408),  187. 
Dos    Hermanos    (10   Wheat.    306), 

921,   923,   930. 
Doty,  In  re  (5  Am.  B.  R.  58),  407. 
Doty.  In  re  (16  N.  B.  R.  202),  383. 
Dougherty,  In   re    (109   Fed.   Rep. 

480),  552. 
Douglass,  In  re  (11  Fed.  Rep.  403), 

864,   865. 


TABLE   OF   CASES. 
References  are  to  pages. 


1371 


Douglas  V.   Voegler    (6  Fed.  Rep. 

52),  571,  586,  588. 
Douglass  V.  Zinc  Co.  (56  Mo.  388), 

609. 
Douglas   Coal    &   Coke   Co.,   In   re 
(131  Fed.  Rep.  760),  193,  202. 
Dow's  Estate,  In  re  (105  Fed.  Rep. 

889,  684,   803. 
Dowell  V.  Dew    (1  W.  &  C.  Chan. 

365),  488. 
Downer    v.    Chamberlin     (21    Vt. 

414),   859. 
Downer  v.  Dana  (22  Vt.  337),  840. 
Downing,  In  re    (1  Dill.  33),  308, 

318,  316,  317,  323. 
Downing  v.  Traders'  Bank  (2  Dill. 

136),  356. 
Downs,    Ex    parte    (1    Rose.    96), 

401. 
Doyle  V.  Heath  (22  R.  I.  213),  545. 
Doyle   V.    Sharpe    (74   N.   Y,   154), 

259. 
Drake,  In  re  (114  Fed.  Rep.  229), 

170. 
Drake    v.    Rice    (130    Mass.    412), 

468. 
Drake  v.  Rollo   (3  Biss.  273),  373. 
Drayton,    In    re     (135    Fed.    Rep. 

883),  459. 
Dreeben,    In    re     (101    Fed.    Rep. 

110),   160,   161,   407. 
Dressel    v.    North    State    Lumber 

Co.    (107   Fed.  Rep.   255),   234. 
Dressel    v.    North    State    Lumber 

Co.   119    Fed.   Rep.   531),    143, 

150,  412,  556,  576,  577. 
Dresser,  In  re  (124  Fed.  Rep.  915), 

656,  661. 
Dresser,  In  re  (135  Fed.  Rep.  495), 

407. 
Dresser,  In  re  (146  Fed.  Rep.  383), 

814. 
Dresser    &    Co.,    In   re    (144    Fed. 

Rep.  318),  810. 
Dresser  v.  Brooks    (3  Barb.  429), 

350. 
Dressier,    Ex    parte    (9    Ch.    Div. 

252),  485. 
Dreyer,   In  re    (2   N.   B.   R.   212), 

799. 
Driggs  V.  Russell  (3  N.  B.  R.  161), 

510. 
Drisko,  In  re    (2  Low.   430),  208, 

831. 
Drummond,  In  re  (1  N.  B,  R.  231), 

191,   193.   238. 
Drummond,   In  re    (4   Biss.   149), 

194,   579. 


Duble,  In  re   (117  Fed.  Rep.  794), 

547,   780. 
Ducker,  In  re  (134  Fed.  Rep.  43), 

438,    439,    445,    446,    449,    450, 

491,  492,  581,  586,  595,  596. 
Dudley's  Case  (1  Pa.  L.  Jour,  302), 

222. 
Dudley  v.  Easton    (104  U.   S.  99), 

419,    469,    611,    614,    615,    617, 

619. 
Duerson,  In  re   (13  N.  B.  R.  183) 

518. 
Duff,    In    re    (4    Fed.    Rep.    519), 

177. 
Duffey,  In  re  (118  Fed.  Rep.  926), 

476,   523,   525. 
Dufour    V.    Lang     (54    Fed.    Rep. 

913),  929. 
Duguid,  In  re  (100  Fed.  Rep.  274). 

172,    183,    294,    298,    299,    306, 

492,  539. 

Duigman,  Ex  parte   (11  L.  R.  Eq. 

604),  718. 
Dumahaut,  In  re   (15  Blatch.  20). 

651. 
Dumont,  In  re    (4   N.   B.   R.    17), 

756. 
Dunavant,    In    re    (96    Fed.    Rep. 

542),  481,  492,  564. 
Dunbar,  In  re  (not  reported),  207. 
Dunbar    v.    Dunbar      (190    U.    S. 

340),    112,    337,   338,    339,    340, 

342,    343,    345,    348,    362,    364, 

830,  835,  883. 
Duncan,  In  re   (8  Ben.  365),  281. 
Duncan     v.     Hargrove      (22  '  Ala. 

150),  834. 
Duncan  v.  Landis    (106  Fed.  Rep. 

839),  189,  190,  917,  187. 
Dundas,  In  re  (111  Fed.  Rep.  500), 

554,  561,  574. 
Dunham,  Bi  re  (27  Leg.  Int.  404), 

484. 
Dunham,  In  re  (2  Ben.  488),  194, 

200,   274. 
Dunlap  V.  Rogers   (47  N.  H.  281), 

827. 
Dunkerson,   In   re    (4    Biss.    227), 

307. 
Dunks  V.  Gray  (3  Fed.  Rep.  868), 

965. 
Dunn,  In  re  (12  Blatch.  42),  278, 

280. 
Dunn    V.    Cans     (129    Fed.    Rep. 

750),  399. 
Dunn  Hardware  &  Furniture  Co., 

In    re    (132    Fed.    Rep.    719), 

384,   446,   449. 


1372 


TABLE   OF   CASES. 
References  are  to  pages. 


Dunn  Hardware  &  Furniture  Co., 

In    re    (134    Fed.    Rep.    997), 

155. 
Dunnigan,    In    re    (95    Fed.    Rep. 

428),   172,   298. 
Dunning,    In    re     (94    Fed.    Rep. 

709),   922,   929. 
Dunning  v.  Perkins  (2  Biss.  421), 

565. 
Dupee,    In    re    (2    Low.    18),    8G3, 

864,  865. 
Duplex   Radiator   Co.,   In   re    (142 

Fed.  Rep.  906),   203,  235. 
Dupree,  In  re    (97  Fed.  Rep.  28), 

240,  242. 
Durham,    In    re     (104    Fed.    Rep. 

231),   519,   537. 
Durham,    In    re     (114    Fed.    Rep. 

750),    97,    98,    584,    585,    586, 

589,  593. 
Durham    Paper    Co.    v.    Seaboard 

Knitting  Mills   (121  Fed.  Rep. 

179),   228. 
Dusenbury  v.  Hoyt  (53  N.  Y.  521), 

855,   858,   862. 
DuShane  v.  Beall  (161  U.  S.  513), 

433. 
Dutcher  v.  Wright  (94  U.  S.  553), 

204,  242,  379,  474,  572,  591. 
Dutton  V.  Morrison   (17  Ves.  193), 

200. 
Dvorak,  In  re  (107  Fed.  Rep.  76), 

789.' 
Dwight   V.   Merritt    (4    Fed.   Rep. 

614),   248. 
Dwyer,  In  re  (112  Fed.  Rep.  777), 

207. 
Dwyer  v.  Garlough  (31  O.  S.  158), 

531. 
Dyer   v.    Cleveland    (18   Vt.    241), 

854,  859. 


Eagles,  In  re   (99  Fed.  Rep.  695), 

159,    306,    322,    323,    324,    327, 

328,  329,  415,  651. 
Eades,  In  re   (143  Fed.  Rep.  293), 

805,  809,  818. 
Eames,   Ex   parte    (2    Story   322), 

20,    23,    26,    29. 
Eastern   Com.   &   Imp.   Co.,  In   re 

(129   Fed.   Rep.   847),   110. 
Eastlack,    In    re    (145    Fed.    Rep. 

68),   415. 
Easum  v.  Cato   (5  B.  &  Aid.  861), 

370 


Eaton,  In  re    (51  Fed.  Rep.  804), 

652,  697,  705. 
Eaton,  In  re  (HO  Fed.  Rep.  731), 

684. 
Eby    V.    Schomacher    (29    Pa.    St. 

40).   627. 
Eckler  v.  Galbraith  (12  Bush,  Ky., 

71),  855. 
Economical    Printing    Co.,    In    re 

(106  Fed.  Rep.  839),  906. 
Economical    Printing    Co.,    In    re 

(110   Fed.   Rep.    514),   615. 
Edelman,    In    re    (130    Fed.    Rep. 

700),  194,   241. 
Edelstein  v.  U.  S.    (149  Fed.  Rep. 

636),    683. 
Edes,  In  re   (135  Fed.  Rep.  595), 

750,  751. 
Edith,  The  (94  U.  S.  518),  611. 
Edmeads   v.   Newman    (1  B,   &  C. 

418),   373. 
Edmonson  v.  Hyde    (2  Saw.  205), 

478,   525. 
Ed.  W.  Wright  Lumber  Co.,  In  re 

(114  Fed.  Rep.  1011),  194. 
Edwards  v.   Milling  Co.    (108  Mo. 

App.    275),    558,    625. 
Eeles,   In   re    (5    Law   Rep.    273), 

177. 
Egbert  v.  McMlchael    (9  B.  Mon., 

Ky.,  44),  855,  858. 
Eggert,  In  re  (102  Fed.  Rep.  735), 

472,  473,  558,  562.  563,  565. 
Eidemiller,  In  re    (105   Fed.  Rep. 

595),  172. 
Eidom,   In  re    (3   N.   B.   R.    257), 

794. 
Eilenbecker   v.    Plymouth   County 

(134  U.  S.  31),  703. 
Eisenberg,   In   re    (117    Fed.   Rep. 

786),  173,  676. 
Elder,    In    re    (1    Saw.    73),    393, 

404,  412. 
Eldred,   In  re    (3   N.   B.  R.   256), 

510. 
Eldred     v.     Michigan     Insurance 
Bank   (17  Wall.  545),  96,  263. 
Eldridge,   In  re    (2   Hughes   256), 

383. 
Elk  Park  Min.  &  Mill  Co.,  In  re 

(101  Fed.  Rep.  422),  178. 
Ellerbe,  In  re  (13  Fed.  Rep.  530), 

693,  698. 
Ellerhorst,    In   re    (2    Saw.    219), 

748. 
Ellerhorst,  In  re  (5  N.  B.  R.  144), 

354    356. 
Elliott, 'in   re    (2   N.    B.    N.   350). 
295,  301,  319. 


TABLE   OF   GASES. 
References  are  to  pages. 


1373 


Elliot  V.   Higgins    (S3   N.   C.   4.59), 

847. 
Elliott    V.    Keith     (32    Mo.    Apix 
.585),  6G2. 
.Elliott    V.    Toeppner     (187    U.    S. 
327),    84,    186,    187,    189,    233, 
275,    276,    869,    870,    871,    876, 
902,  913,  917,  943. 
Ellis,  In  re  (1  N.  B.  R.  555),  536. 
Ellis,  In  re   (5  Ben.  421),  307. 
Ellis,  In  re   (143   Fed.  Rep.  103), 

224,  225,  338,  342,  343,  901. 
Ellis   V.   Ham    (28   Me.    385),   343, 

350,  356. 
Ellis  V.  Krulewitch  (141  Fed.  Rep. 

954),  903. 
Ellis  V.   McHenry    (L.  R.   6  C.   P. 

228),  825,  826. 
Ells,    In   re    (98    Fed.    Rep.    967), 

365,  366,  367,  483,  488. 
Elm  Brewing  Co.,  In  re  (132  Fed. 

Rep.   299),   598,   607. 
Elmira  Steel  Co.,  In  re   (109  Fed. 
Rep.   456),   175,   196,   234,   236, 
272. 
Emery    v.    Canal    Nat.    Bank     (3 

Cliff.  507),  315. 
Emison,  In  re    (2   N.   E.  R.   595), 

395,  403,  404. 
Empire  Metallic  Bedstead  Co.,  In 
re    (98    Fed.    Rep.    981),    1S3, 
199,  201. 
Empire  State  Trust  Co.  v.  Fisher 

(67  N.  J.  Eq.  88),  557,  588. 
Emrich,    In    re     (101    Fed.    Rep. 

231),  495,  Ti\. 
Emslie,  In  re  (102  Fed.  Rep.  291), 
79,  93,  107,  108,  110,  120,  121, 
430,   544,   546,  608. 
Engel  V.  Union  Square  Bank    (87 

N.  Y.  Supp.  1070),  559. 
Engle,  In  re   (105  Fed.  Rep.  893), 

436,  547. 
English    V.    Ross    (140    Fed.    Rep. 
630),   564,    569,   570,    591,    596. 
Epstein,  In  re  (109  Fed.  Rep.  878), 

432,   452,   453,   843. 
Equitable  Loan  &  Security  Co.  v. 
Moss    &    Co.     (125    Fed.    Rep. 
609),   739,  746,   770. 
Erie  R.  R.   Co.  v.   Dial    (140  Fed. 

Rep.   689),   454,   503,  504. 
Erwin  v.  United  States    (97  U.   S. 

392),  511. 
Eschwege  &  Cohn,  In  re   (8  Am. 

B.  R.  641),  160. 
Esdaile  v.  Sowerby  (11  East,  114), 
496. 


Estate  of  the  Franklin  Sav.  Bank 

Soc,  In  re  (31  Leg.  Int.  173), 

757. 
Estho  V.  Lear   (7  Pet.  130),  939. 
Etheridge    Furn.    Co.,    In    re    (92 

Fed.   Rep.    329),   30.   252,   263, 

268. 
Ethier,  In  re  (118  Fed.  Rep.  107), 

754,  755. 
Eureka    Ins.    Co.,   In   re    (1    Low. 

500),  365. 
Evans,   In   re    (3    N.    B.    R.    261), 

612. 
Evans,  In  re  (116  Fed.  Rep.  909), 

159,  519,  530. 
Evans  v.  Carey   (29  Ala.  99),  857. 
Evans  v.   Hararick  &  Co.    (61  Pa. 

St.    19),   480. 
Evans  v.  Lincoln  Co.    (204  Pa.  St. 

448),   366,   367. 
Evans  v.  Nat.  Broadway  Bank  (85 

N.   Y.    Supp.   101),  .564,   626. 
Evans    v.    Rounsaville     (115    Ga. 

684),  823. 
Evans   v.    State   Bank    (134   U.   S. 

330),  922,   934,  941. 
Everitt,   In   re    (9    N.    B.    R.    90), 

514,  518. 
Everleth,    In    re    (129    Fed.    Rep. 

620),  515,  516. 
Ewald  &  Brainard,  In  re  (135  Fed. 

Rep.  168),  568,  597. 
Ewing,  In  re  (115  Fed.  Rep.  707), 

193,   238. 
Excelsior  Wooden  Pipe  Co.  v.  Pa- 
cific   Bridge    Co.     (185    U.    S. 

285),  895. 
Exley  V.  Berryhill  (36  Minn.  117), 

920. 
Eyster  v.  Gaff   (91  U.  S.  521),  92, 

428,   435,   617. 


Factors,  etc.,  Ins.  Co.  v.  Murphy 

(111  U.  S.  738),  883. 
Fagin,  In  re   (140  Fed.  Rep.  758), 

389. 
Fahy,  In  re   (116  Fed.  Rep.  239), 

790. 
Fairbanks  v.  Amoskeag  Bank   (38 

Fed.  Rep.  630),  729. 
Falco   V.   Kaupisch   Creamery   Co. 

[Ore.]  (70  Pac.  Rep.  286),  469, 

614. 
Falconer,    In    re    (110    Fed.    Rep. 

Ill),  519,  525,  529,  533. 


1374 


TABLE   OF   CASES. 
References  are  to  pages. 


Falls   City   Shirt  Mfg.    Co.,   In   re 

(98  Fed.  Rep.  592),  401,  404, 

G09,   779. 
Falter  v.  Reinhard   (104  Fed.  Rep. 

292),  415. 
Fanshaw  v.   Tracy    (4  Diss.   490), 

701. 
Farham,  In  re  (2  Ch.  Div.   (1895) 

805),  173. 
Farish,   In   re    (2   N.    B.   R.    168), 

514,  523. 
Farley,  In  re  (115  Fed.  Rep.  359), 

303,    305. 
Farley  v.  Banks  (4  El.  &  Bl.  493), 

289. 
Farmer,  In  re  (116  Fed.  Rep.  763), 

348. 
Farmers   L.   &   T.    Co.   v.    Chicago 

N.    P.    R.    Co.    (73    Fed.    Rep. 

314),   941. 
Farmers'  Loan  &  Trust  Co.  v.  Wa- 
terman   (106   U.    S.   265),   924, 
Farmers'  &  Mech.  Bank  v.   Smith 

(6  Wheat.  130),  20,  21. 
Farmers'  &Merchants'  State  Bank 

V.    Armstrong    (49    Fed.    Rep. 

600),  896. 
Farnum,  In  re   (6  Law  Rep.  21), 

315. 
Farr  v.  Pearce  (3  Madd.  74),  489. 
Farrand,  Williams  &  Clark  v.  Mil- 
burn  &  Co.,  122. 
Farrar    v.    Churchill     (135    U.    S. 

609),  916. 
Farrar    v.    Churchill     (135    U.    S. 

609),  923. 
Farrin   v.   Crawford    (2   N.   B.   R. 

602),  903. 
Faxon,  Ex  parte   (Low.  404),  487. 
Faxon  v.  Folvey   (110  Mass.  392), 

503. 
Fay,  In  re  (3  Ben.  6G0),  645. 
Featherstonhaugh  v.  Fenwick    (17 

Ves.    308),    310,    311. 
Federhen,    In    re    (not    reported), 

580. 
Federhen,    In    re    (1    Low.    207), 

571. 
Fehley    v.    Barr    (66    Penn.    196), 

519,  524. 
Fehling  v.   Goings    (57   N.    J.   Ch. 

375),  546. 
Feinberg,  In  re  (3  Ben.  162),  637. 
Felch  V.  Bugbee    (48  Me.  9).  827. 
Feldser,  In  re  (134  Fed.  Rep.  307), 

81,   87,   694,   733. 
Feldstein,    In    re    (103    Fed.    Rep. 

269),    643,    644. 


Feldstein,    In   re    (115    Fed.    Rep. 

259),   805,   807,   808,   914. 
Felker  v.  Crane  (77  Ga.  484),  519. 
Fellows  V.  Freudenthal    (102  Fed. 

Rep.   731),   151,   491,  492,   682, 

820. 
Fellows  V.  Hall    (3  McLean  281), 

860. 
Felson,  In  re  (124  Fed.  Rep.  288), 

653,    696. 
Felson,  In  re  (139  Fed.  Rep.  275), 

163,  434. 
Fendley,  In  re   (10  N.  B.  R.  250), 

257. 
Fereday  v.  Wightwick  (1  R.  &  M. 

49),  310. 
Ferguson,    In    re     (95    Fed.    Rep. 

429),  198,  199. 
Ferris,  In  re  (105  Fed.  Rep.  356), 

683. 
Fetter  v.  Cirode    (4  B.  Mon.,  Ky., 

482),  824. 
Feuerlicht,    In    re    (8    Am.    B.    R. 

550),  576. 
Fidelity  Ins.  Co.  v.  Roanoke  Iron 

Co.    (81    Fed.   Rep.    439),   599. 
Fidelity  Trust  &  Safety  Vault  Co. 

V.    Mobile    St.    R.    R.    Co.    (53 

Fed.  Rep.  850),  246,  250. 
Fidgeon,  Ex  "parte    (4   Dea.   217), 

351. 
Fiegenbaum,  In  re  (121  Fed.  Rep. 

69),    208,    223,    791,    813,    822, 

904. 
Field  V.   Baker    (12   Blatch.   438), 

197. 
Field   V.   United   States    (137  Fed. 

Rep.  6),  678,  691. 
Fielding,  In  re  (96  Fed.  Rep.  800), 

150,  432. 
Fields   V.    Karter    (115    Fed.    Rep. 

950),  682. 
Fife,  In  re    (109   Fed.   Rep.    880), 

347,  350. 
Filer,  In  re   (108  Fed.  Rep.  209), 

185,  191,  234.  517. 
Filer,  In  re    (125  Fed.  Rep.  262), 

361,  382. 
Filley,  In  re   (2  Cent.  L.  J.  419), 

794. 
Fillingin     v.     Thornton     (49     Ga. 

384),  206. 
Finlay,  In  re    (5  Biss.   480),   268. 
Finlay  Bros.,  In  re  (104  Fed.  Rep. 

675),  755. 
Finklestein,  In  re   (101  Fed.  Rep. 

418),  681, 
Finnegan    v.    Hall,    6    Am.    B.    R. 

648),  347, 


TABLE   OF   CASES. 

I 

References  are  to  pages. 


1375 


Firemen's  Ins.  Co.,  In  re   (3  Biss. 

462),  360. 
First  Nat.  Bank,  In  re   (135  Fed. 

Rep.     62),     77,     88,     120,    438, 

595,  869,  877,  878,  879. 
First  Nat.  Bank  v.  Chicago  Title 

Trust  &  T.  Co.  (198  U.  S.  280), 

76,    82,    88,    90,    430,    445,    598, 

738,    743,    749,    869,    870,    873, 

877,   878,   889,   912,   944. 
First  Nat.   Bank  v.   Connett    (142 

Fed.  Rep.  33),  5G7,  569,  591. 
First   Nat.   Bank   v.   Lasater    (196 

U.   S.   115),  443,   444,   4-15. 
First  Nat.  Bank  v.  Omatia  (96  U. 

S.    737),   931. 
First  Nat.  Bank  v.  Penn  Trust  Co. 

(124  Fed.  Rep.  968),  599,  602, 

605. 
First   Nat.    Bank   v.    Staake    (202 

U.    S.    141),    92,    94,    424,    438, 

439,    445,    447,    450,    551,    582, 

592,   594,   596,   606,   614,  615. 
First  Nat.  Bank  v.  State  Nat.  Bank 

(131  Fed.  Rep.  422),  317,  924, 

942. 
First  Nat.   Bank  v.  Wyoming  Ice 

Co.    (136  Fed.  Rep.  466),  177, 

188. 
First   Nat.   Bank  of  Holdredge  v. 

Johnson  (68  Neb.  641),  588. 
First  Nat.  Bank  of  Troy  v.  Cooper 

(20  Wall.   171),  903,  906. 
Firth    Co.    v.    South    Carolina    L. 

&  T.  Co.   (122  Fed.  Rep.  569), 

602. 
Fishblate  Clothing  Co.,  In  re  (125 

Fed.   Rep.   986),   225. 
Fischer    v.    Hayes     (6    Fed.    Rep. 

70),  703,  704. 
Fisher,  In  re    (98.  Fed.  Rep.   89), 

495,  734. 
Fisher,  In  re  (103  Fed.  Rep.  860), 

899,  90.5. 
Fisher    v.    Currier    (5    Law    Rep. 

217),  10. 
Fisher    v.    Currier    (7    Met.    424), 

208,   506. 
Fisher  v.  Cushman  (103  Fed.  Rep. 

867),  79,  89,  96,  121,  430,  455, 

456,   912. 
Fisher   v.    Syfers    (109    Ind.    514), 

309. 
Fisher  v.  Zollinger  (149  Fed.  Rep. 

54),  570,  590,  597. 
Fisher  Co.,  In  re   (135  Fed.  Rep. 

223),    416,    424,    712,    736,    771. 
Fisk,   Ex  parte    (113   U.    S.    713), 

278,  411,   705. 


Fitch     V.    Richardson     (147     Fed. 

Rep.  196),  943. 
Flitchard,    In    re    (103    Fed.    Rep. 

742),  679,  680,  683. 
Fitzgerald   Co.  v.   Fitzgerald    (137 

U.  S.  98),  244. 
Fitzgerald    v.    Phillips    (3    Martin 

[La.],  O.  S.  588),  2. 
Fixen,  In  re    (96  Fed.  Rep.  748), 

250,  254,  633,  645. 
Fixen,  In  re  (102  Fed.  Rep.  295), 

599. 
Flagg  V.  Tyler   (6  Mass.  33),  854. 
Flanagan,  In  re  (5  Saw.  312),  207. 
Flanagan  v.  Pearson   (42  Tex.  1), 

837,    839,    847. 
Flanders,    In    re    (121    Fed.    Rep. 

936),  113. 
Flanders,    In   re    (134    Fed.    Rep. 

560),  446,  448. 
Fleishman,  In  re   (120  Fed.  Rep. 

941),    800. 
Fleitas   v.    Mellen    (39    Fed.   Rep. 

129),   859. 
Fleitas  v.  Richardson    (147  U.   S. 

550),  859. 
Fleming  v.  Andrews   (3  Fed.  Rep. 

632),  374,  579. 
Fleming  v.  Buchanan   (3  DeG.  M. 

&  G.  976),  466. 
Fleming  v.  Lullman   (11  Mo.  App. 

104),  855. 
Fletcher  v.  Manning   (12  M.  &  W. 

571),  351. 
Fletcher  v.  Neally  (20  N.  H.  464), 

855. 
Fletcher  v.  Peck   (6  Cranch,  87), 

939. 
Flick,  In  re  (105  Fed.  Rep.  503), 

412,  776. 
Flickinger     v.     First     Nat.     Bank 

(145  Fed.  Rep.  162),  170,  171, 

929,  930,  938. 
Flippin  V.  Kimball    (87  Fed.  Rep. 

258),  459. 
Florcken,    In    re    (107    Fed.    Rep. 

241),  87,  252,  253. 
Florida  v.  Charlotte  Harbor  Phos- 
phate Co.   (70  Fed.  Rep.  883), 

940,  941. 
Florida     Cent.     Railroad     Co.     v. 

Shutte    (100   U.   S.    644),  933, 

937. 
Flower  v.  Grenebaum  (2  Fed.  Rep. 

897),  725. 
Floyd,  Crawford  &  Co.,  In  re   (15 

Am.  B.  R.  277),  362. 
Flynn,  In  re  (126  Fed.  Rep.  422), 

398. 


1376 


Plynn,  In  re  (134  Fed.  Rep.  145), 

712,  768. 
Foerst,  In  re   (93  Fed.  Rep.  190), 

G41,  642,  645. 
Fogarty  v.  Gerrity   (1  Saw.  233), 

280. 
Folb,  In  re    (91  Fed.  Rep.   107), 

325. 
Foley,  In  re  (140  Fed.  Rep.  300), 

574. 
Foley    V.    Shriver    (81    Va.    568), 

783. 
Forbes,  In  re  (128  Fed.  Rep.  137), 

301. 
Forbes  v.  Howe   (102  Mass.  427), 

552. 
Ford  V.  Belmont  (7  Rob.  [N.  Y.], 

97),  465. 
Foreman    v.    Burleigh     (109    Fed. 

Rep.   313),- 915,  924. 
Forgay  v.   Conrad    (6   How.   201). 

927. 
Fornsworth,   In   re    (5    Biss.    23), 

373. 
Forsaith  v.  Merritt   (1  Low.  336), 

571. 
Forsaith  v.  Merritt   (1  Saw.  336), 

580. 
Forster   v.    Wilson    (12    M.    &    W. 

203),  369. 
Forsyth,  In  re   (7  N.  B.  R.  174), 

565. 
Forsyth  v.   Hammond    (166   U.    S. 

513),  889,  892. 
Forsyth   v.    Behmeyer    (177  U.    S. 

177),  841,  843. 
Forsyth  v.  Woods   (11  Wall.  484), 

365,  372,  376. 
Fort  V.  McCully   (59  Barb.,  N.  Y., 

87),  372. 
Fort  Wayne  Blec.  Corp.,  In  re  (94 

Fed.  Rep.   109),   150,  432. 
Fort  Wayne  Electric  Corp  ,  In  re 

(95  Fed.  Rep.  264),  369. 
Fortune,  In  re   (1  Low.  306),  340, 

359,  394. 
Foster,  In  re  (3  Ben.  386),  297. 
Foster,   In   re    (18   N.    B.   R.    64), 

194,  579. 
Foster,  In  re  (126  Fed.  Rep.  1014), 

192,  277. 
Foster  v.  Ames  (1  Low.  313),  735. 
Foster    v.    Hackley    (2    N.    B.    R. 

406),   552,  555,  579. 
Foster   v.    Lowell    (4    Mass.    307), 

509. 
Fourth    Nat.    Bank    v.    Francklyn 

(120  U.  S.  747),  337. 


TABLE   OF  CASES. 
References  are  to  pages. 

Fowler,  In  re   (1  Low.  161),  219 

301. 
Fowler,  In  re  (2  Low.  122),  864. 
Fowler,  In  re  (93  Fed.  Rep.  417), 

491,  631. 
Fowler    v.    Hart    (13    How.    373), 

612,  743. 
Fowler    v.    Jenks    (90   Minn.    74), 

786. 
Fowler   v.   Kendall    (44   Me.   448), 

848. 
Fowler  v.  Lindsey   (3  Dall.  411), 

887. 
Fowler  v.  Michael  (81  So.  W.  Rep. 

321),  860. 
Fowler   v.   Wood    (26   S.    C.    169), 

523. 
Fox   V.   Adams    (5   Greenl.    [Me.], 

245),  461. 
Fox  V.  Eckstein  (4  N.  B.  R.  373), 

191. 
Fox    V.    Gardner    (21    Wall.    475), 

574. 
Fox    V.    Hale    &    Norcross    Silver 

Mining    Co.     (108    Cal.    369), 

849. 
Pox  V.  Paine    (10  Ala.  523),  840. 
Fox    V.    Woodruff    (9    Barb.    498), 

350. 
Foxall    V.    Levi    (1    Cranch,   C.    C. 

139),  658. 
Foye,  In  re  (2  Low.  399),  339. 
Fraley    v.    Kelly    (67    N.    C.    78), 

855,  856,  857. 
Francis    v.    Ogden    (22    N.    J.    L. 

210),   861. 
Frank,   In  re    (5    Ben.    164),   323, 

387. 
Frank    v.    Mercantile    Nat.    Bank 

(100  Sup.  Ct.,  N.  Y.  Appellate 

Div.   449),   374. 
Frank  v.   Musliner    (9  Am.  B.  R. 

229),  627. 
Franklin,  In  re  (8  Ben.  233),  190, 

191. 
Franklin,   In   re    (106    Fed.    Rep. 

666). 
Franklin  v.   Hosier   (4  B.  &  Aid. 

341),  606. 
Franklin    Syndicate,    In    re    (114 

Fed.   Rep.    205),    643. 
Franks,  In  re  (95  Fed.  Rep.  635), 

474. 
Frazier,  In  re  (117  Fed.  Rep.  746), 

446,  449. 
Frazier    v.    Banks    (11    La.    Ann. 

31),  859. 


TABLE   OF   CASES. 
References  are  to  pages. 


1377 


Frazier  v.  Southern  Loan  &  Trust 
Co.      (99   Fed.   Rep.   707),   31, 
112,    115,    116,    545. 
Frear,  In  re  (2  Ben.  467),  315. 
Frear,  In  re   (120  Fed.  Rep.  978), 

708,   709,   710,   711,   712. 
Frear,  In  re   (120  Fed.  Rep.  978), 

722. 
Freche,  In  re  (109  Fed.  Rep.  620), 

659,  668,  705,  835,  838. 
Fredenberg,   In   re    (2   Ben.    133), 

637. 
Freeman    v.    Clay    (48    Fed.    Rep. 

849),  931,  935. 
Freeman  v.  Howe   (24  How.  450), 

93,  116,  441. 
French  v.  Andrade  (6  T.  R.  582), 

377. 
French  v.  Carr    (7   111.   664),  512. 
French    v.    Shoemaker    (12    Wall. 

100),  931,  932. 
Freudenfels,  In  re  (No.  5112a  Fed. 

Cas.),  284. 
Freund,  In  re   (98  Fed.  Rep.  81), 

678,   682,   683. 
Frey,    In   re    (9    Fed.    Rep.    376), 

822. 
Frey   v.    Torrey    (75   N.   Y.    Supp. 

40),   841,   844,    849. 
Frice,  In  re    (96   Fed.  Rep.   611), 

799. 
Frick,  In  re    (1   Am.   B.  R.   719), 

744,   767. 
Friedlander    v.    Holloman     (9    N. 

B.  R.  331),  431. 
Friedrich,    In    re    (100    Fed.    Rep. 

284),  520,  521,  533,  539. 
Friend,  In  re  (134  Fed.  Rep.  778), 

77,   869,   871,   901,   914. 
Frisbee,  In  re   (4  Law  Rep.  483), 

215. 
Frisbie,  In  re   (13  N.  B.  R.  349), 

628,  632. 

Frizelle,  In  re   (5  N.   B.  R.  119), 

629,  795. 

Frizelle,  In  re   (5  N.  B.  R.   122), 

629,  632. 
Froehlich  Rubber  Co.,  In  re   (139 

Fed.  Rep.  201),  447,  448,  458. 
Frothingham    v.    Haley    (3    Mass. 

68),  342. 
Fuller,   Ex   parte    (2    Story    327), 

480. 
Fuller  V.  Jameson  (184  N.  Y.  605), 

500,  509,  510. 
Fuller  V.  N.  Y.  Fire  Ins.  Co.   (184 

Mass.   12),  435,  500,   509,   510. 
Fulton  Club,  In  re  (113  Fed.  Rep. 

997),   176,   179. 


Fulwood    V.    Bushfield    (14   Penn 

St.  90),  354,  355. 
Funk,  In  re  (101  Fed.  Rep.  244). 

173. 
Funkenstein,  In  re   (3  Saw.  605), 

281. 
Furse  &  Co.,  In  re  (127  Fed.  Rep. 

690),  585,  589. 
Furth  V.  Stahl   (205  Pa.  439),  166 

575. 


Gage  &  Co.  v.  Bell   (124  Fed.  Rep. 

371),  226,  235,  242,  270. 
Gailey,  In  re  (127  Fed.  Rep.  538), 

481,  681,  901. 
Gaines  v.  Rugg    (148   U.   S.   228), 

950. 
Gainey,  In  re    (2   N.   B.  R.    525), 

514,  523. 
Galbraith,  Ex  parte  (1  N.  Y.  Leg. 

Obs.  n  5),  10. 
Gallagher,  In  re  (16  Blatch.  410), 

495. 
Gallimore,  Ex  parte  (2  Rose  424), 

178. 
Gallinger,  In  re  (1  Saw.  224),  283. 
Gallison,  In  re    (2  Low.   72),  350. 
Gait,   In  re   (120  Fed.  Rep.   443), 

439. 
Gait,   In   re    (120   Fed.   Rep.    64), 

445,  448. 
Galveston,  etc.,  R.  R.  Co.  v.  Gon- 
zales    (151    U.    S.    496),    234, 

245. 
Gammon,    In   re    (109    Fed.    Rep. 

312),  679. 
Gans    V.    Ellison    (114    Fed.    Rep. 

734),  399,   560,  576. 
Gany,  In  re   (103  Fed.  Rep.  930), 

451,  452,  843. 
Garcewich,  In   re    (115   Fed.   Rep. 

87),    439,    447,    451,    491,    581, 

593,  606,  904. 
Garden,  In  re   (93  Fed.  Rep.  423), 

522. 
Gardner,    In    re    (103    Fed.    Rep. 

922),  150. 
Gardner  v.   Houghton    (2  B.  &  S. 

743),  826. 
Garlington,  In  re    (115  Fed.  Rep. 

999),   338,   345,  346. 
Garneau,    In    re    (127    Fed.    Rep. 

677),  222,  223. 
Garneau  v.  Dozier   (100  U.   S.  7), 

938. 
Garner,  In  re  (115  Fed.  Rep.  200), 

527,  530. 


1378 


TABLE   OF  CASES. 


References  are  to  pages. 


Garrett    v.    Sayles    (1    Fed.    Rep. 

371),  337. 
Garrison,  In  re  (5  Ben.  430),  177. 
Garrison  v.  Markley    (7  N.  B.  R. 

246),  125,  645. 
Gaskill,  In  re  (130  Fed.  Rep.  235), 

446,  502,  504. 
Gasser,  In  re  (104  Fed.  Rep.  537), 

159,  160. 
Gassett  v.  Grout   (4  Met.   [Mass.], 

486),  783. 
Gassett  et  al.  v.  Morse    (3  N.   Y. 

Leg.  Obs.   350),  10. 
Gates  V.  Goodloe  (101  U.  S.  612), 

939. 
Gattman   v.   Honea    (12   N.   B.   R. 

493),    586,    588. 
Gauss  V.   Schrader    (48  Fed.  Rep. 

816),   312. 
Gay,  In  re   (2  N.  B.  R.  358),  807. 
Gay,    In    re    (98    Fed.    Rep.    870), 

217,  303,  305,  318. 
Gay  V.   Kingsley    (93   Mass.   345), 

496. 
Gay  V.  Parpart    (101   U.   S.   391), 

930    931. 
Gayle   v.   Randall    (71   Ala.   469), 

526. 
Gaylord,    In    re    (106    Fed.    Rep. 

833),  683. 
Gaylord,  In  re  (111  Fed.  Rep.  717), 

495. 
Gaylord,    In    re     (112    Fed.    Rep. 

668),  684,  803,  804,  818,  914. 
Gaylord,    In    re    (113    Fed.    Rep. 

131),  386. 
Gazlay  v.  Williams  (148  Fed.  Rep. 

),  488. 

Gebhard,    In    re    (140    Fed.    Rep. 

571)     345. 
Gee  V.   C^ee    (84   Minn.    384),   845, 

846. 
Geilinger   v.    Philippi    (143    U.    S. 

246,  257),  21. 
Geister,  In  re  (97  Fed.  Rep.  322), 

107. 
General    Metals    Co.,    In    re    (133 

Fed.  Rep.  84),  272. 
Genu  V.  Howard  (65  Md.  40),  830. 
George,  In  re    (1   Low.   409),  320. 
George  v.   Clagett    (7  T.  R.   359), 

377. 
George    Halbert    Co.,    In    re    (134 

Fed.  Rep.  236),  163,  434. 
George    M.    Hill    Co.,    In    re    (123 

Fed.  Rep.   866),  447,  456. 
George  M.  Hill  Co.,  In  re  (130  Fed. 

Rep.   315),   573,  574,  576,   578. 


Georgia    Handle    Co.,    In    re    (109 

Fed.  Rep.  632),  609. 
Gerdes,  In  re  (102  Fed.  Rep.  318) 

94,  108,  110,  111,  114,  428,  613. 
German    American    Bank,    In    re 

(not  reported),  482. 
Gerson,  In  re  (105  Fed.  Rep.  891) 

346,   352. 
Gerson,  In  re  (107  Fed.  Rep.  897) 

345,   346,    352,    362. 
Gerstel,  In  re  (123  Fed.  Rep.  166) 

694,   702,   733. 
Gerry,  In  re   (112  Fed.  Rep.  958) 

713,   735,   736,   741,   745,  771. 
Ghiglione,    In    re    (93    Fed.    Rep 

186),  165,  290. 
Gibbs,  In  re   (109  Fed.  Rep.  627) 

747,   739,   741,   520,   521,   522.. 
Gibson  v.  Boutts   (4  M.  &  G.  169) 

553. 
Gibson  v.  Carruthers    (8  M.  &  W 

326),  508,   509,  511. 
Gibson  v.  Lewis  (11  N.  B.  R.  247) 

Gibson    v.    Muskett    (4    M.    &    G 

160),  553. 
Gibson  v.  Warden   (14  Wall.  244) 

567,   572,   612. 
Gift,  In   re    (130   Fed.  Rep.    230) 

797,  798,  799,  811,  812. 
Gilbert,  In  re    (1  Low.  340),  628 
Gilbert,  In   re    (2   N.   B.   R.   378) 

630. 
Gilbert,  In  re  (112  Fed.  Rep.  951) 

189,   193,   194,   558,   625. 
Gilbert    v.    Quinby    (1    Fed.    Rep 

111)     782 
Gile,  In 're    (Law  Rep.   224),  222 
Gillette,  In  re  (104  Fed.  Rep.  769) 

225,  265,  564. 
Gillman    v.     Lockwood     (4    Wall 

409),  23,  827. 
Ginsburg,  'In    re    (130    Fed.    Rep 

627),    793,    795,    797,    798. 
Girard  Glazed  Kid  Co.,  In  re  (129 

Fed.  Rep.  841),  225,  921. 
Girard  Glazed  Kid  Co.,  In  re  (136 

Fed.  Rep.  511),  760. 
Githens  v.  Shiffler   (112  Fed.  Rep. 

o05),    190,    195,   466,    475,   476, 

623. 
Gladding  Co.,  In  re  (120  Fed.  Rep. 

709),  777. 
Glaser,   In  re    (2   Ben.    180),    656, 

■     659,   664,   666. 
Glass,  In  re   (119  Fed.  Rep.  391), 

159. 
Glass,  In  re   (119  Fed.  Rep.  509), 

239,  796,  798,  799. 


TABLE   OF   GASES. 
References  are  to  pages. 


1379 


Gleason  v.    Smith,   Perkins   &  Co. 

(145  Fed.  Rep.  S95),  245. 
Glenn  v.  Johnson    (IS  Wall.  470), 

510. 
Glenny  v.  Langdon   (98  U.  S.  20), 

419,  433,  4G9,  508,  G14,  G19. 
Globe   Cycle  Wks.,  In  re    (2   Am. 

B.   R.   447),   746. 
Globe    Ins.    Co.    v.    Cleveland    Ins. 

Co.    (14  N.  B.  R.  311),  25,  2G, 

27,   29. 
Globe    Sec.    Co.,   In   re    (132    Fed. 

Rep.  709),  272. 
Glover  v.  Love  (2G  Coop.  Sup.  Ct. 

Rep.  657),  493. 
Glover  Grocery  Co.  v.  Dome   (116 

Ga.  216),  725. 
Godchaux  v.  Morris  (121  Fed.  Rep. 

482),  75L 
Goddard  v.  Ordway  (94  U.  S.  672), 

931. 
Godding  v.  Rosenthal    (ISO  Mass. 

43),  342,  343. 
Godshalk    v.    Sterling     (129    Fed. 

Rep.    580),   798. 
Godshalk    v.    Sterling     (129    Fed. 

Rep.   580,   808,  811,  902. 
Goodwin,    In    re    (122    Fed.    Rep. 

Ill),  719. 
Goldberg,    In    re    (117    Fed.    Rep. 

692),   105,   106,   108,   110. 
Goldberg  &  Bros.,  In  re  (144  Fed. 

Rep.  56G),  290,  781. 
Golden  v.  Prince    (3  Wash.  C.  C. 

313),    20. 
Goldey  V.  Morning  News    (156  U. 

S.    518),   246. 
Goldfarb    Bros.,   In   re    (131    Fed. 

Rep.    643),    696. 
Goldman,    In    re    (102    Fed.    Rep. 

.122),  481. 
Goldman,    In    re    (129    Fed.    Rep. 

212),  620. 
Goldman  v.   Smith    (93   Fed.  Rep. 

182),   194,  262,  265. 
Goldman,  Bettman  &  Co.  v.  Smith 

(41  W.  L.  Bui.  4),  2G0. 
Goldman,  Beckman  &  Co.  v.  Smith 

(93  Fed.  Rep.  182),  274. 
Goldsmith,   In   re    (118   Fed.   Rep. 

763),    150,    605,   613,    747,    748, 

756,    737,    739,    741,    742,    743, 

744. 
Goldsmith,  In   re    (118   Fed.   Rep. 

419),   775. 
Goldville  Mfg.  Co.,  In  re  (118  Fed. 

Rep.   892),   774. 
Goldville  Mfg.  Co.,  In  re  (123  Fed. 

Rep.  579),  161. 


Goldville   Mining  Co.,  In  re    (123 

Fed.   Rep.    579),   150. 
Golson    V.    Niehoff    (2    Biss.    434), 

565. 
Good,  In   re    (99    Fed.   Rep.   389), 

869,  906,  912,  919. 
Goodale,    In    re     (109    Fed.    Rep. 

783),    679,   684,   797,   802,   803, 

815. 
Goodall    V.    Tuttle    (3    Biss.    219), 

19,  104,  514. 
Goode  V.  Elwood  Lodge   (160  Ind. 

251),  556. 
Goode  V.  Elwood  Lodge   (160  Ind. 

241),  577. 
Goodfellow,   In   re    (1   Low.   510), 

171,  210,  219. 
Goodier  v.   Barnes    (94   Fed.  Rep. 

798),  123,  617. 
Goodhile,    In    re    (130    Fed.    Rep. 

471),  563,  573. 
Goodhile,    In    re    (130    Fed.    Rep. 

782),    809,    810,    818. 
Goodman,  In  re  (5  Biss.  401),  174. 
Goodman    v.    Brenner     (109    Fed. 

Rep.   481),   912,   920. 
Goodman    v.    Herrman     (172    Mo. 

344),    842,    844,    845. 
Goodrich     v.     Dobson     (43     Conn. 

576),  370,   374,  375. 
Goodridge,  In  re  (2,  N.  B.  R.  324), 

682. 
Goodwin    v.    Noble    (8    El.    &    Bl. 

5S7),  483,  486. 
Goodwin  v.  Stark  (15  N.  H.  218) 

8.54. 
Goodyear    v.    Muller     (5    Blatch. 

429),  652,  695. 
Gordon,  Ex  parte   (1  Black,  503), 

887. 
Gordon    v.    Anthony     (16    Blatch. 

453),  463. 
Gordon    Supply    Co.,    In    re    (129 

Fed.   Rep.    622),   417. 
Gordon    Sup.    &    Mfg.    Co.,    In    re 

(133   Fed.  Rep.  798),  420. 
Gorman  v.  Wright  (136  Fed.  Rep. 

164),  356,  397,   611. 
Gormley    v.    Bunyan     (138    U.    S. 

623),  431. 
Gould  V.  N.  Y.  Life   Ins  Co.    (132 

Fed.    Rep.    927),   499. 
Gould   V.    Sessions    (67   Fed.   Rep. 

163),  705. 
Coyer    v.    Jones    (79    Miss.    253), 

853. 
Grady,    In   re    (3    N.    B.   R.    227), 

318. 


1380 


TABLE   OF   CASES. 
References  are  to  pages. 


Graff,  In  re   (117  Fed.  Rep.  343), 

362,  G05. 
Graff    V.    Bonnett    (31    N.    Y.    9), 

505. 
Graham,  Ex  j)arte   (3  Wash.  C.  C. 

45G),    670. 
Graham,  In  re   (2  Biss.  449),  530, 
Graham    v.    Boston,    H.    &    E.    R. 

Co.   (118  U.  S.  161),  279. 
Graham  v.  Pierson  (6  Hill  [N.  Y.], 

247),  359,   347,  861. 
Graham    v.    Richardson    (115    Ga. 

1002),  823. 
Graham  v.  Stark  (3  N.  B.  R.  357), 

555. 
Graham    v.    Stark    (3    Ben.    520), 

552,  564. 
Graham    v.    Van    Dieman's    Land 

Co.    (11   Exch.   101),   433,   492. 
Graham  v.  Whichelo    (1  Cr.  &  M. 

186),  316. 
Grandin   v.    First   Nat.   Bank    (98 

N.  W.  Rep.  70),  823. 
Granger,  In  re    (8   N.   B.  R.   30), 

401. 
Granite  City  Bank,  In  re  (137  Fed. 

Rep.   818),  80,  85,  88,  92,  120, 

437,    440,    461,    735,    736,    742, 

743. 
Grant,  In  re    (2   Story  312),  506, 

510. 
Grant,  In  re   (106  Fed.  Rep.  496), 

183,    194,    195,    238,    294,    299, 

305. 
Grant,  In  re  (135  Fed.  Rep.  889), 

793,  795. 
Grant,  In  re   (143  Fed.  Rep.  661), 

142. 
Grant  v.  First  Nat.   Bank    (97  U. 

S.  80),  552,  562,  589. 
Grant  Bros.,  In  re  (118  Fed.  Rep. 

73),  144. 
Grant  Shoe  Co.,  In  re    (130  Fed. 

Rep.    881),   224,    225,   363. 
Grant  Shoe  Co.  v.   Laird    (203  U. 

S.  502),  869,  870,  871,  902,  912, 

913  917. 
Graver  V.  Faurot  (162  U.  S.  435), 

897. 
Graves,  In  re    (2  Ben.  100),  731, 

757. 
Graves,  In  re   (9  Fed.  Rep.  816), 

383. 
Graves,  In  re   (24  Fed.  Rep.  550), 

799. 
Graves,  In  re   (24  Fed.  Rep.  60), 

698. 
Graves  v.  Dolphin  (1  Sim.  66), 

505. 


Gray,   l7i   re    (3   Am.    B.   R.    647), 

614,  619,   467,  469. 
Gray  v.  Bennett   (3  Met.    [Mass.], 

526),  340. 
Gray  v.   Bennett    (44   Mass.    522), 

510. 
Gray     v.     Chicago,     etc.,     R.     Co. 

(Woolw.  63),  700. 
Gray   v.    Chiswell     (9    Ves.    118), 

292. 
Gray   v.   Grand   Forks   Mercantile 

Co.    (138  Fed.  Rep.  344),  912, 

915,   924,   933. 
Gray  v.  Rollo   (18  Wall.  632),  371, 

372,  373,  376,  377. 
Greater   American   Exposition,  In 

re   (102  Fed.  Rep.  986),  112. 
Great  Western  Mining  Co.  v.  Har- 
ris   (198  U.   S    561),  104. 
Great  Western   Telegraph   Co.,  In 

re    (5   Biss.    359),   280,   903. 
Green,  In  re  (106  Fed.  Rep.  313), 

201. 
Green,  In  re   (116  Fed.  Rep.  118), 

308,   769. 
Green  v.   Bank  of  England    (3  Y. 

&  C.  722),  492. 
Green   v.   Blunt    (50   la.    79),   526. 
Green  v.   Elbert    (137  U.   S.   615), 

921,  922. 
Green   v.    Sarmiento    (3  Wash.   C. 

C.    17),   827. 
Green  v.  Spicer    (1  R.  &  M.  395), 

505. 
Green     River     Deposit     Bank     v. 

Craig    (110    Fed.    Rep.    137), 

169,  200,  23Y,  266,  283,  300. 
Greensberg,  In  re   (106  Fed.  Rep. 

496),  653,  694,  733. 
Greenberg,  In   re    (114  Fed.  Rep. 

773),  681,  683,  807. 
Greene,  In  re   (134  Fed.  Rep.  137), 

595. 
Greene  v.  Henkel   (183  U.  S.  249), 

672. 
Greenebaum,   In  re    (1   Chi.   Law 

Jour.  599),   717,  723. 
Greenewald,  In  re    (99   Fed.  Rep. 

705),   777. 
Greening,  Ex  parte  (13  Ves.  206). 

496. 
Greensf elder  v.   Corbett    (3   N.  B. 

R.  825),  49L 
Greenwald  v.  Appell  (17  Fed.  Rep. 

140),  822. 
Grefe,  In  re  (2  N.  B.  R.  329),  796. 
Gregg,  In  re   (1   Hask.   173),   489. 
Gregg,  In  re  (4  N.  B.  R.  456),  580. 


TABLE   OF  CASES. 
References  are  to  pages. 


1381 


Gregory    v.    Atkinson     (127    Fed. 

Rep.  183),  83,  99,  G13,  G17,  621. 
Gregory    v.    Pike     (79    Fed.    Rep. 

520),  250. 
Gretcliel   v.    First    Nat.    Bank    (G6 

N.  J.  Eq.  88),  5G2. 
Gretchell,  In  re  (8  Ben.  256),  279. 
Greth,  In  re   (112  Fed.  Rep.  978), 

402. 
Grether  v.  Wright    (75  Fed.  Rep. 

742),   274. 
Griel    v.    Solomon     (82    Ala.    85), 

856. 
Griffin  v.  Mut.  Life  Ins.  Co.    (119 

Ga.  664),  822. 
Griffin    v.    Sutherland    (14    Barb., 

[N.  Y.],  456),  514. 
Grigsby  v.  Purcell   (99  U.  S.  505), 

941. 
Grimes,  In  re  (94  Fed.  Rep.  800), 

515,  517,  539. 
Grimes,  In  re  (95  Fed.  Rep.  529), 

484,  522,  534,  535. 
Grissler,    In    re     (136    Fed.    Rep. 

754),   110,   608,   609,  610,  611. 
Griswold  v.  Pratt  (9  Met.  16),  20, 

23,   24,   25,   26,   29. 
Groetzinger,  In  re   (127  Fed.  Ren. 

814),  310. 
Groetzinger    &    Sons,    In    re    (127 

Fed.   Rep.   124),   907. 
Grossman,   In   re    (111    Fed.   Rep. 

507),  151,  681,  807,  820. 
Groves   v.    Kilgore    (72    Me.   489), 

177. 
Groves   v.    Osburn    (79   Pac.   Rep. 

500),  829. 
Grubbs-Wiley  Gro.  Co.,  In  re    (96 

Fed.  Rep.  183),  364,  777. 
Guarantee    Title    &    Trust    Co.    v. 

Pearlman  (16  Am.  B.  R.  461), 

104. 
Guaranty  T.  &  T.  Co.  v.  Pearlman 

(144  Fed.  Rep.  550),  253,  254. 
Guise  V.  State  (41  Ark.  249),  514. 
Gumbel  v.  Pitkin   (124  U.  S.  131), 

116,  118. 
Gunn    V.    Barry     (15    Wall.    621), 

514,  515. 
Gurewitz,    In    re    (121    Fed.    Rep. 

982),  776. 
Gutman,    In    re     (114    Fed.    Rep. 

1009),  107,  IIL 
Gutterson,   In   re    (136   Fed.   Rep. 

698),  750. 
Gutwillig,    In    re     (90    Fed.    Rep. 

475),  23,  32,  105,  111,  199,  256. 
Gutwillig,    In    re    (92    Fed.    Rep. 

337),  107,  905. 


H 


Haack  v.  Theise  (51  N.  Y.  Misc. 

3),  214. 
Haake,   In  re    (2   Saw,   231),   340, 

358,  527. 
Haas-Baruch   &   Co.    v.   Portuondo 

(138   Fed.  Rep.   949),   397. 
Habegger,   In  re    (139   Fed.   Rep. 

G23),   166,   575. 
Hackney  v.   First  Nat.   Bank    (68 

Neb.  594),  615,  620,  627. 
Hackney  v.  Hargreaves  Bros.    (G8 

Neb.  624),  559,  562,  625,  G2G. 
Hackney    v.    Raymond    Bros.    Co. 

(10  Am.  B.  R.  213),  473,  475. 
Hackney  v.  Raymond  Bros.  Clark 

Co.  (68  Neb.  624),  564. 
Haddin-Rodee  Co.,  In  re  (135  Fed. 

Rep.   886),   78,   458. 
Hadley,  In  re   (12  N.  B.  R.  366), 

237,  661,  662. 
Haensell,  In  re  (91  Fed.  Rep.  355), 

512. 
Haeseler-Kohlhoff   Carbon   Co.,  In 

re    (135   Fed.   Rep.   867),   290. 
Haff,  In  re    (135  Fed.  Rep.   742), 

253. 
Haff,   In  re    (136    Fed.   Rep.   78), 

237,   271,    285,    286. 
Hagan,   In  re    (6   B,en.   407),   764. 
Haggerty    v.     Morrison     (59    Mo. 

324),  861. 
Haines    v.    Carpenter    (91    U.    S. 

254),  105. 
Haines  v.   Stauffer    (13   Pa.   541), 

857. 
Halbert  v.  Pranke  (91  Minn.  204), 

558,  625. 
Hal  dame  v.  United  States  (69  Fed. 

Rep.  819),  929. 
Hale,  In  re   (107  Fed.  Rep.  432), 

305,   320. 
Hale   V.    Bischoff    (53   Kan.   301), 

128. 
Halford,  Ex  parte   (19   L.  R.   Eq. 

436),  726. 
Hall,  Ex  parte  (5  Law  Rep.  269), 

211. 
Hall,  In  re   (2  Hughes  411),  535. 
Hall    V.    Fowler    (6    Hill    [N.   Y.], 

730),   853. 
Hall    V.    Fowler    6    Hill    [N.    Y.], 

630),  859. 
Hall  V.  Scovel   (10  N.  B.  R.  295), 

607. 
Hallett's  Estate  (13  Ch.  Div.  696), 

501,  502. 


1382 


TABLE   OF   CASES. 
References  ai-e  to  pages. 


Halliburton    v.    Carter     (55     Mo. 

435),  847. 
Halsell,  In  re  (132  Fed.  Rep.  5G2), 

809,   819. 
Hambriglit,  In  re  (2  N.  B.  R.  498), 

75G. 
Hamburger,   In   re    (12   N.    B.    R. 

277),  484. 
Hamilton,  In  re  (1  Fed.  Rep.  800), 

314. 
Hamilton,   In  re    (102   Fed.   Rep, 

683),  254,  780. 
Hamilton,    In    re    133    Fed.    Rep. 

823),   804,   807,   808,   809,   811, 

818. 
Hamilton    v.    Reynolds     (88    Ind. 

251),  832. 
Hamilton,  Ex  parte  (2  Low.  571), 

729. 
Hamlin,  In  re   (8  Biss.  122),  289. 
Hamlin  v.  Kassafer  (15  Ore.  45G), 

128. 
Hammer    v.    Preese    (19    Pa.    St. 

255),  527. 
Hammond,    Ex    parte    (21    Wkly. 

Rep.  8G5),  318. 
Hammond,   In   re    (1    Low.   381), 

807. 
Hammond,   In   re    (98   Fed.   Rep. 

845),  491. 
Hampton  v.  Rouse  (22  Wall.  263), 

435. 
Handlin,  In  re   (3  Dill.  290),  538. 
Hankey  v.   Smith    (3   T.  R.   507), 

373. 
Hanna,  In  re  (5  Ben.  5),  324, 
Hanna,  In  re  (105  Fed.  Rep.  587), 

605. 
Hannahs,  In  re  (8  Ben.  533),  721. 
Hanover    Nat.     Bank    v,     Moyses 

(186  U.  S.   181),  518. 
Hanover    Nat.     Bank    v.    Moyses 

(186  U.  S.  181),  18,  20. 
Hansen,  !n  re  (107  Fed.  Rep.  252), 

682. 
Hanson,  Ec^  parte   (12  Ves.   346), 

377. 
Hanson  v.  Stevenson  (1  Barnw.  & 

Aid.   30S),  483,   486,  487. 
Hapgood,  In  r-^  (2  Low.  200),  195, 

577. 
Harcourt,  Ex  i^rte  (2  Rose,  203), 

289. 
Harddin,  In  re  V   N.  B.  R.  395), 

215. 
Hardeman  v.  Etheridge  (112  Fed. 

Rep.   619),  603. 
Hardee  v.  Wilson  (146  U,  S.  179), 

925. 


Hardie    &    Co.,    In   re    (143    Fed, 

Rep.  607),  800,  810. 
Hardin,  In  re   (1  Hask.  163),  383. 
Hardy  v.  Carter  (8  Humph.  Tenn. 

153),  35.5. 
Hardy  v.  Clark   (3  N.  B.  R.  385), 

278. 
Hare,  In  re   (119  Fed.  Rep.  246), 

135,  330,  331,  415,  416. 
Hargadine-McKittrick    Dry   Goods 

Co.  V.  Hudson   (122  Fed.  Rep. 

232),    382,    383,   399,   824,   829, 

842. 
Hark,  In  re   (135  Fed.  Rep.  G03), 
Hark,  In  re   (142  Fed.  Rep.  279), 

284,  286,  287. 
Harmon,    In    re    (128    Fed.    Rep. 

170),    777. 
Harmon  v.   McDonald    (187  Mass. 

578),  343,  364. 
Harper,  In  re  (105  Fed.  Rep.  900), 

198. 
Harper  v.  Rankin   (141  Fed.  Rep. 

626),    848. 
Harper  Bros.,  In  re  (100  Fed.  Rep. 

266),  191,  199,  201. 
Harpke,  In  re  (116  Fed.  Rep.  295), 

560. 
Harr,  In  re   (143  Fed.  Rep.  421), 

792,  809,  810. 
Harrell    v.    Beal    (17   Wall.    590), 

470. 
Harrington    v.    McNaughton     (20 

Vt.  293),  350. 
Harris,   Ex   parte    (2   Low.    568), 

727, 
Harris,  In  re   (3  N,  Y,  Leg.  Obs. 

152),   222,   652. 
Harris,  In  re   (6  Ben.  375),  280, 
Harris,  In  re  (108  Fed.  Rep,  517), 

302. 
Harris,  In  re  (117  Fed.  Rep,  575), 

714,  727, 
Harris  v.  Barber  (129  U.  S,  368), 

890. 
Harris   v.   Collins    (13   Ala,   388), 

431, 
Harris  v.  Farwell    (15  Beav,  31), 

316, 
Harris  v.  Peck   (1  R.  L  262),  857, 
Harris  v.  Second  Nat.  Bank   (110 

Tenn.   239),  573. 
Harrison  v.  Gamble  (69  Mich.  96), 

725. 
Harrison    v.    Sterry     (5    Cranch, 

289),    292,   388,   461,   781,   833. 
Harrison  Mercantile  Co.,  In  re  (96 

Fed.  Rep.  13),  162,  165,  290, 


TABLE   OF   CASES. 
References  are  to  pages. 


1383 


Harrod  v.  Farrar    (68  Kan.  153), 

G20. 
Harthill,  In  re  (4  Ben.  448),  259, 

2G0. 
Hartman,    In    re    (96    Fed.    Rep. 

593),   295,  319. 
Hartman,   In   re    (121    Fed.    Rep. 

940),  616. 
Hartman  v.  Peters  (146  Fed.  Rep. 

82),   183. 
Harter  v.  Harlan  (2  N.  B.  R.  238), 

660. 
Harthorn,  In  re  (4  N.  B.  R.  103), 

777. 
Harvey,  In  re  (122  Fed.  Rep.  745), 

388,  736,  771. 
Harvey,  In  re  (144  Fed.  Rep.  901), 

712. 
Harvey's  Estate,  In  re   (13  L.  R. 

Ch.  Div.  216),  466. 
Harvey  v.  Crane  (5  N.  B.  R.  218), 

478. 
Harvey  v.  Richmond,  etc.,  R.  Co. 

(64  Fed.  Rep.  19),  234,  245. 
Harwood  v.  Dickerhoff   (117  U.  S. 

200),  931,  933. 
Haskell,  In  re   (11  N.  B.  R.  164), 

719. 
Haskell   v.   Equitable  Life  Assur. 

Society    (181  Mass.  341),  499. 
Haskell  v.  Ingalls   (1  Hask.  341), 

552. 
Haskin,  In  re  (109  Fed.  Rep.  789), 

526,  536. 
Haskins  v.  R.  R.   Co.    (109  U.   S. 

106,  931. 
Hassenbusch,  In  re  (108  Fed.  Rep. 

35),  630,  661,  668,  906. 
Hastings    v.    Wilson    (Holt,    290), 

483,   486,   489. 
Hatch,  In  re  (102  Fed.  Rep.  280), 

520,   536. 
Hatch   V.   Curtin    (146   Fed.   Rep. 

200),  121,  123;  124. 
Hatch  V.  Seely  (13  N.  B.  R.  383), 

401. 
Hatcher,    In    re    (145    Fed.    Rep. 

658),  775. 
Hatcher    v.    Jones    (53    Ga.    208), 

523. 
Hatje,  In  re  (6  Biss.  436),  365. 
Havighev  v.  Albin    (2  Bond,  244), 

124,"  125,  552. 
Haughton,  In  re  (1  N.  B.  R.  460), 

283. 
Hausman,  In   re    (121   Fed.  Rep. 

984),  696,  702. 
Havens,  In  re   (8  Ben.  309),  261. 


Havens,  In  re   (1  N.  B.  R.  485), 

416. 
Havens   &   Geddes   Co.   v.   Pierek 

(120   Fed.   Rep.   244),   76,   78. 

98,  120. 
Hawk,  In  re  (114  Fed.  Rep.  916), 

790. 
Hawk,  In  re  (114  Fed.  Rep.  916), 

866,  904. 
Hawk    V.    Hawk    (102    Fed.    Rep. 

679),  491. 
Hawkeye   Smelting  Co.,  In  re   (8 

N.  B.  R.  385),  274. 
Hawkins,    Ex    parte    (4    Ves.    Jr. 

691),  246. 
Hawkins,    In    re    (125    Fed.    Rep. 

633),  736,  750. 
Hawkins  v.  Hawkins  (1  Q.  B.  D. 

25),  348. 
Hawley,  In  re  (116  Fed.  Rep.  428), 

141. 
Hawley,  In  re  (117  Fed.  Rep.  364), 

752. 
Haworth  v.  Travis    (67   HI.   301), 

523. 
Hayer  v.  Comstock  (115  Ga.  187), 

829. 
Hayes  v.  Fischer  (102  U.  S.  122), 

698. 
Hayes  v.  Flowers  (25  Miss.  169), 

859. 
Haynes,  In  re   (2  N.  B.  R.  227), 

331,  764,  784. 
HajTies,  In  re  (122  Fed.  Rep.  560), 

790,  816. 
Haynes,    In    re     (123    Fed.    Rep. 

1001),   545,  547,   550. 
Hays    v.    Riddle    (1    Sandf.    248), 

602. 
Hays,   Foster  &  Ward   Co.,  In  re 

(117  Fed.  Rep.  8/9).  366,  483. 
Hayward,   In   re    (130    Fed.    Rep. 

720),    384. 
Hazelton    v.    Valentine     (1    Low. 

270),  658,  664. 
Headley,  In  re  (97  Fed.  Rep.  763), 

386. 
Heaney  v.  Birch  (1  Rose,  356), 

179. 
Heard  v.  Jones  (15  N.  B.  R.  402), 

401. 
Heath  v.  Percival   (1  P.  W.  682), 

316. 
Heath   v.    Shaffer    (93    Fed.    Rep. 

647),  94,  110,  111. 
Hebbart,    In    re     (104    Fed.    Rep. 

322),  222. 
Heckathorn,  In  re  (144  Fed.  Rep. 

499),  448,  459. 


1384 


TABLE   OF   CASES. 
References  are  to  pages. 


Heckman,   In   re    (140   Fed.   Rep. 

859),  115. 
Heehner,    7n    re     (132    Fed.    Rep. 

1003),   142,   786. 
Heffren    v.    Leroy    (39    Ind.    171), 

847. 
Heinsfurter,  In  re    (97  Fed.  Rep. 

198,  381. 
Heller,  In  re  (41  How.  Prac.  213), 

221. 
Helmbokl    v.    Helmbold    Mfg.    Co. 

(53  How.  Pr.  453),  4G2. 
Hemby-Hutchinson    Pub.    Co.,    In 

re   (105  Fed.  Rep.  909),  98. 
Hemstreet,  In   re    (117   Fed.   Rep. 

5G8),    138,    457,   459,    633,    G3G, 

647,   648. 
Hemstreet,  In  re    (139   Fed.  Rep. 

958),   591,  592,  593. 
Henderson,   In   re    (13   Am.   B.   R. 

782),  705. 
Henderson,    In    re    (9    Fed.    Rep. 

196),  286. 
Henderson,  In  re    (130  Fed.   Rep. 

385),  442,  696. 
Henderson,  In  re    (142  Fed.  Rep. 

588),  308. 
Henderson  v.  Carbondale  Co.   (140 

U.  S.  25),  244. 
Hendrick,    In    re    (138    Fed.    Rep. 

473),  798,  799,  793,  815,  817. 
Hendrick,    In    re    (143    Fed.    Rep. 

647,   792. 
Hendrie  v.  Sayles   (98  U.  S.  546), 

463. 
Hendry    v.    Ocean    Steamship    Co. 

(164  U.  S.  707),  892. 
Hendryx   v.    Fitzpatrick    (19    Fed. 

Rep.    810),    696,    698,    705. 
Henkel,  In  re   (2   Saw.  305),  537. 
Henly  v.   Lanier    (75   N.   C.   172), 

519. 
Hennocksburgh,    In    re     (6    Ben. 

150),   381. 
Hennequin    v.    Clewes    (11    U.    S. 

676),    845,    846,    883. 
Henrich,    In   re    (5    Blatch.    414), 

669. 
Henrie    v.    Henderson     (145    Fed. 

Rep.   316),   76,  78,  754. 
Henry,  In  re   (9  Ben.  449),  724. 
Henry  C.   King,   In   re    (113    Fed. 

Rep.    110),    555,    576. 
Henry  Zeltner  Brewing  Co..  In  re 

(117  Fed.  Rep.  799),  191. 
Henschel,    In    re    (109    Fed.    Rep. 

861),   135,  330,  415. 
Henschel,    In   re    (113    Fed.    Rep. 

443),  332. 


Hercules    Atkin    Co.,   In   re    (133 

Fed.   Rep.   813),   175,   202. 
Hercules   Mut.   Ins.  Co.,  In  re    (6 

Ben.  35),  181. 
Herdon   v.   Givens    (16  Ala.   261), 

855. 
Herndon    v.    Davenport    (75    Tex. 

462),  440. 
Herndon  v.  Howard  (9  Wall.  664), 

428,  429,  437. 
Herndon    v.    Ridgway     (17    How. 

424),  244. 
Herriek,  In  re   (13  N.  B.  R.  312), 

313. 
Herrman,  In  re  (4  Ben.  126),  326. 
Herrman,    In    re    (102    Fed.    Rep. 

753),  831. 
Herrman,    In    re    (134    Fed.    Rep. 

566),  791,  821. 
Hersey    v.    Elliott    (67    Me.    526), 

496. 
Hersey  v.   Fosdick    (20  Fed.  Rep. 

44),  764. 
Hershkowitz,  In  re  (136  Fed.  Rep. 

950),  653,  699. 
Herzberg,    In    re     (25    Fed.    Rep. 

699),  113. 
Herzikopf,   In   re    (118    Fed.    Rep. 

101),  159,  225,  239. 
Herzikopf,   In   re    (121    Fed.   Rep. 

544),  188,  275. 
Hess,  In  re   (134  Fed.  Rep.  109), 

462. 
Hess,  In  re    (136  Fed.  Rep.  988), 

643,   644. 
Hess,  In  re    (138  Fed.  Rep.  954), 

449,  450. 
Hesseltine  v.  Prince  (95  Fed.  Rep. 

802),  481,  482. 
Hester,   In   re    (5   N.   B.   R.   285), 

482,  519. 
Hewes     v.     Parkman     (20     Pick. 

[Mass.]  90),  526. 
Hewit  V.  Berlin  Mach.  Wks.    (194 

U.   S.   296),  77,  78,  81,   88,  92, 

120,    430,    438,    439,    444,    445, 

447,    448,    450,    456,    458,    460, 

491,    542,    580,    582,    592,    594, 

869,    870,    873,    874,    877,    878, 

879,   880. 
Hewitt  V.  Filbert  (116  U.  S.  142), 

922. 
Heyman,  In  re  (95  Fed.  Rep.  800), 

354,  355,  356. 
Heyman,    In    re    (104    Fed.    Rep. 

677),   682. 
Heyman,    In    re    (108    Fed.    Rep. 

207),  730. 


TABLE   OF   CASES. 
References  are  to  pages. 


1385 


Hibbard  v.  Bailey    (129  Fed.  Rep. 

575),  345,  34G. 
Hibberd  v.  McGill   (129  Fed.  Rep. 

590),  317. 
Hicks,  In   re    (2    Fed.   Rep.    851), 

138. 
Hicks,  In  re  (107  Fed.  Rep.  910), 

289,  G76. 
Hicks,  In  re  (133  Fed.  Rep.  739), 

111. 
Hicks  V.  Hotchkiss  (7  John.  Chan. 

N.  Y.  297),  827. 
Hicks   V.   Knost    (178   U.    S.   541), 

83,   97,   102,   616,  876. 
Hicks   V.    Langhorst    (3    N.    B.   R. 

528),   561. 
Higgens's  Case  (6  Coke,  344),  317. 
Hilborn,    In    re     (104    Fed.    Rep. 

866),  329,  709,  711,  712. 
Hildebrant,  In  re    (120  Fed.  Rep. 

992),    360,    361,    382,   405,    453. 
Hill,  In  re  (1  Ben.  321),  214,  215. 
Hill,  In  re   (7  Ben.  378),  279. 
Hill,    In    re    (96    Fed.    Rep.    185), 

520,  521,   522,   533. 
Hill,   in   re    (140    Fed.   Rep.    984), 

204,   474,  476,   572,   585,  591. 
Hill  V.  Bowers    (4  Heisk.   [Tenn.] 

272),   482. 
Hill  V.  Cowery  (25  L.  J.  Ex.  285), 

203. 
Hill  V.  Dobie  (8  Taunt.  325),  483, 

486. 
Hill  V.  Dobie  (2  Moore,  342),  483, 

486. 
Hill  V.  Gordon  (45  Fed.  Rep.  278), 

248. 
Hill  V.  Harding    (107  U.   S.   631), 

428,   883. 
Hill  V.   Harding   (130  U.   S.   699), 

851,   861. 
Hill   V.    Levy    (98    Fed.   Rep.    94), 

269,  277. 
Hill    V.    Robbins    (1    Mich.    N.    P. 

305),  840. 
Hill  V.  Robins  (22  Mich  474),  856. 
Hill  V.  Sheibley  (68  Ga.  556),  846. 
Hills  V.  Alden   (2  Hask.  299),  753 

755. 
Hillyer  v.  LeRoy  (179  N.  Y.  369), 

545,   549. 
Hilton,  In  re  (104  Fed.  Rep.  9S1), 

106,  110,  829. 
Hinckel   Brewing  Co.,  In  re    (123 

Fed.  Rep.   942),   365,  367,  410. 
Hinckel  Brew.  Co.,  In  re  (124  Fed. 

Rep.   702),  432. 
Hinds,  In  re  (3  N.  B.  R.  351),  307. 


Hinds,  Ex  parte  (3  DeG.  &  S.  613), 

310. 
Hines,  In  re   (117  Fed.  Rep.  790), 

528. 
Hines,  In  re   (144  Fed.  Rep.  142) 

185,   187. 
Hines,  In  re  (144  Fed.  Rep.  543), 

396. 
Hines    v.    Moore    (134    Fed.    Rep. 

221),   877. 
Hintze,  In  re  (134  Fed.  Rep.  141), 

262. 
Hirsch,   In   re    (2    Ben.    493),    96, 

244. 
Hirsch,  In  re   (97  Fed.  Rep.  571), 

294. 
Hirsch,  In  re  (96  Fed.  Rep.  468), 

797,  799. 
Hirshman,   In   re    (104   Fed.   Rep. 

69),  337,  361,  381,  382. 
Hiscocks  V.   Jaycox    (12  N.   B.  R. 

507),   310,   482. 
Hitchcock  V.  Rollo    (3  Biss.  276), 

379. 
Hitz,   Ex   parte    (111   U.    S.    766), 

887. 
Hixon,  In  re   (93  Fed.  Rep.  440), 

799. 
Hoadley,  In  re   (2  N.  B.  R.  704), 

481. 
Hoagland  v.  Crum    (113   III.  365), 

365. 
Hobbs,  In  re   (2  Low.  491),  50t 
Hobough  V.   Murphy    (114  Pa.   St. 

358),  855. 
Hoe  V.  Kahler  (27  Fed.  Rep.  145), 

937. 
Hoffman,    In    re    (102    Fed.    Rep. 

979),  681. 
Hoffschlaeger    Co.    v.    Young   Nap 

12  Am.  B.  R.  510),  663. 
Hoffschlaeger   v.    Young   Nap    (12 

Am.  B.  R.   526),  773,  774. 
Holbrook,  In  re  (2  Low.  259),  312. 
Holbrook  v.   Coney    (25    111.   447), 

461. 
Holden,  In  re  (113  Fed.  Rep.  141), 

903. 
Holden,  In  re  (127  Fed.  Rep.  980), 

779. 
Holden  v.  Stratton  (113  Fed.  Rep. 

141),  880,  885. 
Holden    v.    Stratton     (191    U.     S. 

115),    76,    870.    872,    873,    880, 

889,  894,  900,  911,  915. 
Holden    v.     Stratton     (198    U.    S. 

202),  499,  516. 
Holder  v.   Western  German  Bank 

136  Fed.  Rep.  90),  502,  504. 


1386 


TABLE   OF   CASES. 
References  are  to  pages. 


Holgate,  In  re    (8  Ben.  355),  SG5. 
Holland,  v.    Cunliff    (96    Mo.    App. 

G7).   823. 
Holland   v.   Fuller    (13    Ind.    195), 

503. 
Holland  v.  Withers    (7G  Ga.  607), 

513. 
Hollenfeltz,   In   re    (94    Fed.    Rep. 

629),  771. 
Hollister,  In  re  (3  Fed.  Rep.  452), 

354,   35G. 
Holloway,    In    re    (93    Fed.    Rep. 

638),  110,  746. 
Hoist,  In  re    (11   Fed.  Rep.   856), 

817. 
Holman,  In  re  (92  Fed.  Rep.  512), 

799. 
Holmes,  In  re  (142  Fed.  Rep.  391), 

869,  872,  901,  906. 
Holstein,    In    re    (114    Fed.    Rep. 

794),   681. 
Holyoke  v.  Adams   (59  N.  Y.  233), 

860. 
Home   Ins.   Co.   v.   Hollis    (53   Ga. 

659),  428. 
Hood  V.  Blair  St.  Bank  (91  N.  W. 

R.   701),   614,   618. 
Hood  V.  Karper   (5  N.  B.  R.  358), 

566. 
Hood  V.  Spencer  (4  McLean,  ICS), 

840. 
Hooks  V.  Aldridge   (145  Fed.  Rf.p. 

865),  116,  117,  119,  202. 
Hooks    Smelting    Co.,    In   re    (138 

Fed.  Rep.  954),  642. 
Hooks    Smelting   Co.,   In   re    (146 

Fed.  Rep.  336),  701. 
Hoole,   In   re    (3    Fed.   Rep.    496), 

731,  757. 
Hooson,  Ex  parte  (L.  R.  8  Ch.  App. 

251),  100. 
Hoover,  In  re  (105  Fed.  Rep.  354), 

865. 
Hoover   v.    Wise    (91   U.    S.    808), 

552,  565,  577. 
Hopkinson  v.  Lovering    (11  L.  R. 

Q.  B.  Div.  92),  487. 
Horgan,  In  re   (98  Fed.  Rep.  414), 

628,  641,  642. 
Horner  v.  Speed  (2  Patt.  &  H.,  Va. 

616),   855,   858,   857. 
Horner   v.    Speman    (78    111.    206), 

859. 
Horner    v.    United    States,    No.    2 

(143  U.  S.  570),  672,  674. 
Horner-Gaylord    Co.    v.    Miller    & 
Bennett    (147  Fed.  Rep.   295), 
253,   256,   257,   619,   624. 


Hornstein,   In   re    (122    Fed.   Rep. 

266),    399,   111,    116,    225,   400, 

829. 
Hornthall    v.    Collector     (9    Wall. 

560),  948. 
Hornthal  v.  McRae   (67  N.  C.  21), 

857. 
Horskins  v.   Sanderson    (132  Fed. 

Rep.    415),    99,    614,    616,    619, 

621. 
Horton,  In  re  (102  Fed.  Rep.  986), 

94. 
Hoskins,  In  re  (Crabbe,  466),  658. 
Hough  V.  National  Bank   (4  Biss. 

349),  577. 
Houghton,    In    re    (2    Low.    328), 

794,   795. 
Houghton,    In    re    (10    N.    B.    R. 

337),  816. 
House,  In  re    (1  N.  Y.   Leg.   Obs. 

348),   10,   194. 
House,  In  re    (1   N.   Y.   Leg.   Obs. 

348),   579. 
House  V.  Nat.  Bank  (43  O.  S.  346), 

496. 
Houston    V.    City    Bank    (6    How. 

486),  612,  743. 
Hovey,  In  re    (5   Fed.   Rep.   356), 

765. 
Hovey  v.  Home  Ins.  Co.   (10  N.  B. 

R.   224),   378,   379. 
How,  In  re  (18  N.  B.  R.  5G5),  640. 
Howard,  In  re   (4  N.  B.  R.  571), 

353. 
Howard,  In  re  (95  Fed.  Rep.  415), 

633,  636,  693. 
Howard,    In    re     (100    Fed.    Rep. 

630),  412. 
Howard,    In    re     (130    Fed.    Rep.. 

1004),   418. 
Howard,    In    re     (135    Fed.    Rep. 

721),  87. 
Howard   Nat.    Bank,  Ex  parte    (2 

Low.   487),   727. 
Howden,    l7i    re     (111    Fed.    Rep. 
723),    682,    683,    800,    803,    804. 
Howe  V.  Noyes  (93  N.  Supp.  476), 

841. 
Howell,  In  re  (105  Fed.  Rep.  594), 

G79. 
Howland,  In  re   (2  N.  B.  R.  357), 

174,   270,   284. 
Howland,    In    re    (109    Fed.    Rep. 

8C9,  447,  451,   593. 
Howley-Dresser    Co.,    In    re     (132 

Fed.  Rep.   1002),  463. 
Hov,  In  re    (137  Fed.   Rep.   175), 
170. 


TABLE  OF   CASES. 


1387 


References  are  to  pages. 


Hoyt,  In  re  (3  N.  B.  R.  55),  7C1, 

784. 
Hoyt,  In  re   (119  Fed.  Rep.  987), 

77G. 
Hubbard,  In  re  d  Low.  190),  404. 
Hubbard,  In  re  (98  Fed.  Rep.  710), 

340,  348,  835. 
Hubbard  v.  Tod    (171  U.  S.  474), 

893. 
Hubbill  V.  Cramp  (11  Paige,  310), 

840. 
Hudgins  v.  Kemp    (18  How.  530), 

931,  932,  939. 
Hudgins  v.  Lane  (2  Hughes,  361), 

318,  323. 
Hudson    V.    Courier    Co.     (8    Fed, 

Rep.  422),  793. 
Hudson  V.  Guestier  (7  Crancb,  1), 

945. 
Hudson   V.   Mercantile   Nat.   Bank 

(119  Fed.  Rep.  346),  819. 
Hudson   Clothing  Co.,  In  re    (140 

Fed.  Rep.  40),  921. 
Huenergardt      v.      Brittain      Dry 
Goods  Co.  (116  Fed.  Rep.  31), 
528,  537. 
Huffnagel,  In  re  (12  N.  B.  R.  554), 

484. 
Hughes,  Ex  parte  (114  U.  S.  548), 

948    949. 
Hughes!  In  re   (8  Biss.  107),  538. 
Hughes   V.   Nelson    (29    N.    J.   Eq. 

547),  496. 
Hugewitter  v.  Von  Sacks   (4  Ben. 

167),  503. 
Hull,  In  re   (115  Fed.  Rep.  858), 

439,  478,   585,   589,  593,  606. 
Humbert,    In    re    (100    Fed.    Rep. 

439),  203,  265,  279. 
Humphrey    v.    Havens     (9    Minn. 

301),  920. 
Humphrey  v.   Tatman    (198  U.   S. 
91),  439,  475,  566,  567,  570,  582, 
587,  589,  591,  592,  593,  597. 
Humphreys    v.    Blight     (1    Wash. 

C.  C.  44),  7. 
Humphreys    v.     Blight     (4     Dall. 

370),  378,  379. 
Hunt,  In  re  (5  N.  B.  R.  433),  227. 
Hunt,  In  re  (5  N.  B.  R.  493),  519. 
Hunt,  in  re  (17  N.  B.  R.  205).  325. 
Hunt,  In  re    (26   Fed.   Rep.   739), 

808. 
Hunt,  In  re   (118  Fed.  Rep.  282), 

159    239. 
Hunt,  in  re  (139  Fed.  Rep.  283), 
568,  569,  570,  587,  590,  591. 


Hunt  V.   Oliver    (109   U.   S.   177), 

932. 
Hunter,   In  re    (3   McLean,   297), 

863. 
Hurst,  Ex  parte  (4  Dall.  387),  668. 
Hurst,  In  re    (1  Flipp.  162),  713, 

726. 
Hurlburt,  Hatch  &  Co.,  In  re  (135 

Fed.  Rep.  504),  495,  734. 
Hussey  v.  Danforth    (77  Me.  17), 

658. 
Hussman,  In  re   (2  N.  B.  R.  437), 

192. 
Hutchins  v.  Taylor    (5  Law  Rep. 

289),    10. 
Hutchinson    v.    Campbell    (25    Pa. 

St.  273),  527. 
Hutchinson    v.    LeRoy    (113    Fed. 
Rep.   202),   899,   904,   912,  944. 
Hutchinson  v.  Otis   (115  Fed.  Rep. 

937),  944. 
Hutchinson  v.  Otis  (123  Fed,  Rep. 

H),  885. 

Hutchinson    v.    Otis     (190    U.    S, 

552),   383,   389,   403,   404,    869, 

885,  915. 

Hutto,  In  re  (3  N.  B.  R.  787),  607. 

Hyde    In   re    (6    Fed.    Rep.    587), 

754,  755. 
Hyde  v.  Corrigan  (9  N.  B.  R.  466), 

565. 
Hvde  V.  Sontag  (1  Saw.  249),  467. 
Hyde  v.  Tufts    (45  N.  Y.  Sup.  Ct. 

56),  512. 
Hyde  v.  Woods  (94  U.  S.  523),  495. 
Hyde  &  Gload  Mfg.  Co.,  In  re  (103 

Fed.  Rep.  617),  285. 
Hyman,  In  re  (97  Fed,  Rep.  195), 

680,  806. 
Hyman   v.   Chales    (12   Fed.   Rep, 

855).  244. 
H'-^mes  Buggy  &  Imp.   Co.,  In  re 

(130  Fed.  Rep.  977),  439. 
Hymes  Buggy  &   Imp.   Co.,  In   re 
(130  Fed.  Rep.  977),  545,  547, 
549. 
Hyslop  V.  Hoppock    (5  Ben.  447), 

247. 


Idaho  &  Ore.  Land  Imp.  Co.  v, 
Bradbury  (132  U.  S.  509),  938, 

Idzall,  In  re  (96  Fed.  Rep.  314), 
804).    807,   808. 

Illinois  Central  R.  Co.  v.  Illinois 
(146   U.   S.  387),  939, 


1388 


TABLE   OF  CASES. 


References  are  to  pages. 


Illinois  Trust  &  Savings  Bank  v. 

First  Nat.  Bank  (15  Fed.  Rep. 

S5S),  502. 
Imhoff  V.  Whittle  (82  So.  W.  Rep. 

1056),  860. 
Imlay  v.  Carpentier  (14  Cal.  173), 

351. 
Imperial  Brewing  Co.,  In  re   (143 

Fed.  Rep.  579),  363. 
Imperial   Corporation,  In  re    (133 

Fed.  Rep.  73),  283. 
Indianapolis,    etc.,    R.    Co.,    In   re 

(5   Biss.   287),  289. 
Independent    Ins.    Co.,    In    re    (2 

Low.  187),  361. 
Independent    Ins.    Co.,    In    re    (1 

Holmes,  103),  27,  181. 
Independent    Thread    Co.,    In    re 

(113  Fed.  Rep.  998),  203,  226. 
Ingalls  Bros.,  In  re  (137  Fed.  Rep. 

517),  389. 
Ingalls  V.  Savage  (4  Pa.  224),  859. 
Inglehart  v.  Stansbury   (151  U.  S. 

68),  926,  927. 
Inglis  V.  McDougal  (1  J.  B.  Moore, 

196),   488. 
Ingraham  v.  Geyer  (13  Mass.  246), 

461. 
Ingraham     v.     Phillips     (1     Day, 

Conn.  117),  823,  824. 
Ingram  v.  Wilson    (125  Fed.  Rep. 

913),  521,  522. 
Insley  v.   Garside    (121   Fed.  Rep. 

699),  342,  354. 
Ins.    Co.    V.    Comstock    (16    Wall. 

258),  190,  870,  871,  917. 
Interior  Const.  &  Imp.  Co.  v.  Gib- 

ney   (160  U.  S.  217),  895. 
International    Bank    v.     Sherman 

(101   U.   S.   403),   286. 
International  Coal  Min.  Co.,  In  re 

(143  Fed.  Rep.  665),  202,  203. 
International  Mahogany  Co.,  In  re 

(147   Fed.  Rep.  147),  595. 
Interstate   Com.   Com.   v.   Ry.   Co. 

(57  Fed.  Rep.   948),  245. 
Iowa  Barbed   Wire   Co.   v.   South- 
ern  Co.    (30    Fed.    Rep.    615), 

695. 
Iowa   Falls   Mfg.   Co.,  In  re    (140 

Fed.  Rep.  527),  150,  749,  766. 
Iron     Mountain     Co.,     In     re     (9 

Blatch.  320),  747. 
Ironsides,  The   (4  Biss.  518),  610. 
Irvin,  In  re   (120  Fed.  Rep.  733), 

528,  514,  537,  903. 
Irving  V.  Hughes  (2  N.  B.  N.  61), 

106,  256. 


Irwin  V.  Williar   (110  U.  S.  507), 

277. 
Irwine,  In  re   (1  Penn.  L.  J.  291), 

17,  18. 
Isaacs,  In  re  (3  Saw.  35);  317. 
Isidor,   In   re    (2    Ben.    123),   628, 

632. 
Ives,  In  re  (5  Dill.  146),  279,  802. 
Ives,  In  re   (18  N.  B.  R.  28),  484. 
Ives,  In  re    (111   Fed.  Rep.   495), 

280. 
Ives,  In  re   (113  Fed.  Rep.   911), 

34,  219,  90.5. 
Ives   V.   Tregent    (29   Mich.   390), 

753. 


Jacobs,  In  re  (5  Saw.  458),  796. 
Jacobs,  In  re    (1  Am.  B.  R.  518), 

56L 
Jacobs,  In  re  (18  N.  B.  R.  48),  720. 
Jacobs,  In  re  (144  Fed.  Rep.  868), 

679,  803. 
Jacobs  V.  George   (150  U.  S.  415), 

934. 
Jacobs    V.    Van    Sickle    (127    Fed. 

Rep.  62),  476. 
Jacobs    V.    Van    Sickle    (123    Fed. 

Rep.  340),  561. 
Jacobs  V.   Verstandig,  In  re    (147 

Fed.  Rep.  797),  811. 
Jacoby  v.  Distilling  Co.   (41  Minn. 

277),  537. 
Jackson,  In  re  (7  Biss.  280),  326, 

327,  406. 
Jackson,  In  re   (2  N.  B.  R.  508), 

514,  523. 
Jackson,  In  re  (94  Fed.  Rep.  797), 

111. 
Jackson   v.   Allen    (30  Ark.   110), 

523. 
Jackson     v.     Burke      (4      Heisk. 

[Tenn.]   614),  662. 
Jackson  v.  Cummins    (5  M.  &  W. 

342),  606. 
Jackson    v.    First   Nat.    Bank    (42 

N.  J.  L.  177),  849. 
Jackson  Iron  Mfg.  Co.,  In  re    (15 

N.  B.  R.  438),  586,  588. 
James,  In  re  (2  N.  B.  R.  227),  764, 

784. 
James  v.  Atlantic  Delaine  Co.   (11 

N.  B.  R.   390),  337. 
James    v.    Gray     (131    Fed.    Rep. 

401),  386. 
Jamieson,    In    re    (120    Fed.    Rep. 

697),  798. 


TABLE   OF  CASES. 
References  are  to  pages. 


1389 


Janes,  In  re   (133  Fed.  Rep.  912), 

308. 
Janeway,  In  re   (4  N.  B.  R.  100), 

502. 
Jaquith  v.  Alden    (189  U.   S.  78), 

399,  554,  5G0,  575,  885. 
Jaquith  v.  Rowley  (188  U.  S.  G20), 

82,    83,    90,    97,    100,    101,    103, 

112,   618. 
Jarecki    Mfg.    Co.    v.    McElwaine 

(107  Fed.  Rep.  249),  294,  318, 

Jaycox,  7n  re    (8  N.   B.   R.   241), 

404. 
Jefferson,  In  re  (93  Fed  Rep.  948), 

3G5,  3G6,  483. 
Jefferson,    In    re     (96    Fed.    Rep. 

826),  631. 
Jeffries  v.  Bartlett    (20  Fed.  Rep. 

496),  521. 
Jeffries   v.    Laurie    (27   Fed.   Rep. 

198),  693,  704. 
Jeffs    V.    Wood     (2    P.    Williams, 

128),  340. 
Jehu,   In   re    (94   Fed.   Rep.    638), 

219,  633,  913. 

Jelsh,  In  re  (9  N.  B.  R.  412),  278. 

Jemison     Mercantile     Co.,     In    re 

(112  Fed.  Rep.  966),  288,  905. 

Jenkins  v.  Armour   (6  Biss.  312), 

374. 
Jenkins     v.     International     Bank 

(127  Fed.  Rep.  484),  883. 
Jennings,  In  re  (8  Am.  B.  R.  358), 

781. 
Jenks  V.  Opp    (43   Ind.  108),  854, 

859. 
Jerome  v.  McCarter  (21  Wall.  17), 

930,  931,  933. 
Jerome  v.  McCarter  (94  U.  S.  734), 

604,  612. 
Jersey    City    Ins.    Co.    v.    Archer 

(122  N.  Y.  376),  856. 
Tersey   Island  Packing  Co.,  In   re 
(138  Fed.  Rep.  625),  87,  107, 
256,  440,  441. 
Jervey  v.   The  Carolina    (66   Fed. 

Rep.  1013),  118. 
Jewett,   Ex   parte    (2    Low.    393), 

713,   716,   717,  718,  721. 
Jewett,   In  re    (1   N.   B.   R.   491), 

308,  309. 
Jewett,  In  re   (3  Fed.  Rep.  503), 

806. 
Jewett  V.  Preston    (27  Me.   400), 

462. 
Jewett  Bros.  &  Jewett  v.  Bentson 
(18  S.  D.  575),  84L 


Jobbins  v.  Montague  (5  Ben.  425), 

9G,  244. 
Jobtins  V.  Montague    (G  N.  B.  R. 

509),   210. 
Johnson,  In  re  (2  Low.  129),  571, 

580. 
Johnson,    In    re    (108    Fed.    Rep. 

373),   546,   547. 
Johnson  v.  Auditor   (78  Ky.  282), 

833. 
Johnson  v.  Fitzhugh   (3  Barb.  Ch. 

360),   350. 
Johnson   v.    Rogers    (15   N.   B.   R. 

1),  793,  819. 
Johnson    v.    Spiller    (1    Douglass, 

168),  381. 
Johnson    v.    Wald    (93    Fed.    Rep. 

640),  193,  194. 
Johnson  v.  Waters  (108  U.  S.  4), 

931    933. 
Johnson    v.    Waters     (111    U.    S. 

640),  244. 
Johnson   Steel  Co.   v.   N.   B.   Steel 

Co.    (48   Fed.   Rep.   191),   693. 
Johnston,  In  re   (23  Pitts.  Leg.  J. 

141),  757. 
Johnston    v.    Forsyth    Mercantile 

Co.    (127   Fed.   Rep.    845),   99, 

219,  221,  223,  476,  613,  616,  619. 
Johnston  v.  Hutf,  Andrews  &  Moy- 

ler  Co.    (133   Fed.   Rep.   704), 

571. 
Johnston  v.  Strauss  (26  Fed.  Rep. 

57),    580. 
Jones'  Appeal  (70  Penn.  169),  310. 
Jones,   In   re    (2    Dill.    343),    523, 

535. 
Jones,  In  re    (97  Fed.  Rep.   773), 

492,  515. 
Jones,  In  re   (100  Fed.  Rep.  781), 

Jones,  In  re   (110  Fed.  Rep.  736), 

576. 
Jones,  In  re  (116  Fed.  Rep.  341), 

314. 
Jones,  In  re   (118  Fed.  Rep.  673), 

585. 
Jones  V.  Burnham,  Williams  &  Co. 

(138  Fed.  Rep.  986).  296. 
Jones  V.  Clifton    (101  U.   S.  225), 

464. 
Jones  V.  Emerson    (1  Caines   [N. 

Y.]  487),  664. 
.Jones  V.  Kinney  (5  Ben.  259),  627. 
.Jones  V.  Knox  (46  Ala.  53),  848. 
Jones  V.  Leach   (1  N.  B.  N.  595), 

106. 
Jones  V.  Lellyett  (39  Ga.  64),  823. 


1390 


TABLE   OF   CASES. 
References  are  to  pages. 


Jones  V.  Mackenzie  (122  Fed.  Rep. 

390),  101. 
Jones  V.  Mann   (72  Fed.  Rep.  85), 

941. 
Jones  V.  Newsome    (7  Biss.   321), 

503. 
Jones  V.  Russell  (44  Ga.  460),  854. 
Jones  V.  Sleeper  ( 2  N.  Y.  Leg.  Obs. 

131),  10,  195,   577. 
Jones  V.  Smith  (38  Fed.  Rep.  380), 

4G9. 
Jones  V.  Stevens  (94  Me.  582), 

204,  547,  572,  591. 
Jones  V.  The  State  (28  Ark.  119), 

833 
Jordan,' In  re   (S  N.  B.  R.  180),  17, 

19,  609. 
Jordan,  In  re    (10  N.  B.  R.  427), 

19,  518,  609. 
Jordan,  hi  re   (16  N.  B.  R.  427), 

479. 
Jordan,  In  re    (2  Fed.  Rep.  319), 

Jordan,  In  re   (142  Fed.  Rep.  292), 

814. 
Joseph,  In  re   (24  Fed.  Rep.  137), 

709. 
Josephson,  In   re    (121  Fed.  Rep. 

142),  499,  500. 
Josephson,  In   re    (116  Fed.  Rep. 

404),  584,  585. 
Joyce,  In  re   (128  Fed.  Rep.  985), 

750. 
Judd  V.  Lawrence  (1  Cnsh.  [Mass.] 

531),  171. 
Judson,  In  re    (2   Ben.   210),   C38. 
Jiidson  V.  Courier  Co.  (8  Fed.  Rep. 

422),  472,  578,  819. 
Judson    V.    Courier    Co.     (25    Fed. 

Rep.   705),  590, 
Judson  V.  Etheridge    (1  Cr.  &  M. 

743),  606. 


K 


Kahlev,  In  re    (2  Biss.  383),  309, 

311. 
Kahn,  In  re  (130  Fed.  Rep.  1023), 

819. 
Kaiser,  In  re   (99  Fed.  Rep.  689), 

678,  797,  799,  817,  819,  683. 
Kaiser,  In  re  (112  Fed.  Rep.  955), 

432. 
Kaldenberg,  In  re   (105  Fed.  Rep. 

232).   407. 
Kalish,  In  re  (Dead v.  575),  215. 
Kane,  In  re   (127  Fed.  Rep.   552), 

526,  533,  535, 


Kane,  In  re   (131  Fed.  Rep.  386), 

83    91 
Kane   v.    Haywood    (66   N.   C.    1), 

696.  • 

Kansas    City,    etc.,    R.    R.    Co.    t. 

McDonald  (60  Fed.  Rep.  522), 

949. 
Kansas    City    Mfg.    Co.,   In   re    (9 

N.  B.  R.  76),  419,  572. 
Kanter,  In  re  (117  Fed.  Rep.  356), 

643. 
Kanter  &  Cohen,  In  re   (121  Fed. 

Rep.  984),  430,  456,  904. 
Kaplan,  In  re  (141  Fed.  Rep.  463), 

810. 
Kaplan,  In  re  (144  Fed.  Rep.  159), 

442. 
Karr    v.    Whittaker    (5    N.    B.    R. 

123),  280. 
Kauffman    v.    Kennedy     (25    Fed. 

Rep.   785),  246. 
Kaufman,    In    re    (136    Fed.    Rep. 

262),  790,  822. 
Kaufman  v.  Treadway   (195  U.   S. 

271),    380,    439,    558,   564,    619, 

625,   627. 
Kean,  In  re    (2  Hughes,  322),  19, 

479,  518,  526,  609. 
Kearney,  Ex  parte  (1  Wheat.  38), 

698,   70.5. 
Keating    v.    Keefer    (5    N.    B.  '  R. 

133),    471,    530,    626. 
Keefer,  In  re  (135  Fed.  Rep.  885), 

803,  808,   809,  818. 
Keegan    v.    Hamilton    Nat.    Bank 

(163   Ind.   216),   556,   577. 
Keegan    v.    King     (96    Fed.    Rep. 

758),  79,  86,  93,  101,  112,  119, 

121,   430. 
Keene  v.  Mould   (16  Ohio  12),  IS. 
Keet,  In  re    (128  Fed.  Rep.   651), 

735,  739,  742.  613,  747. 
Keeton,  In  re  (125  Fed.  Rep.  462), 

345. 
Keith    V.    Gettysburg    Nat.    Bank 

(23  Pa.  Supr.  Ct.  14),  625. 
Kellar,  In  re  (110  Fed.  Rep.  348), 

575,  576. 
Keller,  In  re  (109  Fed.  Rep.  118), 

402.   650. 
Keller,  In  re   (109  Fed.  Rep.  131), 

745,  753,  768,  771. 
Keller    v.    Denmead     (68    Pa.    St. 

-M9).    609. 
Kellcrg,  In  re  (6  Am.  B.  R.  389), 

746. 
Kellogg,  In  re  (1^^  Fed.  Rep.  52), 

448,  449,  492. 


TABLE   OF   CASES. 
References  are  to  pages. 


1391 


Kellogg,    In    re     (113     Fed.    Rep. 

120),  86,  101,  610. 
Kellogg,  In  re  (121  Fed.  Rep.  333), 

78,  120,  438,  745,  450,  455,  470. 
Kellogg    V.     Russell     (11     Blatcli. 

519),  125. 
Kellogg  V.  Schuyler   (2  Denio  [N. 

Y.],  73),  350,  835. 
Kelly,  In  re    (18   Fed.  Rep.   528), 

340,  341. 
Kelly,  In  re    (91   Fed.  Rep.   504), 

239,  258,  2G0. 
Kelly    V.     Sparks     (54    Fed.    Rep, 

70),    537. 
Kelly  V.   Strange    (3  N.  B.  R.  8), 

525,   532. 
Kelly  Dry  Goods  Co.,  In  re    (102 

Fed.  Rep.   747),  203,  252,  253, 

254,   141. 
Kemper,    In    re     (144    Fed.    Rep. 

439),  389. 
Kempner,  In  re   (6  N.  B.  R.  521), 

141. 
Kennedy   v.    Bank    (8   How.   586), 

33. 
Kennedy    v.    Bank   of   Georgia    (8 

How.  610),  939. 
Kennedy  v.  Nat.  Union  Bank   (23 

Hun   [N.  Y.]    494),  309. 
Kennedy  v.  R.  R.  Co.  (3  Fed.  Rep. 

97),  459. 
Kenney,  In  re  (95  Fed.  Rep.  427), 

106,  111. 
Kenney,  In  re  (95  Fed.  Rep.  427), 

117. 
Kenney,  In  re  (97  Fed.  Rep.  554), 

231,  473,  474. 
Kenney,  In  re  (105  Fed.  Rep.  897), 

86,  105,  110,  547,  548. 
Kenney  Co.,  In  re   (136  Fed.  Rep. 

451),   323,   331,  387. 
Kenova  Loan  &  Trust  Co.  v.  Gra- 
ham  (135  Fed.  Rep.  717),  903. 
Kentucky    National    Bank   v.   Car- 
ley    (121   Fed.  Rep.   822),   683, 

793,  819,  820.  904. 
Kenyon,  In  re  (112  Fed.  Rep.  658), 

681,  805,  807. 
Kenyon    v.    Fenton     (6    N.    B.    R. 

238),  194. 
Keppel,  Trustee,  v.  Tiffin  Savings 

Bank    (197  U.  S.  356),  402. 
Kerber,  In  re  (125  Fed.  Rep.  653), 

138,  636,  693. 
Kerby-Dennis  Co.,  In  re   (95  Fed. 

Rep.  116),  609. 
Kerosene   Oil   Co.,  In  re    (3   Ben. 

35),  746. 
Kerr,  In  re   (2  N.  B.  R.  388),  552. 


Kerr,  In  re   (9  N.  B.  R.  566),  515. 
Kerr  v.  Kerr  (2  Q.  B.  439),  348. 
Kersten,  In  re   (110  Fed.  Rep.  929), 

183,   199,   202.   299. 
Ketcham  v.  McNamara   (72  Conn. 

709),  27,  28,  .30. 
Ketchum,  In  re  (1  Fed.  Rep.  840), 

495. 
Keyes    v.    McKirrow     (180    Mass. 

261),  159. 
Keyser  v.  Wessel    (128  Fed.  Rep. 

281),   744,   745. 
Keystone  Coal  Co.,  In  re  (109  Fed. 

Rep.  872),  178. 
Kibbe   v.   Benson    (17  Wall.   624) 

247. 
Kidd  V.  Johnson   (100  U.  S.  617), 

462. 
Kimball,  In  re    (2   Ben.  38),   637, 

656,  657,  660,  677. 
Kimball,  In  re   (2  Ben.  554),  665, 

666,  668. 
Kimball,    In   re    (6    Blatch.    292), 

656. 
Kimball.  In  re   (7  Fed.  Rep.  461), 

178. 
Kimball,    In    re     (100    Fed.    Rep. 

777),  159,  395. 
Kimball  v.  Dresser    (98  Me.  519), 

557,  558,  560,  622,  625. 
Kimball    v.    Rosenham    (114    Fed. 

Rep.   85),  399,   500,   576. 
Kindt,  In  re    (98  Fed.  Rep.  403), 

158,  212. 
Kindt,  In  re    (98  Fed.  Rep.   867), 

85. 
Kindt,  In  re    (98  Fed.  Rep.  867), 

92. 
Kindt,  In  re   (101  Fed.  Rep.  107), 

473,    567,   572,   580. 
King,    In   re    (3    Fed.    Rep.    842), 

755. 
King    V.    Bowman    (24    La.    Ann. 

506),  397,  405. 
King  V.  Central  Bank  (6  Ga.  257), 

850. 
King   V.    Dietz    (12    Pa.    St.    156), 

469,   614,   619. 
King  V.  Remington  (36  Minn.  15), 

440. 
Kingley  v.    Cousins    (47   Me.   91), 

856. 
Kingman  v.  Western  Mfg-.  Co.  (170 

U.    S.    675).   921. 
Kingsley,  In  re  (1  Low.  216),  215, 

383. 
Kingsley,  In  re  (6  Ben.  300).  636. 
Kinl-ead,  In  re   (3  Biss.  405),  174, 

309. 


1392 


TABLE   OP   CASES. 
References  are  to  pages. 


Kinmouth    v.    Braentigam    (63    N. 

J.   Eq.   103),   547. 
Kinne  v.  Lant  (68  Fed.  Rep.  436), 

246. 
Kinsman,  In  re  d  N.  Y.  Leg.  Obs. 

309),   209. 
Kip    V.    Bank    of    New    York    (10 

Johns.    [N.   Y.],  63),  501. 
Kipp,  In  re  (4  N.  B.  R.  593),  612. 
Kirby    v.    Garrison    (21    N.    J.    L. 

17),  854. 
Kirkland,    In    re    (12    Am.    Law. 

Reg.  300),  610. 
Kirkland,  In  re  (14  N.  B.  R.  157), 

781. 
Kirkpatrick,  In  re  (148  Fed.  Rep. 

811).   255,   433. 
Kirtland,  In  re    (10  Blatch.   515), 

96,  247,  263,  653,  737. 
Kitchen  v.   Bartsch    (7   East   53), 

496,  506. 
Kitchen    v.    Randolph     (93    U.    S. 

SO),  931,   932. 
Kittle  V.  Hall   (29  Fed.  Rep.  512), 

463,   508. 
Kittridge  v.   McLaughlin    (33  Me. 

327),  507. 
Kitzinger,  In  re  (19  N.  B.  R.  152), 

313. 
Kitzinger,  In  re  (19  N.  B.  R.  238), 

764. 
Klapholz,    In    re    (113    Fed.    Rep. 

1002),  745. 
Klein,   In   re    (1   How.    277??),    17, 

18,  26. 
Klein,   In   re    (97    Fed.    Rep.    31), 

108. 
Klein  &  Co.,  /??  re  (116  Fed.  Rep. 

523),  32,  102. 
Kleinhans,   In   re    (113    Fed.   Rep. 

107),   107,   121,   254. 
Kletchka,    In    re    (92    Fed.    Rep. 

901).    106. 
Klingaman,  In  re   (101  Fed.  Rep. 

691),  572,  580. 
Klipstein  &  Co.  v.  Allen-Miles  Co. 

(136  Fed.  Rep.  385),  850,  851, 

852. 
Knabe   v.   Hayes    (71   N.   C.    109), 

840. 
Knapp  V.  Anderson  (71  N.  Y.  4G6), 

850,   853. 
Knapp    V.    Harold    (1    Ohio    C.    C. 

Rep.  N.  S.  469),  839,  840. 
Knauer,  In  re  (133  Fed.  Rep.  805), 

790. 
Knickerbocker,    In    re     (121    F'-d. 

Rep.  1004),  102,  117,  616,  G18. 


Knickerbocker  v.  Comstock   (9  N. 

B.  R.  484),  195,  262,  577. 
Knight,  In  re    (2  Biss.   518),  308, 

315. 
Knight,  In  re  (125  Fed.  Rep.  35), 

31,    32,    90,    91,    94,    107,    109, 

111,  116,  117,  118,  207,  442. 
Knight  V.  Cheney  (5  N.  B.  R.  305), 

908. 
Knopf,  In  re   (144  Fed.  Rep.  245), 

80,  81,  87,  99,  254,  475,  476,  477. 
Knott,  In  re   (109  Fed.  Rep.  626), 

362. 
Knott  V.  Putnam    (107   Fed.   Rep. 

907),  111,  656,  667,  845. 
Knowlton   v.    Moseley    (105   Mass. 

136),  467,  647. 
Knox,  In  re    (98   Fed.  Rep.   585), 

412. 
Knox  V.  Exchange  Bank  (12  Wall. 

379),  428,  429. 
Koenig  &  Van  Hoogenhuyze,  In  re 

(127  Fed.  Rep.  891),  142. 
Kohlsaat,  In  re  (18  N.  B.  R.  570), 

782. 
Kohn,   In  re    (7  Am.   B.  R.   Ill), 

576. 
Kountze  v.  Omaha  Hotel  Co.   (107 

U.  S.  378),  261. 
Kraft,   In   re    (3    Fed.   Rep.    892), 

793,  819. 
Krinsky,    In    re     (112    Fed.    Rep. 

972),  111,  113,  695,  697. 
Krippendorf   v.    Hyde    (110   U.    S. 

276),   78,   116. 
Kross,  In  re    (96  Fed.  Rep.  816), 

161,   166. 
Krone   v.    Cooper    (43    Ark.    547), 

209. 
Krueger,  In  re  (2  Low.  66).  302. 
Krueger,  In  re   (2  Low.  182),  646. 
Kuffler,  In  re   (97  Fed.  Rep.  187), 

135,  331,  416. 
Kuffler,  In  re  (127  Fed.  Rep.  125), 

869.  914. 
Kuffler,  In  re  (144  Fed.  Rep.  445), 

813. 
Kunzler  v.  Kohaus    (5  Hill.  317), 

17,    18,    860. 
Kuntz    V.    Young    (131    Fed.    Rep. 

719),    208,    223,    813,   814,   831. 
Kurtz.  In  re   (125  Fed.  Rep.  992), 

141.    142,    442. 
Kyle  &  Gunter  v.  Bostick  &  Sher- 

rod    (10  Ala.   589),  354,  355. 
Kvle    Lumber    Co.    v.    Bush     (133 

Fed.  Rpp.  688),  906. 
Kvler,  /??,  re  (2  Ben.  414),  96,  247, 

263,  410,  635,  653. 


TABLE   OF  CASES. 


1393 


References  are  to  pages. 


Lachemeyer,  In  re    (18   N.   B.   R. 

270),   339. 
Lacov,  In  re  (134  Fed.  Rep.  237), 

275. 
Lacov,  In  re   (142  Fed.  Rep.  960), 

255,  291,  694. 
Lacy,  In  re   (12  Blatch.  322),  262. 
Ladue,  Tate  Mfg.  Co.,  In  re   (135 

Fed.  Rep.  910),  362. 
Lafayette   Ins.   Co.   v.   French.    (18 

How.  404),  517. 
Lafleche,    In    re    (109    Fed.    Rep. 

307),   683,   820. 
Lafountain    v.    Savings    Bank    (56 

Vt.  332),  509. 
Laird,  In  re   (109  Fed.  Rep.  550), 

778,   779. 
Lake    Jaclvson    Sugar    Co.,    Zn    re 

(129    Fed.   Rep.   640),   176. 
Lake    Superior   Ship   Canal  R.   R. 

&  Iron  Co.,  In  re   (7  N.  B.  R. 

376),  327. 
Lake   Superior   Ship   Canal   R.   R. 

&  Iron  Co.,  In  re  (10  N.  B.  R. 

76),  394. 
Lalor  V.  Wattles   (8  111.  225),  18. 
Lambert,  In  re   (2  N.  B.  R.  426), 

519,  523. 
Lampkin  v.  Starkey   (7  Hun    [N. 

Y.],  479),  246. 
Lammer,  In  re  (7  Biss.  269),  537, 
Lamoille    County    Nat.     Bank    v. 

Stevens    (107  Fed.  Rep.  245), 

313. 
Lamson   Consol.    Store    Service   v. 

Rowland   (114  Fed.  Rep.  639), 

345,  365,  366,  483. 
Lancaster  v.  Collins   (7  Fed.  Rep. 

338),  578. 
Landis  v.  McDonald   (88  Mo.  App. 

335),  567. 
Landry  v.  Andrews  (21  R.  I.  597), 

573. 
Lane,  In  re   (2  Low.  305),  374. 
Lane,    In    re    (2    Low.    333),    311, 

314,  571,  580. 
Lane,  In  re   (125  Fed.  Rep.  772), 

727. 
Lane  v.  Holcombe  (182  Mass.  360), 

860. 
Lane  v.   Nickerson    (99    111.    284), 

469,   614,   619. 
Lanesborough  v.   Jones    (1   P.   W. 

Lang,  In  re  (2  N.  B.  R.  480),  204, 

242,  379,  572. 
Lang,  In  re   (127  Fed.  Rep.  755), 

162. 


Langdon,  In  re  (2  Low.  387),  713. 
Lange,  In  re   (91  Fed.  Rep.  301), 

497. 
Lange,  In  re   (97  Fed.  Rep.  197), 

196,   238,   277,  284,  286,   575. 
Langley  v.  Perry  (2  N.  B.  R.  596), 

27. 
Langley  v.  Perry  (2  N.  B.  R.  506), 

903. 
Langslow,    In    re    (98    Fed.    Rep. 

869),  217,  303,  305. 
Lansing    Boiler    &    Eng.    Wks.    v. 

Ryerson    (128  Fed.  Rep.  701), 

187,    190,    191,    475,    476,    623, 

812. 
Lantzenheimer,   In   re    (124    Fed. 

Rep.  710),  396,  397. 
La  Plume  Condensed  Milk  Co.,  In 

re    (145   Fed.   Rep.   1013),   82. 
Lathrop,  In  re  (3  Ben.  490),  413. 
Lathrop,  In  re    (4   N.   B.  R.   93), 

645. 
Lathrop  v.  Drake   (91  U.  S.  516), 

97,  104,  114,  617. 
Lathrop    v.     Stuart     (5     McLean, 

107),  859 
Latimer  v.  McNeal  (142  Fed.  Rep. 

451),  253. 
LaTourette     v.     Price     (28     Miss. 

702),  858. 
Lauck's  Appeal    (24  Pa.   St.   426), 

527. 
Laughlin,    In    re    (96    Fed.    Rep. 

589),   295,   301,   303,   319. 
Lau  Ow   Bew,   petitioner    (141   U. 

S.  583),  892. 
Lau  Ow  Bew  v.  U.  S.    (144  U.  S. 

58),  892. 
Lantzenheimer,    In   re    (124    Fed. 

Rep.  716),  325. 
Lawler,  In  re  (110  Fed.  Rep.  135), 

778,  779. 
Lawrence,  In  re  (10  Ben.  4),  200. 
Lawrence  v.  Knowles  (5  Bing.  [N. 

C],   399),  508,   443. 
Lawrence    v.    Lowrie     (133    Fed. 

Rep.    995),    99,    103,    104,   477, 

614,   617,   619.   624,   625. 
Lazoris,  In  re  (120  Fed.  Rep.  716), 

323,  417. 
Lea   V.    West   Co.    (91    Fed.    Rep. 

237),  106,  107,  111,  280. 
Leachman,  In  re  (IN.  B.  R.  391), 

637. 
Leather  Cloth  Co.  v.  Cloth  Co.  (11 

H.   L.  523),  462. 
Le   Claire,   In  re    (124   Fed.   Rep. 

654),  460,  680,  682,  812. 


1394 


TABLE   OF   CASES. 
References  are  to  pages. 


Lee  V.   Phillips    (6  Hill.    [N.  Y.l, 

246),   861. 
Lee  Injector  Co.  v.  Penberthy  (109 

Fed.  Rep.  964),  948,  949. 
Leeuw,  In  re   (3  Am.  B.  R.  418), 

680. 
Le    Favour,    In   re    (8    Ben.    43), 

283. 
Leffingwell    &   "Warren,   In   re    (2 

Black.  603),  514. 
Legg,  In  re    (96   Fed.  Rep.   326), 

445,   446,   449,   491,   595. 
Legion    v.    Allen     (6    Miss.    632), 

724. 
Lehigh    Lumber    Co.,    In   re    (101 

Fed.  Rep.  216),  314. 
Leibowitz,   In   re    (108   Fed.    Rep. 

617),  383,  389. 
Leicester    v.    Hoadley     (66    Kas. 

172),  838. 
Leidigh    Carriage    Co.    v.    Stengel 

95  Fed.  Rep.   637),  18,  20,  24, 

30,    32,    82,    90,    101,    103,    117, 

211,   228,   239,  266,   274,  283. 
Leigh,  In  re    (96  Fed.  Rep.   806), 

478. 
Leigh  ton  v.   Kelsey    (57  Me.   85), 

823,  824. 
Leighton    v.    Kennedy     (129    Fed. 

Rep.  737),  226,  227,  230. 
lieighton   &   Co.,   In  re    (147   Fed. 

Rep.  311),  178. 
Leinweber,  In  re    (128   Fed.  Rep. 

641),   694,   696. 
Leitch   V.    Northern   Pac.   Ry.    Co. 

95  Minn.  35),  830. 
Leland,   in  re    (5   Ben.   168),  318, 

323. 
Leland,  In  re  7  Ben  156),  612. 
Leland,    In    re    (10    Blatch.    503), 

478. 
Lemmon,  Gale  &  Co.,  In  re   (112 

Fed.    Rep.    96),    34,    610,    905. 
Lengert  Wagon  Co., In  re  (110  Fed. 

Rep.   927),   775. 
Lennon.    In   re    (166    U.    S.    548), 

697. 
Lennox,    Ex    parte    (16    Q.    B.    D. 

315),  349.    . 
Lentz,  In  re   (97  Fed.  Rep,  486), 

538. 
Leon  V.  Galceran    (11  Wall.  185), 

611. 
Leslie,  In  re  (119  Fed.  Rep.  406), 

642,  681,  683,  803,  804. 
Lesser.  In  re    (5  Am.  B.  R.  320), 

773. 
Lesser,  In  re   (99  Fed.  Rep.  913), 
106. 


Lesser,  In  re  (100  Fed.  Rep.  433), 

94,    112,    290,    773. 
Lesser,  In  re  (114  Fed.  Rep.  83), 

680,   68L 
Lessure  v.  Weaver   (108  111.  App. 

616),  614,  619. 
l.etchworth,  In  re    (19  Fed.  Rep. 

873),  352. 
Le   Vay,   In   re    (125    Fed.    Rep.), 

990),  255,  526,  535,  735,  750. 
Levey,  In  re  (133  Fed.  Rep.  572), 

792,  796,  798,  811,  815. 
Levi,  In  re   (121  Fed.  Rep.  198), 

573. 
Levi  &  Klauber,  In  re   (142  Fed. 

Rep.  962),  288,  902. 
Levin,  In  re  (7  Biss.  231),  794. 
Levin,  In  re   (131  Fed.  Rep.  388), 

643. 
Levor  v.  Seiter  (8  Am.  B.  R.  459), 

548,  56L 
Levy,    In    re    (1    Ben.    496),    508, 

637,  643. 
Levy,  In  re    (2  Ben.   169),  850. 
Levy,   In  re    (95   Fed.   Rep.    812), 

297. 
Levy,  In  re   (101  Fed.  Rep.  247), 

217,    218,    416. 
Levy,  In  re   (110  Fed.  Rep.  744), 

712. 
Levy,  In  re    (142  Fed.  Rep.  442), 

698. 
Levy  &  Co.,  Ex  parte  (11  L.  R.  Eq. 

619),  718. 
Lewensohn,   In  re    (98   Fed.   Rep. 

576),    136,    330,   331,   415,   416, 

417. 
Lewensohn,  In  re    (99   Fed.   Rep. 

73),   656,  657,  661. 
Lewensohn,  In  re   (121  Fed.  Rep. 

538),  409. 
Lewensohn,  In  re   (121  Fed.  Rep. 

1),  904. 
Lewin,  In  re  (103  Fed.  Rep.  850), 

145,  160,  167,  575. 
Lewin,  In  re   (135  Fed.  Rep.  252), 

790. 
Lewis,  In  re  (2  Hughes  320),  316. 
Lewis,  In  re    (2   Ben.  96),   301. 
Lewis,  In  re  (4  Ben.  67),  645. 
Lewis,   In   re    (8    N.    B.   R.    546), 

313. 
Lewis,  In  re    (14   N.   B.  R.   144), 

713. 
Lewis,  In  re   (99  Fed.  Rep.  935), 

290,    360.    780,    781. 
Lewis,  In  re   (125  Fed.  Rep.  143), 
452,  453,  844. 


TABLE   OF   CASES. 
References  are  to  pages. 


1395 


Lewis,  In  re  (129  Fed.  Rep.  147), 

2SS. 
Lewis  V.  Hawkins  (23  Wall.  119), 

823. 
Lewis  V.  Owen  (4  B.  &  Aid.  C54), 

826. 
Lewis    V.    Sloan    (68    N.    C.    557), 

279. 
Lewis  V.  United  States    (92  U.   S. 

618),  388,  781,  833. 
Lexan    v,    Wilson    (43    Me.    186), 

510. 
Libby  v.  Hopkins  (104  U.  S.  307), 

370,   371,   374,   375. 
Liddell   v.   Wiswell    (59   Vt.   365), 

354. 
Liddon  Bros.  v.   Smith    (135  Fed. 

Rep.    43),    767,    869,    877,    878, 

879. 
Liebke  v.  Thomas  (116  U.  S.  605), 

724. 
Liesum  v.  Krauss   (85  Misc.  Rep., 

N.  Y.,  376),  840. 
Light  V.  Chapman    (44  Ore.  265), 

840. 
Lillington  Lumber  Co.,  In  re  (132 

Fed.  Rep.  886),  605,  609. 
Lines,  In  re   (133  Fed.  Rep.  803), 

111. 
Lingan  v.  Bayley  (1  Cranch,  C.  C. 

112),  658. 
Linton    v.    Linton    (15    Q.    B.    D. 

239),  348. 
Linton  v.  Stanton   (12  How.  423), 

882. 
Lipke,  In  re    (98  Fed.  Rep.  970), 

063. 
Lipman,  In  re  (94  Fed.  Rep.  353), 

348,  382. 
Lipman    v.    Stein    (13^   Fed.   Rep. 

235),  526,   533,  535. 
Lipset,  Levittan  &  Co.,  In  re  (119 

Fed.  Rep.   379),  139,  143,  638, 

818. 
Liscomb  v.  Grace    (26  Ark.   231), 

354. 
Lissburger,    In   re    (2    Fed.    Rep. 

153),  727. 
Litchfield,  In  re  (5  Fed.  Rep.  47), 

309. 
Litchfield,    In    re    (13    Fed.    Rep. 

868),  96,  244,  700. 
Little,    In   re    (2    Ben.    186),    318. 
Little,  In  re  (3  Ben.  25),  209,  210. 
Little,  In  re  (1  N.  B.  R.  341),  324. 
Little,  In  re  (110  Fed.  Rep.  621), 

521,  576. 
Little.  In  re  (137  Fed.  Rep.  521), 
208,  814. 


Little  V.  Alexander  (21  Wall.  500), 

552. 
Little  V.  Holly-Brooks  Hardw.  Co. 

(133  Fed.  Rep.  874),  475,  567. 
Littlefield    v.    Del.    &    Hud.    Canal 

Co.    (3   Cliff.   371),   908. 
Little    River    Lumber    Co.,    In    re 

(92  Fed.  Rep.  585),  586. 
Little    River    Lumber    Co.,    In    re 

(101  Fed.  Rep.  558),  159,  162, 

165,    422.    772. 
Livermore     v.     Bagley     (3     Mass. 

487),  191. 
Livingston    Co.,    In   re    (144    Fed. 

Rep.  971),  408. 
Livingston  v.  Heineman  (120  Fed. 

Rep.   786),   354,   356,   387,   399, 

573,   574,   915,   924. 
Lizardi   v.   Cohen    (3   Gill.    [Md.], 

430),   824,   826. 
Lloyd,   In   re    (22    Fed.   Rep.    88), 

308,  316,  317. 
Lloyd  V.  Chapman    (93  Fed.  Rep. 

599),  922,  929. 
Lloyd  V.   Strobridge    (16  N.  B.  R. 

107),  580. 
Lloyd    V.    Turner    (5    Saw.    463), 

378,  379. 
Llynvi  Coal  Co.,  In  re  (  7  Ch.  App. 

28),  487. 
Lobb,  Ex  parte   (7  Ves.  592),  318. 
Lockman  v.  Lang,   (132  Fed.  Rep. 

1),    271,    287,    933,    934. 
Lockman  v.  Lang    (128  Fed.  Rep. 

279),  912,  913,  922,  929. 
Locks,  In  re  (194  Fed.  Rep.  783), 

680,   682. 
Lockwood,   In   re    (104   Fed.   Rep. 

794),  765. 
Lockwood  V.  Exchange  Bank   (190 

U.    S.   294),   94,   112,   519,   521, 

522,  820,  892. 
Loder,  In  re   (4  Ben.  305),  352. 
Loder,  In  re   (4  Ben.  125),  393. 
Lodge  V.   Dicas    (3   B.  &  A.   611), 

316. 
Loeser  v.  Savings  Deposit  Bank  & 

Trust  Co.  (148  Fed.  Rep.  975), 

204,  568,  569,  591. 
Logan,  In  re  (102  Fed.  Rep.  876), 

793. 
Logan  V.  Goodwin   (101  Fed.  Rep. 

654),  932. 
London  Guaranty  &  Accident  Co, 
V.    Mossness     (108    ril.    App. 
440),   546,- 547. 
Long,    In   re    (7    Ben.    141),    311, 
315,  316,  317. 


1396 


Long,  In  re   (116 

519,    530. 
Long 


TABLE  OF  CASES. 
References  are  to  pages. 


Fed.  Rep.  113), 
U.  S.  617), 

(147 


Billiard    (117 

592,    611,   883. 
Long  V.  Farmers'  State  Bank 

Fed.  Rep.  360),  570,  918. 
Long   V.    Murphy    (27    Kan.    375), 

537. 
Longfield  v.  Minn.  Sav.  Bank   (95 

Minn.  54),  361,  835,  840. 
Longley    V.    Swayne     (4    Heis)k.,^ 

Tenn.,  506),  861. 
Lord,   Ex  parte    (16   Mees.   &  W. 

462),  640. 
Lord,  In  re  (3  N.  B.  R.  243),  638. 
Lord  V.  Hart  (118  Mass.  271),  462. 
Lord  V.  Veazie   (8  How.  251),  924. 
Loring      v.      Kendall       (1      Gray 

[Mass.],  305),  343,  364. 
Lott  V.  Young  (109  Fed.  Rep.  798), 

296. 
Loud  V.  Pierce    (25  Me.   233),   18. 
Louisville,    etc.,    Ry.    Co.    v.    Pope 

(74  Fed.  Rep.  1),  896. 
Louisville  Trust  Co.   v.  Comingor 

(181  U.   S.   620),  889,  892. 
Louisville  Trust  Co.   v.   Comingor 

(184  U.  S.  18),  32,  82,  83,  90, 

91,  100,  101,  102,  291,  618,  695, 

734,    869,    870,    873,    877,    902, 

904,  905. 
Lount,  In  re    (11   N.   B.   R.   315), 

409,  412. 
Love  V.   Export   Storage  Co.    (143 

Fed.    Rep.    1),    598,    601,    602, 

928. 
Low  V.  Durfee,   (5  Fed.  Rep.  256), 

100. 
Lowe,   In   re    (11   N.   B.   R.   221), 

312. 
Lowe,  In   re    (19   Fed.  Rep.   589), 

779. 
Lowenstein,  In  re   (106  Fed.  Rep. 

51),  680. 
Lowenstein   v. 

(130    Fed. 

Lowree,  In  re 
Lowry  v.  Morrison 

Y.,  327),  824. 
Lucas  V.  Morris   (1  Paine,  396),  7. 
Lucius,  In  re  (124  Fed.  Rep.  455), 

520,  521,  533. 
Lucious    V.    Cawtlion-Coleman    Co. 

(196  U.   S.   149),   894. 
Lucker   v.    Phoenix    Co.    (66    Fed. 

Rep.  161),  62. 
Luckhardt,   In   re    (101   Fed.   Rep. 

807),  170,  171. 


McShane  Mfg 
Rep.    1007), 


Co. 

228, 


(1 


Ben.   406),  403. 
(11  Paige,  N. 


Ludlow,  In  re   (1  N.  Y.  Leg.  Obs. 

332),  510. 
Ludwig  V.  Highley  (5  Pa.  St.  132), 

50L 
Luftig,  In  re   (15  Am.  B.  R.  773), 

686. 
Lukens,  In  re  (138  Fed.  Rep.  188), 

582,  592,   594,   596. 
Lumber  Co.  v.   Sawyer    (76  Minn. 

118),    31. 
Luxton    V.    North    River    Bridge 

(147  U.  S.  337),  887. 
Lyde  v.  Russell   (1  B.  &  Ad.  394), 

489. 
Lyell  V.  Goodwin   (4  McLean  29), 

246. 
Lyell  V.  Goodwin   (4  McLean  29), 

668. 
Lynch,  In  re  (101  Fed.  Rep.  579), 

515,  536. 
Lyon,  In  re   (121  Fed.  Rep.  723), 

354,  356,  387,  399,  573. 
Lyon  V.  Bertram    (20   How,   149), 

431. 
Lyon    V.    Clark    (129    Mich.    381), 

473,  556,  562,  563,  565,  618. 
Lyon    V.    Isett,    (34    N.    Y.    Supp. 

41),  860. 
Lyons,   In   re    (2    Saw.    524),    174. 

M 

McAdoo  V.  Lumis    (43  Tex.   227), 

847. 
McAlpine  v.   Tourtelotte    (24  Fed. 

Rep.  69),  866. 
McArdle,    In    re    (126    Fed.    Rep. 

442),  495. 
McBachron,  In  re   (116  Fed.  Rep. 

783),  806. 
McBride,  In  re  (19  N.  B..  R.  452), 

782. 
McBride   &   Co.,  In   re    (132   Fed. 

Rep.  285),  101.  462,  464. 
McBrien,  In  re  (2  Ben.  513),  633. 
McBrien,  In  re   (3  Ben.  481),  462. 
McBryde,    In    re     (99    Fed.    Rep. 

686),  347,  350,  383,  535. 
McCall,  In  re  (145  Fed.  Rep.  898), 

919,   920. 
McCallum,   In   re    (113    Fed.   Rep. 

393),  86. 
McCance  v.  Taylor   (10  Grat.,  Va., 

580),  823. 
McCarthy  v.  Goodwin  (8  Mo.  App. 

380),  350. 
McCartney,  7n  re    (109  Fed.  Rep. 

G29),  545,  550. 


TABLE  OF  CASES. 
References  are  to  pages. 


1397 


MeCarty,    In    re    (111    Fed.    Rep. 

151),  SOO. 
McCauley,   In   re    (101    Fed.    Rep. 

223,  347. 
McCbnnell,  In  re  (9  N.  B.  R.  387), 

405,  744. 
McConnell,  In  re  (9  N.  B.  R.  387), 

767. 
McCormick,   In   re    (97   Fed.  Rep. 

566),  144. 
McCormick  v.  Pickering   (4  N.  Y. 

276),  18. 
McCormick    Harvesting    Machine 

Co.  V.  Aultman   (69  Fed.  Rep. 

371),  896. 
McClaskey  v.  Barr   (45  Fed.  Rep. 

151),  248. 
McClellan  v.  Pyeatt  (50  Fed.  Rep. 

686),  929. 
McCluslvy  V.  McNeely  (8  111.  578), 

527. 
McCracken  &  McLeod,  In  re   (129 

Fed.  Rep.  621),  160,  273. 
McCullough    V.    Caldwell    (5    Ark. 

237),  823. 
McCutchen,  In  re   (100  Fed.  Rep. 

779),   515,   535. 
McDaniel  v.  Stroud  (106  Fed.  Rep. 

486),  312,  916,  925. 
McDonald,  In  re    (24   Pitts.   L.   J. 

42),  850. 
McDonald,   In   re    (138    Fed.   Rep. 

463),  446,  454. 
McDonald    v.    Daskam    (116    Fed. 

Rep.   276),   598,   600,   605,   607. 
McDonald    v.    Davis     (105    N.    Y. 

508),  836. 
McDonald  v.   Ingraham    (30  Miss. 

389),  351. 
MacDonald     v.     Tefft-Welter     Co. 

(128  Fed.  Rep.  381),  174. 
McDonnell,  In   re    (101   Fed.  Rep. 

239),  463,  499,  506. 
McDougald  v.  Reid    (5  Ala.   810), 

861. 
McDowell    V.  Adams,     (45    Pa.  St. 

432),  130,  2J29. 
McDowell   V.   United    States    (159 

U.    S.    596),    128. 
McEwen,  In  re   (6  Biss.  294),  308, 

309,  311,  314. 
McFadden,  In  re  (3  N.  B.  R.  104), 

418. 
McFarlan  Carriage  Co.  v.  Solanas 

(106  Fed.  Rep.  145),  123,  124. 
McFarlan,  In  re  (10  N.  B.  R.  301), 

297. 
McFarland    v.    CJoodman    (6    Biss. 

Ill),   529,   532,   471,   482. 


McFarland  Carriage  Co.  v.  Solanus 

(108  Fed.  Rep.  532),  430,  487, 

488. 
McFaiin,  In  re-  (96  Fed.  Rep.  592), 

295,  319. 
McGahan   v.    Andei-son    (113    Fed. 

Rep.  115),  520,  528,  916. 
McGee,  In  re  (105  Fed.  Rep.  895), 

193. 
McGehee   v.    Hentz    (19   N.    B.   R. 

136),   725. 
McGill,  In  re   (106  Fed.  Rep.  57), 

135,   330,   332,   415,   906. 
McGilton,  In  re  (3  Biss.  144).  746. 
M'Gowan  v.  Knittel  (137  Fed.  Rep. 

453),  277. 
McGrath,  In  re  (5  Ben.  183),  484. 
McGregor  v.   Balch    (14   Vt.   428), 

129. 
McGurn,    In    re     (102    Fed.    Rep. 

743),  679. 
McHarry,    In    re    (111    Fed.    Rep. 

498),  480. 
McHenry    v.    Alford     (168    U.    S. 

851),  897. 
McHenry  v.  La  Societe  Francaise 

(95  U.  S.  58),  611,  615. 
Mclntire,  In  re  (2  Ben.  345),  863, 

864. 
Mclntire,    In    re    (132    Fed.    Rep. 

295),  317. 
Mcintosh,  In  re  (2  N.  B.  R.  506), 

403. 
Mcintosh   V.   Trotter    (3  M.   &  W. 

184),  489. 
Mclver   v.    Wilson    (1    Cranch,    C. 

C.  423),  379. 
McKay  v.  Funk   (37  la.  661),  747. 
McKenna,  In  re  (9  Fed.  Rep.  27), 

442,  480,  481,  525. 
McKenna,    In    re    (137    Fed.    Rep. 

Gil),   162,  434,   507. 
McKenna   v.    Simpson    (129   U.    S. 

506),  882. 
McKenney    v.    Cheney     (118    Ga. 

387),  527,  544,  830. 
McKensey    v.    Harding    (4    N.    B. 

R.   38),   349. 
McKenzie,    In   re    (132    Fed.   Rep. 

986),  482. 
McKenzie.    In   re    (142    Fed.    Rep. 

383),  869,  880. 
McKercher  v.  Pettigrew    (8  N.  B. 

R.  409),  513. 
McKey  v.  Lee  (105  Fed.  Rep.  923), 

398,  413. 
McKev   V.    Smith    (105   Fed.    Rep. 

899),  103. 


139$ 


TABLE   OF   CASES. 
References  are  to  pages. 


McKibben,  In  re  (12  N.  B.  R.  97), 

191,   238,    661,   662. 
McKinley,  In  re  (7  Ben.  562),  279, 

281, 
McKinney,    In   re    (15    Fed.   Rep. 

912),  383. 
McKinney    v.    Reader     (6    Watts. 

34),  527. 
McKinsey  v.  Harding   (4  N.  B,  R. 

38),  393. 
McLam,  In  re  (97  Fed.  Rep.  922), 

476,   572,  585,  732. 
McLaren,    In    re    (125    Fed.    Rep. 

835),  279,  296. 
McLaughlin    v.    Swann    (18    How. 

217),  783. 
McLean,  In  re   (15  N.  B.  R.  333), 

314. 
McLean    v.    Johnson    (3    McLean, 

202),  29. 
McLean  v.  Lafayette  Bank   (3  Mc- 
Lean,  185),   746. 
McLean   v.    Mayo    (113    Fed.   Rep. 

106),    112,    418,    422,    441. 
McLean     v.     Meline     (3     McLean, 

199),  29. 
McMahon,    In   re    (147    Fed.    Rep. 
685),    78,    80,    86,    88,    89,    93, 
455,    742,    749,    878,    904. 
McMenomy    v.    Murray    (3    Johns. 

Chan.  N.  Y.  435),  824,  826. 
McMillan    v.    McNeill     (4    Wheat. 

209),  22,  827. 
McMinn    v.    Graves    (68   Ala.    21), 

848. 
McMullen    v.    Bank    of    Penn.     (2 

Penn.  St.  243),  337,  355. 
McMurtrey   &    Smith,    In   re    (142 

Fed.    Rep.    853),    297. 
McNamara  v.  Helena  Coal  Co.    (5 

Am.  B.  R.  48),  178. 
McNair.  In  re    (2   N.   B.   R.   219), 

634. 
McNair,  In  re    (2   N.   B.  R.   343), 

395,  404. 
McNair    v.    Mclntyre     (113    Fed. 
Rep.   113);   588.   589,   613,   748, 
756,   766,  744,   775. 
McNeil  V.  Knott  (11  Ga.  142),  352, 

859. 
MacNichol  Constructing  Co.,  In  re 

(134  Fed.  Rep.  979),  177. 
McNulty    V.    Feingold     (129    Fed. 
Rep.   1001),   99,   613,   616.   618. 
McNulty  V.  Wiesen  (130  Fed.  Rep. 

1012),    477,    624,    625. 
McVav,  In  re   (13  Fed.  Rep.  443), 
375. 


McVey,   In   re    (2    N.    B.   R.    257), 

794,  796,  815. 
MacCallum    &    MacCullum,    In    re 

(127  Fed.  Rep.  768),  390,  404. 
Macdonald  v.  Moore  (8  Ben.  579), 

27. 
Mace  V.  Wells   (7  How.  272),  354, 

355. 
Macey  v.  Jordan    (2  Den.   [N.  Y.] 

570),  339,  834. 
Machin,  In  re  (128  Fed.  Rep.  315), 

331. 
Macintire,  In  re  (1  Ben.  277),  633. 
Mack    V.    Winslow    (59    Fed.    Rep. 

316),  118. 
Mackel    v.    Rochester     (102    Fed. 

Rep.  314),  643. 
Mackel    v.    Rochester     (135    Fed. 

Rep.  904),  112,  842,  844. 
Mackellar,   In    re    (116   Fed.    Rep. 

547),    135,   136,   330,   331,   332, 

415,   416. 
Mackenzie,  In   re    (132   Fed.   Rep. 

114),  805. 
Mackey,  In  re  (110  Fed.  Rep.  355), 

170,  171,  234,  262,  265. 
Mackey  v.  Pattendon   (30  L.  J.  Q. 

B.   225),  486. 
Mackin  v.  United   States    (117  U. 

S.   348),   689. 
Maclean,  Ex  parte   (2  Mont.  D.  & 

D.  564),  351. 
Macon   Sash   Door  &  Lumber  Co., 

In   re    (7   Am.   B.   R.   66),  27, 

28,  30. 
Madison  v.  Dunkle  (114  Ind.  262), 

847,   848. 
Magann    v.    Segal    (92    Fed.    Rep. 

252),  754. 
Magid-Hope   Silk   Mfg.   Co.,  In   re 

(110  Fed.  Rep.  352),  234. 
Magie,  In  re   (2  Ben.  269),  209. 
Magoon  v.  Warfield  (3  Greene,  la., 

293),  840. 
Maker,  In  re   (not  reported),  140, 

253. 
Maher,  In  re  (144  Fed.  Rep.  503), 

466,   476,   812,   821. 
Mahler,  In  re  (105  Fed.  Rep.  428), 

366. 
Mahoney  v.  Ward    (100  Fed.  Rep. 

278),  212,  213,  236,  295. 
Majestic.  The   (69  Fed.  Rep.  844), 

896. 
Malcolm.  In  re  (4  Law  Rep.  488), 

212),  215. 
Malino,  In  re  (118  Fpd.  Rep.  368), 
135.   323,   324,   326,   330,  415. 


TABLE   OF  CASES. 


1399 


References  are  to  pages. 


Mall  V.  Ullrich  (37  Fed.  Rep.  653), 

863. 
Mallin  v.  Wenham    (209  111.  252), 

830. 
Mallory,  In  re    (1   Saw.   88),   106. 
Mallory,  In  re    (4   N.   B,.  R.  153), 

417.    425,    426. 
Mallory  Alfg.  Co.  v.  Fox   (20  Fed. 

Rep.    409),    100. 
Mammoth  Pine  Lumber  Co.,  In  re 

(109  Fed.  Rep.  308),  261. 
Mammoth  Pine  Lumber  Co.,  In  re 

(116  Fed.  Rep.  731),  150,  151, 

432,  774. 
Mandel,  In  re  (127  Fed.  Rep.  863), 

557,    559,    625. 
Mangan,    In    re     (133    Fed.    Rep. 

1000),  330,  415. 
Manhattan  Ice  Co.,  In  re  (114  Fed. 

Rep.   400),  269. 
Manhattan  Ice  Co.,  In  re  (116  Fed. 

Rep.  604),  225,  337. 
Manning.    In    re    (10    Am.    B.    R. 

497),  32. 
Manning,  In  re  (44  Fed.  Rep.  275), 

698,  669.  670. 
Manning,    In    re    (112    Fed.    Rep. 

948),  513,  526,  534. 
Manning,    In    re    (123    Fed.    Rep. 

180),  536,  586. 
Manning,  In   re    (139   U.    S.   504), 

128. 
Mansfield,  In  re  (6  N.  B.  R.  388), 

350. 
Mansfield,    etc..    R.    Co.    v.    Swan 

(111  U.   S.  379),  947,  948. 
Manufacturers'    Nat.   Bank,   In   re 

(5  Biss.  299),  170. 
Manwarring    v.    Kouns     (35    Tex. 

171),  859,  861. 
Maples,  In  re  (105  Fed.  Rep.  919), 

168,    206,    222,    348,    792,    835, 

838. 
Marcer,   In   re    (6   N.   B.   R.   351), 

227. 
March    v.    Heaton    (1    Low.    278), 

125,   436. 
Marcus,  In  re  (104  Fed.  Rep.  331), 

360. 
Marcus,  In  re  (105  Fed.  Rep.  907), 

656,    657,    659,    660,    668. 
Marine    Const.    &    Dry    Dock    Co., 

In  .re    (130    Fed.    Rep.    446), 

177. 
Marine   Machine   &  Conveyor   Co., 

In  re  (91  Fed.  Rep.  630),  203, 

234,  235. 
Marine,  etc.,  Dock  Co.,  In  re  (144 

Fed.  Rep.   649),  590,  593,  597. 


Marionneaux's     Case      (1     Woods, 

37),  865. 
Marks,   In   re    (2    N.    B.    R.    575), 

261. 
Marks  v.   Barker    (1  Wash.  C.   C. 

178),   7,  372,  373. 
Markson  v.  Heaney   (1  Dill.  497), 

746. 
Markson  v.  Hobson   (2  Dill.  327), 

565. 
Markson  v.  Hughes   (1  Dill.  497), 

106. 
Marlin,    Ex   parte    (2    Bro.    C.    C. 

15),   307. 
Maroin,   In   re    (1   Dill.   178),   270. 
Marrett  v.  Atterbury  (3  Dill.  444), 

412. 
Marrett  v.   Murphy    (11  N.   B.   R. 

131),  310. 
Marsh    v.    Armstrong    (20    Minn. 

81),  261,  470. 
Marsh  v.   Putnam    (3   Gray,  551), 

22. 
Marshal  v.  Tray  (74  111.  379),  855. 
Marshall  v.  Knox   (16  Wall.  551), 

90,  97,  100,  124,  125,  617,  627. 
Marshall    Paper    Co.,    In    re    (102 

Fed.  Rep.  872),  113,  494,  800, 

821,   824,   828,   854,   914. 
Marshall    Field    &   Co.   v.   Wolf   & 

Bro.  Dry  Goods  Co.   (120  Fed. 

Rep.  815),  728,  914,  925,  928. 
Marston    v.    Stickney     (55    N.    H. 

383),  609. 
Martin,    Ex    parte    (5    Law    Rep. 

158),  104,  617. 
Martin,    In    re    (2    Hughes,    418), 

523. 
Martin,  In  re  (105  Fed.  Rep.  753), 

851. 
Martin    v.    Berry    (37    Cal.    208), 

20,  23,  24,  26,  27. 
Martin  v.  Bigelow    (7   Am.   B.   R. 

218),   621,   623. 
IMartin   v.   Bigelow    (36   Misc.    [N. 

Y.]   298),  557. 
Martin    v.    Nightingale     (3    Bing. 

421),  178. 
Martin-Vernon    Music    Co.,    In    re 

(132  Fed.  Rep.  983),  446,  448. 
Marvin,  In  re  (1  Dill.  178),  173. 
Marwick,  In  re  (2  Ware,  233),  309. 
Marx,  In  re   (102  Fed.  Rep.  676), 

684,   803,   805. 
Marx  V.  Hart   (166  Mo.  503),  823, 

851. 
Mason,  In  re   (99  Fed.  Rep.  256), 

210,   211,   219,   266,   802. 


1400 


TABLE   OF   CASES. 
References  are  to  pages. 


Mason    v.    Beebe     (44    Fed.    Rep. 

558),  479. 
Mason  v.  Bogg  (2  Myl.  &  Cr.  44G), 

612. 
Mason  v.  Hartford  P.  &  F.  R.  Co. 

(19  Fed.  Rep.  53),  97,  104. 
Mason  v.  Hughart  (9  B.  Mon.,  Ky., 

480),    857. 
Mason  v.  Pewabic  Co.    (153  U.   S. 

3G1),  950. 
Masterson   v.    Herndon    (10   Wall. 

416),  926. 
Mather  v.  Coe  (92  Fed.  Rep.  333), 

239,  268. 
Mathews    Consolidated    Slate    Co., 

In    re    (144    Fed.    Rep.    724), 

180    235 
Matson!  In  re  (123  Fed.  Rep.  743), 

170. 
Matthews,    In    re    (97    Fed.    Rep. 

772),  161. 
Matthews,   In   re    (109    Fed.    Rep. 

603),  737,   740,   742,  743,  74G. 
Matthews,    In   re    (132    Fed.    Rep. 

274)     353 
Matthews  v.  Abbott  (2  Hask.  289), 

357. 
Matthews  v.  Puffer   (10  Fed.  Rep. 

606),  246. 
Matthews  v.  Tuffts  (87  N.  Y.  568), 

246. 
Mattocks  V:  Lovering  (3  Fed.  Rep. 

212),    378,    379. 
Mattocks  V.  Rogers  (1  Hask.  547), 

311. 
Mattoon  Nat.  Bank  v.  First  Nat. 

Bank     (102    Fed.    Rep.    728), 

262,   265,   274. 
Mattot,  In  re    (16  N.  B.  R.  485), 

195,    575. 
Maundrell,  Ex  parte  (2  Mad.  315), 

487. 
Mawson,  In  re   (1  N.  B.  R.  271), 

629. 
Maxim    v.    Morse    (8    Mass.    127), 

855,  858. 
Maxwell  v.  McCune  (37  Tex.  515), 

521,  526. 
May,  In  re  (2  Cin.  Law  Bui.  152), 

523    524. 
May,  In  re  (17  N.  B.  R.  192),  316. 
May,  In  re  (19  N.  B.  R.  101),  314. 
May,    In    re    (1    Fed.    Rep.    743), 

702. 
Maybin  v.  Raymond    (15  N.  B.  R. 

353),  865. 
Mayer,  7n  re   (98  Fed.  Rep.  839), 
144,  702. 


Mayer,  In  re  (101  Fed.  Rep.  695), 

161,   162,   165. 
Mayer,  In  re  (101  Fed.  Rep.  227), 

777. 
Mayer,  In  re  (108  Fed.  Rep.  599), 

442,   519,   520. 
Mayer  v.  Hellman   (91  U.  S.  502), 

25,  2G,  29,  30,  200,  567. 
Mayer     v.     Herman     (10     Blatch. 

256),   564,   565. 
Mayor  v.  Ketchum  (67  How.  Prac, 

N.   Y.,   161),   365. 
Mays   V.    Fritton    (20   Wall.    414), 

472,  552,  746. 
Mays    V.    Nat.    Bank    (64    Pa.    St. 

74),  50G. 
Mead  v.  National  Bank  (6  Blatch. 

180),  31.5. 
Mechanics'    Bank    v.    Hazard     (9 

Johns.   N.   Y.,   392),   836. 
Medbury  v.  Swan   (46  N.  Y.  200), 

860. 
Medley,  Petitioner  (134  U.  S.  160), 

689. 
Melick,    In    re    (4    N.    B.    R.    97), 

266,   292. 
Mellen,  In  re   (97  Fed.  Rep.  326), 

628,   643. 
Memphis  v.  Brown  (94  U.  S.  715), 

932. 
Mencke  v.  Rosenberg  (202  Pa.  St. 

131),  548,  549. 
Mendenhall    v.    Hall     (134    U.    S. 

559),   933. 
Mendelsohn,  In  re    (3   Saw.   342), 

200. 
Mendelsohn,  In  re  (102  Fed.  Rep. 

119),  681,  805,  806. 
Mercantile    Agency,    In    re     (111 

Fed.  Rep.  152),  156. 
Mercur,  In  re   (95  Fed.  Rep.  634), 

224,    241,    2G1,    262,    284,    286. 

295. 
Mercur,  In  re  (122  Fed,  Rep.  384), 

294,   799. 
Merchants'  Bank  v.  Cole  (150  Fed. 

Rep.  ).  943. 

Merchants'  Bank  v.  Comstock   (55 

N.  Y.  24),  397. 
Merchants'  Bank  v.  Thomas    (121 

Fed.    Rep.    306),    345,    346. 
Merchants'  Ins.  Co.,  In  re  (3  Biss. 

162),  181,  195,  198,  575. 
Merchants'  Ins.  Co.,  In  re  (6  Biss. 

252),   335,   786. 
Merchants'    Ins.    Co.    v.    Buckner 

(98  Fed.  Rep.  222),  919. 
Merchants'  Nat.  Bank  v.  Cook  (95 

U.    S.    342),    552,    579. 


lABLE  OF  CASES. 
References  are  to  pages. 


14(J1 


Meriwether,  In  re   (107  Fed.  Rep. 

102),    513,   514,    538. 
Mero,  In  re    (128  Fed.  Rep.  G30), 

199,  238,  54G. 
Merrick,  In  re   (7  N.  B.  R.  459), 

391,  403. 
Merrick's    Estate    (5    Watts    &    S. 

Pa.   9),   1G9. 
Merrell,  In  re  (19  Fed.  Rep.  874), 

338. 
Merrill   v.   Nat.    Bank    (173   U.    S. 

131),  494. 
Merritt,  In  re   (7  Fed.  Rep.  853), 

178. 
Merrow,  In  re  (131  Fed.  Rep.  993), 

551. 
Mertens,    In    re     (131    Fed.    Rep. 

507),  107,  120. 
Mertens,  In  re  (131  Fed.  Rep.  972), 

499. 
Mertens,    In    re     (142    Fed.    Rep. 

445),  8G9. 
Mertens,    In    re     (144    Fed.    Rep. 

818),   396,  397,  436,  604,   611. 
Mertens,    In    re     (147    Fed.    Rep. 

177),    390. 
Messengill,  In  re    (113   Fed.   Rep. 

3GG),  323. 
Metcalf  V.  Barker  (187  U.  S.  1G5), 

31,,112,  114,  115,  IIG,  119,  428, 

439,    469,    542,   545,   546,   547, 

605,  876. 
Metcalf    V.    Officer    (5    Dill.    565), 

302. 
Metcalf  V.  Watertown    (128  U.   S. 

586).  939. 
Metropolitan  Nat.  Bank  v.  Rogers 

(53   Fed.   Rep.   77G),   4G9. 
Meurer,  In  re  (144  Fed.  Rep.  445), 

798. 
Mexican    Ore   Co.   v.    Mexican   Co, 

(47   Fed.   Rep.   353),   703. 
Meyer,   In   re    (2    N.    B.    R.    422), 

566. 
Meyer,  In  re   (97  Fed.  Rep.  757), 

295,   301,   306,   318. 
Meyer,  In  re   (98  Fed.  Rep.  976), 

262,    265,    292,    299,    300,    303, 

305,    306,    318,    320,    913,    925. 
Meyer,  In  re  (115  Fed.  Rep.  997), 

399,   574. 
Meyer,  In  re  Henry  L.    (106  Fed. 

Rep.  828),  373. 
Meyer,  In  re  Henry  L.    (107  Fed. 

Rep.  86),  373. 
Meyer  v.  Pritchard  (23  Law  Coop. 

S.  C.  R.  9G1),  924. 
Meyer    Drug  Co.    v.    Pipkin    Drug 


Co.    (136  Fed.  Rep.  396),  569, 

590,  591,  907. 
Meyers,  In  re    (2   Ben.  424),   469, 

G14. 
Meyers,  In  re  (96  Fed.  Rep.  408), 

295,   319. 
Meyers,  In  re  (99  Fed.  Rep.  691), 

373. 
Meyers,  In  re  (105  Fed.  Rep.  353), 

G80,   806,   924,   938. 
Meyers  v.  Farrell    (47  Miss.  283), 

662. 
Meyers    v.    Josephson     (124    Fed 

Rep.  734),  443,  495. 
Meymot,   Ex  parte    (1   Atk.    196) 

178. 
Michaels  v.   Post    (21   Wall.   398), 

279,  472. 
Michel,  In  re   (95  Fed.  Rep.  803), 

161. 
Michie,  In  re  (116  Fed.  Rep.  749), 

83,  91,  102. 
Michigan  Bank  v.  Eldred    (143  U. 

S.   293),   918. 
Mifflin,   In   re    (1    Pa.    L.   J.   146), 

657. 
Miffin,  Ex  parte  (1  Pa.  L.  J.  146), 

6G4. 
Migel,  In  re  (2  N.  B.  R.  481),  656, 

664. 
Milgraum  &  Ost,  In  re   (129  Fed. 

Rep.  827),  797,  798. 
Milgraum  &  Ost,  In  re    (133  Fed. 

Rep.  802),  142. 
Miller,  In  re  (No.  9556  Fed  Cas.), 

313,  314. 
Miller,  In  re   (6  Biss.  30),  92. 
IMiller,  In  re    (1   N.   Y.   Leg.   Obs. 

180),  762. 
Miller,  In  re   (104  Fed.  Rep.  764), 

188,    225,    284,    2SG,    287. 
Miller,  In  re   (118  Fed.  Rep.  360), 

591,  592,  594. 
Miller,  In  re  (133  Fed.  Rep.  1017), 

676,   788. 
Miller,  In  re   (135  Fed.  Rep.  591), 

811. 
Miller  v.   Gillespie    (59   Mo.   220), 

854. 
Miller  v.  Keys    (3  N.  B.  R.   224), 

194. 
Miller    Electric    Maintenance    Co., 

In    re    (111    Fed.    Rep.    515), 

87. 
Miller  &  Brown,  In  re   (135  Fed. 

Rep.   868),  445,  446,   447,  449, 

451. 
Milligan,  Ex  parte   (4  Wall.  110), 

665. 


14U2 


TABLE  OF  CASES. 
References  are  to  pa.";es. 


Milne  v.  Moreton    (6  Binn.    [Pa.] 

353),  461. 
Milner    v.    Meek    (95    U.    S.    252), 

102,  927. 
Mills,  In  re    (7   Ben.   452),  335. 
Mills,  In  re  (11  N.  B.  R.  74),  308, 

314. 
Mills,  In  re   (95  Fed.  Rep.   269), 

309. 
Mills  V.  Bennett  (2  M.  &  S.  556), 

182,    299. 
Miner,  In  re  (104  Fed.  Rep.  520), 

227,  228,  237. 
Miner,  In  re   (114  Fed.  Rep.  998), 

682,  684. 
Miner  v.  Markham    (28  Fed.  Rep. 

387),  246. 
Mingo  Valley  Creamery  Assn.,  In 

re    (100   Fed.  Rep.   282),   204, 

241. 
Minon  v.  Van  Nostrand    (1  Low. 

458),   658. 
Mitchell,  In  re  (1  Am.  B.  R.  687), 

165.    • 
Mitchell,    In    re    (116    Fed.    Rep. 

87),  368. 
Mitchell,    In    re    (116    Fed.    Rep. 

87),   488,   541,   605,   779. 
Mitchell    V.    Mfg.    Co.     (2    Story, 

648),  19. 
Mitchell  V.  Marker    (62  Fed.  Rep. 

139),  929. 
Mitchell    V.    McClure    (178    U.    S. 

539),   83,   97,  102,   616,  875. 
Mitchell  V.  McKibben   (8  N.  B.  R. 

548),  125. 
Mitchell    V.    Singletary    (19    Ohio 

291),  840. 
Mitchell  V.  United  States  (21  Wall. 

352),  516. 
Moch  V.  National  Bank    (107  Fed. 

Rep.   897),   343. 
Mock  V.  Howell    (101  N.  C.  443), 

846. 
Moebius,    In    re     (116    Fed.    Rep. 

47),  383,  389. 
Moench,  In  re  (130  Fed.  Rep.  685), 

175,  176,  203. 
Moench   &    Sons    Co.,    In   re    (123 

Fed.  Rep.  965),  228,  229,  262, 

265. 
Hofht  V.  Cruise    (7  Cold.    [Tenn.] 

137),  429. 
Mohr  &  Sons  v.  Mattox    (120  Ga. 

962).  545. 
Moline,   Ex  parte    (19   Ves.    216), 

496. 
Monongahela  Bank  v.  Overholt  (96 

Pa.  St.  327),  509. 


Monroe,  In  re  (114  Fed  Rep.  398), 

839,  862. 
Monroe  v.  Dewey  (2  N.  B.  R.  840), 

481. 
Monroe  v.  Upton    (50  N.  Y.  593), 

830. 
Montgomery,  In  re   (3  Ben,  565), 

311,   404. 
Montgomery,   In   re    (3    N.    B..    R. 

430),   406. 
Montague,   In   re    (143    Fed.   Rep. 

428),  596. 
Montgomery    v.     McNichols     (138 

Fed.    Rep.    956),    626. 
Moody,  In  re  (131  Fed.  Rep.  525), 

80,  81,    87,    99,    254. 

Moody,  In  re  (134  Fed.  Rep.  628), 

476,  477,  578,  585. 
Mooney,   In   re    (14    Blatch.    204), 

640. 
Moore,  In  re   (5  Biss.  79),  301. 
Moore,  In  re   (104  Fed.  Rep.  8C9), 

81,  86,   101.   103,   115,   733. 
Moore,  In  re  (107  Fed.  Rep.  234), 

544,  550,  551. 
Moore,  In  re  (111  Fed.  Rep.  145), 

339,   347,   834. 
Moore  v.  Jones    (23  Vt.  739),  104, 

438,  509. 
Moore  v.   Stanwood    (98  111.  605), 

725. 
Moore  v.  Waller    (1  A.  K.  Marsh, 

[Ky.],    488),    850,   854. 
Morales,    In    re     (105    Fed.    Rep. 

761),  225,   269,  381. 
Moran    v.    King     (111    Fed.    Rep. 

730),   526. 
Morgan,  In  re  (101  Fed.  Rep.  982), 

681,  799,  805,   807. 
Morgan   v.   Bain    (L.  R.   10   C.   P. 

15),  508. 
Morgan  v.  Brundrett  (5  B.  &  Ad. 

296),  553. 
Morgan  y.   First  Nat.   Bank    (145 

Fed,  Rep.  466),  878,  903,  905. 
Morgan    v.    Mastick    (2    N.    B.    R. 

521),  195. 
Morgan    v.    Rhodes     (1    M.    &    K. 

435),  487. 
Morgan  v.  Thornhill  (11  Wall.  65), 

124,   125,  817. 
Morgan    v.    Wordell     (178    Mass. 

350),  342,  354,  356,  377. 
Morgan   County  v.   Allen    (103   U. 

S.  498),  375. 
Morgan's,    etc.,    R.    Co.    v.    Texas 

Cent.  Ry.  Co.   (137  U.  S.  171), 

78,  79,  456- 


TABLE  OF  CASES. 
References  are  to  pages. 


1403 


Morier,  Ex  parte   (12  Chan.  Div. 

491),   375. 
Morley  v.  Lake  Shore  Ry.  Co.  (146 

U.    S.    162),    514. 
Morris,    Ex   parte    (2    Low.    424), 

357. 
Morris,  In  re  (Crabbe,  70),  76. 
Morris,  In  re  (102  Fed.  Rep.  1004), 

176,   178,   179. 
Morris,  In  re  (115  Fed.  Rep.  591), 

165. 
Morris,  In  re  (125  Fed.  Rep.  841), 

IGl,  166. 
Morris  v.  Gilmer  (129  U.  S.  328), 

516. 
Morris  Arc  Lamp  Co.,  In  re    (10 

Am.   B.  R.   569,   493. 
Morrison,    In    re    (127    Fed.    Rep. 

186),  295,  319. 
Morrison  v.  Savage   (56  Md.  142), 

846. 
Morrison    v.    Woolson    (23    N.    H. 

11),  859. 
Morrow,  Ex  parte    (1   Low.   386), 

489. 
Morrow,  In  re   (2  Saw.  356),  356. 
Morrow,  In  re  (97  Fed.  Rep.  574), 

679. 
Morrow    &    Co.,    In   re    (134    Fed. 

Rep.    686),    380,    574. 
Moi-se,  In  re   (7  N.  B.  R.  56),  425, 

426. 
Morse,  In  re    (11  N.   B.  R.   482), 

312. 
Morse,   In  re    (13   N.   B.  R.   376), 

309. 
Morse    v.    Anderson     (150    U.    S. 

156),  919. 
Morse  v,  Cloyes   (11  Barb.,  N.  Y., 

100),  860. 
Morse    v.    Hovey    (1    Sandf.    Ch. 

187),  18. 
Morse   v.    Hovey    (7   N.    Y.    Chan. 

Rep.   186),   354,   355. 
Morse  v.   Lowell    (48   Mass.   152), 

848. 
Moi-se  v.  Presby    (25  N.   H.   299), 

840. 
Morss  V.  Sewing  Machine  Co.    (38 

Fed.  Rep.  482),  695. 
Morse  &  Rodgers  v.  Kaufman  (100 

Va.  218),  841,  842. 
Morss  V.   Franklin   Coal  Co.    (125 

Fed.  Rep.  998),  275. 
Morton,  In  re  (118  Fed.  Rep.  918), 

330,  415. 
Morton,  In  re  (118  Fed.  Rep.  908), 

761. 


Morton    Boarding    Stables,    In    re 

(108    Fed.   Rep.    791),    178. 
Mosby    V.    Steele    &    Metcalfe     (7 

Ala.    299),    506,   508. 
Moses  V.  Pond  (4  Am.  B.  R.  655), 

115),  294,  298. 
Mosier,  In  re  (112  Fed.  Rep.  138), 

481,   538. 
Moss,  In  re  (19  N.  B.  R.  132),  178. 
Moss    Nat.    Bank    v.    Arend     (143 

Fed.  Rep.  351),  201. 
Mott,  In  re  (9878  Fed.  Cas.),  754. 
Mott  v.   Wissler  Mining  Co.    (135 

Fed.  Rep.  697),  609. 
Moulton  V.  Coburn   (131  Fed.  Rep. 

201),  227,   228,   230. 
Mount   V.    Manhattan    Co.    (41    N. 

J.  Eq.  211),  279. 
Mowbray,    Ex   parte    (1.   J,    &   W. 

428),   496. 
Moyer,  In  re   (15  Fed.  Rep.  598), 

526. 
Moyer,  In  re   (93  Fed.  Rep.  188), 

198. 
Moyer  v.  Dewey    (103  U.   S.  301), 

469,   859,   614,   619. 
Mudd,  In  re   (105  Fed.  Rep.  348), 

797,  799. 
Mueller,    In    re     (135    Fed.    Rep. 

711),    77,    458,    460,    868,    871, 

877,  880,  901,  906,  919. 
Mueller  v.   Bruss    (112  Wis.  406), 

614,    618,    624. 
Mueller  v.  Nugent  (180  U.  S.  640) 

873,  889. 
Mueller  v.  Nugent    (184  U.   S.  1), 

81,  82,  85,  86,  91,  92  101,  115, 

120,  131,  436,  441,  442,  693,  694, 

698.    705,    733,    892,    902,    903, 

904,  905. 
Muhlhauser,  In  re  (121  Fed.  Rep. 

669),  735,  736,  741,  754. 
Mullee,  In  re  (7  Blatch.  23),  704. 
Mullen,  In  re  (101  Fed.  Rep.  413) 

466,  470,  477,  624. 
Muller,   In   re    (Deady,   513),   257, 

258,  261. 
Mulliner  v.  Florence  (3  Q.  B.  Div. 

484),   607. 
Muncie  Pulp  Co.,  In  re   (139  Fed. 

Rep.   546),  81,  83,   87,  91,  254. 
Mundle,  In  re  (139  Fed.  Rep.  691) 

456. 
Munn,  In  re  (3  Biss.  442),  195. 
Murdock,  In  re  (1  Low.  362),  387, 

792. 
Murray,    In    re    (14    Blatch.    43), 

863. 


1404 


TABLE  OF  CASES. 
References  are  to  pages. 


Murray,  In  re  (9G  Fed.  Rep.  600), 

249,   295,   300,   301,   302,   304. 
Murray  v.  DeRottenham    (6  John. 

Chan.  N.  Y.  52),  830. 
Murray    v.    Jones     (50    Ga.    109), 

470. 
Murray  v.  Murray  (2  Johns.  Chan. 

60),    292. 
Murray  v.  Riggs   (15  John.  N.  Y., 

571),  370. 
Murphy's  Case  (1  Shoaels,  8),  340. 
Murphy,  In  re    (10  N.  B.  R.   48), 

270. 
Murphy  v.  Crawford    (114  Pa.  St. 

496),  855. 
Murphy    v.    Manning    (134    Mass. 

488),    827. 
Murrill    v.    Neill     (8    How.    414), 

292. 
Muskoka  Lumber  Co.,  In  re   (127 

Fed.   Rep.    886),   389. 
Mussey,  In  re   (99  Fed.  Rep.  71), 

821,   828. 
Mutual   Mercantile   Agency,  In   re 

(111  Fed.  Rep.  152),  203. 
Myers,  In  re    (99   Fed.  Rep.  691), 

403. 
Myers,  In  re  (102  Fed.  Rep.  8G9), 

516. 
Myers  v.  Callaghan    (5  Fed.  Rep. 

726),  435. 
Myrick,  In  re    (3   N.   B.  R.   156), 

404. 

N 

Nachman,    In    re    (114    Fed.    Rep. 

995),  643, 
Nassau,  In  re  (140  Fed.  Rep.  912), 

564. 
Nassau    v.    Parker     (2    Penu.    L. 

Jour.  298),  340,  835. 
Nashua  &  Lowell  R.  Corp.  v.  Bos- 
ton &  Lowell  R.  Corp.  (61  Fed. 

Rep.  237),  937,  941. 
Nashua  &  Lowell  R.  R.  v.  Boston 

&  Lowell  R.  R.   (51  Fed.  Rep. 

929),  950. 
Nathan.  In  re  (92  Fed.  Rep.  590), 

110,  111. 
National  Bank  v.  Gish's  Assignee 

(72  Penn.  13),  438. 
Nat.  Bank  v.  Hobbs  (118  Fed.  Rep. 

626),  545. 
Nat.   Bank  v.   Insurance   Co.    (104 

U.  S.  54),  501,  502,  504. 
National  Bank  v.  Warren    (96  U. 

S.  539),  552. 
Nat.   Bank   v.    Sprague    (20   N.    J. 

Eq.  13),  309. 


Nat.    Bank    v.    Taylor    (120   Mass. 

124),   859,   860. 
Nat.  Ex.  Bank  v.  Moore   (2  Bond, 

170),   358. 
National   Deposit  Bank,  Ex  parte 

(26  W.  R.  624),  179. 
Nat.  Distilling  Co.  v.  Seidel  (Wis.) 

79  N.  W.  R.  744),  428. 
Nat.     Mercantile    Agency,     In    re 

(128  Fed.  Rep.   639),  254. 
National      Mercantile     Bank     Ex 

parte   (16  Ch.  Div.  104),  489. 
National  Hotel  &  Cafe  Co.,  In  re 

(138  Fed.  Rep.  947),  199,  204, 

241. 
National    Nickel    Co.    v.    Nevada 

Nickel     Syndicate     (112    Fed. 

Rep.  44),  751. 
National    Valve    Co.,    In    re    (140 

Fed.  Rep.  679),  590. 
Nations  v.  Johnson  (24  How.  195), 

934. 
Neal  V.' Clark  (95  U.  S.  704),  883. 
Neasmith,   In   re    (147    Fed.    Rep. 

160),    188,    269,    275,    276,   917. 
Neely,  In  re   (108  Fed.  Rep.  371), 

120,  360,  427,  430,  775. 
Neely,  In  re   (113  Fed.  Rep.  210), 

90.5. 
Neely,  In  re   (134  Fed.  Rep.  '667), 

813. 
Negley,  In  re   (20  Fed.  Rep.  499), 

726. 
Neilson,  In  re    (7  N.  B.   R.   505), 

280. 
Neiman,  In  re  (109  Fed.  Rep.  113), 

386. 
Neimann,    In    re    (124    Fed.    Rep. 

738),  495. 
Nelson,  In  re    (98  Fed.  Rep.   76), 

211.  198,  238,  239,  284,  287. 
Nelson  v.  Garland    (1  How.   265), 

10. 
Neustadter  v.  Dry  Goods  Co.    (96 

Fed.  Rep.   830),  265,  288. 
New,  In  re    (116   Fed.  Rep.  116), 

573. 
New  Amsterdam  Fire  Ins.  Co.,  In 

re   (6  Ben.  368),  198. 
New   Bedford    Institution   v.   Fair 

Haven   Bank    (9   Allen,  Mass. 

178),  357,  405. 
New  Brunswick  Carpet  Co.,  In  re 

(4  Fed.  Rep.  514),  346,  351. 
New    England    Piano    Co.,    In    re 

(122  Fed.  Rep.  937),  80,  85,  88. 
New   England  R.   Co.  v.  Carnegie 

Steel   Co.    (75   Fed.   Rep.    54), 

948. 


TABLE  OF  CASES. 


1405 


References  are  to  pages. 


New  England  R.  Co.  v.  Hyde  (101 

Fed.  Rep.  397).  932. 
Newhall,  Ex  parte   {2  Story,  3G0), 

490,  50G. 
New  Jersey  v.  Anderson    (203   U. 

S.  483,  364,  423,  7G8,  709. 
Nev/land,  In  re  (6  Ben.  342),  397. 
Newman,  In  re    (3  Ben.  20),   177. 
New  Orleans  v.  Steamship  Co.  (20 

Wall.  393),  698. 
New  Orleans  Ins.  Co.  v.  Albro  Co. 

(112  U.  S.  50G),  931. 
New  Orleans,  etc.,  R.  Co.  v.  Dela- 

more  (114  U.  S.  506),  27,  180. 
New  Quebrada  Co.  v.  Carr    (4   L. 

R.  C.  P.  651),  369. 
Newton,  In  re  (107  Fed.  Rep.  429), 

88,  416,  786. 
New  York  Bldg.  &  L.  Banking  Co., 

In  re  (127  Fed.  Rep.  471),  176, 

178. 
New  York  Car  Wheel  Wks.,  In  re 

(132  Fed.  Rep.  203),  82,  90. 
N.  Y.  County  Bank  v.  Massey  (192 

U.   S.  138),  374.   578. 
New    York    Economical    Printing 

Co.,  In  re  (110  Fed.  Rep.  514), 

439,    440,    491,    582,    590,    592, 

594,   606. 
New  York  &  N.  J.   Ice  Lines  Co., 

In  re  (147  Fed.  Rep.  214),  177. 
New  York  &  W.  Water  Co.,  In  re 

(98   Fed.  Rep.   711),  176,  178, 

179,  180. 
Niagara    Contracting    Co.,    In    re 

(127   Fed.   Rep.    782),   177. 
Nice  &  Schreiber,  In  re   (123  Fed. 

Rep.  987),  135,  136,  331. 
Nichol  V.  Levy  (5  Wall.  433),  479, 

505. 
Nicholas,    In    re    (122    Fed.    Rep. 

299),  605. 
Nicholos  V.  Murray   (5  Saw.  320), 

383. 
Nichols   V.   Bellows    (22   Vt.   581), 

438. 
Nichols  V.  Eaton    (91  U.   S.   716), 

439,  480,  505. 
Nichols    V.    Nixey    (29    L.    R.    Ch. 

Div.  1005),  405. 
Nicholson  v.  Gouthit  (2  H.  Black, 

609),  496. 
Nickodemus,    In    re    (3    N.    B.    R. 

230),   266. 
Nisbit    V.    Macon    Bank    &    T.    Co. 

(12   Fed.   Rep.   686),   564,   571. 

599,  600. 
Nisbit  V.  Quinn  (7  Fed.  Rep.  760), 

579. 


Noel,  In  re    (137  Fed.  Rep.   694), 

568,  586,  597,  614,  61G,  621. 
Noesen,  In  re  (6  Biss.  443),  383. 
Noonan,  In  re   (3  Biss.  491),  297. 
Noonan,  In  re   (10  N.  B.  R.  330), 

318,   324. 
Noonan   v.   Chester  Park  Athletic 

Co.   (93  Fed.  Rep.  576),  923. 
Noonan    v.    Orton    (34   Wis.    259), 

512. 
Norcross    v.    Mercantile    Co.     (101 

Fed.  Rep.  79G),  919,  922. 
Norfolk  Q.  W.  Ry.  Co.  v.  Graham 

(145  Fed.  Rep.  809),  378,  390. 
Norris,   In   re    (2   Hask.   19),   312, 

316. 
Norris  Case  (4  N.  B.  R.  35),  33. 
Norris  v.  Beach   (2  Johns.  [N.  Y.] 

294),   246. 
Norris   v.    Hassler    (23    Fed.   Rep. 

581),   693. 
Norton,   In  re    (6  N.   B.   R.   297), 

329. 
Norton    v.    Billings    (4    Fed.    Rep. 

623),  579. 
Norton  v.  Switzer   (93  U.  S.  355), 

427,  428. 
Norton  v.  Walker  (3  Ex.  480),  668. 
Noj-wood,  Ex  parte   (3  Biss.  504), 

oS7. 
North  V.  House   (6  N.  B.  R.  365), 

566. 
North  V.   Taylor    (70  N.  Y.   Supp. 

339),   556. 
North  Carolina  Car  Co.,  In  re  (127 

Fed.  Rep.   178),  777. 
Northern  Iron  Co.,  In  re  (14  N.  B. 

R.   356),   323,  327,  406. 
Novak,  In  re  (101  Fed.  Rep.  800), 

224,  237. 
Novak,  In  re  (111  Fed.  Rep.  161), 

480. 
Nowlan,  Ex  parte  (2  Durn.  &  East, 

58),  640. 
Noyes  Bros.,  In  re  (127  Fed.  Rep. 

286),  356. 
Nudd  V.  Burrows    (91  U.  S.  426), 

579. 
Nugent  V.  Boyd   (3  How.  426),  10. 
Nye,  In  re  (133  Fed.  Rep.  33),  527. 


Oakey  v.   Bennett    (11   How.   33), 

437,  461,  480,  654. 
Oakley   v.    Gardiner    (2    La.   Ann. 

1005),  443. 
Gates  V.  Parish  (47  Ala.  157),  862. 


1406 


TABLE  OF  CASEK. 
References  are  to  pages. 


O'Brien,  7?^  re    (1  N.  B.  R.   17G), 

174. 
O'Brien  v.  Weld  (92  U.  S.  81),  883. 
Ocean  Nat.  Bank  v.  Olcott  (46  N. 

Y.  12),  8C2. 
Oconee    Milling    Co.,    In    re    (109 

Fed.  Rep.  86G),  744. 
O'Connell,  In  re  (98  Fed.  Rep.  83), 

161. 
O'Connell,    In   re    (137    Fed.    Rep. 

838),  786,  908,  .909. 
O'Connei,    In    re    (114    Fed.    Rep. 

777),  452,  843. 
Oderkirlv,    In    re    (103    Fed.    Rep. 

779)    321 
Odell,  In  re    (9  Ben.  209),  178. 
Odell,  In  re   (9  Ben.  247),  709. 
O'Dell    V.    Boyden    (148    U.    S.— ), 

120,  440,  441,  881. 
Odell    V.    Wootten    (38    Ga.    224), 

850,  853. 
O'Donnell,   In   re    (131    Fed.   Rep. 

150),  195. 
O'Donnell  v.  Segar  (25  Mich.  3G6), 

537. 
O'Donohoe,  In  re  (3  N.  B.  R.  245), 

646. 
O'Dowd  V.  Russell  (14  Wall.  404), 

926. 
Odwin  V.  Forbes    (Buck.  57),  825. 
Off  V.  Hakes   (142  Fed.  Rep.  304), 

99,  563,  619. 
O'Gara,  In  re   (97  Fed.  Rep.  932), 

681. 
Ogden  V.  Cowley  (2  Johns.  [N.  Y.] 

274),  373. 
Ogden  V.  Jackson   (1  Johns.  370), 

605. 
Ogden    V.     Saunders     (12    Wheat. 

213),  20,  22,  26,  827. 
Ogilvie  V.  Knox  Ins.  Co.   (22  Hov^ 

380),  493. 
Ogles,  In  re    (93   Fed.  Rep.   426), 

239. 
O'Halloran,    In   re    (8    Ben.    128), 

263. 
O'Hara  v.  O'Connell  (93  U.  S.  151), 

245. 
Ohio   Valley   Bank    v.    Mack    (149 

Fed.  Rep.  ),  916,  92.5. 

Ohlemacher    v.    Broed    (44    Upper 

Canada  Rep.  366),  826. 
Olcott  V.  McLean    (50  How.  Prac. 

455),  556. 
Old    Colony   Boot    &    Shoe    Co.    v. 
Parker  -  Sampson  -  Adams    Co. 
(183  Mass.  557),  484. 
Olds    V.    Forrester    (126    la.    456). 
835. 


Oleson,  In  re  (110  Fed.  Rep.  796), 

507,  863. 
Olewine,  In  re  (125  Fed.  Rep.  840), 

495,  516. 
Oliver,  In  re   (132  Fed.  Rep.  588), 

608. 
Oliver,  In  re  (133  Fed.  Rep.  832), 

863. 
Oliver  v.  Sanborn   (60  Mich.  346), 

440. 
Oil  Well  Supply  Co.  v.  Hall    (128 

Fed.  Rep.   875),  917. 
Okell,  In  re   (2  Ben.  144),  634. 
Olman,  In  re  (134  Fed.  Rep.  681), 

720. 
O'Mara,  In  re    (4  Biss.  506),  664. 
O'Neal,  Ex  parte    (125   Fed.   Rep. 

967),  693,  705. 
O'Neil,  Ex  parte  (1  Low.  163),  347, 

349,  359,  393. 
O'Neil  V.  Dougherty  (46  Cal.  575), 

429. 
O'Neil    V.    Glover    (5    Gray,    159), 

192. 
Ontario  Bank  v.  Mumford  (5  N.  Y. 

Ch.  Rep.  616),  501. 
Oppenheimer,  In  re  (140  Fed.  Rep. 
51),  401. 

Orcutt  V.  Green   (204  U.  S.  ), 

389. 
Orem  v.  Harley   (3  N.  B.  R.  263), 

26.5. 
Oregon  Bulletin  Print.  &  Pub.  Co., 
In  re  (13  N.  B.  R.  503),  194, 
277,  574. 
O'Reilly    v.    Edrington    (96    U.    S. 

724),  931. 
Oriental   Society,  In  re   (104  Fed. 

Rep.   975),   176,  177,  ISO. 
Ormsby    v.    Dearborn    (116    Mass. 

386),  453. 
O'-ne,  In  re  (1  Ben.  161),  358,  359. 
Oine,  In  re  (1  Ben.  361),  326,  371. 
Orne,  In  re  (1  Ben.  420),  212,  215. 
Orage,  etc..  R.  Co.,  In  re   (9  N.  B. 

R.  281),  270. 
Osborn,  In  re  (104  Fed.  Rep.  780), 

516,   527,   533,   536. 
Osborn  v.  McBride    (3   Saw.  590), 

311. 
Osborn  v.  Perkins   (112  Fed.  Rep. 

127),  681. 
Osborne,  In  re   (115  Fed.  Rep.  1), 

936. 
Osgood  v.  Maguire  (61  N.  Y.  529), 

461. 
Ostrander,   In    re    (139    Fed.    Rep. 
592),  839. 


TABLE  OF  CASES. 
References  are  to  pages. 


1407 


Ostrander  v.  Meunch  (12  Fed.  Rep. 

562),  25. 
Otis  V.  Gazlin    (31  Me.  567),  856. 
Otis   V.    Hadley    (112    Mass.    100), 

552. 
Ott,  In  re  (95  Fed.  Rep.  274),  769. 
Otto,  In  re    (115   Fed.   Rep.   860), 

681. 
Ouimette,  In  re   (1  Saw.  47),  268, 

270,  271. 
Owen    V.    Brown    (120    Fed.    Rep. 

812),  197,  199,  204,  545,  547. 
Owens,  In   re    (6   Biss.   432),   523. 
Owens    V.    Bruce    (109    Fed.    Rep. 

72)     753    755. 
Owings.'/n  re  (109  Fed.  Rep.  623), 

402. 


Pacific  Coast  Warehouse  Co.,  In  re 

(123  Fed.  Rep.  749),  179. 
Pacific  R.  Co.  V.  Ketchum    (95  U. 

S.  1),  939. 
Pacific  R.  R.  V.  Missouri  Pac.  Ry. 

Co.    (3    Fed.    Rep.    772),    244, 

250. 
Pack  V.  Bathurst  (3  Atk.  269),  466. 
Paddock,  In  re   (6  N.  B.  R.  396), 

410. 
Paddock,  In  re   (6  N.  B.  R.  132), 

635. 
Paddock    v.    Fish    (10    Fed.    Rep. 

125)    555. 
Page  V.  Broom   (3  Beav.  36),  487. 
Page  V.  Edmunds  (187  U.  S.  596), 

495,  885. 
Page  V.  Godden    (2   Starkie,  309), 

.483,  486. 
Paige,  In  re    (99   Fed.  Rep.   538), 

268. 
Paine,  In  re   (127  Fed.  Rep.  246), 

620. 
Paine  v.  Caldwell    (1  Hask.  452), 

96,  244. 
Palliser,  In-re  (136  U.  S.  261),  674. 
Palmer,  In   re    (3   N.   B.  R.   283), 

566. 
Palmer  v.  Day  (2  Q.  B.  618),  370, 

371. 
Palmer  v.  Hussey   (119  U.  S.  96), 

845,  846,  883. 
Palmer   v.    Preston    (45   Vt.    154), 

837. 
Pancoast,    In    re    (129    Fed.    Rep. 

643),  395. 
Paret    v.    Ticknor    (4    Dill.    Ill), 

726. 


Parish,  In  re  (112  Fed.  Rep.  553), 

680. 
Parish,  In  re  (122  Fed.  Rep.  553), 

797,  799,  800,  812,  815. 
Park,  In  re    (102  Fed.  Rep.  602), 

529,  533,  536. 
Parker,  In  re   (5  Saw.  58),  537. 
Parker,  In  re    (4   Biss.   501),  679. 
Parker,  In  re  (11  Fed.  Rep.  397), 

589. 
Parker  v.  Atwood   (52  N.  H.  181), 

862. 
Parker    v.    Black    (143    Fed.    Rep. 

560),  618. 
Park  V.  Casey   (35  Tex.  536),  836, 

859,   861. 
Parker  v.  Hotchkiss    (1  Wall.  Jr. 

269),  246. 
Parker  v.   Norton    (6   T.  R.   695), 

381. 
Parkes,   In   re    (10   N.   B.   R.    82), 

324,  404,  405. 
Parkinson    v.    United    States    (121 

U.  S.  281),  689. 
Parks,  In  re  (9  N.  B.  R.  270),  538. 
Parmelee  Library,  In  re  (120  Fed. 

Rep.   235),   176.   179. 
Parmenter  Mfg.   Co.   v.   Carpenter 

(51  N.  H.  529),  23. 
Parmenter   Mfg.    Co.    v.    Hamilton 

(172  Mass  178),  17,  24,  26,  27, 

30. 
Parmenter  Mfg.  Co.  v.  Stoever  (97 

Fed.  Rep.   330),   197,   198,   199, 

204,  241,  913. 
Paschal,  In  re  (10  Wall.  491),  693. 
Pattee,  In  re  (143  Fed.  Rep.  994), 

755,   781. 
Patten    v.    Carley    (8    Am.    B.    R. 

482),  606. 
Patterson,  In  re  (2  Ben.  155),  656, 

659,  667. 
Patterson,  In  re  (1  Ben.  448),  388. 
Patterson,  In  re  (1  Ben.  496),  507. 
Patterson,  In  re  (1  Ben.  508),  643. 
Patterson,    In   re    (121    Fed.    Rep. 

921),  797,  798. 
Patterson,   In   re    (125    Fed.    Rep. 

562),    445,   446,    451,    452,    453, 

843 
Patterson  v.  U.  S.  (2  Wheat.  221), 

887. 
Pattison  v.  Wilbur  (10  R.  L  448), 

824. 
Pattison  &  Co.  v.  Oliver   (10  R.  L 

448),   840. 
Pattv-.Toiner  &  Eubank  Co.  v.  Cum- 
mins (4  Am.  B.  R.  269),  30. 


1408 


TABLE  OF  CASES. 
References  are  to  pages. 


Pauly,  In  re   (2  Am.  B.  R.  333),    ]    Penn,  In  re   (4  Ben.  99),  210. 


291. 
Payne  v.  Able   (7  Bush,  Ky.  344), 

824),  840,  850,  852. 
Payne    v.    Soloman    (14    N.    B.    R. 

162),  195,  575. 
Payson     v.     Brooke      (1     Weekly 

Notes,  89),  493. 
Payson  v.  Deitz  (2  Dill.  504),  126. 
Payson   v.    Stoever    (2   Dill.   427), 

493. 
Payson  v.  Withers    (5  Biss.   269), 

493. 
Peace  River  Phosphate  Co.  v.  Ed- 
wards (70  Fed.  Rep.  728),  930, 

935. 
Peacock,    In    re    (101    Fed.    Rep. 

560),  800. 
Pearce,  In  re   (21  Vt.  611),  680. 
Pearsall  v.  Smith  (149  U.  S.  231), 

467. 
Pearson,  In  re  (95  Fed.  Rep.  425), 

195,  575. 
Pease,  In  re    (6  Ben.  173),  413. 
Pease,  In   re    (13   N.   B.   R.    168), 

316,  317. 
Pease,  In  re    (29   Fed.  Rep.   595), 

96,  247,  263,  635. 
Pease,  In  re   (129  Fed.  Rep.  446), 

584,  475,  477,  585,  590. 
Peaslee   v.   Haberstro    (15   Blatch. 

472),   248. 
Peasley,  In  re  (137  Fed.  Rep.  190), 

341,  607. 
Peck,  In  re    (120  Fed.  Rep.  972), 

797,  798,  799,  815. 
Peck  V.  Connell  (6  Am.  B.  R.  93), 

548,  549. 
Peck  V.  Connell  (8  Am.  B.  R.  500), 

623. 
Peck  V.  Hibbard  (26  Vt.  698),  826, 

827. 
Peck    V.    Jenness     (7    How.    625), 

105,  116,  823. 
Peckham    v.    Burrows     (3    Story, 

544),  552. 
Peiper  v.  Harmel  (5  N.  B.  R.  252), 

431. 
Reiser,  In  re  (115  Fed.  Rep.  199), 

103,  104,  617. 
Pekin  Plow  Co.,  In  re    (112   Fed. 

Rep.   308),   438,   450,   581,   595, 

905. 
Pence    v.    Cochran    (6    Fed.    Rep. 

269),  779. 
Pender  v.   Brown    (120  Fed.   Rep. 

496),  941. 
Penfield  v.  C.  &  O.  R.  Co.  (29  Fed. 
Rep.  494),  209. 


Pennell  v,  Percival    (13  Pa.  .197), 

860. 
Pennewell,   In   le    (119   Fed.   Rep. 

139,    483,    338,    345,    346,    3G4, 

365,  366,  367. 
Penn.  Co.  v.  Jacksonville,  etc.,  Ry. 

Co.   (55  Fed.  Rep.  131),  937. 
Penny  v.  Taylor  (10  N.  B.  R.  200), 

529. 
People's  Bank  v.  Brown  (112  Fed. 

Rep.   652),   641,   644,   646,   647. 
People's  Mail  Steamship  Co.,  In  re 

(3  Ben.  226),  105. 
People   v.   Duncan    (41   Cal.   508), 

495 
People  V.  Palmer  (46  111.  398),  526. 
People  V.  Spalding  (10  Paige,  [N. 

Y.]    284),   834. 
People    V.    Swarts    (8    Am.    B.    R. 

487),   689. 
People  V.  Whitman    (10  Cal.  38), 

129. 
Perdue,   In   re    (2   N.   B,.  R.   183), 

524,  607. 
Perkins,   Ex  parte    (5   Biss.    254), 

425. 
Perkins,  In  re   (5  Biss.  254),  905. 
Perkins    v.    Fourniquet    (14    How. 

313),  950. 
Perley    v.    Hays     (138    Fed.    Rep. 

927),  187,  296. 
Perley  v.  Mason   (64  N.  H.  6),  23. 
Perry  v.  Aldrich    (13  N.   H.  343), 

365. 
Peter  Paul   Book  Co.,  In  re    (104 

Fed.  Rep.  786),  203,  341,  386, 

780. 
Petersen,  In  re  (10  Am.  B.  R.  355), 

810. 
Petersen,  In  re  (95  Fed.  Rep.  417), 

515. 
Petersilea    v.     Stone     (119     Mass. 

465),  128. 
Peterson  v.   Nash    (112  Fed.  Rep. 

311),   576,   919. 
Pettingill  &  Co..  In  re   (135  Fed. 

Rep.  218),  398. 
Pettingill  &  Co.,  In  re   (137  Fed. 

Rep.   143),  337,  338,  342,  363, 

365. 
Pettingill  &  Co.,  In  re    (137  Fed. 

Rep.   840).   902,   903,   906,   909. 
Pettis,    In    re    (7    Am.    law    Reg. 

695,   660. 
Petrie,  In  re   (5  Ben.  110),  373. 
Peugh   V.   Davis    (110  U.   S.   227), 
921,  923,  930,  932. 


TABLE  OF  CASES. 
References  are  to  pages. 


14U9 


Pevear,  In  re   (17  N.  B.  R.  461), 

778. 
Pfromm,  In  re   (8  N.  B.  R.  357), 

329. 
Phelan,  In  re   (62  Fed.  Rep.  817), 

701. 
Phelan  v.  Iron  Mountain  Bank   (4 

Dill.  88),  502. 
Phelps,  In  re  (1  N.  B.  R.  525),  329. 
Phelps  V.  Borland  (103  N.  Y.  40G), 

826,  827. 
Phelps    V.    McDonald     (99    U.    S. 

298),  511. 
Phelps  V.  Sellick  (6  N.  B..  R.  419), 

747. 
Phila.  &  Lews  Transp.  Co.,  In  re 

(127  Fed.  Rep.   896),  165. 
Philadelphia  &  Lewes  Transp  Co., 
In  re  (114  Fed.  Rep.  403),  178, 
181. 
Philips  V.  Allan  (8  B.  &  Aid.  477), 

826. 
Philips  V.  Turner    (114  Fed.  Rep. 

726),  97. 
Philip    Semmer    Glass    Co.,    In    re 

(135  Fed.  Rep.  77),  374. 
Phillips  V.   Dreher   Shoe  Co.    (112 

Fed.  Rep.  404),  338,  354. 
Phillips  V.  Eyre  (L.  R.  6  Q.  B.  1), 

826. 
Phillipps  V.  Kahn  (98  N.  Y.  Supp. 

250),  584. 
Phillips  V.  Solomon   (42  Ga.  192), 

850. 
Philmon     v.     Marshall     (116     Ga. 

811),  823. 
Philpot  V.  O'Brien   (126  Fed.  Rep. 

167),   176,   277. 
Phoenix  Bessemer  Steel  Co.,  In  re 

(4  Ch.  Div.  108),  508. 
Phoenix  Ins.  Co.  v.  Wulf   (1  Fed. 

Rep.   775),   247,  248. 
Pickens    v.    Dent    (106    Fed.    Rep. 

653),  31,  94,  427,  435. 
Pickens  v.  Roy    (187   U.    S.    177). 
31,   94,   98,   112,   114,   115,   428. 
435,  545,  547. 
Pickett  V.  McGavick   (14  N.  B.  R. 

236),  863. 
Pierce,  In  re   (11  Fed.  Rep.  516) 

133,   137,   138,   151,   423.  774. 
Pierce,  In  re  (102  Fed.  Rep.  977), 

115,  297,  298. 
Pierce,  In  re   (103  Fed.  Rep.  64), 

678,  679,  683.  797,  799. 
Pierce  v.  O'Brien  (129  Mass.  314), 

827. 
Pierce  v.  Wilcox  (40  Ind.  70),  746 
823. 


Piercy  V.  Roberts  (1  Myl.  &  K.  4), 

505. 
Pierson,  In  re   (10  N.  B.  R.  107), 

788,  806. 
Pilger,  In  re  (118  Fed.  Rep.  206) 

170,  285. 
Pike  V.  Lowell    (32  Me.  245),  431. 
Pike   V.   McDonald    (32   Me.    418) 

350. 
Pincus,  In  re  (147  Fed.  Rep.  621), 

790. 
Pingrey    v.     Nat.     Ins.     Co.     (144 

Mass.    374),    499. 
Pioneer  Paper  Co.,  In  re  (7  N.  B. 

R.  250),  645. 
Pirie  v.  Chicago  T.  &  T.  Co.    (182 

U.   S.  438),  398,  438,  413,  439, 

554,  559,   573,   885. 
Pitt,  In  re  (8  Ben.  389),  285. 
Pittelkow,    In    re    (92    Fed.    Rep. 

901,  110.  Ill,  743,  746. 
Pittman,    In    re    (1    Curtis,    186), 

693,  702. 
Pittock,  In  re   (2   Saw.  416),  358. 
Pitts,  In  re  (19  N.  B.  R.  63),  837 

838. 
Piatt  V.  Johnson  (168  Pa.  47),  366. 
Piatt  V.  Preston  (19  N.  B.  R.  241) 

25,  27. 
Platteville  Foundry  &  Machine  Co., 

In  re  (147  Fed.  Rep.  828),  743. 
Plimpton,    In    re    (103    Fed.    Rep. 

775),  134,  218. 
Plimpton  V.  Winslow  (9  Fed.  Rep. 

365),  246. 
Plotke,  In  re  (104  Fed.  Rep.  964), 

234. 
Plummer  v.  Myers  (137  Fed.  Rep. 

660),  622,  564. 
Plymouth  Cordage  Co.,  In  re  (135 

Fed.  Rep.  1000),  227,  236,  237, 

240,    262,    271,    284,    285,    287, 

288,  901. 
Plymouth    Cordage    Co.    v.    Smith 

194   U.   S.   311),  867,   869,   881, 

898,  900,  901. 
Poillon    V.    Lawrence     (77    N.    Y. 

208),   862. 
Poland   V.   Glyn    (12   J.   B.   Moore, 

109),  553. 
Poleman,  In  re   (5  Biss.  526),  529, 

530. 
Polleys   V.    Black    River    Co.    (113 

U.  S.  81),  919. 
Pollock   V.    .Tones    (124    Fed.    Rep. 

163),   474.   571,   586.   588. 
Pond  V.  Kimball   (101  Mass.  105), 

526,  538. 
Pond  V.  New  York  Exchange  Bank 


1410 


TABLE  OF  CASES. 
References  are  to  pages. 


(124  Fed.  Rep.  992),  99,  GIG, 

GIS,  758 
Ponsford  v.  Walton   (3  L.  J.  C.  P. 

Cas.  1G7),  200. 
Pool    V.    McDonald    (15    N.    B.    R. 

560),  708,  710,  729. 
Pope,   In   re    (98   Fed.   Rep.    722), 

514. 
Porter,  In  re  (109  Fed.  Rep.  Ill), 

110,  111,  746. 
Porter  v.   Lazear    (109   U.   S.   84), 

444,    460,    482,    510,    531,    532, 

611,  830. 
Porter  v.  Porter  (31  Me.  169),  858. 
Porter  v.   Sabin    (149   U.   S.   473), 

93,  441. 
Port  Huron   Dry  Dock  Co.,  In  re 

14  N.   B.  R.   253),  392. 
Portland  Co.  v.  United  States   (15 

Wall.    1),   943. 
Portuondo,   In   re    (135   Fed.  Rep. 

592),  479,  607. 
Post  V.    Corbin    (5   N.   B.   R.   11), 

565,   580. 
Post,    Administrator,    v.    Losey   et 

al.    (Ill  Ind.  74),  354. 
Postal    Telegraph    Co.,   In   re    (85 

Fed.  Rep.  853),  950. 
Potter  V.  Brown  (5  East,  130),  825, 

826. 
Potter  V.   Couch    (141  U.   S.  319  j, 

505. 
Potts,  Ex  parte  (Crabbe,  469),  10, 

195,  238. 
Powder  Co.  v.  Burkhardt  (97  U.  S. 

110),  448. 
Powell,  In  re  (2  N.  B.  R.  45),  417, 

425. 
Powell   V.   Leavitt    (150  Fed.  Rep. 

89),  390. 
Powell  V.  Lloyd    (1  Y.  &  J.  427). 

487. 
Powles   V.    Hargreaves    (3    DeGex, 

A.  M.  &  G.  445),  405. 
Powers   Dry   Goods  Co.   v.  Nelson 

(10  N.   D.  580),  830. 
Pi'ager    &    Son,    In    re    (134    Fed. 

Rep.  1006),  793,  806,  807. 
Prankard,  In  re  (1  N.  B.  R.  297), 

301. 
Pratesi,  In  re  (126  Fed.  Rep.  588), 

546. 
Pratt,  In  re  (2  Low.  96),  173,  270. 
Pratt,  In  re   (1  Flip.  353),  525. 
Pratt    V.    Bothe     (130    Fed.    Rep. 

670),   166,   575,  915. 
Pratt  V.  Burr  (5  Biss  36),  537. 
Pratt  V.  Curtis  (2  Low.  87),  469. 


Pratt  V.  Russell  (61  Mass.  462), 
856,  857,  858. 

Prescott,  In  re   (1  Atk.  230),  372. 

Prescott,  In  re  (5  Biss.  523),  358. 

Press  Post  Printing  Co.,  In  re 
134  Fed.  Rep.  998),  446,  449, 
450. 

Preston  v.  Simons  (1  Rich.,  S.  C. 
262),  859. 

Prewett  v.  Caruthers  (20  Miss. 
491),  858. 

Price,  In  re  (6  N.  B.  R.  400),  538. 

Price,  In  re  (8  N.  B.  R.  514),  277. 

Price,  In  re  (91  Fed.  Rep.  635), 
628,  629,  631,  633,  642. 

Price,  In  re  (92  Fed.  Rep.  987), 
115,  419. 

Price  V.  Moulton  (10  C.  B.  561), 
317. 

Price  V.  Price  (48  Fed.  Rep.  823), 
427. 

Prichard  v.  Budd  (76  Fed.  Rep. 
710,  929. 

Prime  v.  Brandon  Mfg.  Co.  (16 
Blatch.  453),  463. 

Prince  &  Walter,  In  re  (131  Fed. 
Rep,  546),  388,  744,  753,  767, 
769,  770,  771,  774,  775. 

Privett,  In  re  (132  Fed.  Rep.  592), 
398. 

Proctor,  In  re  (6  Am.  B.  R.  660), 
576. 

Producers  Bank  v.  Farnum  (5  Al- 
len, Mass.  10),  827. 

Protector,  The   (11  Wall.  82),  939. 

Proudfoot,  Ex  parte  (1  Atk.  252), 
506. 

Prouty,  In  re  (24  Fed.  Rep.  554), 
425. 

Providence  County  Sav.  Bank  v. 
Frost    (8  Ben.  293),  358. 

Providence  &  Stonington  Steam- 
ship Co.  V.  Ins.  Co.  (11  Fed. 
Rep.  284),  783. 

Provident  Institution  v.  Massachu- 
setts (6  Wall.  630),  514. 

Public  Schools  v.  Walker  (9  Wall. 
603),  945. 

Purcell,  In  re  (18  N.  B.  R.  447), 
727. 

Pugh  v.  Arton  (8  L.  R.  Eq.  626), 
489. 

Pullman  Palace  Car.  Co.  v.  Cen- 
tral Transportation  Co.  (83 
Fed.  Rep.  1),  896. 

Pullman  Palace  Car.  Co.  v.  Cen- 
tral Transportation  Co.  (171 
U.  S.  138),  890. 


TABLE  OF  CASES. 
References  are  to  pages. 


1411 


Pullman's  Car  Co.  v.  Pennsylvania 

(141  U.   S.   18,  22),  21. 
Pulsifer,  In  re  (14  Fed.  Rep.  247), 

353. 
Pulsifer  v.  Hussey    (97  Me.  434), 

499,   500. 
Punnett,    Ex   parte    (16    Ch.    Div. 

22G),   489. 
Pupke   V.   Churchill    (91   Mo.   81), 

726. 
Purple    V.    Farrington     (119    Ind. 

164),  309. 
Pursell,  In  re  (114  Fed.  Rep.  371), 

631. 
Purvine  In  re  (96  Fed.  Rep.  192), 

653,'  694,  733,  903,  905. 
Purvis,   In   re    (1   N.   B.   R.    163), 

324,   332. 
Pusey,  In  re  (7  N.  B.  R.  45),  190. 
Putnam  v.  Story   (132  Mass.  205), 

480. 


Quackenbush,  In  re  (102  Fed.  Rep. 

282),  679,  681. 
Quelin  v.  Moisson  (1  Knapp,  265), 

825. 
Quincy  Granite  Quarries  Co.,  In  re 

(147  Fed.  Rep.  279),  180,  288. 
Quimby   Freight   Forwarding   Co., 

In    re    (121    Fed.    Rep.    139), 

178,  181. 


Rabenau,    In    re    (118    Fed.    Rep. 

471),  446,  448. 
Rachel   Goodman,   In   re    (5   Biss. 

401),  270. 
Rahilly   v.    Wilson    (3    Dill.    420), 

454. 
Rainsford,  In  re  (5  N.  B.  R.  381), 

864. 
Railroad  Equipment  Co.  v.  South- 
ern   Ry.    Co.     (92    Fed.    Rep. 

541),  933. 
Railway  Co.  v.  Stewart   (95  U.  S. 

279),  949. 
Rand  v.  Iowa  Central  Ry.  Co.  (186 

N.  Y.   58),  435. 
Randall,  In  re    d   Saw.   56),  436, 

572. 
Randall,  In  re   (Deady,  557),  265. 
Randall,  In  re   (5  Law  Rep.  115), 

222. 
Randall  v.  Brigliam  (7  Wall.  541), 

514,  703. 


Randall   v.   Rich    (11   Mass.    494), 

365. 
'Randolph    v.    Scruggs    (190    U.    S. 
533),   29,   30,   31,   32,   111,   163, 
200,    386,    341,    342,    565,    773, 
781,   812,   876,  915. 
Rank,  In  re  (Crabbe,  493),  658. 
Ransom    v.    Geer     (12    Fed.    Rep. 

607),  726. 

Rasmussen's    Estate,    In    re    (136 

Fed.  Rep.  704),  447,  451,  581, 

593. 

Rathbone,  In  re  (2  Ben.  138),  798. 

Rathbone  v.  Ayer  (82  N.  Y.  Supp. 

235)     493. 
Rauchenplat,  In  re  (1  P.  R-  471), 

817. 
Ray,  In  re   (2  Ben.  53),  215,  383. 
Ray    v.     Norseworthy     (23    Wall. 

128),  743. 
Raymond    v.    Merchant     (3    Cow. 

147),  351. 
Raynolds  v.  Hanna  (55  Fed.  Rep. 

795),   480. 
Raynor.  In  re  (11  Blatch.  43),  239, 
Read  v.  Buffalo   (3  Keyes  [N.  Y.] 

447),  128. 
Read  &  Knight,  In  re  (7  Am.  B.  R. 

Ill),  560. 
Real  Estate  Co.  v.  Thompson  (112 

Fed.  Rep.  945),  76,  78,  97. 
Receivers,  etc.,  v.  Staake  (133  Fed. 

Rep.  717),  163. 
Rector  v.  City  Deposit  Bank   (200 
U.   S.  405),  556,  575,  874,  883. 
Rector   v.   Commercial   Nat.   Bank 

200  U.  S.  420),  556,  575. 
Redfield,  In   re    (2   Ben.   71),  215. 
Redmond,  In  re  9  N.  B.  R.  408), 

182,  299. 
Reed,  In  re   (6  Biss.  250),  383. 
Reed  v.  Bullington  (49  Miss.  223), 

823,  802. 
Reed  v.  Equitable  Trust   (115  Ga. 
780,)   91,  94,  107,  112,  114,  428, 
546. 
Reed  v.  Mclntyre   (98  U.  S.  507), 

26,  548. 
Reed    Bros.    &   Co.    v.    Taylor    (32 

la.  209),  25,  27. 
Reed  &  Knight,  In  re  (7  Am.  B.  R. 

Ill),  576. 
Reed  v.  Vaughn   (15  Mo.  137),  18. 
Reese,  In  re   (115  Fed.  Rep.  993), 

534. 
Reeves  v.  Capper  (5  Bing.  [N.  C] 

136),  602. 
Reg.  V.  Boyd  (5  Cox  Cr.  Cas.  502), 
690. 


1412 


TABLE  OF  CASES. 
References  are  to  pages. 


Reg.  V.  Lands  (33  Eng.  Law  &  Eq. 

53G),   G90. 
Regan  v.  Zeeb  (28  O.  S.  483),  524. 
Reggel,  Ex  parte  (114  U.  S.  642), 

G72. 
Reichman,    In    re    (91    Fed.    Rep. 

624),  196,  197,  198. 
Reid  V.  Cross    (1  Am.  B.  R.  34), 

107. 
Reid,  Murdock  &  Co.  v.  Cross    (1 

Am.   B.   R.   34),  94. 
Reiley  v.  Lamar   (2  Cranch,  344), 

923. 
Reiman,   In  re    (7   Ben.   455),   17, 

713,  716,  718. 
Reiman,   In   re    (12   Blatch.    562), 

18,  707,  723. 
Reitz  V.  The  People   (72  111.  435), 

848. 
Rekerdres,  In   re    (108   Fed.   Rep. 

206),  135,  330,  415. 
Reliance  Storage  &  Warehouse  Co., 

In  re  (100  Fed.  Rep.  619),  142, 

252,  255,  412. 
Remington  Auto  &  Motor  Co.,  In  re 

(119  Fed.  Rep.  441),  113,  494, 

824,  854. 
Repplier  v.  Bloodgood  (1  Sweeney 

[N.   Y.   Sup.   Ct]    34),   577. 
Republic  Ins.  Co.,  In  re    (3   Biss. 

452,  493. 
Republic  Ins.  Co.,  In  re  (8  N.  B.  R. 

197),  387. 
Resler,  In  re   (95  Fed.  Rep.  804), 

382 
Retzer  v.  Wood    (109  U.   S.  187), 

431. 
Reukauff  Sons  &  Co.,  In  re   (135 

Fed.  Rep.   251),   142,   143. 
Revell,  Ex  parte  (13  Q.  B.  D.  720), 

349. 
Rex  V.  iones  (24  E.  C.  L.  156),  090. 
Rex  V.  Pixley  (Bunbury,  202),  832. 
Rex    Buggy   Co.    v.    Hearick    (132 

Fed.   Rep.    310),   194. 
Reynolds,  In  re   (9  N.  B.  R.  50), 

23,  26,  27. 
Reynolds,   In   re    (127    Fed.    Rep. 

760),  92,  120. 
Reynolds,    In   re    (133    Fed.    Rep. 

584),  618,  620. 
Rhodes,  In  re  (105  Fed.  Rep.  231), 

383,  389,  390. 
Rhodes,  In  re  (109  Fed.  Rep.  117), 

535. 
Rhodes   v.    Farish    (16    Mo.    App. 

434),  209. 
Rhutassel,    In   re    (96    Fed.    Rep. 
597),  828,  842,  844. 


Rice,  In  re   (9  N.  B.  R.  373),  308, 

316,   317. 
Rice  V.  Grafton  Mills    (177   Mass. 

228),   55.5,   578. 
Rice  V.  Maxwell   (13  Smeads  &  M. 

289,  686. 
Rice  V.  Melendy   (41  la.  395),  578. 
Richard,  In  re  (94  Fed.  Rep.  633), 

30,   348,   386,   402,   536. 
Richards,  In  re  (4  Ben.  303),  644. 
Richards,    In    re     (96    Fed.    Rep. 

935),    543,    545,   547,    549,   905, 

908,  909. 
Richards,    In    re    (103    Fed.    Rep. 

849),   135,   159,   323,   331. 
Richards,    In    re    (127    Fed.    Rep. 

772),  255,  433. 
Richards   v.    Ins.    Co.    (8   Cranch, 

84),  7. 
Richards    v.    Nixon    (20    Pa.    19), 

860. 
Richardson,   In   re    (2   Ben.    517), 

114. 
Richardson,    In   re    (11    N.    B.    R. 

114),  538. 
Richardson    v.    Green    (130    U.    S. 

104),  922,  934,  935. 
Richardson    v.     Shaw     (147    Fed. 

Rep.  659),  556. 
Richardson     v.     Woodward      (104 

Fed.  Rep.   873),  513. 
Richmond,  The  (9  Fed.  Rep.  863), 

123. 
Richmond  v.  Brown   (66  Me.  373), 

848. 
Riddle's    Sons,    In    re     (122    Fed. 

Rep.  559),  576. 
Rider,  In  re    (90  Fed.  Rep.   808), 

708,  709,  711. 
Rider,  In  re    (96  Fed.  Rep.  811), 

386,   408. 
Ridgway  v.  Clare   (19  Beav.  Ill), 

292. 
Riggin  V.  Magwire  (15  Wall.  549), 

342,   343,   830. 
Riggs  V.  Roberts    (85  N.  C.  151), 

855. 
Riggs   V.   White    (4   Heisk.,  Tenn. 

503),  861. 
Riggs  Restaurant  Co.,  In  re   (130 

Fed.  Rep.   691),  194,   284,  286. 
Riker,  In  re    (107  Fed.  Rep.  96), 

111. 
Ripon  Knitting  Wks.  v.  Schreiber 
(101  Fed.  Rep.  810),  653,  694, 

702,  703,  704,  733. 
Rise    V.    Bordner    (140    Fed.    Rep. 

566>,  237. 


TABLE  OF  CASES. 
References  are  to  pages. 


1413 


Rison  V.  Knapp  (1  Dill.  187),  555, 

579. 
Risteen,  In  re  (122  Fed.  Rep.  732), 

247. 
Rix  V.  Capital  Bank  (2  Dill.  367), 

519,   523,  "530,  592. 
Roalswick,  In   re    (110  Fed.  Rep. 

639),   453,   843. 
Robarts  v.  Biee  (8  Cha.  Div.  198), 

378 
Roberts  v.  Reilly    (116  U.  S.  80), 

672. 
Roberts  v.  Wood  (38  Wis.  60),  823. 
Robertshaw   Mfg.   Co.,  In  re   (133 

Fed.  Rep.  556),  557. 
Robertshaw   Mfg.   Co.,  In  re    (135 

Fed.  Rep.  220),  937. 
Robinson,  Ex  parte  (19  Wall.  510), 

692,  704. 
Robinson,  In  re    (6   Blatch.   253), 

656,  665. 
Robinson,  In  re  (8  Ben.  406),  412. 
Robinson,    In   re    (123    Fed.    Rep. 

844),  798,  799,  81.5,  816. 
Robinson,    In    re    (136    Fed.    Rep. 

994),   389. 
Robinson  v.  Denny  (57  Ala.  492), 

480. 
Robinson  v.  Elliott  (22  Wall.  513), 

593. 
Robinson  v.  Hall  (8  Ben.  61),  435. 
Robinson  v.  Ins.  Co.  Bank  (9  Biss. 

117),  577. 
Robinson  v.  Soule  (56  Miss.  549), 

725. 
Robinson  v.  Wilson  (15  Kan.  595), 

544. 
Roche,  In  re  (101  Fed.  Rep.  956), 

161,  165,  915,  916,  925. 
Rochford,    In    re    (124    Fed.    Rep. 

182),  78,  80,  81,  86,  87,  88,  99, 

101,   254,  440,   736,  744.  745. 
Rockett,  Ex  parte    (2   Low.   522), 

776. 
Rockwood,    In    re    (91    Fed.    Rep. 

363),  259. 
Roddin,  In  re    (6  Biss.  377),  313. 
Roden  v.  Jaco   (17  Ala.  344),  350. 
Roden  Grocery  Co.  v.  Bacon   (133 

Fed.   Rep.    515),   112. 
Rodger,  In  re   (18  N.  B.  R.  381), 

724. 
Rodgers,    In    re    (125    Fed.    Rep. 

169),    120,    121,    4.50,    581,    598, 

601. 
Rodgers  &  Son  v.  Forbes  &  Schoen 

(23   Ohio   Cir.   Ct.   Rep.   438), 

545,  549. 


Roeber,  In  re  (121  Fed.  Rep.  449, 

609. 
Roeber,  In  re  (127  Fed.  Rep.  122), 

389,  404. 
Roehm  v.  Horst  (178  U.  S.  1),  363. 
Roeller  v.  Ames    (33  Minn.   132), 

783. 
Rogers,  In  re    (2   N.   B.   R.   397), 

194. 
Rogers,  In  re  (125  Fed.  Rep.  169), 

253,  254. 
Rogers   v.    Ins.    Co.    (1    La.    Ann. 

IGl),  351. 
Rogers    v.    Page    (140    Fed.    Rep. 

596),   475,   567,   584,   597. 
Rogers    v.    Page    (149    Fed.    Rep. 

194),  165. 
Rogers  v.  Palmer  (102  U.  S.  263), 

552,  564. 
Rogers  v.  Riessner   (31  Fed.  Rep. 

591),  250. 
Rogers    v.    Spence    (13    M.    &    W. 

571),  508,  512. 
Rogers    v.    Stevenson     (16    Minn. 

68),  437. 
Rogers  v.  Winsor  (6  N.  B.  R.  246), 

462. 
Rogers    Milling    Co.,    In    re    (102 

Fed.  Rep.  687),  225. 
Rogers   &   Woodward,   In  re    (132 

Fed.  Rep.  560),  590. 
Rohde   V.    Proctor    (4    B.    &   Cres. 

517),  496. 
Rollins  V.  Twitchell  (2  Hask.  66), 

379. 
Rollins    Gold    &   Silver    Min.    Co., 

In    re    (102    Fed.    Rep.    982), 

178. 
Romaine   v.   Union    Insurance   Co. 

(28  Fed.  Rep.   635),  244,  250. 
Romanow,    In    re    (92    Fed.    Rep. 

510),    30,    228,    241,    28-5,    261, 

262. 
Rome    Planing   Mills.,    In   re    (96 

Fed.  Rep.  812),  189,  192,  196, 

198,    199,    204,    241,    269,    277, 

625. 
Romine,    In    re    (138    Fed.    Rep. 

837),   139,   638,   639,   640,   645, 

818. 
Ronk,  In  re   (111  Fed.  Rep.  154), 

586,  588. 
Rooney,  In  re  (109  Fed.  Rep.  601), 

489,  491. 
Roosa,  In  re  (119  Fed.  Rep.  542), 

6S1,  864. 
Rose  V.  Hart  (8  Taunt.  499),  370, 

371,  374,  375. 


1414 


TABLE  OF  CASES. 
References  are  to  pages. 


Rosenbaum,    In    re    (1    N.    B.    N. 

541),  297. 
Rosenberg,  In  i-e  (3  Ben.  14),  113, 

828. 
Rosenberg,    In    re    (3    Ben.    366), 

627. 
Rosenberg,  In  re    (116   Fed.   Rep. 

402),    650,    736,    742,    743,    749. 
Rosenberg,   In  re    (144   Fed.   Rep. 

442),    384. 
Rosenfield,  In  re  (1  N.  B..  R.  319), 

507. 
Rosenfield,  In  re  (2  N.  B.  R.  116), 

815,   822. 
Rosenfields,    In   re    (11    N.    B.    R. 

86),  287. 
Rosenthal,   In   re    (108    Fed.   Rep. 

368),  113,  114. 
Rosenthal,   In   re    (144   Fed.   Rep. 

■548),  250, 
Rosenthal  &  Lehman^  In  re    (120 

Fed.  Rep.   848),  162,   774. 
Rosey,  In  re   (6  Ben.  507),  782. 
Ross,  Ex  parte    (Buck,  125),  372, 

377. 
Ross  V.  Jordan   (62  Ga.  298),  855. 
Ross  V.   Saunders    (105  Fed.  Rep. 

915),  715,  724,  914,  928. 
Ross-Meehan      Foundry      Co.      v. 

Southern  Car  &  Foundry  Co. 

(124  Fed.  Rep.  403),  104,  253. 
Rosser,  In  re  (96  Fed.  Rep.  305), 

643. 
Rosser,  In  re  (101  Fed.  Rep.  562), 

85,   115,  442,   653,   694,  733. 
Rothenberg,  In  re   (140  Fed.  Rep. 

798),  224,  225. 
Rothermel  v.  Moyer   (24  Pa.  Sup. 

Ct.  Rep.  325),  549. 
Roukous,    In    re     (128    Fed.    Rep. 

645),  729. 
Rouse,  In  re    (40  Law  Bull.  Ohio 

220),   337,   361. 
Rouse,  Hazard  &  Co.,  In  re  (1  N. 

B.  N.  75),  19. 
Rouse,    Hazard    &   Co.,   In   re    (91 

Fed.    Rep.    96),    24,    778,    779, 

903,  908,  912,  944. 
Rowan's   Case    (4    Atty,    Gen.   Op. 

458),  705. 
Rowan  v.  Holcomb  (16  Ohio  463), 

18,   859. 
Rowe  V.  Page   (54  N.  H.  194),  20, 

23,  26,  27. 
Roy,    In    re    (96    Fed.    Rep.    400), 

680. 
Royal,  In  re  (112  Fed.  Rep.  135), 

680. 


Royal,  In  re   (113  Fed.  Rep.  140), 

791,  822. 
Royal  Baking  Powder  Co.  v.  Sher- 

ell    (93   N.   Y.   334),   462. 
Royle,    Ex    parte    (.46    L.    T.    Bk. 

85),  496. 
Rozinsky,    In   re    (101    Fed.    Rep. 

229),  138,  163,  290. 
Rude,  In  re  (101  Fed.  Rep.  805), 

102,   759,   783. 
Rudnick,  In  re  (93  Fed.  Rep.  787), 

728,  729. 
Rudnick,    In    re    (102    Fed.    Rep. 

750),  297,  312. 
Rugely  V.  Robinson  (19  Ala.  404), 

680. 
Ruiz  V.   Eickerman    (5   Fed.  Rep. 

790),  114,  824,  859. 
Rumsey  &  Sikemier  v.  Novelty  & 

Machine    Mfg.    Co.     (99    Fed. 

Rep.  699),  19L 
Rundle,  In  re    (2  N.   B.  R.   113), 

361. 
Rung   Furniture    Co.,   In   re    (139 

Fed.   Rep.    536),   198. 
Rupp,  In  re  (4  N.  B.  R.  95),  538. 
Rusch,  In  re  (105  Fed.  Rep.  607), 

159.  420,  422. 
Rush  V.  Lake  (122  Fed.  Rep.  561), 

944. 
Rushforth    v.    Hadfield     (6    East. 

519),  606. 
Russell,    ex    parte    (16    N.    B.    R. 

476),  313. 
Russell,  In  re   (10  Ch.  App.  255), 

721. 
Russell,  In  re   (97  Fed.  Rep.  32), 

295,  301,  319. 
Russell,  In  re  (101  Fed.  Rep.  248), 

79,  93,  111,  119,  281,  430,  456, 

872. 
Russell,  In  re  (105  Fed.  Rep.  501), 

141,  142,  409. 
Russell    V.    Cheatham     (16    Miss. 

703),  840. 
Russell    V.    OM^ens    (61    Mo.    185), 

381. 
Russell  V.  Phelps   (42  Mich.  388), 

753. 
Russie,  In  re   (96  Fed.  Rep.  609), 

481. 
Ryan,  In  re   (2  Saw.  411),  185. 
Ryan,  In  re   (6  N.  B.  R.  235),  752, 

755. 
Ryan,  In  re   (114  Fed.  Rep.  373), 

241,  261,  262. 
Ryan  v.  Koch    (17  Wall.  19),  9^3. 
Ryburn,  In  re  (145  Fed.  Rep.  662), 

786. 


TABLE  OF  CASES. 
References  are  to  pages. 


1415 


Ryttenberg    v.    Schefer    (131    Fed. 
Rep.  313),  98,  573. 


St.  Cyr  Daignault   (103  Fed.  Rep. 

854),  547. 
St.    John,    In    re    (105    Fed.    Rep. 

234),  481. 
St.    John's    College    v.    Carter    (8 

Law    Jour.    Eq.    N.    S.    218), 

695. 
St.  Louis  Ice  Mfg.  &  Storage  Co., 

In    re    (147    Fed.    Rep.    752), 

777. 

(147  Fed.  Rep.  752),  777. 
St.  Louis  &   San  Francisco  R.  R. 

Co.  V.  James   (161  U.  S.  545), 

234,  245. 
Sabin,  In   re    (18   N.   B.   R.    151), 

96,   247,   263. 
Sabin  v.  Camp  (98  Fed.  Rep.  974), 

576,  567,  570,  571,  586.  588. 
Sacchi,   In  re    (6   N.    B..   R.    398), 

425. 
Sackett  v.  Andrews   (5  Hill.  327), 

18. 
Sadler   v.    Immel    (15   Nev.    265), 

25   27. 
Sage  V.  R.  R.  Co.    (93  U.  S.  416), 

931. 
Sage  v.R.  R.  Co.    (96  U.  S.  712), 

922,  923,  929. 
Sagor,  In  re   (121  Fed.  Rep.  658), 

399,  560,  576. 
Salaberry,   In   re    (107   Fed.   Rep. 

95),  162,  165,  222. 
Salkey,  In  re    (5   Biss.   486),   629, 

643. 
Salkey,  In  re    (6  Biss.  269),  640, 

641,  642,  692. 
Salkey,  In  re    (6   Biss.   280),   698. 
Sallee,  In  re  (2  N.  B.  R.  228),  213. 
Salmon  &  Salmon,  In  re  (143  Fed. 

Rep.  395),  201. 
Samel    v.    Dodd     (142    Fed.    Rep. 

68),  696. 
Samson   v.   Burton    (5   Ben.   343), 

109,  654. 
Samuel  v.  Cravens  (10  Ark.  380), 

857. 
Sanborn,  In  re  (96  Fed.  Rep.  551), 

613,  742,  743. 
Sanborn,    In    re    (131    Fed.    Rep. 

397),  816,  820. 
Sanderlin,   In   re    (109    Fed.   Rep. 

857),  589,  744,  756,  767. 
Sanderson's  Trust,  In  re  (3  K.  &  J. 

497),  505. 


Sandford  v.  Lackland    (2  Dill.  6), 

480,  505. 
Sandford   v.    Sandford    (58    N.    Y. 

67),  350,  359,  429. 
Sandford  Fork  &  Tool  Co.,  In  re 

(160  U.  S.  247),  950. 
Sandford  v.  Chase    (3  Cowen   [N. 

Y.],  381),  246. 
Sandford  Furniture  Co.,  In  re  (126 

Fed.  Rep.  888),  150,  433. 
Sandford  Furniture  Co.,  In  re  (126 

Fed.  Rep.  888),  749,  766. 
Sands   v.    Codwise    (4    Johns.    [N. 

Y.],  536),  471. 
San  Gabriel  Sanitorium  Co.,  In  re 

(95  Fed.  Rep.  271),  179. 
San  Gabriel  Sanitorium  Co.,  In  re 

(102  Fed.  Rep.  310),  110. 
San  Gabriel  Sanitorium  Co.,  In  re 

(111    Fed.    Rep.    892),    904. 
Sanger   v.    Upton    (91    U.    S.    56), 

375. 
Sapiro,  In  re   (92  Fed.  Rep.  340), 

644. 
Sarah,    The    (52    Fed.   Rep.    233), 

949. 
Sargent,  In  re   (13  N.  B.  R,  144), 

287. 
Saul,  In  re  (5  Fed.  Rep.  715),  294. 
Saunders,  In  re  (2  Low.  444)]  324. 
Saunders    v.    Commonwealth     (10 

Grat.,  Va.,  494),  833,  848. 
Saunders    v.    Mitchell     (61    Miss. 

321),  173. 
Saunders    v.    Williams    (5    N.    H. 

213),  461. 
Saur,  In  re   (122   Fed.  Rep.  101), 

459. 
Sauthoff,  In  re  (7  Biss.  167),  397. 
Sauthoff,  In  re   (8  Biss.  35),  537. 
Savage,  in  re   (16  N.  B.  R.  368), 

308. 
Savage,  In  re  (12  Fed.  Rep.  719) 

784,  785. 
Savage  v.  Savage  (141  Fed.  Rep. 

346),  557,  742. 
Savin,  In  re   (131  U.  S.  267),  692, 

703,  705. 
Savings  Bank  v.  Webster   (48  N. 

H.   21),   861. 
Savoye  v.  Marsh    (10  Met.  Mass., 

594),   827. 
Sawyer,  In  re   (2  Low.  475),  720. 
Sawyer.  In  re  (2  Hask.  337),  793, 

819. 
Sawyer,    In    re    (124    U.    S.    207), 

700,  701. 
Sawyer,  In  re  (130  Fed.  Rep.  384), 

585,  589, 


1416 


TABLE  OF  CASES. 
References  are  to  pages. 


Sawyer   v.    Hoag    (17    Wall.    622), 

371,  374,  375,  493,  494. 
Sawyer  v.  Turpin   (91  U.  S.  114), 

233,  478,  503,  567,  586. 
Saxton    Furnace    Co.,    In    re    (136 

Fed.  Rep.   697),   743,  753. 
Saxton    Furnace    Co.,    In   re    (142 

Fed.   Rep.    293),   3G3. 
Scammon    v.    Cole    (3    Cliff.    472), 

552. 
Scammon   v.  Cole    (1   Hask.   214), 

558. 
Scammon  v.  Kimball  (5  Biss.  223), 

373. 
Scammon    v.    Kimball    (92    U.    S. 

362),  373,  375. 
Scanlan,  In  re   (97  Fed.  Rep.  26), 

777. 
Schaefer,    In    re    (104    Fed.    Rep. 

973),  346,  352. 
Scheiffer,  In  re   (2  N.  B..  R.  591), 

331,  332. 
Schenck,    In    re    (116    Fed.    Rep. 

554),  469,  624,  800,  811. 
Schenectady    Eng.    &    Const.    Co., 
In    re    (127    Fed.    Rep.    782), 
280. 
Schenectady    Eng.    &    Const.    Co., 
In    re    (147    Fed.    Rep.    868), 
128,   131,   132,   220,   281. 
Schenkein,   In   re    (113    Fed.   Rep. 

421),  185,  192,  225. 
Schnechter,   In   re    (9   Am.   B.   R. 

729),  528. 
Scherber,    In    re    (131    Fed.    Rep. 

121),  100. 
Schermerhorn,    In    re    (145    Fed. 

Rep.  341),  120. 
Scherr,  In  re  (138  Fed.  Rep.  695), 

142. 
Scherzer,    In    re     (130    Fed.    Rep. 

631),  374,  578. 
Scheuer  v.   Smith  &  Montgomery, 
etc.,  Co.    (112  Fed.  Rep.  407), 
197,  175,  231,  676. 
Schiller,  In  re  (96  Fed,  Rep.  400), 

141,  142. 
Schiller    v.    Weinstein    (91    N.    Y. 

Supp.  76),  840. 
Schilling    v.    Curran     (30    Mont. 

.    370),  557. 
Schlitz    V.    Schatz    (2    Biss.    248), 

519,  523,  592. 
Schlesinger,  In  re   (102  Fed.  Rep. 

117),  653,  694,  733. 
Schnepf,  In  re    (2   Ben.   72),  552. 
Schonberg,    In    re    (7    Ben.    211), 
638. 


Schonder  v.  Wace  (1  Camp.  487), 

509. 
Scholtz,  In  re  (106  Fed.  Rep.  834), 

94,  291,  780. 
Schreyer  v.  Scott  (134  U.  S.  405), 

624. 
Schrom,  In  re  (97  Fed.  Rep.  760), 

92,  103,  104. 
Schuchardt,   In   re    (8    Ben.    585), 

381. 
Schulenburg  v.  Kabwrech  (2  Dill. 

132),  G26. 
Schuller,    In    re    (108    Fed.    Rep. 

591),  474,  525,  585. 
Schultz,  In  re  (109  Fed.  Rep.  264), 

806. 
Schulz,  In  re  (135  Fed.  Rep.  228), 

517. 
Schumpert,  In  re  (8  N.  B.  R.  415), 

462,  489. 
Schuyler,  In  re  (3  Ben.  200),  793, 

819,  822. 
Schwaninger,  In  re  (144  Fed.  Rep. 

555),  206. 
Schwartz,  In  re   (14  Blatch.  196), 

381. 
Schwartz,    In    re     (14    Fed.    Rep. 

787),  697. 
Schweer  v.  Brown  (195  U.  S.  171), 

82,   91,    870,    877,    894,    895. 
Schweer  v.  Brown   (130  Fed.  Rep. 

328),  442,  653,   696.   702,  733. 
Scott,  In   re    (1  Abb.   U.   S.   336), 

610,  611. 
Scott,    In    re    (15    N.    B.    R.    73), 

707,  711,  729. 
Scott,  In  re    (11  Fed.  Rep.   133), 

192. 
Scott,   In   re    (93   Fed.  Rep.   418), 

392,   403. 
Scott,  In  re    (95   Fed.  Rep.   815), 

636,   643. 
Scott,  In  re    (99   Fed.   Rep.   404), 

142,  157,  255,  744,  771. 
Scott,  In  re   (111  Fed.  Rep.  144), 

219. 
Scott,  In  re   (126  Fed.  Rep.  981), 

799),  809,   810,  816. 
Scott  V.    Ellery    (142   U.    S.    381), 

Scott %.  Kelly    (22  Wall.  57),  92, 

746,   882. 
Scott    V.    Surman     (Willes'    Rep. 

400),  500. 
Scott    V.    Wilson    (115    Fed.    Rep. 

284),  874. 
Scovill  V.  Thayer  (105  U.  S.  143), 

372,  375. 


TABLE  OF  CASES. 
References  are  to  pages. 


1417 


Screws,  In  re  (147  Fed.  Rep.  989), 

431,   434. 
Scrinopski,  In  re    (10  Am.   B.   R. 

221),  G24. 
Scully,  In  re  (108  Fed.  Rep.  372), 

323,  324. 
Seaboard  Fire  Underwriters,  In  re 

(137  Fed.  Rep.  987),  175,  250, 

245. 
Seaboard     Steel     Casting     Co.     v. 

Trigg  (124  Fed.  Rep.  75),  202, 

238. 
Seabolt,  In  re  (113  Fed.  Rep.  766), 

519,  539. 
Seabury,  In  re   (10  N.  B.  R.  90), 

794. 
Seaholm,    In    re    (136    Fed.    Rep. 

144),  813. 
Sears,  In  re   (117  Fed.  Rep.  294), 

286,   904. 
Sears,  Humbert  &  Co.,  In  re  (128 

Fed.  Rep.  275),  255. 
Seaton,    Ex    parte     (8    Mor.    97), 

349. 
Seavey  v.  Potter   (121  Mass.  297), 

453. 
Seay,  In  re    (113  Fed.  Rep.  969), 

399,  576. 
Sebring  v.  Wellington    (6  Am.  B. 

R.    671),    554,    561,    564,    572, 

('•26. 
Seckendorf,   In   re    (2    Ben.    462), 

629,   796. 
Second    Nat.    Bank    v.    State   Nat. 

Bank     (10    Bush,    Ky.,    367), 

823. 
Secor,  In  re    (IS  Fed.  Rep.   319), 

340,   341. 
Security    v\  hse.  Co.  v.  Hand    (143 

Fed.   Rep.    32),    605,    598,    601, 

603,   877,   878,  879. 
Seddon,  Ex  parte  (2  Cox,  49),  318. 
Seebold,  In  re  (105  Fed.  Rep.  910), 

122,  904,  908. 
Sedgwick    v.    Place    (1    N,    B.    R. 

673),   27. 
Sedgwick    v.    Place     (12    Blatch. 

163),  470. 
Seldner   v.    Smith    (40    Md.    602), 

850. 
Selkregg  v.   Hamilton   Bros.    (144 

Fed.   Rep.   550),    261. 
Selkrig  v.  Davies  &  Salt   (2  Dow, 

230),   461. 
Sellers  v.  Bell  (94  Fed.  Rep.  801), 

218,  492,   515,   807. 
Semmel,  In  re  (118  Fed.  Rep.  487), 

682. 


Semmer  Glass  Co.,  In  re  (135  Fed. 

Rep.   77),   343,  362. 
Senior    v.    Pierce     (31    Fed.    Rep. 

625),  116. 
Sentenne  &  Green  Co.,  In  re   (120 

Fed.  Rep.  436),  590,  791,  792, 

797. 
Sessions   v.   Romadka    (145   U.    S. 

39),  443,  403,  508. 
Severin  v.  Robinson   (60  N.  E.  R. 

9G6),  622. 
Sewell,  In  re  (111  Fed.  Rep.  791), 

596. 
Seymour,  In  re   (1  Ben.  348),  656, 
■      659. 
Seymour    v.    Browning    (17    Ohio 

362),  859. 
Seymour  v.   Freer    (5  Wall.  822), 

930. 
Seymour    v.    Street    (5    Neb.    85), 

862. 
Shachter,    In    re    (119    Fed.    Rep. 

1010),  696,  702. 
Shaeffer,    In    re     (105    Fed.    Rep. 

352),  482,  531,  739,  741,  747. 
Shaffer,  In  re  (104  Fed.  Rep.  982), 

88,   389. 
Shaffer,  In  re  (124  Fed.  Rep.  Ill), 

367. 
Shaffer  v.   Fritchery    (4   N.   B.  R. 

548),  125. 
Shaffer    &    Son,    In   re    (128    Fed. 

Rep.  986). 
Shainwald  v.  Lewis    (5  Fed.  Rep. 

513),  97,  104,   105. 
Shanker,    In    re     (138    Fed.    Rep. 

862),    651,    817. 
Shapiro,  In  re  (106  Fed.  Rep.  495), 

183,   191,  238,   296,  300,   305. 
Sharon  v.  Hill  (24  Fed.  Rep.  726), 

693. 
Sharp  V.  Philadelphia  Warehouse 

Co.    (10   Fed.    Rep.    379),    580. 
Shaw,   In   re    (9    Fed.   Rep.    495), 

729. 
Shaw,  In  re   (109  Fed.  Rep.  780), 

406,  407,  778,  779. 
Shaw  V.  Quincy  Min.  Co.    (145  U. 

S.  444),  245,  517. 
Shawhan    v.    Wherritt     (7    How. 

627),  10,  279,  437. 
Shay    V.    Sessaman     (10    Pa.    St. 

432),  510. 
Shea,  In  re   (126  Fed.  Rep.  153), 

753. 
Shea,  In  re   (122  Fed.  Rep.  742), 

755. 
Shears  v.   Solhinger    (10   Abb.  Pr. 

N.   S.  287),  20,  23,  26,  27. 


1418 


TABLE  OF  CASES. 
References  are  to  pages. 


Sheehan,  In  re   (8  N.  B.  R.  353), 

270,  271,  348,  663,  765. 
Sheldon  v.  Parker   (66  Neb.  610), 

614,  618. 
Sheldon   v.   Rothschild    (8    Taunt. 

156),  372. 
Sheldon  v.  Rounds  (40  Mich.  427), 

521. 
Shenberger,  In  re   (102  Fed.  Rep. 

978),  480. 
Shepard,  In  re   (1  N.  B.  R.  439), 

383,  402,  791. 
Shepard,  In  re   (3  Ben.  347),  571, 

580. 
Shepard,  In  re, {97  Fed.  Rep.  187), 

112,  835. 
Shepherd    v.    Murrill     (90    N.    C. 

208),  527. 
Shera,  In  re   (114  Fed.  Rep.  207), 

643. 
Sherman    v.     Bingham     (3     Cliff. 

552),   19,   97,   104,    114,   617. 
Sherman   v.   Hobart    (26   Vt.    60). 

857. 
Sherman    v.    Luckhardt    (11    Am. 

B.   R.   26),   474. 
Sherman    v.    Luckhardt    (96    Mo. 

App.  320),  476,  573. 
Sheridan,    In    re     (98    Fed.    Rep. 

406),  571,  576,  599,  600,  605. 
Shields,  In  re  (4  Dill.  588),  708. 
Shields    v.    Coleman     (157    U.    S. 

168),  93,  441,  895. 
Shillito   Co.  V.  McClung    (66  Fed. 

Rep.  22),  949. 
Shirley,  In  re  (112  Fed.  Rep.  301), 

449,    580,    586,    592,    595,    596, 

905. 
Shoemaker,  In  re    (4   Biss.    245), 

796. 
Shoemaker,  In  re   (112  Fed.  Rep. 

648),  106. 
Shoesmith,   In  re    (135   Fed.   Rep. 

684),  187,  284,  286. 
Shoe    &   Leather   Co.,   In   re    (129 

Fed.  Rep.  588),  735,  902,  908. 
Shouse,   In   re    (Crabbe,   482),   10, 

195,  229,  580. 
Shopshire,  Woodliff  &  Co.  v.  Bush 

(204  U.   S.   186),   777. 
Shults,  In  re  (132  Fed.  Rep.  573), 

372    373    379. 
Shults,  'in  re  (135  Fed.  Rep.  623), 

379. 
Shuman  v.  Strauss  (52  N.  Y.  404), 

667,  856. 
Shurtleff    v.    Thompson    (63    Me. 
118),  861. 


Shuster,  In  re  (134  Fed.  Rep.  43), 

120. 
Shute  V.  Patterson  (147  Fed.  Rep. 

509),  244,  289,   676. 
Sibbald  v.  United  States    (12  Pet. 

488),  950. 
Sidle,  In  re  (2  N.  B.  R.  220),  834, 

835. 
Siebert,  In  re  (133  Fed.  Rep.  781), 

109,  134. 
Sievers,  In  re  (91  Fed.  Rep.  366), 

30,   252. 
Sigafus    V.    Porter    (84    Fed.   Rep. 

430),  896. 
Sigsby  V.  Willis  (3  Ben.  371),  339, 

340,  341,  356. 
Silberstein  v.  Stahl   (4  Am.  B.  R. 

626),  580. 
Silsby    V.    Foote    (20    How.    290), 

919. 
Silver  v.  Ladd   (6  Wall.  440),  933. 
Silverman's    Case    (1    Saw.    410), 

17,  194,   268,  574. 
Silverman,    In    re    (97    Fed.    Rep. 

325),  165,   290,   773. 
Silverman,   In   re    (101   Fed.   Rep. 

219),   337,  360,  362,  363,   364. 
Simmons,  In  re  (10  N.  B.  R.  253), 

287. 
Simonson  v.  Sinsheimer    (95  Fed. 

Rep.  948),  228,  239,  266,  283. 
Simonson  v.  Sinsheimer  (100  Fed. 

Rep.   426),   275,   913. 
Simonson,  Whiteson  &  Co.,  In  re 

(92  Fed.  Rep.  904),  239,  283. 
Simpson,    Ex    parte     (DeGex,    9), 

553. 
Simpson,  In  re    (2  N.   B,.  R.   47), 

664. 
Simpson    v.    Houston     (97    N.    C. 

344),   519. 
Simpson   v.  Van  Etten    (108   Fed. 

Rep.  199),  550. 
I   Simpson  Mfg.  Co.,  In  re  (130  Fed. 

Rep.  307),  447,  451. 
Sims,    In    re    (9    Fed.    Rep.    440), 

863. 
Sims,  In  re   (118  Fed.  Rep.  356), 

77L 
Sims    v.    Union    Assur.    Soc.    (129 

Fed.  Rep.  804),  127,  254. 
Singer    v.    Jacobs    (11    Fed.    Rep. 

559),   566,   579. 
Sinsheimer  v.  Simonson  (107  Fed. 

Rep.  898),  291. 
Sisler,  In  re    (96  Fed.  Rep,  402), 

522. 
Skelley,  In  re   (3  Biss.  260),  270, 

271. 


TABLE  OF  CASES. 
References  are  to  pages. 


1419 


Skillin    V.    Maibrunn     (78    N.    Y. 

Supp.)   626, 
Skinner,  In  re  (97  Fed.  Rep.  190), 

679. 
Slack,  In  re  (111  Fed.  Rep.  523), 

482. 
Slaughter  v.  Detlny   (15  Ind.  49), 

527. 
Slingluff,    In    re     (106    Fed.    Rep. 

154),  497,  498. 
Slingluff,    In    re    (105    Fed.    Rep. 

502),  682. 
Slipper  V.  Stidstone  (5  T.  R.  493), 

^77 
Sloan,  In  re  (135  Fed.  Rep.  493), 

377. 
Sloan,  In  re   (135  Fed.  Rep.  873), 

526    535. 
Sloan    V.    Lewis     (22    Wall.    150), 

229,  L'79,  346,  358. 
Slomka,    In    re     (122    Fed.    Rep. 

630),  778,  779. 
Small  V.  MuUer  (8  Am.  B.  R.  448), 

9L 
Smalley  v.  Langenour   (196  U.  S. 

93),  533. 
Smart,  In  re  (136  Fed.  Rep.  974), 

504. 
Smith,   Ex   parte    (1   M.   D.   &   D. 

165),  316. 
Smith,  Ex  parte  (2  Rose  64),  612. 
Smith,  In  re  (2  Low.  69),  178. 
Smith  In  re  (  8  Blatch.  461),  791. 
Smith,    In    re    (2    Ben,    113),    135, 

328, 
Smith,  In  re  (5  N.  B.  R.  20),  794. 
Smith,  In  re  (8  N.  B.  R.  401),  518. 
Smith,  l7i  re    (13   N.   B.   R.   500), 

309. 
Smith,  In  re    (16  N.  B.  R.   113), 

314. 
Smith,  In  re   (16  Fed.  Rep.  465), 

799,  807. 
Smith,  In  re   (92  Fed.  Rep.  135), 

27,  30,  82,  90,  734. 
Smith,  In  re   (93  Fed.  Rep.  791), 

135,  142,   143,   442,   520,  534. 
Smith,  In  re   (96  Fed.  Rep.  832), 

492,  515. 
Smith,  In  re   (108  Fed.  Rep.  39), 

150,  161,  162,  166. 
Smith,  In  re  (112  Fed.  Rep.  509), 

647,   678. 
Smith,  In  re  (113  Fed.  Rep.  993), 

113. 
Smith,  In  re  (117  Fed.  Rep.  961), 

96,  250. 
Smith,  In  re  (121  Fed.  Rep.  1014), 

430. 


Smith,  In  re  (146  Fed.  Rep.  923), 

343,   362. 
Smith  Lumber  Co.,  In  re  (132  Fed. 

Rep.    618),   352. 
Smith   &   Shuck,  In  re    (132  Fed. 

Rep.  301),  446,  449. 
Smith  &  Wallace  Co.  v.  Lambert 

(69  N.  J.  L.  487),  841. 
Smith  V.  Au  Gres   (148  Fed.  Rep. 

— ),  455,  501. 
Smith  V.   Belford    (106  Fed.  Rep. 

658),    89,    133,    139,    692,    701, 

703. 
Smith  V.  Brinkerhoff  (2  Selden  N. 

Y.  305),  379. 
Smith   V.    Buchanan    (1   East   6), 

826. 
Smith  V.  Chandler  (69  Mass.  392), 

496. 
Smith   V.   Cooper    (120   Fed.   Rep. 

230),   162,   165,   774. 
Smith  V.  Ely   (10  N.  B,  R.  553), 

467. 
Smith  V.  Engle  (14  N.  B.  R.  481), 

724. 
Smith    V.    Gordon     (6    Law    Rep. 

313),  433,  483,  487,  508. 
Smith  V.  Hill  (8  Gray  572),  379. 
Smith   V.   Hodson    (4   T.   R.   212), 

370. 
Smith   V.    Hodson    (50   Wis.    279), 

832. 
Smith  V.  Jameson    (5  T.  R.  601), 

316. 
Smith  V.   Keegan    (111  Fed.  Rep. 

157),  678,  683,  821. 
Smith  V.   Kehr    (2   Dill.   50),   525, 

529,  627. 
Smith  V.  McKay   (161  U.  S.  355), 

895. 
Smith    V.    McLean    (10    N.    B.    R. 

260),  566,  579,  580. 
Smith    V.    Marshall    (2    Atk.    70), 

245. 
Smith    V.    Mason    (14    Wall    419), 

100,  124,  125,  617. 
Smith    V.    Means    (148    Fed.   Rep. 

89),  458. 
Smith   V.    Motley    (149    Fed.   Rep. 

),  455,  504. 

Smith   V.    National    Suffolk   Bank 

127  Fed.  Rep.  286),  944. 
Smith   V.   Pickering    (1   Peak's  N. 

P.  69),  496. 
Smith  V.  Profitt  (82  Va.  832),  50.5. 
Smith  V.  Ramsey    (27  0.   S.  339), 

862. 
Smith  V.  Teutonia  Ins.  Co.  (6  Am, 

Law  Rev.  584),  196,  575. 


1420 


TABLE  OF  CASES. 
References  are  to  pages. 


Smith  V.  Smith  (5  Ves.  193),  310, 

482. 
Smith  V.  Union  Nat.  Bank  (5  Pet. 

518),  21. 
Smith  V.  Wheeler   (55  N.  Y.  App. 

Div.  170),  355. 
Smith  V.  Zachery    (115  Ga.  722), 

823 
Snedaker,  In  re  (3  N.  B.  R.  629), 

397. 
Snell,  In  re   (125  Fed.  Rep.  154), 

112,  114,  545,  547,  550. 
Snelling,  In  re  (la  N.  B,  R.  120), 
'      720. 
Snowdon   v.   Dales    (6    Sim.   524), 

505. 
Snyder  v.   Smith    (185  Mass.   58), 

545,  547. 
Snyder  &  Johnson  Co.,  In  re  (133 

Fed.  Rep.   806),  179. 
Societe  v.   Western   Distilling  Co. 

(42  Fed.  Rep.  96),  652,  695. 
Sohier  v.  Johnson  (111  Mass.  238), 

462. 
Soldiers'  Business  Messenger  Dis- 
patch Co.,  In  re   (3  Ben.  204), 

593. 
Soils,  In  re   (4  Ben.  143),  629. 
Solomon,  Ex  parte   (1  Glyn.  &.  J. 

25),  405. 
Soltykoff,    In    re    (1    Q.  B.    1891, 

415),  173. 
Son,  In  re  (2  Ben.  153),  799. 
Sonstiby  v.  Keeley    (11  Fed.  Rep. 

578),  578. 
Soper,  In  re   (1  Am,  B.  R.   193), 

655. 
Soudan  Mfg.  Co.,  In  re  (113  Fed. 

Rep.   804),  473,  562,  584,  585, 

593. 
South    End    Imp.    Co.    v.    Harden 

(52  Atl.  Rep.  1127),  609,  610. 
South    Straffordshire    Ry.    Co.    v. 

Burnside    (5    Ex.    Rep.    128), 

492. 
Southard    v.    Benner     (72    N.    Y. 

424),  467. 
Southern  v.  Fisher   (6  S.  C.  345), 

91. 
Southern  L.   &  T.  Co.  v.  Benbow 

(96  Fed.  Rep.  514),  743. 
Southern  Pac.  Co.  v.  Denton   (146 

U.  S.  202),  245. 
Southern    Pine    Co.    v.    Savannah 

Trust     Co.      (141     Fed.     Rep. 

802),  438,  455,  502,  503,  944. 
Southern  Ry.  Co.  v.  Allison   (190 

U.  S.  326),  234,  245. 


Southwestern   Bridge   &   Iron  Co; 

In    re    (133    Fed.    Rep.    568), 

273. 
Spalding,    In    re    (137    Fed.    Rep. 

1020),  676. 
Spalding,    In    re    (139    Fed.    Rep. 

244),  201,  202. 
Spalding    v.    Dixon    (21    Vt.    45), 

338. 
Spalding   v.    New   York    (4    How. 

21),   339. 
Spades,  In  re   (6  Biss.  448),  708, 

710,  711. 
Spades,  In  re  (6  Biss.  448),  723. 
Sparhawk    v.    Cloon     (128    Mass. 

263),  505. 
Sparhawk  v.  Cochran  (30  Leg.  Int. 

233),  438. 
Sparhawk  v.  Richards    (12  N.  B. 

R.  74),  578. 
Sparhawk    v.    ^erkes    (142    U.    S. 

1),  443,  486,  495,  508. 
Spaulding  v.  McGovern   (10  N.  B. 

R.  188),  125. 
Speake  v.  Kinnard    (4   S.  C.  54), 

531. 
Spear,  In  re  (103  Fed.  Rep.  779), 

804. 
Spencer  v.   Duplan   Silk  Co.    (112 

Fed.  Rep.  688),  479,  606. 
Spencer  v.   Duplan   Silk  Co.    (191 

U.   S.  526),   123,  124,  126,  127, 

875,  885. 
Spencer  v.  Lapsley  (20  How.  264), 

122,  123. 
Speyer,/)i  re  (42  How.  Prac.397), 

141. 
Spicer,  In  re  (145  Fed.  Rep.  431), 

866. 
Spillman,  In  re  (13  N.  B.  R.  214), 

71L 
Spindle  v.  Shreve  (111  XJ.  S.  542), 

.  479,  481,  505. 
Spitley    V.    Frost     (15    Fed.    Rep. 

304),  526. 
Spitzer,    In    re     (130    Fed.    Rep. 

879),  430,  455. 
Spofford  In  re  (62  Fed.  Rep.  443), 

693. 
Spooner  v.  Russell    (30  Me.  454), 

855,  856. 
Spreckles    v.    McClain    (192   U.    S. 

397),  875. 
Springer  v.  Foster   (2  Story  383), 

22. 
Squire  v.  Compton  (Vin.  Ab.  Dow- 
er G.  pi.  60),  482. 
Stalker,  In  re  (123  Fed.  Rep.  691), 

769,  770. 


TABLE  OF  CASES. 
References  are  to  pages. 


1421 


Stamp,  Ex  parte    (De   Gex,   345), 

173. 
Standard  Laundry  Co.,  In  re   (112 

Fed.  Rep.  12G),  582,  605. 
Standard  Varnish  Works  v.   Hay- 
dock  (143  Fed.  Rep.  318),  405, 

453. 
Staniford    v.    Fellows    (1    Marsh, 

184),  372,  378. 
Stansfield  v.  Portsmouh    (4   C.  B. 

N.  S.  120),  487,  489. 
Stanton,  In  re  (28  Miss.  447),  307. 
Stark,   In   re    (96   Fed.   Rep.   88), 

806. 
Stark  V.   Stinson    (23  N.  H.  259), 

858. 
State  Bank  v.  Cox  (143  Fed.  Rep. 

91),  547. 
State  Ins.  Co.,  In  re  (16  Fed.  Rep. 

756),  381,  388,  412. 
State  V.  Pike   (15  N.  H.  83),  640, 

677. 
State    V.    Strait     (94    Minn.    384), 

689. 
State  V.  Vaile  (41  la.  29),  129. 
State    Bank    v.    Wilborn    (6    Ark. 

35),  18. 
Steam  Vehicle  Co.,  In  re  (121  Fed. 

Rep.  939),  554,  576. 
Stearns   v.   Flick    (103   Fed.   Rep. 

919),  341,  386,  780. 
Stedman  v.  Bank  of  Monroe   (117 
Fed.  Rep.  237),  473,  562,  585, 
588. 
Steed,  In  re  (107  Fed.  Rep.  682), 

683,  797,  815,  819,  820. 
Steele,  In  re    (98   Fed.  Rep.   78), 

497,  498,  499. 

Steele  v.  Buel  (104  Fed.  Rep.  968), 

498,  499,    506,    513,    874,    880, 
919. 

Steele  v.  Moody  (53  Ala.  418),  526. 
Steevens  v.  Earles   (25  Mich.  40), 

784. 
Stegar,  In  re  (113  Fed.  Rep.  978), 

207. 
Steiger  v.  Bonn  (4  Fed.  Rep.  17), 

246. 
Stein,   In  re    (94   Fed.  Rep.   124), 

762,  765,  785. 
Stein,  In  re   (105  Fed.  Rep.  749), 

241,  245  261,  262. 
Stein,  In  re   (130  Fed.  Rep.  377), 

285 
Stein  &  Co.,  In  re  (127  Fed.  Rep. 

547),  174,   231,  298. 
Steiner.  In  re  (1  Pa.  Law  J.  368), 

776. 


Steiner  v,  Marshall  (140  Fed.  Rep. 

710),  903,  909. 
Steininger    Mercantile    Co.,   In   re 
(107  Fed.  Rep.  669),  474,  585. 
Stelling  V.  Jones  Lumber  Co.  (116 
Fed.  Rep.  261),  874,  878,  879. 
Stengel-Rothschild  v.  Leidigh  Car- 
riage Co.   (not  reported),  109, 
256. 
Stephens,  Ex  parte   (11  Ves.  24), 

'^77 
Stephens,    In    re     (3    Biss.    187), 

393,  412,  612. 
Stephens,   In   re    (114    Fed.    Rep. 

192),  523. 
Stephens  v.  Cady   (14  How.  531), 

462. 
Stephenson  v.  Jackson  (2  Hughes 

204),  315. 
Stern,  In  re   (116  Fed.  Rep.  604), 

363. 
Stern,  In  re   (144  Fed.  Rep.  956), 

406,  409,  419. 
Stern  v.  Nussbaum    (47  How.  Pr. 

N.  Y.   489),  840. 
Stern,    Falk    &    Co.    v.    Louisville 
Trust  Co.  (112  Fed.  Rep.  501), 
553. 
Steur,  In  re   (104  Fed.  Rep.  976), 

98,  102,  134,  621. 
Stevens,  In  re  (1  Low.  397),  171. 
Stevens,  In  re  (2  Biss.  373),  515. 
Stevens,  In  re   (1  Saw.  397),  297, 

318,  323. 
Stevens,  In  re  (104  Fed.  Rep.  323), 

314. 
Stevens,    In    re     (107    Fed.    Rep. 

243),  390,  391,  393,  403. 
Stevens   v.  Earles    (25  Mich.   40), 

440. 
Stevenson,    In    re    (6    Fed.    Rep. 

710),  754,  755,  737. 
Stevenson,    In    re    (93    Fed.    Rep. 

789),  514,  539. 
Stevenson,    In    re    (94    Fed.    Rep. 

110),  240,  242. 
Stevenson   v.   McLaren    (14   N.   B, 

R.  403),  259. 
Stevenson  v.  Milliken  Milling  Co. 

(99  Me.  320),  563. 
Stewart,  In  re   (3  N.  B.  R.  108), 

207. 
Stewart,  In  re   (13  N.  B.  R.  295), 

538. 
Stewart  v.  Anderson  (10  Ala.  504), 

823. 
Stewart     v.    Hargrove    (23     Ala. 
429),  495,  861. 


1422 


TABLE  OF  CASES. 
References  are  to  pages. 


Stewart  v.  Ingle   (9  Wheat.  52G), 

888. 
Stewart  v.  Isidor  (5  Abb.  Prac.  N. 

S.  G8),  404,  405. 
Stewart  v.  Loomis   (No.  13433  Fed. 

Cas  )     10. 
Stewart  V.  Piatt   (101  U.   S.  731), 

190,   542,   591,   592. 
Stewart  v.  Reckless   (24  N.  J.  L. 

427),  856,  857. 
Stewart   v.    Sonneborn    (98    U.    S. 

187),  289. 
Stewne   v.   Aylesworth    (18   Conn. 

244),  509. 
Stickney  v.   Wilt    (23  Wall.   150), 

102. 
Stiles   V.    Lay    (9' Ala.    795),   209, 

210. 
Stillwell,  In  re   (7  N.  B.  R.  226), 

325. 
Stillwell  V.  Cope   (4  Denio,  N.  Y., 

225).   857. 
Stockwell  V.   Silloway   (105  Mass. 

517,  657,  658,  659. 
Stockwell  V.  U.  S.   (13  Wall.  531), 

340. 
Stockwell    V.    Woodward    (52    Vt. 

234),    350. 
Stoddard,    In    re    (114    Fed.   Rep. 

486),    684. 
Stoever,  In  re  (105  Fed.  Rep.  355), 

409. 
Stoever,  In  re  (127  Fed,  Rep.  394), 

388,  781. 
Stokes,   In   re    (1   N.   B.   R.    489), 

425. 
Stokes,  In  re  106  Fed.  Rep.  312), 
32,  81,  82,  85  86,  90,  101,  103, 
115,  117,  306,  734. 
Stone,  In  re   (116  Fed.  Rep.  35), 

514,   537,   528. 
Stoner,  In  re  (105  Fed.  Rep.  752), 

490. 
Storm,  In  re  (103  Fed.  Rep.  618), 

198 
Stotts,  In  re   (93  Fed.  Rep.  438), 

144,  160,  161,  162,  165,  776. 
Stout,  In  re   (109  Fed.  Rep.  794), 

820. 
Stout    V.    Yaeger    Miling    Co.    (13 

Fed.  Rep.  802),  600. 
Stowell.  In  re  (24  Fed.  Rep.  468), 

726. 
Stowers,  In  re  (1  Low.  528),  297. 
Strachen,  In  re  (3  Biss.  181),  3.59, 

387,  413. 
Strachan   v.   Barton    (1   Ex.    647), 
553. 


Strader  v.  Graham  (IS  How.  602), 

948. 
Strain  v.  Gourdm   (2  Woods  380), 

572. 
Strait,  In  re    (2  Am.   B.  R.   308), 

284. 
Strang  v.  Bradner  (114  U.  S.  55), 

883. 
Strassburger,    In    re    (4     Woods 

557),   782. 
Stratton    v.    Perry    (2    Tenn.    Ch. 

633),  351. 
Strause  v.  Hooper   (105  Fed.  Rep. 

590),  303,  300,  313,  320. 
Strauss,   In   re    (2   N.    B.   R.    48), 

390. 
Strauus  &  Stern  In  re  (not  report- 
ed), 302. 
Street    v.    Dawson     (4    N.    B.    R. 

207),  124,  125,  552. 
Streeter    v.    Sumner     (11    Foster 

[N.  H.]  557),  497,  542,  51L 
Strenz,  In  re   (8   Fed.  Rep.   311), 

578. 
Strong  V.   Clawson    (10    111.    346), 

840. 
Stubbs,  In  re  (4  N.  B.  R.  376),  27. 
Stuckey  v.  Masonic  Savings  Bank 

(108  U.  S.  74),  552,  562,  589. 
Studebaker,  In  re   (127  Fed.  Rep. 

951),  805,  806,  808. 
Sturgeon,  In  re   (1  N.  B.  R.  498), 

414. 
Sturgeon,    In    re    (139    Fed.    Rep.' 

608),   139,   632,  638,  639,  648. 
Sturges      V.      Crowninshield       (4 
Wheat.  122),  7,  18,  19,  20,  21, 
26. 
Sturgiss  V.  Corbin   (141  Fed.  Rep. 

1),  752,  753,  754,  904. 
Sturm  V.   Boker    (150  U.   S.  312), 

448. 
Stuyvesant   Bank,   hi   re    (6   Ben. 

33),  637,  645. 
Styer,  In  re    (98   Fed.  Rep.   290), 

254,  613,  739,  741,  747. 
Suburban  Electric  Co.,  In  re  (not 

reported),    178. 
Sugenheimer,  In  re   (91  Fed.  Rep. 

744),  159. 
Sulling    v.    Gunderman    (35    Tex. 

545),  519. 
Sullivan  v.  Bridge   (1  Mass.  511), 

512. 
Sullivan  v.  Hieskill  (Crabbe,  525), 

20,  23,  26. 
Sully    In  re   (133  Fed.  Rep.  997), 
255. 


TABLE  OF  CASES. 


1423 


References  are  to  pages. 


Sully,  In  re   (142  Fed.  Rep.  895), 

409. 
Summers  v.  Abbott  (122  Fed.  Rep. 

36),   163,  773,  781. 
Summerville    v.    Stockton    Milling 

Co.  (142  Cal.  529),  589. 
Sumner,    hi    re     (101    Fed.    Rep. 

244),  407. 
Sunderson     v.     Rowles     (4     Burr 

2064),  179. 
Sundheim  v.  Ridge  Ave.  Bank  (138 

Fed.  Rep.  951),  564,  626. 
Supervisors    v.    Kennicott    (94    U. 

S.  498),  950. 
Surety  Guarantee  &  Trust  Co,  In 
re    (121    Fed.    Rep.    73),    170 
178,  180. 
Sutherland,    In   re    (Deady    344), 

207,  268. 
Sutherland,   In   re    (Deady,   416), 

339. 
Sutherland,   In   re    (Deady,    573), 

794,  796,  816. 
Sutherland,   In   re    (6   Biss.    526), 

495. 
Sutherland  v.  Lasher   (11  Am.  B. 

R.  780),  212,  214. 
Sutherland    v.    Lasher    (84    N.    Y. 

Supp.  50),  840. 
Sutherland   v.   Lake   Superior  Ca- 
nal Co.  (9  N.  B.  R.  298),  125. 
Sutter  Bros.,  In  re  (131  Fed.  Rep. 

654),  103,  104,  105,  630. 
Suydam  v.  Broadnax  (14  Pet.  67), 

22. 
Svfa.n,' In  re   (150  U.  S.  637),  700, 

701. 
Swan    V.    Robinson    (5    Fed.   Rep. 

287),  565. 
Swarts  V.  Fourth  Nat.  Bank   (117 
Fed.    Rep.    1),    337,    354,    355, 
356,    363,    387,    399,    559,    500, 
573. 
Swartz    V.    Frank    (183    Mo.    438), 

16G,  557,  575. 
Swarts    V.    Hammer     (194    U.    S. 

441),  771. 
Swarts   V.    Seigel    (117   Fed.   Rep. 

113),  387,  354,  356,  557,  573. 
Swarts   V.    Siegal    (114   Fed.   Rep. 

1001),  560. 
Sweatt  V.  Boston,  etc.,  R.  Co.    (3 

Cliff.  339),  18. 
Sweet,  In  re    (36  Fed.  Rep.  761), 

822. 
Sweetser,    In   re    (128    Fed.    Rep. 

165),  387. 
Sweetser,  Pembroke  &  Co.,  In  re 
142  Fed.  Rep.  131),  364, 


Swepson  v.  Rouse    (65  N.  C.   34), 

503. 
Swift,  In  re   (105  Fed.  Rep.  493), 

362. 
Swift,  In  re   (106  Fed.  Rep.  65), 

314,  356. 
Swift,  In  re   (HI  Fed.  Rep.  503), 

550. 
Swift,  In  re  (112  Fed.  Rep.  315), 

338,  363. 
Swift,  In  re   (118  Fed.  Rep.  348), 

143,  144,  820. 
Switzer,    In    re     (140    Fed.    Rep. 

976),  696. 
Swofford     V.      Cornucopia     Mines 

140  Fed.  Rep.  957),  126,  127. 
Swords,  In  re  (112  Fed.  Rep.  661), 

521. 
Sykes,  In  re  (106  Fed.  Rep.  669), 

216,  790,  793. 
Sylvester    v.    Edgecomb     (76    Me. 

499),  177. 
Symonds  v.  Barnes   (59  Me.  191), 

840. 

T 

Taft,  In  re   (133  Fed,  Rep.  511), 

448,  454,  501,  503,  903,  908,  909. 
Taft    &    Co.    V.    Century    Saving:: 

Bank     (141    Fed.    Rep.    369), 

231,  232,  285,  286,  913,  937. 
Taft  v.  Fourth  Nat.  Bank  (2  N.  B. 

R.  1145),  473. 
Taft  V.  Fourth  Nat.  Bank  (8  Ohio 

N.  P.  59),  561,  623. 
Taitt,  Ex  parte  (16  Ves.  193),  307. 
Talbott,    In    re     (116    Fed.    Rep. 

417),  519,  529. 
Talcott,  Ex  parte    (9   B.  R.   502), 

356. 
Tallmann,  In  re   (2  Ben.  404), 794. 
Tampa  Suburban  R.  R.  Co.,  In  re 

168  U.  S.  583),  887,  890. 
Tanner,  In  re  (1  Low.  215),  638. 
Taplin,  In  re  (135  Fed.  Rep.  861), 

819. 
Tatem,   Mann   &   Co.,   In   re    (HO 

Fed.  Rep.  519),  446,  449. 
Tatum,  In  re  (112  Fed.  Rep.  50), 

780. 
Taylor,  In  re  (8  Ves.  328),  640. 
Taylor,  In  re  (95  Fed,  Rep.  956), 

479. 
Tavlor,  In  re  (102  Fed.  Rep.  728), 

169,  236. 
Tavlor,  In  re  (114  Fed.  Rep.  607). 

'  528,  704,  705. 
Taylor  v.   Carryl    (20  How.   583), 

93,  44L 


1-124 


TABLE  OF  CASES. 
References  are  to  pages. 


Taylor    v.    Irwin     (20    Fed.    Rep. 

G15),  443,  487,  508. 
Taylor  v.  Nixon   (4  Smeed,  Tenn. 

352),  857. 
Taylor  v.   Plumer    (3   Maule  &   S. 

562),  503. 
Tavlor    v.    Rasch     (1    Flip.    385), 

'  314. 
Taylor  v.  Rasch  (5  N.  B.  R.  399), 

125  310. 
Taylor  v.  Robertson  (21  Fed.  Rep. 

209),  436,  572. 
Taylor  v.  Taylor  (4  Am.  Br.  211), 

94. 
Taylor    v.    Taylor    (59    N.    J.    Eq. 

84),  545. 
Tazewell  County  v.  Davenport  (40 

111.  197,  209. 
Tebbetts,  In  re  (5  Law  Rep.  259), 

792. 
Tebo,  In  re    (101  Fed.  Rep.  419), 

138,    151,    160,    161,    291,    744, 

767. 
Tecopa  Mining  &  Smelting  Co.,  In 

re   (110  Fed.  Rep.  120),  176. 
Teller    v.    U.    S.     (Ill    Fed.    Rep. 

119),  936,  938. 
Temple,  In  re  (4  Saw.  92),  297. 
Ten  Eyck,  In  re   (7  N.  B.  R.  26), 

483,  486. 
Tennessee,  etc.,  R.  Co.  v.  East  Ala- 
bama Ry.  Co.    (785  Ala.  529), 

444,  460. 
Tennessee  Producer  Marble  Co.  v. 

Grant    (135    Fed.    Rep.    322), 

112. 
Terrell,  In  re   (51  Fed.  Rep.  213), 

674,  675. 
Terrill,  In  re  (103  Fed.  Rep.  781), 

160. 
Terry,  Ex  parte    (128  U.   S.  289), 

703,  705. 
Terry  v.  Abraham    (93  U.  S.  38), 

927. 
Tertelling,  In  re  (2  Dill.  339),  325. 
Teschmacher  &  Mrazay    (127  Fed. 

Rep.  728),  91,  98. 
Tesson,  In  re    (9   N.   B.  R.   378), 

313,  315. 
Texas  &  Pac.  Ry.  Co.  v.  Anderson 

■     (149  U.  S.  237),  950. 
Texas    &    Pac.    Ry.    v.    Interstate 

Transp.  Co.    (155  U.   S.   585), 

947. 
Texas  &  P.  Ry.  Co.  v.  Reeder   (76 

Fed.  Rep.  550),  942. 
Texas  &  P.  Ry.  Co.  v.  Murphy  (111 

U.  S.  d§S),  932. 


Thatcher  v.  Rockwell    (105  U.    S. 

467),   428. 
Theobald  v.   Hammond    (133   Fed. 

Rep.  525),  777. 
Thomas,  Ex  parte  (2  M,  D.  &  DeG. 

294),  489. 
Thomas,  Ex  parte  (44  L.  T.  781), 

489. 
Thomas,  In   re    (3   N.   B.   N.   38), 

114.       • 
Thomas,  In  re   (11  N.  B.  R.  330), 

280. 
Thomas,  In  re  (92  Fed.  Rep.  912), 

821,  828. 
Thomas,    In    re     (103    Fed.    Rep. 

272),   198. 
Thomas    v.    Adelman     (136    Fed. 

Rep.   973),   561,   566. 
Thomas  v.  C.  N.  O.  &  T.  P.  R.  Co. 

62  Fed.  Rep.  817),  701. 
Thomas  v.  Hudson  (13  Mees.  &  W. 

353),  668. 
Thomas   v.   Jones    (39  "Wis.   124), 

840. 
Thomas  v.  Pemberton  &  Kittredge 

(7  Taunt.  205),  483,  486,  487. 
Thomas  v.  Shaw    (2  Cin.  Sup.  Ct. 

97),  861. 
Thomason  v.  Frere  (10  East,  418), 

378. 
Thompson,    In    re    (2    Ben.    166), 

796. 
Thompson,    In    re    (2    Am.    B.    R. 

216),  754. 
Thompson,  In   re    (102   Fed.   Rep. 

287),   170. 
Thompson,   In   re    (102   Fed.   Rep. 

174),  3L.  90,  117. 
Thompson,  In   re    (128   Fed.   Rep. 

575),  82,  582. 
Thompson,  hi  re    (140  Fed.  Rep. 

257),  529. 
Thompson  v.  Alger  (53  Mass.  442), 

18. 
Thompson    v.    Fairbanks    (196    U. 

S.  516),  439,  444,  566,  570,  582, 

587,    589,    590,    591,    592,    595, 

597,  611. 
Thompson  v.  First  Nat.  Bank   (84 

Miss.  54),  614,  619. 
Thompson    v.    Spittle    (102    Mass. 

207),  309. 
Thompson  v.  Ragan   (25  Ky.  Law 

Rep.  1684),  544,  550. 
Thompson    v.    Towne     (Prec.    Ch. 

52),  465. 
Thompson's  Sons.  In  re   (123  Fed. 

Rep.  174),  390. 


TABLE  OF  CASES. 
References  are  to  pages. 


1425 


Thompson    v.    Harding    (3    C.    B. 

[N.  S.]  254),  318. 
Thompson  v.  Wooster    (114  U.   S. 

204),  283. 
Thornhill   v.   Bank    (1   Woods   1), 

20,  23,  26. 
Thornhill    v.    Bank    of    Louisville 

(3  N.  B.  R.  435),  170. 
Thornton    v.    Ins.    Co.     (125    Fed. 

Rep.    250),   935. 
Thornton  v.  Nichols  (119  Ga.  50), 

856. 
Thorp,  In  re  (2  Ware  294),  421. 
Thrall  v.  Crampton   (9  Ben.  218), 

310. 
Three  Friends,  The  (166  U.  S.  1), 

890,  892. 
Thurmond   v.   Andrews    (10   Bush 

[Ky.]  400),  4G9. 
Tice,   In   re    (139    Fed.   Rep.    52), 

445,  449. 
Tichenor  v.  Allen   (13  Grat.   [Va.] 

15),   747. 
Tiffany,  In  re  (147  Fed.  Rep.  314), 

820. 
Tiffany  v.   Boatman's   Savings   In- 
stitution   (18  Wall.   375),  438, 
510,  583. 
Tiffany    v.    La    Plume    Condensed 
Milk  Co.   (141  Fed.  Rep.  444), 
171,  175,   176,   235. 
Tiffany  v.   Lucas    (15   Wall.   410), 

190,  472,  473,  555,  557,  578. 
Tifft,  In  re  (19  N.  B.  R.  201),  104. 
Tilden,  In  re   (91  Fed.  Rep.  500), 

423,  768,  770. 
Tindle  v.  Birkett,  (183  N.  Y.  264), 

841. 
Tinker,  In  re    (99   Fed.  Rep.   79), 

821. 
Tinker  v.  Colwell   (193  U.  S.  473), 

821,  838. 
Tinker   v.   Hurst    (70   Mich.    159), 

726. 
Tinsley    v.    Anderson    (171    U.    S. 

101),  703. 
Tipton    v.    Tipton    (87    Ky.    243), 

209. 
Tirrell    v.     Freeman     (139     Mass. 

297),  726. 
Titterton  v.  Cooper  (9  L.  R.  Q.  B. 

Div.  473),  485. 
Tiuda  V.  Osgood  (71  N.  H.  185), 

456. 
Tobias   v.   Rogers    (13   N.   Y.    59), 

854. 
Todd,  In  re   (109  Fed.  Rep.  265), 
138,  146,  151,  165,  774. 


Todd,  In  re   (112  Fed.  Rep.  315), 

680. 
Toenes  v.  Moog  (78  Ala.  558),  527. 
Toland  v,  Sprague    (12  Pet.  300), 

244. 
Toledo,  etc.,  Ry.  Co.  v.  Continental 
Trust  Co.   (95  Fed.  Rep.  497), 
78. 
Toledo,   etc.,  Ry.   Co.  v.   Penn  Co. 
54    Fed.    Rep.    746),    697,    700, 
701. 
Toilet,  In  re   (106  Fed.  Rep.  866), 

525  529,  533. 
Tonne,  In  re    (13   N.   B.   R.   170), 

538. 
Tontine    Surety    Co.,    In    re    (116 

Fed.  Rep.  401),  180. 
Toof  v.  Martin  (13  Wall.  48),  194, 
233,    472,    476,    552,    553,    557, 
561,   579. 
Tooker,  In  re  (8  Ben.  390),  726. 
Toothaker  Bros.,  In  re    (128  Fed. 

Rep.  187),  470,  863. 
Topliff,  In  re  (114  Fed.  Rep.  323), 

380. 
Town,  In  re  (8  N.  B.  R.  40),  764. 
Towne,  In  re  (122  Fed.  Rep.  313), 

390. 
Towne    v.    Smith    (1    Wood    &   M. 

115),  827. 
Townes    v.    Alexander    (69    S.    C. 

23),  557. 
Townsend,  In  re  (2  Ben.  62),  789. 
Townshend    v.    Windham    (2    Ves. 

Sen.  1),  466. 
Traders    Bank    v.    Campbell     (14 

Wall.  87),  24,  552. 
Trafton,   Ex  parte    (2   Low.   505), 

724. 
Train  v.  Marshall  Paper  Co.    (180 

Mass.  513),  854. 
Traphagen,  Ex  parte  (1  N.  Y.  Leg. 

Obs.   98),   792. 
Trask,  In  re   (7  Ben.  60),  645. 
Tremont  Nat.   Bank,  Ex  parte    (2 

Low.  409),  496. 
Tribelhorn,  In  re    (137  Fed.  Rep. 

3),   226,  271. 
Trimble   v.   Woodhead    (102   U.   S. 

047),  469,  543,  614,  619. 
Tripp  V.  Santa  Rosa  Street  R.  Co. 

(144  U.  S.  126),  934. 
Troth,  In  re   (194  Fed.  Rep.  291), 

151. 
Troy  Laundering  Co..  In  re    (132 

Fed.  Rep.  266),  179,  ISO. 
Troy   Wagon    Wks.    v.   Vastbinder 
(130  Fed.  Rep.  232),  277,  448. 


1426 


TABLE  OF  CASES. 
References  are  to  pages. 


Troy  Woolen  Co.,  7n  re   (S  N.  B. 

R.  412),  376. 
Truitt  V.  Truitt  (38  Ind.  16),  746, 

823. 
Trustees  v.  Bossieux  (3  Fed.  Rep. 

817),  383. 
Trustees  v.  Greenough   (105  U.  S. 

527),  164. 
Tua  V.  Carriere   (117  U.  S.  209), 

20,   23. 
Tubbs   V.   Williams    (9   N.   C.    1), 

354,  355. 
Tuck  V.  Fyson   (6  Bing.  321),  443, 

488. 
Tucker,  In  re  (131  Fed.  Rep.  647), 

386. 
Tucker  v.  Denico    (26  R.   I.  560), 

547. 
Tucker   v.   Oxley    (5   Cranch,  34), 

7    372    377. 
Tudor,  In  re   (96  Fed.  Rep.  942), 

131,  141. 
Tudor,  In  re   (100  Fed.  Rep.  796), 

642,  651. 
Tuesley    v.    Robinson    (103    Mass. 

558,  523. 
Tug  River  Coal  &  Salt  Co.  v.  Bri- 

gel   (67  Fed.  Rep.  625),  939. 
Tune,  In  re   (115  Fed.  Rep.  906), 

94,  83,  91,  544,  547,  550,  553. 
Tunno   v.   Bethune    (2    Dessau,    S. 

C.  285),  355. 
Turnbull,    In    re    (106    Fed.    Rep. 

667),   515,   534. 
Turner  v.  Enrille  (4  Dall.  7),  948. 
Turner  v.   Fisher    (133   Fed.  Rep. 

594),  623. 
Turner   v.    Richardson    (7    East's 

Rep.  336),  483,  486. 
Turner  v.  Turner    (108  Fed.  Rep. 

785),   348,  349,  835. 
Turner  v.  Thomas    (6  I.  R.  C.  P. 

610),  369. 
Turrill  v.  Crawley   (13  Ad.  &  El. 

N.  S.  197),  607. 
Tuttle  V.  'i'ruax   (1  N.  B.  R.  601), 

565. 
Twaddell,   In   re    (110    Fed.   Rep. 

145),  480. 
Tweed,  In  re  (131  Fed.  Rep.  355), 

446,  449. 
Twogood,  Ex  parte  (11  Ves.  517), 

372,  376. 
Tybo  Mining  Co.,  In  re   (132  Fed. 

Rep.   697).   104,   27?. 
Tyler,  In  re   (104  Fed.  Rep.  778), 

118. 
Tyler,  In  re  (149  U.  S.  180),  704, 

705. 


Tyrrel,  In  re  (2  N.  B.  R.  200),  799. 
Tyrrel  v.  Hammerstein   (67  N.  Y. 
Supp.  717),  839. 


u 


Udall    V.    Steamship    "Ohio"     (17 

How.  17),  939. 
Uf elder    Clothing   Co.,    In    re    (98 

Fed.  Rep.  409),  385,  407. 
Ulman    v.    Ritter    (72    Fed.    Rep. 

1000),  652,  695,  697. 
Ulrich,  In  re  (3  Ben.  355),  96,  244, 

247,  263,  653. 
Underwood  v.  Eastman   (18  N.  H. 

582,   857,   858. 
Ungewitter  v.  Von  Sachs    (4  Ben. 

167,    361,    564. 
Union  Pac.  R.  Co.,  In  re  (10  N.  B. 

R.  178),  178,  195. 
Union    Pacific    Ry.    Co.    v.    Calla- 

ghan-  (161  U.  S.  95),  931. 
Union  Pac.  Ry.  Co.  v.  Stewart  (95 

U.  S.  279),  888,  936. 
Union     Pac.     Ry.     Co.     v.     United 

States  (116  U.  S.  402),  937. 
Union    Sugar   Refinery   v.   Mathie- 

son    (2  Cliff.  304).  246. 
Union  Trust  Co.,  In  re   (122  Fed. 

Rep.    937),    89,    735,    736,    739, 

742,  747,  903,  905. 
Union  Trust  Co.  v.  Bulkeley   (150 

Fed.  Rep.  ),   571,  600. 

Union    Trust   Co.   v.    Wilson    (198 

U.   S.   530),  598,  600,  602,  693. 
United  Button  Co.,  In  re  (132  Fed. 

Rep.  378),  272. 
United  Button  Co.,  In  re  (137  Fed. 

Rep.   668),  234. 
United  Button  Co.,  In  re  (140  Fed. 

Rep.   495),   337,   381. 
United    States,  Ex  parte    (1   Gall. 

338),  123. 
United   States  v.  Adams    (6  Wall. 

101),  923. 
United   States  v.   Anonymous    (21 

Fed.  Rep.  761),  693,  699,  702, 

703. 
United   States  v.   Armejo    (131  U. 

S.  Appendix,  Ixxxii.),  935. 
United    States   v.    Atcheson   R.    S. 

Co.    (16   Fed.   Rep.    853),   700. 

703. 
United    States    v.    Bayer    (4    Dill. 

407).    690. 
United    States   v.    Berry    (24    Fed. 

Rep.  780),  698,  700. 


TABLE  OF  CASES. 
References  are  to  pages. 


1427 


United    States    v.    Block    (4    Saw. 

211),  G77,  688. 
United   States  v.  Booth    (18  How. 

477),   935. 
United  States  v.  Brawner   (7  Fed. 

Rep.  86),  670,  674,  675. 
United  States  v.  Caldwell   (2  Dall. 

UOO  ^  ,      D«70, 

United  States  v.  Carter  (3  Cranch, 

C.   C.   423),   692. 
United    States    v.    Chambers    (135 

Fed.   Rep.    1023),   089. 
U.  S.  V.  Curry    (6  How.   106),  96, 

263,  935. 
U.    S.   V.    Davis    (3    McLean   483), 

832. 
United  States  v.  Dewalt  (128  U.S. 

393),  689. 
United  States  v.  Dewwy   (39  Fed. 

Rep.  251).  418. 
United  States  v.  Dobbins    (5  Law 

Rep.    81),    664. 
United    States   v.    Dodge    (2   Gall. 

313),  702. 
United  States  v.  Fletcher.  (147  U. 

S.  664),  674. 
United  States  v.  Fowkes   (49  Fed. 

Rep.  50),  670,  675. 
United    States    v.    Goldstein    (132 

Fed.  Rep.   789),   643,  644,  678, 

693,   695,   699,   700. 
United   States  v.  Gomez    (1  Wall. 

690),  921. 
United   States  v.   Gomez    (3  Wall. 

752),  923,  935,  94L 
United    States   v.    Hammond    (101 

Fed.  Rep.  862),  724,  914. 
U.  S.  V.  Heron  (20  Wall.  251),  388, 

781,   832,   848. 
U.  S.  V.  Hewecker   (164  U.  S.  46), 

894. 
United     States     v.    Hopewell     (51 

Fed.  Rep.  798),  939. 
United    States    v.    Houghton     (14 

Fed.  Rep.  544),  690. 
United  States  v.  Jackson    (2  Fed. 

Rep.  502),  690. 
United    States   v.   Jacobi    (1   Flip. 

108),  672. 
United.  States  v.  Jones   (149  U.  S. 

262),  919. 
United  States  v.  Justices   (10  Fed. 

Rep.  461),  703. 
U.  S.  V.  King  (Wall.  Sen.  13).  832. 
United    States   v.   Lake    (129   Fed. 

Rep.  499),  678,  684,  690.  691. 
United  States  v.  Latorre  (8  Blatch. 

134),  677,  686,  689. 


United     States    v.     Levinson     (13 

Am.  B.  R.  29),  678,  679. 
United  States  v.  Lowenstein    (126 

Fed.  Rep.  884),  678. 
U.    S.    V.    Mason    (129    Fed.    Rep. 

742),   155,  156. 
United  States  v.  Memphis,  etc.,  R. 

Co.    (6    Fed.    Rep.    238),    652, 

695. 
United    States   v.    Montgomery    (2 

Dall.  335),  244. 
U.    S.    V.    Murphy    (15    Fed.    Rep. 

589),  388,  781. 
United  States  v.  Murphy   (44  Fed. 

Rep.  39),  700. 
United    States    v.    Patterson     (26 

Fed.  Rep.  509),  692. 
United  States  v.  Phillips    (121  U. 

S.  254),  918. 
United  States  v.  Prescott  (2  Biss, 

325),  677,  690. 
United  States  v.  Rider   (163  U.  S. 

132),  894. 
United   States  v.  Rogers    (23  Fed. 

Rep.   658),    674,   675. 
United    States    v.    Rose    (14    Fed. 

Rep.  681),  248. 
U.  S.  V.  Rob  Roy    (1  Woods,  42), 

832. 
United  States  v.  Shepard   (1  Abb. 

U.  S.  431),  672. 
U.  S.  V.  Simon  (146  Fed.  Rep.  89), 

683,  684,  685. 
United   States   v.    Snyder    (8   Fed. 

Rep.  805),  690. 
United  States  v.  Stevens   (44  Fed. 

Rep.  132).  690. 
United  States  v.  Sweeney  (95  Fed. 

Rep.  434),  702. 
U.  S.  V.  Throckmorton  (8  N.  B.  R. 

309),  832. 
United  States  v.  Tureaud  (20  Fed. 

Rep.  621),  671. 
U.   S.  V.  Union  Pac.  Ry.  Co.    (168 

U.  S.  505),  897. 
U.   S.  V.  Union  Surety  &  Guaran- 
tee  Co.    (118   Fed.   Rep.   482), 

84,  430. 
United  States  v.  Wechsler  (6  Am. 

B.  R.  1),  641,  683. 
United     States    v.    Wechsler     (16 

Am.  B.  R.  1),  685,  690. 
United   States  v.  White    (25   Fed. 

Rep.  716),  674. 
United  States  v.  Young   (94  U.  S. 

258),  887. 
U.   S.   Hotel   Co.,  In   re    (134   Fed. 

Rep.  244),  178,  179. 


1428 


TABLE  OF  CASES. 
References  are  to  pages. 


Upshur  V.  Briscoe  (138  U.  S.  3G5), 

859. 
Upson,  In  re  (123  Fed.  Rep.  807), 

361. 
Upson,  In  re  (124  Fed.  Rep.  980), 

863. 
Upson  V.  Mt.  Morris  Bank  (14  Am. 

B.  R.  6),  626. 
Upton    v.     Hansbrough     (3     Biss. 

417),  493. 
Upton  V.  Tribilcock  (91  U.  S.  45), 

493. 
Upton   V.   McLaughlin    (105   U.    S. 

640),   431. 
Uran    v.    Houdlette    (36    Me.    15), 

350. 
Urban    &    Suburban    Realty    Title 

Co.,  In  re  (132  Fed.  Rep.  140), 

240,  242,  280. 
Utt,   In   re    (105    Fed.    Rep.    754), 

150,    432,    613,    744.    746,    747. 

748,    756,    766,    775,    905,    908, 

910. 


Vaccaro    v.    Security    Bank     (103 

Fed.  Rep.  436),  187,  191,  199, 

201,  296,  300. 
Vairin  v.   Edmonson    (9   111.   120), 

429. 
Valentine,  In  re  (4  Biss.  317),  392, 
Valk,  In  re  (3  Ben.  431),  665. 
Vallandigham,  Ex  parte    (1   Wall. 

243),   887. 
Van    Brocklin    v.    Tennessee    (117 

U.   S.  151),  783. 
Van  Dyke  v.  Tinker   (11  N.  B.  R. 

308),   124. 
Van  Gunden  v.  Iron  Co.    (52  Fed. 

Rep.  838),  942. 
Van  Hook  v.  Whitlock   (26  Wend. 

N.  Y.  43),  827. 
Van     Ingen    v.     Schophofen     (129 

Fed.  Rep.   352),  804,  805,   808. 
Van    Nostrand    v.    Carr     (30    Md. 

128),   20,   23,   26,   27. 
Van  Tuyl,  In  re  (1  N.  B.  R.  636), 

643. 
Vansant  v.   Gas  Light  Co.    (99  U. 

S.  213),  923. 
Vastbinder,  In  re    (126  Fed.  Rep. 

417),  225,  287. 
Vastbinder,  In  re   (132  Fed.  Rep. 

718),  86,  92,  94,  111. 
Vehon   v.   Ullman    (147   Fed.  Rep. 

694),  812,  911,  943. 
Veitch,  In  re  (101  Fed.  Rep.  251), 

770,  771. 


Vernia,  In  re    (5  Fed.  Rep.   723), 

8U7. 
Vetterlein,  In  re   (5  Ben.  7),  629. 
Vetterlein,  In  re  (5  Ben.  311),  308. 
Vetterlein,    hi    re    (20    Fed.    Rep. 

109),  388,  781. 
Vetterlein,    In    re    (44    Fed.    Rep. 

57),  308. 
Vetterman,  In  re    (135   Fed.  Rep. 

443),   238. 
Vickery,  In  re    (3  N.  B.  R.   696), 

350. 
Victor    V.    Lewis     (1    Am.    B.    R. 

667),   107. 
Vider    v.    O'Brien    (62    Fed.    Rep. 

326),  942. 
Viele    V.    Ogilvie    (2    Greene,    la. 

326),  858. 
Vila,  In  re  (5*  Law.  Rep.  17),  140. 
Viquesney  v.  Allen  (131  Fed.  Rep. 

21),   124,   618. 
Virginia  Commissioners,  Ex  parte 

(112  U.   S.   177),  935. 
Virginia  Hardwood  Mfg.  Co.,  In  re 

139   Fed.   Rep.   209),   563,   588, 

589.  ■ 
Voetter,  In  re   (4  Fed.  Rep.  632), 

372. 
Vogel,    In    re    (5    N.    B.    R.    393), 

628,  640,  642,  693. 
Vogler,    In    re    (2    Hughes,    297), 

535. 
Vogler    V.    Montgomery     (54    Mo. 

577),   529. 
Voight    V.    Lewis     (14    N.    B.    R. 

543),  503. 
Von  Borcke,  In  re   (94  Fed.  Rep. 

352),   240. 
Von  Hartz,  In  re   (142  Fed.  Rep. 

726),  104. 
Von  Kerm,  In  re   (135  Fed.  Rep. 

447),   526. 
Von  Roy  v.  Blackman    (3  Woods, 

98),  244,  248,  250. 
Voorhees   v.    Bonesteel    (16   Wall. 

16),  510. 
Voorheis     v.     Frisbie     (25     Mich. 

476),  753. 
Voyles    V.    Parker     (4    Fed.    Rep. 

210),  548. 
Vulliany   v.    Noble    (3   Mer.    621), 

377. 

w 

Waco    V.    Bryan    (127    Fed.    Rep. 

79),  768,  770. 
Wadsworth  v.  Tyler    (2  N.   B.  R. 

316),   125. 


TA.BLE  OP  CASES. 
References  are  to  pages. 


1429 


Wager    v.    Hall     (16    Wall.    584) 

233,    552,    557,    561,    562,    572 

579. 
Waggoner,    In    re    (1    Ben.    532) 

799,   815. 
Wagner   v.   U.   S.    (104    Fed.   Rep 

133),  109,  114,  105,  652,  697. 
Wagstaff,  Ex  parte    (13  Ves.   65) 

372. 
Waite,  In  re    (1   Low.   207),    182 

183,  194,  299,  300,  571,  580. 
Waties  &  Co.,  In  re  (39  Fed.  Rep 

264),  383. 
Wakeman    v.    Hoyt    (5    Law   Rep 

309),  10,  177. 
Walbridge     v.     Harroon     (18     Vt 

448),  858. 
Walbrun     v.     Babbitt     (16     Wall 

577),    475,    476,    477,   579,   620 
Wald  V.  Webl    (6  Fed.  Rep.  163) 

239. 
Waldron    v.    Waldron    (156    U.    S 

361),  919. 
Walker,  In  re   (1  Low.  222),  658 
Walker,  In  re   (1  Low.  237),  209 

210. 
Walker,  In  re  (96  Fed.  Rep.  550) 

goo 

Walker  v.  Brown   (165  U.  S.  654) 

607. 
Walker    v.    Jack     (88    Fed.    Rep 

576),  274. 
Walker  v.  Robbins  (14  How.  584) 

248. 
Wall,   In   re    (13    Fed.   Rep.    818) 

695. 
Wall  V.   Cox    (181  U.   S.   244),  97 

616,  876. 
Wall  V.  Cox    (101  Fed.  Rep.  403) 

618. 
Wallace,  In  re   (Deady,  433),  106 
Wallace  v.  Loomis  (97  U.  S.  146) 

123. 
Waller,  In  re  (142  Fed.  Rep.  883) 

768,  779. 
Waller  v.  Best   (3  How.   Ill),  10 

548. 
Wallenstein    v.    Irvin     (112    Fed 

Rep.    124),    385. 
Walsh,  In  re  (104  Fed.  Rep.  518) 

643. 
Walshe,    In    re    (2    Woods,    225) 

720,  723. 
Walther,  In  re   (14  N.  B.  R.  273) 

392,   40.5. 
Walther,    In     re     (95     Fed.     Rep 

941),  800. 
Walton,  In  re    (Deady,  442),   552 


Walton,  In  re    (Deady,  510),  394, 

395. 
Walton,  In  re    (1   N.   B.   R.   557), 

484. 
Walwojjth    V.    Harris     (129    U.    S. 

355),   21. 
Ward,  In  re    (12   P'ed.  Rep.   325), 

338. 
Ward,  In  re   (104  Fed.  Rep.  985), 

90,  102,   113,   256. 
Warder,  In  re   (10  Fed.  Rep.  275), 

495. 
Warford  v.  Clark    (2  Grant   [Pa.] 

84),   531. 
Warford    v.    Noble    (2    Fed.    Rep. 

202),  531. 
Waring,  Ex  parte    (19   Ves.   345), 

357,   405. 
Warner     v.     Cronkhite     (6     Biss. 

453,  837. 
Warner  v.  New  Orleans  (167  U.  S. 

407),   897. 
Warren,  In  re  (2  Ware,  322),  313. 
Warren  v.  Moody  (122  U.  S.  133), 

469,  555,  557. 
Warren     v.     National     Bank     (10 

Blatch.  493),  125,  566. 
Warren    v.     Warren    Thread    Co. 

134  Mass.  247),  462. 
Warwell   v.   Foster    (31   Me.   558), 

858. 
Washburn,    7/i    re    (3    Am.    B.   R. 

585),  223. 
Washington  Marine  Ins.  Co.,  In  re 

(2    Ben.   292),   198. 
Washington  &  Georgetown  R.  R., 

In  re   (140  U.  S.  91),  950. 
Washington,  etc.,  R.  Co.  v.  Brad- 
leys    (7   Wall.    575),   922,   929, 

933. 
Waterbury    Furniture    Co.,    In    re 

(114   Fed.  Rep.  255),  574. 
Waterloo    Organ    Co.,    In   re    (118 

Fed.  Rep.   904),  734,   742,  744, 

745. 
Waterloo    Organ    Co.,    In    re    (134 

Fed.  Rep.  345),  602. 
Watertown    Carriage    Co.    v.    Hall 

(176  N.  Y.   313),   841,   844. 
Watkins  v.  Maule  (2  .J.  &  W.  237), 

496. 
Watkins  v.   Watkins    (Prob.   222), 

348. 
Watkinson,  In  re    (146  Fed.  Rep. 

142).  399. 
Watkinson  &  Co.,  In  re   (130  Fed. 

Rep.  218),  632,  648. 
Watrous,  In  re  (14  N.  B.  R.  258), 

385. 


1430 


TABLE  OF  CASES. 
References  are  lo  pages. 


Watts,  l7i  re  (3  Ben.  166),  221. 
Watts,  In  re  (1:^0  U.  S.  1),  202. 
Watts  &  Sachs,  In  re    (190  U.   S. 

1),  29,  31,  32,  91,  94,  116,  117, 

118,  160,  696,  705. 
Watson,  Ex  parte   (4  Mad*d.  477), 

340. 
Watson,  In  re    (4   N.  B.  R.   613), 

209. 
Watson     V.     Holiday     (20     L.     R. 

Chan.  D.  780),  382. 
Watson  V.  McDuff   (101  Fed.  Rep. 

241),   790,  793,  817. 
Watson  V.  Merrill    (136  Fed.  Rep. 

359),  364,  365,   366. 
Watson  V.  Taylor   (21  Wall.  378), 

552. 
Waugh,  In  re  (133  Fed.  Rep.  281), 

274. 
Waukesha  Water  Co.,  In  re   (116 

Fed.  Rep,  1009),  96. 
Wanton    V.    DeWolf     (142    U.     S. 

138),  941. 
Waxelbaum,  In  re    (97   Fed.  Rep. 

562),  209,  219. 
Waxelbaum,  In  re    (98  Fed.  Rep. 

589),  207,  210. 
Waxelbaum,  In  re   (101  Fed.  Rep. 

228),  144,  514. 
Way    V.    Howe    (108    Mass.    502), 

862. 
Way  V.  Sperry  (60  Mass.  238),  858. 
Wayne   Knitting   Mills   v.   Nugent 

104   Fed.  Rep.   530),  120,  441. 
Weatherall    v.    (Jeering    (12    Ves. 

504),  488. 
Weaton  v.  Woodcock   (7  M.  &  W, 

14),  489. 
Weaver's  Appeal  (18  Pa.  St.  307), 

527. 
Weaver,  In  re    (9  N.   B.  R.   132), 

182,  195,  299. 
Weaver,    In    re     (114    Fed.    Rep. 

229),  544. 
Webb,   In   re    (4    Saw.    326),    314, 

318,  323. 
Webb,  In  re  (2  N.  B.  R.  614),  313. 
Webb,  In  re  (6  N.  B.  R.  302),  484. 
Webb  V.  Ward   (7  T.  R.  296),  506. 
Weber,  In  re    (13  N.   B.  R.   529), 

708. 
Weber    Furniture    Co.,    In    re    (2 

Low.   404),   717. 
Weber    Furniture    Co.,    7n   re    (13 

N.  B.  R.  529),  713,  716,  717. 
Weber    Furniture    Co.,    In   re    (13 

N.  B.  R.  599),  723. 
Webster  v.  Upton    (91  U.   S.   65), 

493. 


Weeks    v.    Fowler    (53    Atl.    Rep 

543),  618. 
Weeks  v.  Fowler    (71  N.  H.  221), 

456. 
Wehl   V.    Wald    (17    Blatch.    342), 

126. 
Wehl  V.   Wald    (3   Fed.  Rep.   93), 

627. 
Weil,  In  re    (111  Fed.  Rep.   897), 

451,  452,  440. 
Weiner  &  Goodman   Shoe  Co.,  In 

re    (96    Fed.    Rep.    949),    386, 

388. 
Weinger-Bergman  Co.,  In  re   (126 

Fed.    Rep.    875),    85,    92,    120, 

440,  441,  456. 
Weintraub,  In  re    (133   Fed.  Rep. 

1000),  813,  831. 
Weitzel,  In  re    (7  Biss.  289),  173, 

270. 
Welch,  In  re  (5  Ben.  230),  535. 
Welch,  In  re   (100  Fed.  Rep.  65), 

679. 
Welch  V.  Myers  (4  Campbell,  368), 

483,   486,   487. 
Welch  V.  Polley    (177  N.  Y.  117), 

446,   50L 
Welling,    In    re     (113    Fed.    Rep. 

189),   497,  498,  499. 
Wells,    In    re    (4    Fed.    Rep.    68), 

340,  341. 
Wells,  In  re   (105  Fed.  Rep.  762), 

519),  520,  521,  522. 
Wells,  In  re   (114  Fed.  Rep.  222), 

94,  112. 
Wells,  In  re   (140  Fed.  Rep.  752), 

448. 
Wells,    Fargo    Co.    v.    Oregon    Co. 

(19   Fed.  Rep.  20),   698. 
Wentworth      v.      Whittemore      (1 

Mass.  471),  342. 
Werder,  In  re  (15  Fed.  Rep.  789), 

495. 
Wesson,  In  re  (88  Fed.  Rep.  855), 

113. 
West,  In  re  (46  L.  T.  823),  462. 
West,   In  re    (39   Fed.   Rep.   203), 

308,  309. 
West,  In  re   (108  Fed.  Rep.  940), 

192. 
West,  In  re   (116  Fed.  Rep.  767), 

523. 
West,  In  re   (128  Fed.  Rep.  205), 

830. 
West    V.    Brashear    (14    Pet.    51), 

950. 
West  V.  Cabell  (153  U.  S.  87),  670. 
West    Chicago    St.    R.    R.    Co.    v. 


TABLE  OF  CASES. 
References  are  to  pages. 


1431 


Ellsworth  (77  Fed.  Rep.  GG4), 

941. 
West  V.  Irwin  (54  Fed.  Rep.  419), 

940. 
West  V.  Pryce   (2  Bing.  455),  375, 

376. 
West  Co.  V.  Lea    (174  U.  S.  590), 

30,  31,  186,  199,  200,  203,  233, 

236,    267,    268,    269,    277,    390, 

913. 
Westfall  Bros.  Co.,  In  re   (8  Am. 

B.  R.  431),  629,  631. 
Westheimer  v.  Howard    (93  N.  Y. 

Siipp.  518),  840. 
Westlund,    In    re     (99    Fed.    Rep. 

399),   777. 
West  Norfolk  Lumber  Co.,  In   re 

(112  Fed.  Rep.  759),  541,  542, 

609. 
West    Phil.    Bank    v.    Dickon    (95 

U.   S.   180),  472. 
Western  German  Bank  v.  Norvell 

(134  Fed.  Rep.  724),  502,  504. 
Western   Sav.   &  T.   Co.,  In  re    (4 

Saw.   490),   237. 
Western    Tie    &    Timber    Co.,    v. 

Brown    (196    U.    S.    502),   376, 

379,  380,   398,  556,  564,   885. 
Western   Union   Cold    Storage   Co. 

V.  Hurd    (116  Fed.  Rep.  442), 

843. 
Westinghouse    Air    Brake    Co.    v. 

Christensen    Engineering    Co. 

(123  Fed.  Rep.  632),  705. 
Wetmore,    In    re    (99    Fed.    Rep. 

703),  679. 
Wetmore,    In    re    (102    Fed.    Rep. 

290),   465,   481. 
Wetmore    v.    Markoe    (196    U.    S. 

68),  348,  830,  835,  839. 
Wetstein  v.   Franciscus    (133  Fed. 

Rep.  900),  564,  626. 
Whealton    Restaurant    Co.,    In    re 

(143    Fed.   Rep.   921),   779. 
Wheeler  v.  Bramah    (3  Campbell, 

340),   483,   486. 
Wheeler   v.    Cobb    (75    N.    C.    21), 

209. 
Wheeler  v.  Wheeler    (28  111.  App. 

385),  856. 
Wheelock  v.  Lee  (10  N.  B.  R.  363), 

438. 
Whetmore,    In    re    (Deady,    585), 

215. 
Whetmore,    In    re    (16    N.    B.    R. 

514),   417,   425. 
Whipple,  In  re  (2  Low.  404),  718. 
Whipple,  In  re  (11  N.  B.  R.  524), 

709,  713. 


White,  In  re  (2  N.  B.  R   590),  807. 
White,  In  re  (109  Fed.  Rep.  635), 

519,  530. 
White,  In  re  (128  Fed.  Rep.  513), 

525. 
White,  In  re  (135  Fed.  Rep.  199), 

237,   238,   285. 
White  V.  Bradley  Timber  Co.  (116 

Fed.  Rep.  768),  284,  287. 
White    V.    Cushing    (30    Me.    267), 

858. 
White   V.    How    (3   McLean,   291), 

859. 
White  V.  Piatt  (5  Den.,  N.  Y.  274), 

847. 
White  V.  Schloerb  (178  U.  S.  542), 

78,  85,  86,  89,  92,  93,  101,  107, 

111,    119,    120,    121,    131,    430, 

441,  456,  876. 
White  V.  Thompson  (119  Fed.  Rep. 

8G8),    106,    112.    110,   903,   904. 
White  Mountain  Paper  Co.,  In  re 

127  Fed.  Rep.   180),  175,  231, 

234,  235. 
White    Star  -Laundry,   In   re    (117 

Fed.  Rep.  570),  176,  179,  180. 
Whitehouse,  In  re    (1   Low.   429), 

656,  667. 
Whitener,    In    re    (105    Fed.    Rep. 

ISO),   78,   79,   86,   93,   101,   121, 

430,    455,    456,    872,    879,    900, 

903,  912,  915. 
Whiting,  Ex  parte    (2  Low.  572), 

875. 
Whitley     Grocery     Co.     v.     Roach 

115  Ga.  918),  572. 
Whitman,     Ex     parte      (not     re- 
ported). 483.  484. 
Whitney  v.  Crafts   (10  Mass.  23), 

822,  859. 
Whitney    v.    Dresser    (200    U.    S. 

532),  406,  407. 
Whitney   v.    Wenman    (198    U.    S. 

539),  78,  79,  80,  86,  89,  90,  93, 

101,    104,    121,    253,    430,    444, 

455,  744,  878. 
Whitney    v.    Whiting    (35    N.    H. 

457),  827. 
Whitridge    v.    Taylor    (66    N.    C. 

273),  746. 
Whitson  V.  Farber  Bank   (105  Mo. 

App.  605),  565. 
Whittington,  Ex  imrte  (Buck,  87), 

487. 
Whitworth    v.    Hall    (2    B.    &   Ad. 

695),   289. 
Whyte,  In  re  (9  N.  B.  R.  267),  385. 
Wickelman   v.    Dick   Co.    (85   Fed. 

Rep.  851),  923. 


1432 


TABLE  OP  CASES. 
References  are  to  pages. 


Wicker     v.     Comstock     (52     Wis. 

315),  52G. 
Wickliam    v.    Hull    (GO    Fed.    Rep. 

32G),  115. 
Wicks  V.  Perkins   (1  Woods,  383), 

747. 
Wiener  &  Goodman   Shoe  Co.,  In 

re   (96  Fed.  Rep.  949),  375. 
Wiesen    Bros.,    In    re     (135    Fed. 

Rep.   442),   G49,   804. 
Wiggers,  In  re    (2  Biss.   71),  657, 

664. 
Wilbur  V.  Watson   (111  Fed.  Rep. 

493),  780. 
Wilcox,  In  re    (94  Fed.  Rep.  84), 

308. 
Wilcox,  In  re  (109  Fed.  Rep.  628), 

649,  679,  804,  818. 
Wild,  In  re   (11  Blatch.  243),  358. 
Wilde's  Sons,  In  re  (131  Fed.  Rep. 

142),  139,  639. 
Wilde's  Son,  In  re  (144  Fed.  Rep. 

972),  144. 
Wilder,  In  re  (101  Fed.  Rep.  104), 

401,  403,  404. 
Wilder   v.    Watts    (138    Fed.    Rep. 

426),    284,    287,    571,    599,    600. 
Wiley,  In  re   (4  Biss.  71).  600. 
Wilka,  In  re  (131  Fed.  Rep.  1004), 

437,   461,   735,   743. 
Wilkes,  In  re  (112  Fed.  Rep.  975), 

545,  546,  547,  549. 
Wilkesbarre  Furniture  Co.,  In  re 

(130   Fed.   Rep.    79G),   745. 
Wilkins    v.    Davis    (2    Low.    oil), 

303,  314,  318,  323. 
Wilkinson     v.     Goodfellow-Brooks 
Shoe  Co.   (141.  Fed.  Rep.  21S), 

289. 
Wilkinson  V.  Waite   (44  Vt.  508), 

519. 
Willey,  In  re    (4   Biss.   214),   311. 
Williams,  Ex  parte   (10  L.  R.  Eq. 

61),  718,   729. 
Williams,  In  re  (1  Low.  406),  271. 
Williams,  In  re  (2  Biss.  233),  G5G. 
Williams,  In  re  (6  Biss.  233),  664, 

666. 
Williams,   In  re    (3   Woods,   493), 

Williams,  In  re  (2  N.  B.  R.  229), 

350. 
Williams,  In  re   (3  N.  B.  R.  286), 

192. 
Williams,  In  re  (14  N.  B.  R.  132), 

270. 
Williams,    In    re     (99    Fed.    Rep. 

544),  208. 


Williams,    In    re    (105    Fed.    Rep. 

906),  907. 
Williams,    In    re    (120    Fed.    Rep. 

38),  33,  76,  104,  114. 
Williams,    In    re    (123    Fed.    Rep. 

321),   105,   630,   632,   648. 
Williams    v.    Claflin     (103    U.     S. 

753),   931,    933. 
Williams  v.  Heard  (140  U.  S.  529), 

511,  883. 
Williams    v.    Merritt    (103    Mass. 

187),  436. 
Williams  v.  Robbins  (32  Me.  181), 

855,  856. 
Williams  v.  Thorn  (70  N.  Y.  270), 

505. 
Williams    Bros.    v.     Savage     (129 

Fed.  Rep.  497),  936,  937. 
Williamson    v.    Dickens     (5    Ired. 

Law,  N.  C.   259),   847. 
Willis  V.  Cushman  (115  Ind.  100), 

856. 
Willits  V.   Waite    (25   N.   Y.   583), 

461. 
Willoughby     v.     Weinberger     (79 

Pac.  Rep.  777),  454. 
Wilmington    Hosiery    Co.,    In    re 
(120  Fed.  Rep.  179),  191,  192. 
Wilmot  V.  Mudge  (103  U.  S.  217), 

725. 
Wilson,  Ex  parte  (114  U.  S.  424), 

689. 
Wilson,  In  re  (101  Fed.  Rep.  571), 

539. 
Wilson,  In  re  (116  Fed.  Rep.  419), 
85,  115,  422,  651,  653,  694,  773. 
Wilson    V.    Atlantic,    etc.,    R.    Co. 

(2  Fed.  Rep.  459),  493. 
Wilson  V.  Brinkman    (2  N.  B.  R. 

468),  555. 
Wilson    V.    City    Bank    (17    Wall. 

473),   233,   565. 
Wilson    V.    City    Bank    (17    Wall. 

473),  552,  557. 
Wilson    V.    McElroy     (32    Pa.    St. 

82),   524. 
Wilson  V.  Nat.  Bank  of  Rolla    (3 
Fed.  Rep.  391),  339,  351,  372, 
376. 
Wilson  V.  Nelson   (183  U.  S.  191), 

197,  198,  199,  564,  626,  876. 

Wilson    V.    Northwestern    Mutual 

Life    Ins.    Co.    (65    Fed.    Rep. 

38),  751. 

Wilson  V.  Parr  (115  Ga.  629),  118. 

Wilson    V.    Penn    Trust    Co.,    (114 

Fed.  Rep.   742),   366,   368. 
Wilson    V.    Wallani     (5    Ex.    Div. 
155),   484. 


TABLE  OF  CASES. 
References  are  to  pages. 


1433 


Wilt  V.  Stickney  (15  N.  B.  R.  23), 

125. 
Winchester  v.  Heisl^ell   (119  U.  S. 

450),  883. 
Winchester   v.    Howard    (13G    Cal. 

432),  849. 
Winchester  v.  Jackson,  (3  Cranch, 

514),  948. 
Wineman    v.    Fisher    (135    Mich. 

604),  860. 
Winfield  Mfg.  Co.,  In  re  (137  Fed. 

Rep.  984),  366. 
Winkels,    In    re    (132    Fed.    Rep. 

590),  386. 
Winn  V.  Morse  (50  N.  H.  210),  519. 
Winship,  In  re   (7  Ben.  194),  636. 
Winship,    In    re    (120    Fed.    Rep. 

93),  727,  880. 
Winslow  V.   Bliss    (3   Lans.   N.  Y. 

220),   373,   577. 
Winslow  V.  Clark   (47  N.  Y.  2C1), 

746. 
Winslow    V.    Wallace     (116     Ind. 

317),  309. 
Winsor  v.  Kendell  (3  Story,  507), 

577. 
Winston,    In    re    (122    Fed.    Rep. 

187),  228. 
Winter   v.    Iowa,    etc.,   R.    Co.    (2 

Dill.  487),  18,  195. 
Winthrop,  In  re  (5  Law  Rep.  24), 

664. 
Wiseman,   In   re    (123    Fed.    Rep. 

185),  345,  346. 
Wittenberg   Veneer   &   Panel    Co., 
In  re  (108  Fed.  Rep.  593),  557. 
Witthaus  V.  Zimmerman  (91  N.  Y. 

App.  Div.   202),  850. 
Wolcott  V.  Hodge   (81  Mass.  547), 

847. 
Wolf,  In  re    (27   Fed.   Rep.   606), 

674,  675. 
Wolf,  In  re  (98  Fed.  Rep.  74),  570. 
Wolf,   In   re    (98    Fed.    Rep.    84), 

585,  589. 
Wolf   V.    Stix    (99    U.    S.    1),    850, 

852,  854,  860,  861,  882. 
Wolf  &  Levy,  In  re  (122  Fed.  Rep. 

127),   574,   399. 
Wolff,  In  re   (100  Fed.  Rep.  430), 

790, 
Wolff,  In  re  (132  Fed.  Rep.  390), 

816. 
Wollaston    v.    Porter    (122    Mass. 

308),  357. 
Wollock,    In    re    (120    Fed.    Rep. 

516),   837,  841,   844. 
Wood,  In  re    (98   Fed.  Rep.   972), 
480),  682. 


Wood,  In  re   (140  Fed.  Rep.  964), 

44G,  459. 
Wood  V.  Akers    (2  Esp.  594),  376. 
Wood   V.   Guaranty  Co.    (143   Fed. 

Rep.  424),  363. 
Wood  V.  Partridge  (11  Mass.  488), 

342. 
\\  ood  V.  U.  S.  Fidelity  &  Guaran- 
tee Co.    (143   Fed.  Rep.   424), 

343,   570. 
Wood  M.  &  R.  Co.  V.  Broke  (9  N. 

B.  R.  395),  454. 
Wood  &  Selick  v.  Vanderveer   (55 

N.  Y.  App.  Div.  549),  494,  853. 
Woodard,    In    re     (95    Fed,    Rep. 

955),   157,  162,  165. 
Woodard,    In    re    (95    Fed.    Rep. 

2C0),  515,  536. 
Woodbury    v.    Perkins     (5    Cush. 

80),   350. 
Woodend,    In    re    (133    Fed.    Rep. 

593),  714. 
Woodford,  In  re  (1  Cin.  Law  Bui. 

37),   229. 
Woodhull  v.  Wagner   (Bald.  296), 

20,   22. 
Woodman    v.    Stowe    (11    Bradw. 

[111.  App.]  613),  726. 
Woodruff,    In    re    (96    Fed.    Rep. 

317),  522. 
Woodruff    V.    Cheeves     (105    Fed. 

Rep.  601),  103. 
Woods,  In  re   (133  Fed.  Rep.  82), 

387,    506,   507. 
Woods,  In  re  (143  U.  S.  202),  892. 
Woods    V.    Little    (134    Fed.    Rep, 

229),   480,   681. 
Woods  V.  Owings  (1  Cranch,  239), 

7,  475. 
Woods  &  Malone,  lyi  re  (121  Fed. 

Rep.  599),  503. 
Woodside  Coal  Co.,  In  re  (105  Fed. 

Rep.  50),  178,  180. 
Woodward,    In   re    (4    Ben.    102), 

646. 
Woodward,   In   re    (8    Ben.    112), 

278,  410,  636. 
Woodward,   In   re    (8    Ben.    563), 

178. 
Woodward,    hi   re    (12    N.    B.    R. 

297),  138. 
Woodward,    In   re    (95    Fed.    Rep. 

955),  514. 
Woodward,   In  re    (95    Fed.   Rep. 

260),  572. 
Woodward  v.  Brown   (13  Pet.  1), 

940. 
Woodward    v.    Herbert     (24    Me. 
385),  343. 


1434 


TABLE  OF  CASES. 
References  are  to  pages. 


Woolfolk  V.  Murray  (44  Ga.  137), 

519,   521,   52G. 
Woolford  V.   Diamond   State  Steel 

Co.    (138  Fed.  Rep.  582),  228, 

285. 
Woollcott    (140    Fed.    Rep.    460), 

531. 
Woolridge    v.    McKenna     (8    Fed. 

Rep.   650),   126,   245. 
Wooten,  In  re  (118  Fed.  Rep.  670), 

159. 
Worcester  County,  In  re  (102  Fed. 

Rep.   808),   362,   780,   869,   871, 

872,   899,  915,  921. 
Worcester  v.  Clark  (2  Grant  [Pa.] 

84),  531. 
Worden  v.  Searles   (121  U.  S.  14), 

652,   697,   698. 
Worland,  In  re  (92  Fed.  Rep.  893), 

743,  746. 
World    Pub.    Co.    v.    Rialto    Grain 

Co.    (108   Mo.   App.   480),   853. 
Worrell,    In    re     (125    Fed.    Rep. 

159),  632,  645. 
Worth,  In  re  (130  Fed.  Rep.  927), 

333,   358. 
Wright,  In  re  (2  Ben.  509),  828. 
Wright,  In  re    (3  Biss.  359),  537. 
Wright,  In  re  (6  Biss.  317),  383. 
Wright,  In  re    (1   N.  B.  R.   393), 

414. 
Wright,  In  re    (2   N.   B..   R.   490), 

552,   566. 
Wright,  In  re  (95  Fed.  Rep.  807), 

361. 
Wright,  In  re  (96  Fed.  Rep.  187), 

572. 
Wright,  In  re  (96  Fed.  Rep.  820), 

921. 
Wright  V.  Bird  (1  Price,  20),  178. 
Wright   V.    Fairfield    (2   B.   &   Ad. 

727),   509. 
Wright    V.    First    Nat.    Bank     (8 

Biss.  243),  509. 
Wright     V.     Kogers     (3     McLean, 

229),   375. 
Wright  V.  Skinner   (136  Fed.  Rep. 

694),   619,   221,   222,   618. 
Wright  V.  Snell  (5  B.  &  Aid.  350), 

606. 
Wright   Lumber   Co.,   In   re    (114 

Fed.  Rep.  1011),  556,  557,  588. 
Wrisley  Co.,  In  re  (133  Fed.  Rep. 

388),  419,  425    727,  729,  730. 
Wronkow,  In  re    (15   Blatch.   38), 

713,  715. 
Wulbern  v.  Drake   (120  Fed.  Rep. 

493),  170. 


Wunder,    In    re    (133    Fed.    Rep. 

821),  526. 
Wyllie,  In  re  (2  Hughes,  449),  514, 
Wyly,  In  re    (116  Fed.  Rep.   38), 

573. 
Wynne,  In  re  (Chase,  227),  746. 
Wynne,  In  re  (4  N.  B.  R.  23),  478. 


Yale,  Ex  'parte  (3  P.  W.  25),  318, 

324. 
Yaple  V.  Dahl-Millikin  Grocery  Co. 

(193  U.  S.  526),  399,  576. 
Yates,  In  re   (114  Fed.  Rep.  365), 

168,  206,  219,  222,  349. 
Yates  V.  Sherrington  (11  M.  &  W. 

42),  376. 
Yeatman  v.  New  Orleans  Sav.  In- 
stitution   (95  U.   S.  764),  439, 

542,  603. 
Yeaton,  In  re  (1  Low.  420),  484. 
Yoder,  In  re  (127  Fed.  Rep.  894), 

170. 
Yonge,  Ex  parte  (3  Ves.  &  B.  31), 

340,  341. 
York's  Case   (1  Abb.  [U.  S.]  503), 

920. 
York,  In  re  (3  N.  B.  R.  661),  756. 
i'ork  Mfg.  Co.  V.  Cassell    (201  U. 

S.  344),  77,  78,  81,  85,  88,  92, 

438,    439,    4^5,    447,    449,    450, 

492,    501,    542,    581,    582,    592, 

595,  596,  767,  873,  879. 
Yost  V.   Heffner    (69    Pa.   St.   68), 

527. 
Young,  In  re  (3  N.  B.  R.  440),  538. 
Young,  In  re   (96  Fed.  Rep.  606), 

290,  360,  780,  781. 
Voung,  In  re  (111  Fed.  Rep.  158), 

87,  100,  905. 
Young,  In  re  (140  Fed.  Rep.  728), 

811,  821. 
Young  V.   Bank    (1   Moore,   P.   C. 

150),   370. 
Young  V.   Ins.   Co.    (29   Fed.  Rep. 

273),  62. 
Young  V.    Upson    (115   Fed.   Rep. 

192),   576. 
Younghusband  v.  Gisborne  (1  Coll. 

400),  505. 
Yoxtheimer  v.  Keyser   (11  Pa.  St. 

364),   857. 


Zacher  v.  Fidelity  Trust  &  Safety 
Vault  Co.  (100  Fed.  Rep.  593), 
46L 


TABLE  OF  CASES. 
References  are  to  pages. 


14:35 


Zahm  V.  Fry  (9  N.  B,  R.  546),  566. 
Zantzinger  v.  Ribble   (36  Md.  32), 

437. 
Zaregas  Case  (4  L,  R.  480),  824. 
Ziegenfuss,    In    re    (2    Iredell,    N. 

C).    29. 
Zier,  In  re    (142   Fed.   Rep.    102), 

773,  341. 
Zimmer  v.  Schleehauf  (115  Mass. 

52),  381 


Zimmerman  v.  Ketchum  (66  Kan. 
98),  840. 

Zinn,  In  re  (3  N.  B.  R.  370),  417, 
425. 

Zug,  In  re  (16  N.  B.  R.  280),  311. 

Zugalla  V.  International  Mercan- 
tile Agency  (142  Fed.  Rep. 
927),   176,   179,   180,   202. 

Zule  V.  Zule  (24  Wend.  N.  Y.  74), 
365. 


ANALYTICAL     TABLE     SHOWING     WHERE     EACH 

CLAUSE    OF   THE   BANKRUPT  ACT   IS 

CONSIDERED  IN  THIS  TREATISE. 


Sec- 
tion 

Clause 

Page  of  Treatise. 

Sec- 
tion 

Clause 

Page  of  Treatise. 

1 

(1) 

Meaning   of   "Person 
against     whom     a 
petition  is  filed." 

2 

1 

(1) 

136,  172,  207,  234, 
237,  246,  268,  296, 
302,   515,   653. 

(2) 

279. 

1      (2) 

408. 

(3) 

867. 

1      (3) 

81,  87,   140,  156,  251, 

(4) 

651,  657. 

252. 

(5) 

153. 

1      (4) 

149,  421,  659,  690. 

(6) 

1   175. 

1      (5) 

140,     156,     251,     254, 

(7) 

132,     322.     331,     334, 

1 

735. 

416,    632,    652,    659. 

(6) 

89,   108. 

(8) 

33. 

(7) 

733,  749. 

(9) 

224,  262,  322,  385. 

(8). 

786. 

(10) 

92. 

(9) 

712,  728,  729. 

(11) 

339,  369. 

(10) 

135,  141. 

(12) 

821. 

I    (11) 

520,  536. 

(13) 

462. 

I    (12) 

861. 

(14) 

205,     242,     379,     572, 
791,  920. 

i    (13) 

139,  652,  659,  692, 
693,  703. 

(15) 

186,     193,     197,     233, 

(14) 

668. 

472,  558. 

(15) 

105,     252,     256     653, 

(16) 

132. 

663. 

(17) 

211,  683. 

(16) 

139,     410,     634,     636, 

(18) 

156,  158,  426. 

659,  692,  693. 

(19) 

168,  206,  226,  296. 

(17) 

416,  425,  426. 

(20) 

Meaning     of      "Peti- 

(18) 

756. 

tion." 

(19) 

See  Sec.  32. 

(21) 

Meaning      of      "Ref- 
eree." 

3 

30,  192,  196,  199,  201, 
202,  219,  570. 

^22) 

678,  806. 

a 

30,  183,  186,  190,  191, 

(23) 

611. 

199,    200,   228,    230, 

(24) 

513. 

232,    233,    267,   299, 

(25) 

193,  466,  540,  553. 

811. 

(26) 

Meaning  of  "Trustee" 

b 

182,     203,     204,     231, 

(27) 

169. 

232,    236,    241,    267, 

(28) 

Words    in    masculine 

296,   568,  570. 

1 

gender. 

c 

15,  185,  192,  230,  269. 

(29) 

Words      importing 

d 

185,  186. 

plural. 

e 

258,  259,  773. 

(30) 

Words      importing 

4- 

206,  231,  494,  853. 

singular. 

a 

28.   168,   173,   296. 

2 

25,  33,  74,  78,  79,  84. 
208,    210,    455,   456, 

h 

169,  173.  175,  180, 
237.   267,   296. 

610,    687,    870,   871, 

5 

169,  292. 

1 

878,  899. 

a      \ 

1 

297. 

1437 


1438 


ANALYTICAL    TABLE. 


Sec- 
tion 

Clause 

Page  of  Treatise. 

Sec- 
tion 

Clause 

Page  of  Treatise. 

1 
5   1 

1 
b 

30G,  323. 

16 

1 

294,     353,     377,     488, 

1 

c 

182,     294,     299,     302. 

725,    824,    849,   852. 

303. 

17 

660,     668,     725,     821, 

d 

306,  420. 

824,    828,    829,    834, 

e 

306. 

836. 

f 

292,   307,  762. 

(1) 

832,  833. 

g 

292,  307. 

(2) 

834,     836,     838,     841, 

h 

294. 

842. 

6 

460,     513,     515,     516, 

17 

(3) 

826,   839,   862. 

517,    532,    533,    537. 

(4) 

837,     841,     844,     845, 

7 

326,    328,    651,    653, 

847,   848,   849. 

654. 

18 

243,   248,  322. 

(1) 

327,  651,  653,  817. 

a 

156,   245,   250. 

(2) 

634,  652. 

b 

133,   251,   265,   271. 

(3) 

654. 

c 

211,     239,     271,     457, 

(4) 

653,  654. 

864. 

(5) 

437,  461,  480,  654. 

d 

133,  243,  274,   275. 

(6) 

654. 

e 

133,   278,  282. 

(7) 

654. 

f 

132,   136,   154.   282. 

(8) 

155,     211,     213,     214, 
216,    264,    442,    520, 

9 

132,     133,     136,     154, 

219,  220. 

525,   533,   655. 

19 

121,     150,     233,     266, 

(9) 

628,     634,     641,     653, 

269,    305,   916,   917. 

655,  684. 

a 

188,   251,  275. 

a 

643. 

b 

188,  276,   817. 

8 

174,  482,  531,  676. 

c 

276,     459,     688,     817, 

9 

653,  658,  659,  668. 

864. 

a 

656,   659,   660,   675. 

20 

137,     212,     240,     395, 

b 

132,  630,  661,  6C3. 

663. 

10 

668. 

a 

645. 

11 

94,  428. 

b 

211. 

a 

105,     106,     108,     113, 

i       252. 

21 

410,     459,     629,     631, 
632,  633. 

b 

114,  427. 

a 

105,     278,     631,     632, 

c 

114,  427. 

644,    648,    653,    685, 

d 

1    431,   620. 

690,  693. 

12 

706. 

b 

278,  411,  647. 

a 

1   708. 

c  ' 

412,  648. 

b 

i   712,  714. 

d 

1   136,   787. 

c 

1   722. 

e 

1   437,  442. 

d 

132,     709,     716,     719, 

f 

1   724,  728,  860,  862. 

722. 

0 

728. 

e 

724,  727. 

22 

1      ^ 

132,   133,   220,   28L 

13 

728,  729. 

!     ^ 

132. 

a 

132. 

23 

81,  91,   121,   167,  617, 

14 

132,  788,  793,  866. 

618,   758,   869. 

a 

790. 

a 

98,  123,  126,  621. 

b 

719,     791,     800,     801, 

23 

b 

S3,  99,   616,  621. 

802,    804,    805,    808, 

c 

99,  149,  421,  659,  688. 

809,    811,    813,    814, 

24 

869,  884. 

816,  817,  821. 

a 

867,     868,     870,     871, 

c 

1   714,  724,  822. 

877,   898,   899,.  916, 

15 

1   132,     861,     862,     864, 
1        865. 

919. 

1 

ANALYTICAL    TABLE. 


14:59 


Sec- 
tion 

Clause 

Page  of  Treatise. 

Sec- 
tion 

01auB« 

Page  of  Treatise. 

24 

b 

799,     868,     870,     871, 
877,    898,    899,    900. 

39 

(9) 

138,  142,  147,  411, 
637,  146. 

903,   906,    907,   910, 

(10) 

146. 

912. 

b 

136,  148,  752. 

25 

868,     869,     911,     914, 
922. 

40 

149,  403,  613,  749, 
766. 

a 

414,     870,     898,     899, 
906,    912,    919,   923, 
943. 

41 

96,  138,  139,  220,  410, 
459,  636,  652,  692. 
693. 

b 

885. 

a 

410,     634,     636,     640, 

c 

930. 

647,  648,  659. 

d 

886,  889,  893. 

b 

133,  640,  699. 

26 

734,  757. 

42 

a 

147. 

a 

422,  730. 

b 

147. 

6 

732. 

c 

148,   787. 

c 

732. 

43 

128,  131. 

27 

730,  737,  757. 

44 

135,     251,     329,     331, 

a 

422. 

334,    415,   416,    417, 

28 

322,  789. 

426,   427,   730,   786, 

29 

677,  686,  690,  722. 

866. 

a 

421,  678. 

45 

415,  416. 

b 

678,     683,     685,     686, 
687,   689,   803. 

46 

231,  415,  418,  427, 
678. 

c 

149,  687,  688. 

47 

a 

415. 

d 

691. 

(1) 

759. 

30 

134. 

(2) 

423,     429,     733,     758, 

31 

204,     242,     379,     474, 

759. 

572,    591,    791,   920. 

(3) 

421. 

32 

272,  302. 

(4) 

421,   783. 

33 

128,   415. 

(5) 

42L 

34 

128,  129. 

(6) 

420. 

35 

129,  130. 

(7) 

76L 

36 

130. 

(8) 

785. 

37 

128. 

(9) 

424,  783. 

38 

a 

131,  135,  137,  632. 

(10) 

420,  759,  763. 

(1) 

133,  136,  221,  282. 

(11) 

521,  533. 

(2) 

137,  630. 

b 

424. 

(3) 

133.     140,     154,     252, 

c 

433,   437. 

258. 

48 

415,     431,     613,     749, 

(4) 

181,     132,     133,     134. 

766. 

140,    220,    712,   722. 

a 

432 

731,  817. 

b 

433. 

(5) 

138,     147,     411,     637, 

c 

433. 

774. 

49 

138,  415,  421. 

39 

a 

142,  145. 

50- 

415. 

(1) 

759,  763,  783,  145. 

a 

130,  13L 

(2) 

214,   222,   287,   145. 

b 

417,   418. 

(3) 

145. 

c 

333,  417. 

(4) 

335,  145. 

d 

131,   418. 

(5) 

142,   148,  145. 

e 

130,  418. 

(6) 

146. 

f 

130,  418. 

(7) 

146. 

CI 

130,  418. 

(8) 

148,  146, 

h 

131,  418. 

1440 


ANALYTICAL    TABLE. 


Sec- 
tion 

Olause 

Pag3  of  Treatise. 

Sec- 
tion 

Clause 

Page  of  Treatise. 

50 

i 

418. 

59 

a 

173,  206,   211. 

i 

417. 

6 

224,     225,     226,     229, 

k 

1   130,   418. 

237. 

I 

131 

c 

155,  216,  236,  240. 

m 

418. 

d 

1   226,   237,   270,   271. 

51 

154,  217. 

e 

229. 

52 

a 

155. 

f 

261,  926,  928. 

& 

157. 

g 

222,   225,   227,   287. 

53 

158. 

60 

193,     198,     380,     466, 

54 

158. 

472,    540,    543,   553, 

55 

251. 

557,    566,    567,    570, 

a 

322. 

579,   581,    582,    585, 

h 

135,     327,     328,     329, 

587,    589,    605,    758. 

628. 

a 

554,     556,     559,     566, 

c 

328. 

568,   570,   573,   590, 

a 

334. 

622. 

e 

334. 

h 

83,  99,  204,  225,   380, 

f 

335,  785. 

424,   429,    439,    541, 

56 

327,   332. 

542,   549,    554,    561, 

a 

323,  335,   711. 

564,    566,    583,    587, 

b 

226,     230,     323,     324 
608,  611. 

614,  616,  617,  621, 
622,  627. 

57 

384, 

c 

380. 

a 

38b,  391,  392,  395. 

d 

166,  424,  575. 

h 

395,  404. 

e 

758. 

c 

402. 

Gl 

a 

422. 

a 

325,  403,  40G. 

02 

152,     156,     772,     775, 

e 

324,     338,     396,     611 

776. 

748. 

C3 

a 

224,     336,     337,     344, 

f 

338,  406. 

348,    354,    3.59,    830. 

Q 

325,     338,     380,     3S8, 
398,    400,   413,    554, 

(1) 

343,  346,  347,  351. 
352,   358,   362,    834. 

556,  604. 

(2) 

360. 

h 

396,  612,  740,  748. 

(3) 

360, 

' 

353.     354,     355,     356. 
378,   386,   393,   397, 

(4) 

343,  351,  352,  360, 
382. 

850. 

(5) 

347,  350,  836. 

i 

339,   782,   833. 

6 

225,     337,     365,     390 

k 

326,   408,   409,   412. 

829. 

I       1 

413,  424. 

64 

291,   766,   767,  768. 

m 

357,   387,   423. 

a 

433,   768,   769,  772. 

n 

383,     389,     390,     7C5 
862. 

b 

160,  163,  166,  541. 
769,    772,   773,   774 

58 

151. 

776,  778,  779. 

a 

145,     287,     288,     322 
335,    426,    635,    710 

65 

c 

730,  766,  866. 

715,    722,    731,    73C 

a 

760,   762. 

737,    740,   742,    743 

b 

760,    765. 

• 

749,    757,   760,    763, 

c 

762,  765. 

785,  789. 

d 

765. 

b 

322. 

e 

763. 

c 

133,     146,     156,     322 

66 

785. 

335. 

a 

424. 

ANALYTICAL    TABLE. 


1441 


Sec- 
tion 

Clause 

Page  of  Treatise. 

Sec- 
tion 

Clause 

Page  of  TreatiBe. 

67 

543,  549,  758,  767. 

1 
09 

133,     140,     156,     258, 

a 

439,     449,     542, 

581, 

259,   261. 

582,    583,    591, 

592, 

70 

141,     216,     471,     506, 

594,  606,  609. 

543,  758. 

& 

424,     582,     592, 
615. 

600, 

a 

435,     436,     438,     460, 
466,    516,    519,   521, 

C 

541,     543,     551, 
615. 

552, 

(1) 

525,  594,  786. 
462. 

d 

542,     581,     583, 
585,  605,  779. 

584, 

(2) 
(3) 

462,  463.  . 
464. 

e 

32,   83,    99,    190, 

225; 

(4) 

466,  467,  470. 

423,    429,    406, 

474, 

(5) 

463,     479,     497,     512, 

476,    477,   478, 

541, 

594. 

542,    557,    582, 

583, 

(6) 

508,  511. 

584,    590,    613, 

616, 

& 

420,     535,     752,     753, 

617,    620,    621, 

622, 

755. 

623,   624,   627, 

758, 

c 

440,  613,  753. 

879. 

d 

440,  730,   866. 

f 

117,     185,     423, 
473,    543,    544, 
546,    549,    551, 
606,    615,   620, 
852,  853,  905. 

439, 
545. 
553, 
780. 

e 
f 

83,  99,  429,  466,  470, 
477,  478,  557,  613, 
616,  617,  621,  622, 
624,  627,  758. 

440,  724. 

68 

368,  380. 

71   1 

153. 

a 

394. 

72   ] 

149,  151,  434,  820. 

b 

377,  378,  379. 

1 

1 

INDEX. 


References  are  to  pages. 

The  Analytical  Table  preceding  tliis  Index  sliows  where  each  section  and  clause 
of  the  Bankrupt  Act   is  considered   in   this   treatise. 

A. 

Abatement- 
Proceedings  do  not  abate  upon  death  or  insanity  of  bankrupt,  174, 

675. 
Suits  are  not  abated  by  deatti  or  removal  of  trustee,  676. 

Abroad— 

(See  Alien,  Foreigx.) 

Absconding   debtor- 
How  to  proceed  against,  184. 

Absence — 

Judge's,  in,  case  sent  to  referee,  154. 
Referee's,  effect  of,  128. 

Accounts^ 

Books  of,  destruction,  concealment,  etc.,  prevents  discharge,  804. 

Books  of,  as  evidence  of  insolvency,  189,  625. 

Debts  founded  upon  open,  allowed,  360. 

Notice  to  creditors  of  filing  final,  785. 

Partnership,  insolvent,  kept  by  trustee,  306. 

Penalty  for  making  false,  684. 

Referee's  punishment  for  refusing  inspection  of,  687. 

Trustees  to  keep,  420. 

file  final,  when,  420,  785. 

punishment  for  refusing  inspection  of,  687. 

referee  to  audit,  420,  786. 

Acknowledgment — 

(See  Oath.) 

Act  of  1800— 

Administration  of  the  estate,  9. 

Commission  of  bankruptcy,  8. 

Discharge,  9. 

Dividends,  9. 

What  was  an  act  of  bankruptcy,  7. 

When  petition  filed,  8. 

Who  might  be  adjudged  bankrupt,  7. 

Why  and  when  repealed,  9. 

1443 


144-4  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Act  of  1841— 

Acts  of  bankruptcy,  10. 

Assignee  and  his  powers,  11. 

Discharge,  11. 

Objections  to  and  repeal,  12. 

When  petition  might  be  filed,  11. 

Where  proceedings  were  had,  11. 

Who  might  be  adjudged  bankrupts,  10. 

Act  of  1867— 

Appellate  jurisdiction  of  supreme  court,  27. 

Objections  to  and  repeal,  13. 

Act  printed  in  full,  951. 

Compared  with  act  of  1898,  13.  • 

Act  of  1898— 

Compared  with  act  of  1867,  13. 
State  laws  superseded  by,  25,  29. 
When  it  went  into  effect,  23. 

Actions — 

(See  Suits.) 

At  law,  what  are,  100. 

Acts  of  bankruptcy — 

Admission  in  writing  of  inability  to  pay  debts,  202. 
by  corporation,  203. 

Assignments  for  the  benefit  of  creditors,  30,  199. 

Averred  in  petition,  238. 

Computing  time  in  respect  to,  203. 

Concealing  or  removing  property,  190. 

Creditors  estopped  to  charge,  when,  227. 

Evidence  of,  not  in  petition  inadmissible,  238. 

Fraudulent  transfer,  190.     (See  Fraudulent  Transfeb.) 
intent  of  transfer  only  material,  160. 

How  committed  by  partners,  182,  299. 

Insolvency  as  an  element  of,  185, 

None  relating  to  the  person,  184. 

Of  partnerships,  182,  299. 

Once  committed  can  not  be  rescinded,  185. 

Permitting   preferences   by   legal   proceedings,   196.      (See   Prefer- 
ences.) 

Pleading,  238. 

Preferences  by  debtor,  192.     (See  Preferences.) 

Question  for  jury,  275. 

Receiverships,  201. 

Removing  or  concealing  property,  190. 

Rescinded,  can  not  be,  185. 

Several  acts  may  be  charged  in  same  petition,  238. 

Support  an  involuntary  petition,  234. 

Voluntary  petitions  as,  202. 

What  are,  183. 

When  must  be  committed,  182,  203. 

Who  may  commit,  182. 

Who  may  not  complain  of,  185. 


INDEX.  2445 

References  are  to  pages. 

The  Analytical  Table  preceding  tliis  Index  shows  whero  each  section  and  clause 
of  the  Bankrupt  Act   is   considered  in   this   treatise. 

Adjudication — 

On  creditors'  petition,  278. 

On  debtors'  petition,  218. 

Partnersliip  cases,  in,  304. 

Setting  aside  an,  279. 

When  referees  may  make,  136. 

When  not  made  on  debtor's  petition,  218. 

Administrationi — 

Appointment  of  trustee,  415. 

Arbitration,  730. 

Composition  with  creditors,  706. 

Costs  of,  entitled  to  prioritj',  773. 

Distribution,  dividends,  etc.,  783. 

Exemptions,  513. 

Expenses,   155. 

Partnership  property,  306. 

Proving  claims,  384. 

Reducing  estate  to  money,  733. 

Settlement  of  the  estate.  785. 

Suits  with  reference  to  estate,  100,  427,  618,  757. 

Trustee's  powers  and  duties,  418. 

Trustee  takes  what  property,  435. 

Administrator — 

Discharge  does  not  release  debts  of,  846. 
Proof  of  claims  by,  387. 

Admission  of  proofs — 

(See  Evidence.) 

Adverse  claimants — 

Jurisdiction  over,  when  court  has  custody  of  property,  78. 

when  court  may  summarily  take  possession  of  rroperty  from^ 
81.  " 

when  plenary  suit  is  necessary,  100. 
Jury  when  entitled  to,  100. 
Who  are,  101,  877. 
(See  Claimants.) 

Advertisement — 

(See  Newspapeb.) 

Affidavit- 
Arrest  of  bankrupt  for  examination,  for,  661. 
Voluntary  bankrupt  of,  of  inability  to  pay  fees,  217. 

Affirmation — 

(See  Oath.) 

After-acquired    property — 

Bankrupt  can  not  be  examined  as  to,  507. 
Does  not  pass  to  trustees,  505. 
Protected  by  injunction,  508. 
What  constitutes,  507. 


1446  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  IncVex  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Agent — 

"Creditors"  includes,  224 

Intent  of,  in  transftM',  that  of  principal,  5G4. 

May  vote  at  creditors'  meeting,  322. 

Penalty  for  use  in  compositions  false  claims,  as  or  by,  686. 

Petition  may  be  verified  by,  239. 

Proof  of  claims  by,  395. 

Property  in  possession  of,  passes  to  trustee,  490. 

Whether  acting  in  fiduciary  capacity  to  discharge  debts,  845. 

Aggrieved  person — 

(See  Appellate  Proceedings.) 

Alabama — 

Territorial  jurisdiction  of  courts  in,  34. 

Alaska — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  35. 
"States"  include,  513n. 

Aliens — 

Domestic  creditors  prefered  over,  v^^hen,  765>i. 
May  be  banlvrupts,  171. 
(See  also  Foreign.) 

Alimony — 

Does  not  pass  trustee,  460. 

Not  affected  by  discharge,  judgment  for,  834. 

Not  a  provable  claim,  347. 

Allowance — 

Claims   of,    against   bankrupt's   estate,    326,    406.      (See   Proof   of 
Claims.) 

assignee  to,  387. 

prefered  claims,  of,  397. 

review  of,  413. 

secured  creditors,  of  397. 
Debts  subject  of,  336. 
Widow  and  children  to,  fixed  by  state  laws,  531. 

Amendment — 

Clerk's  certificate  to  record,  938. 
Debtor's  petition  and  schedule,  of,  221. 

must  be  verified,  221. 

referee  may  allow,  222. 
In  involuntary  cases,  when  petition  may  be,  283. 

acts  of  bankruptcy  set  up  by,  new.  2Sr;. 

application  for  must  be  made  within  reasonable  time,  284. 

discretion  of  court  within,  284. 

leave  granted  on  terms  as  pay  costs,  284. 

to  show  jurisdictional  facts,  285. 

referee  may  grant  leave  to,  287. 
In  voluntary  cases,   how  made,   221. 


INDEX.  1447 

References  are  to  pages. 

The  Analytical  Tal)Ie  precedinjr  this  Index  shows  where  each  section  and  clause 
oi:  the  Bankrupt  Act  is  considered  in  this  treatise. 

Amendment    (continued)  — 
Of  proof  of  claim,  403. 

allow  on  terms,  405. 

to  change  from  unsecured  to  secured,  401,  405. 

referee  may  allow,  404. 

when  may  allow  after  year  period,  404. 
Of  record  on  appeal,  9.38. 

Petition  to  C.  C.  A.  to  supervise  court  of  bankruptcy,  of,  908. 
Referee  may  allow,  221,  287,  404. 

Amount — 

Appeal  to  U.  S.  supreme  court,  885. 

Bonds  of  referees,  13"^. 

Bonds  of  trustees  fixed  by  creditors,  333,  417. 

Claims  of  creditors,  who  file  involuntary  petition,  229. 

Debtor's  debts  denied  in  answer,  271. 

Debts  of  petitioning  creditors  denied,  269. 

Ancillary  proceedings — 

Examination  of  witnesses  in  other  districts,  647. 
Suits  in  other  districts,  103. 

Ansvrer — 

Can  not  demur  to,  274. 
Defense  of  coverture,  270. 

acts  of  bankruptcy  not  committed,  268. 

each  must  be  separately  stated,  267. 

insufficient  creditors'  debt,  269. 

insufficient  indebtedness  of  bankrupt,  270. 

infancy,  270. 

insanity,  270. 

more  than  12  creditors,  270. 

payment,  271. 

petitioner  has  not  provable  debt,  269. 

solvency,  185,  232,  268. 

statute  of  limitation  to  creditors'  debt,  270. 

want  of  jurisdiction,  268. 
Filed  where  and  when,  271.  ' 

How  to  plead  to  a  petition,  264. 
Oath  to,  271. 

signature  to,  271. 
To  an  involuntary  petition,  266. 
Verification  of,  271. 

When  names  of  creditors  must  be  set  up  in,  270. 
When  to  file,  266. 
Where  to  file,  271. 

Apparel — 

Unless  exempt,  passes  to  trustee,  490. 
What  included  in,  492,  515. 

Appeal — 

(See  Appellate  Proceedings.) 


1448  INDEX, 

References  are  to  pages. 

The  Annlytical  Talile  precodins  this  Index  shows  whei-p  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Appearance — 

Can  not  be  withdrawn,  263. 
Effect  of,  247,  263. 
Of  creditors  to  become  parties,  261. 
Of  a  nonresident  creditor,  263. 
Oppose  discharge  to,  794. 
Waives  citation,  935. 

Appellants — 

Who  should  be  made,  924. 

Appellate  proceedings — 

Allowance  of  claim  from,  413. 

Appeals  in  bankruptcy  to  supreme  court  of  territories,  898. 

Appeals  to  U.  S.  supreme  court  from  supreme  court  of  District  of 

Columbia,  884. 
Amendment  of  record,  938. 
Appeal  bond,  930.      (See  Bond.) 
Assignment  of  errors,  929. 
Bankrupt  act  does  not  affect  appellate  jurisdiction  at  law  or  in 

equity,  874,  877. 
Bond  necessary  to  perfecting  appeal,  940. 
Bond  not  essential  to  taking  an  appeal,  922. 
Briefs  in  appellate  courts,  942. 

Certifying  questions  of  jurisdiction  to  supreme  court,  894. 
Certifying  questions  of  law  from  C.  C.  A.  to  supreme  court,  895. 
Certiorari  from  supreme  court,  886,  et  seq. 

C.  C.  A.  may  issue,  887. 

for  dimination  of  record,  886. 

to  remove  a  case  from  C.  C.  A.  to  supreme  court,  890. 
Citation,  933.     (See  Citation.) 
Citation  neccessary  to  perfecting  appeal,  940. 
Cost  in,  947. 

Courts  which  have  appellate  jurisdiction,  867. 
Cross  appeals,  916. 

Death  of  party  in  appellate  court,  945. 
Decree  in,  944. 

How  to  prepare  record,  935. 
How  to  review  a  case  from  a  state  court,  881. 
Jurisdiction  of  C.  C.  A.  of  appeals  in  bankruptcy,  911. 

of  C.  C.  A.  of  appeals  and  writs  of  error  in  equity  and  law 
874,  877. 

of  C.  C.  A.  to  supervise  proceedings  in  bankruptcy,  900. 

of  supreme  court  in  bankruptcy,  884. 

of  supreme  court  in  law  and  equity.  874,  877. 

of  supreme  court  from  state  court,  881. 

of  territorial  courts  in  bankruptcy,  898. 
Mandate,  949. 
Parties,  924. 

who  may  prosecute,  924. 

who  must  join,  925. 

who  must  be  made  appellees,  926. 
Perfecting  an  appeal,  940. 

Perfecting  an  appeal  confers  jurisdiction  on  appellate  court,  942. 
Petition  for  appeal,  928. 


INDEX.  1449 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  tliis  treatise. 

Appellate    proceedings    (continued)  — 
Practice  in  C.  C.  A.  on  appeal,  942. 
Printing  record  on  appeal,  942. 
Proceedings  for  rehearlngs,  945. 
Record  on  appeal  or  error  to  contain  what,  935. 

amendment  of,  938. 

on  certificate  to  supreme  court,  897. 

on  return  to  writ  of  certiorari,  893. 

on  revisions  by  C.  C.  A.,  907. 

on  review  by  judge  of  order  of  referee,  142. 
Supersedeas,  931. 

Supervisory  power  of  C.  C.  A.,  900. 

Taking  an  appeal  deprives  court  of  bankruptcy  of  jurisdiction,  940. 
Time  within  which  to  appeal  in  bankruptcy  to  supreme  court,  884, 

885. 
Time  within  which  an  appeal  to  C.  C.  A.  must  be  taken,  919. 
Time  for  appeal  can  not  be  enlarged,  921. 
Threefold  jurisdiction  of  C.  C.  A.,  898. 
What  constitutes  "taking  an  appeal,"  922,  940. 
What  must  be  done  to  "take  an  appeal,"  922. 
When  appeal  lies  to  supreme  court  from  C.  C.  A.,  875,  900. 
When  record  not  filed  in  time,  941. 
When  record  must  be  filed  in  appellate  court,  935. 
When  summons  and  severance  is  necessary,  927. 
Who  are  necessary  parties  to  an  appeal,  924. 
Writ  of  error  to  court  of  bankruptcy,  916. 

time  for  suing  out,  919. 

when  cross  writs  necessary,  918. 

Appellees — 

Who  should  be  made,  924. 

Application — 

For  discharge,  788. 

For  injunction  to  protect  an  estate,  how  made,  256. 

For  a  receiver,  253. 

To  amend  involuntary  cases,  283. 

To  protect  estates,  how  made,  250. 

To  set  aside  an  adjudication,  279. 

To  seize  bankrupt's  property,  how  made,  258. 

To  stay  a  suit,  107,  108. 

Appointment — 

Arbitrators,  732. 
Receiver  for  estate,  253. 
Referees,  128. 
Trustees,  329,  415. 

Apportionment — 

Referee's,  compensation  of,  150. 
Trustee's,  compensation  of,  433. 


U50  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  sliows  where  each  section  and  clause 
of  the  Banlirupt  Act   is  considered   in   this   treatise. 

Appraisal — 

Can  not  sell  property  for  less  than  75  per  cent,  of,  753.. 
Exempt  property,  535. 
Property  for  a  sale,  752. 

Approval — 

Compromises,  of,  by  court,  730. 
Expenses  of  administering  banlirupt  estates,   tin. 
Sale  of  property  subject  to,  753. 

Trustee  may  prosecute  suits  already  commenced,  with,  of  court, 
427. 

Arbitration — 

Application  for,  730. 

Controverseries  may  be  settled  by,  730. 

Choice  of  arbitrators,  732. 

Effect  of  finding,  732. 

Notice  of,  731. 

Referee  may  grant  leave,  731. 

Trustee  may  compound  claims,  when,  731. 

Arizona — 

Territorial  jurisdiction  and  time  of  holding  court  in,  37. 

Arkansas — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  37. 

Arms,  Military  uniforms,  etc. — 

Exempt  by  laws  of  the  United  States,  513. 

Army  pensions — 

Do  not  form  a  part  of  estate,  496. 
When  money  passes  to  trustee,  497. 

Arrest — 

Contempt  cases,  in  659. 

Criminal  cases,  in,  659. 

Debts  not  released  by  discharge,  for,  656,  659. 

Extradition  of  bankrupt,  668. 

Examination,  detained  for,  661. 

proceedings  for,  661. 
Inquiry  as  to  nature  of  debt,  scope  of,  666 
Proceedings  upon  arrest,  662. 
Proceedings  to  release  bankrupt,  from,  663. 

application  to  be  made  in  what  court,  664. 
Time  during  which  protection  extends,  657. 
"When  bankrupt  protected  from,  655. 
When  bankrupt  liable  to,  658. 
When  in  attendance  on  court  of  bankruptcy,  656. 
When  to  remove  bankrupt  to  another  district,  668,  670. 
When  under,  657. 
(See  Habeas  Corpus.)     ' 


INDEX.  1451 

References  are  to  pages. 

The  Analytical  Table  precedins  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Assets — 

Individual,  what  are,  312. 

Individual  partnership,  creditors  sharing,  306. 

Partnership,  individual  creditors  sharing,  306. 

Partnership,  wnat  are,  310. 

Unexplained  shrinkage  of,  681. 

Trustees  to  collect  and  distribute,  306. 

What  are  firm  and  individual,  310. 

What  are  generally.     (See  Estate.) 

Assignee  of  claim — 

May  prove,  vi'hen,  387. 

May  vote  at  creditors'  meeting,  323. 

Of  labor  claims  entitled  to  prority,  777. 

Of  several  claims  entitled  to  one  vote  at  creditors'  meeting,  323. 

Assignee  for  benefit  of  creditors — 

Attorney  for,   fees  of,   163. 

Court  may  order  to  deliver  property  to  trustee,  90,  117. 

Jurisdiction  of  court  over,  81. 

Party  defendant  to  petition  does  not  give  general  jurisdiction  over, 

90. 
Priority  for  services,  when  allowed,  773,  780. 
Proof  for  services  in  state  court,  when,  386. 
When  not  personally  liable  for  assets,  627. 

Assignment — 

Assets  distributed  under  recovery  of  by  trustee,  627. 

Assignee  not  liable  to  trustee  for  distributing  assets,  627. 

Creditors  estopped  to  charge,  as  act  of  bankruptcy,  when,  227. 

Errors  on  appeal,  929. 

For  benefit  of  creditors,  an  act  of  bankruptcy,  199. 

For  benefit  of  creditors  may  be  set  aside,  when,  30. 

For  benefit  of  creditors,  legality  of,  29,  780. 

In  what  court  property  to  be  administered,  31. 

Services  in,  when  entitled  to  priority,  773,  780. 

Title  of  assignee,  117. 

Association — 

(See  Partnership.) 

Attachment — 

Against  insolvent  prior  to  four  months,  etc.,  valid,  545. 

Against  insolvent  within  four  months,  etc.,  invalid,  550. 

Dividends  not  subject  to,  782. 

In  foreign  countries  before  trustee  takes  possession,  461. 

Title  of  bona  fide  purchaser  protected,  551. 

When  costs  of  sheriff's  fees  in  proceeding  in,  avoided,  781. 

Bond  not  released  by  discharge,  when  surety  on,  850. 

Attendance — 

Bankrupt  exempt  from  arrest  while  attending  court  of  bankruptcy, 
656. 


1452  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Attendance    (continued)  — 

Compulsory,  of  bankrupt  and  witnesses  before  referee  or  court,  628. 
Witnesses  exempt  from  service  of  subpoena  while  attending  a  court 
of  bankruptcy,  246. 

Attestation — 

(See  Certificate  and  Wbits.) 

Attorney — 

Advice  by,  not  contempt  when,  697. 

Affidavit  by  bankrupt  may  be  taken  by,  when,  158. 

Authority  of,  how  to  challenge,  242. 

Authority  of,  to  be  written,  when,  159,  323. 

Bankrupt  of,  not  to  represent  creditors,  159. 

Contempt  by,  160,  697. 

"Creditor"  includes,  322. 

Creditor  may  appear  for,  263. 

Disbarred  for  contempt,  not,  704. 

Examination  of  bankrupt,  may  attend,  637. 

Fees  of — 

allowance  of  by  referee,  160. 
amount  of,  161  et  seq. 

provided  for  in  mortgage  refused,  165. 
creditors  of  involuntary  bankrupt,  of,  162. 
Including  in  cost  of  administration,  160,  774. 
lien  of,, for,  162. 
priority  of,  160,  774, 
reasonable,  must  be,  162,  164. 
reasonable,  what  is,  165n. 

services  rendered  assignee  before  filing  petition,  for,  163. 
services  rendered  bankrupt  prior  to  bankruptcy  may  be  exam- 
ined  into,    payments   for,   165. 
services  rendered  debtor  in  preparing  schedules  for,  163. 
taxed  as  cost,  165. 
trustee,  of,  162. 
voltmtary  bankrupt,  of,  161. 
who  entitled  to,  160. 
Fiduciary  character,  act  in,  847. 
Knowledge  of,  effect  of,  865. 
Notary  may  act  as,  158. 
Notice  to,  160. 

Payment  or  transfer  to,  for  services,  etc.,  re-examined,  165. 
Payment  to  on  distribution,  760,  783. 

Penalty  for  using  false  claim  in  composition,  as  or  by,  685. 
Power  of,  must  be  written,  when,  159,  783. 
Privileged  communications  to,  646. 
Proof  of  claim  by,  392. 
Referee  can  not  practice  as,  136. 
Released  by  discharge,  when  debts  of,  847. 
Referee  should  be,  129. 

Represent  bankrupt  and  creditor,  not  to,  159. 
Represent  both  trustee  and  bankrupt,  not  good  practice  to,  159. 
Represent  creditors  and  trustee,  when  should  not,  159. 
Trustee,  of,  creditors  may  elect,  159. 


INDEX.  1453 

References  are  to  pages. 

The  Analytical  Talile  prpcedinu'  this  Index  shows  whore  ea-h  section  and  c!a:se 
ine  Ana  ji  t    _^^   ^^^^  i^a„k,„iJt  Act  is  considered  in   this   treatise. 

Attorney    (continued)  — 

Trustee  may  employ  when  necessary,  159. 
Verification  by,  158,  239. 
Witness,  may  be  summoned  as,  646. 
Witness  not  entitled  to  be  attended  by,  637. 
Written  authority  of,  necessary  when,  159,  7b3. 
(See  also  Counselor  at  Law.) 

Attorney  General — 

Duty  to  lay  statistical  tables  before  Congress,  158. 
Officers  to  furnish  statistical  information  to,  lo8. 

Auction — 

(See  Sale.) 

Audit — 

Referee  audits  and  allows  trustee's  reports,  761,  786. 

Auxiliary  proceedings — 

Examination  of  witnesses  in  another  district,  647. 
Jurisdiction  of  proceedings  in  other  districts,  103. 
Suits  to  recover  property  of  the  estate,  616. 
(See  Intervening  Petition.) 

Award — 

Effect  of  finding  by  arbitrators,  732.   . 


B. 

Bail- 
Bankrupt  on  removal  proceedings  of,  671. 
Bankrupt  about  to  depart,  of,  663. 
Sureties  on  bond,  for,  not  discharged,  854. 

Bailee — 

Preferences  created  by  pledge,  598,  604. 
Rights  of  a,  602. 

Bank — 

Designated  as  depositories,  421. 
National,  can  not  be  bankrupts,  170. 
State,  can  not  be  bankrupts,  170. 
Territorial,  can  not  be  bankrupts,  170. 

Bankers — 

Private,  may  be  bankrupts,  170. 
corporation,  can  not  be,  170. 


145-1  INDEX. 

References  are  to  pages 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Danlirupt  Act  is  considered  in  this  treatise. 

Bankrupt- 
Act  of  bankruptcy,  by,  consists  of  what,  18.3. 
admitting  inability  to  pay  debts,  202. 
general  assignment,  making,  199. 
permitting  preferences  by  legal  proceedings,  196. 
transferring,  etc.,  property  to  defraud,  etc.,  190. 
while  insolvent,  to  prefer  creditors,  192. 
Alien  may  become,  171. 
Answer  to  be  made  when,  264. 

to  rule  for  contempt,  entitled  to,  701. 
what  answer  to,  266. 
Arrested  in  civil  cases,  when,  658. 
in  criminal  cases,  658. 
protected  from  being,  when,  655. 
Attend  meetings,  when,  651. 

not  required  to.  when,  651. 
Attorney  of  should  not  represent  creditors,  159. 

should  not  represent  trustee,  159. 
Bail,  on  removal  proceedings,  671. 

to  secure  release  from  custody,  663. 
Bank,  national  can  not  be  adjudged  involuntary,  170. 
Bond  to  secure  property  seized,  261. 
Canal  company  can  not  be  involuntary,  180. 
Carriers  can  not  be  involuntary,  180. 
Claims  against,  allowance  of,  325. 
disclose  false  to  trustee,  406. 
false,  penalty  for  presenting,  685. 
one  bankrupt  against  another,  387. 
proof,  etc.,  of,  391.     . 
Compositions — 
3      application  for  confirming,  712. 

accepted,  must  be  in  writing  by  majority,  etc.,  712. 
consideration  to  be  paid  and  costs  deposited,  etc.,  712. 
date  and  place  of  hearing,  715. 
confirmation  of,  discharges  from  debts,  725. 
conditions  of  confirmation,  724. 
distribution  of  consideration,  727. 
objections  to  confirming,  715. 
hearing  of,  722. 
creditors'  meetings  to  consider,  710. 
general  nature  of,  706. 
power  of  congress  to  provide  for,  707. 
order  of  confirmation,  723. 
set  aside  for  fraud,  may  be,  728. 
when  may  be  offered  by,  708. 

must  be  examined  and  file  schedule,  708. 
Co-debtors'  liability  not  affected  by  discharge,  849. 
Compulsory  attendance  before  court,  referee,  etc.,  634. 
Concealing  property,  penalty  for,  683. 
Corporations  can  not  be  adjudged  voluntary,  168. 

can  be  adjudged  involuntary,  when,  169,  174. 
Creditors,  number,  etc.,  to  file  petition  against,   226,  229. 
meetings  of,  321. 

to  attend  first,  327,  651. 

when  not  required  to  attend,  651. 

expenses  of  attending  paid,  when,  651, 


INDEX.  1455 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
1  lie  Anaiyocdi^^i  ^^^  Bankrupt  Act  is  considered  in  this  treatise. 

Bankrupt   (continued)  — 

Death  of,  does  not  abate  proceedings,  675. 

of  partner,  after,  297. 
Debts  which  may  be  proved,  636. 

which  have  priority,  766. 

not  affected  by  discharge,  822,  et  seq. 
Deceased  person  can  not  be  adjudged,  171. 
Definition  of,  651. 
Detention  for  examination,  661. 

may  be  kept  in  custody  ten  days,  661. 
released  on  giving  bail,  662. 
Discharge,  application  for,  788. 

groimds  for  opposing,  800,  et  seq. 

hearing,  bankrupt  to  attend,  651. 

releases  from  what  debts,  822,  et  seq. 

specification  in  opposition  to,  796. 

when  not  granted,  821. 

when  revoked,  861. 
Domicile  of,  claiming  exemption,  516. 

of  a  corporation,  234. 
Duties  of,  657,  et  seq. 

claims,  to  examine,  654. 
disclose  false,  654. 

examination,  to  submit  to,  655. 

inform  trustee  of  attempt  to  evade  act,  654. 

orders  of  court,  to  comply  with,  652. 

papers,  to  execute,  654. 

schedules,  to  prepare  and  file,  212,  654. 
Embezzlement  of  property  of,  penalty  for,  678. 
Estate  of  deceased  person  can  not  become,  HI. 

Estates  (see  Estate.)  •     •     ,   „„e.«o    rao 

Evidence  against,  can  not  be  used  m  criminal  cases,  643. 
Examination  of,  641    (see  Examination). 
Execute  papers  ordered  by  court,  654. 

transfer  to  trustee  of  property,  654. 
Exemption   from   arrest,  etc.,   655. 
Exemptions  of,  under  state  laws,  513,  et  seq. 
Expenses  paid  of  attending  meetings,  when    651. 

paid  of  attending  examination,  when,  634. 
Extradition  of,  668. 
False  claim  against  estate,  penalty  for  presenting,  685. 

bankrupt  to  disclose,  654.  ,  .        aoo 

False  oath  against  estate,  penalty  for  making   683. 
Farmers  can  not  be  adjudged  involuntary,  170. 
Pees,  to  deposit,  217,  240. 

clerk's,  217,  240. 

referee's,  217,  240. 

trustee's.  217,  240. 

voluntary,  not  required  to  pay,  when,  ^i'- 
Habeas  corpus  to  release  from  imprisonment,  675. 

to  testify  as  to  his  bankruptcy,  629. 
Insane  person,  when  may  be,  173. 
Insanity  does  not  abate  proceedings,  174,  675. 
Involuntary,  who  may  be  adjudged,  168,  et  seq, 

who  can  not  be  adjudged,  168,  et  seq. 
Lists  of  creditors,  to  make,  212,  263.       ' 


1456  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  slmws  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Bankrupt    (continued)  — 

Lunatic,  when  may  be,  173. 
Married  woman,  when  may  be,  174. 
Manufacturing  companies  may  be  adjudged,  when,  176. 
Meetings  of  creditors,  to  attend  first,  651. 
Mining  companies  may  be  adjudged,  when,  180. 
Misappropriating  property  of,  penalty,  677. 
Offenses  of,  677.     (See  Offenses.) 
Origin  of  the  word,  4. 
Partnership  may  be  adjudged,  296. 
administration  of  estate,  306. 

wliere  all  not  bankrupts,  296. 
jurisdiction  over  one  partner  sufficient,  296. 
payment  of  debts,  306. 
Petition  to  be  filed  in  four  months,  240. 

bond  to  be  accompanied  by,  to  take  property,  258. 

liability  for  costs,  258. 
counsel  fees,  etc.,  fixing  of,  259. 
defense  of  solvency,  185. 
burden  of  proof,  185. 
pleading  in  answer,  268. 
involuntary,  who  may  file,  224. 
service  of,  manner  of,  244. 
voluntary,  who  may  file,  206. 
Pleading  in  answer,  268. 

Printing  companies  may  be  adjudged,  when,  177. 
Property  may  be  seized,  when,  258. 
bond  of  indemnity,  258. 
bond  to  release,  261. 
Protection  of,  655. 

Railroad  company  can  not  be  involuntary,  180. 
Released  from  imprisonment,  how,  663. 
Removal  of,  668. 

Retains  title  to  property,  how  long,  435. 
Sale,  may  purchase  at,  752. 
Schedule  of  propertv,  to  prepare,  212,  263,  654. 
make  oath  to,  and  file,  212,  263,  654. 
voluntary,  to  file  with  petition,  212. 
what  to  contain,  212,  654. 
Secured  creditors,  rights  of,  611. 
Service  of  petition,  244. 
Seizure  of  property,  258. 

Solvency  of,  not  ground  for  resisting  voluntary  petition,   168. 
Steamship  company  can  not  be  involuntary,  180. 
Suits  by  and  against,  76,  427. 
appearance  of  trustee,  427. 
stay  until  adjudication,  etc.,  105. 
time  for  bringing,  by  or  against  trustee,  428. 
trustee  permitted  to  prosecute  suits  commenced,  427. 
Title  to  property  passes  to  trustee,  435. 

revests  in,  on  confirmation  of  composition,  728. 
Trading  companies  may  be  adjudged,  when,  177. 
Unincorporated  company  can  be  adjudged  involuntary,  169. 
Voluntary,  who  may  be  adjudged,  168. 
Wage  earners  can  not  be  adjudged  involuntary,  169. 
Widow  and  children  of,  rights  of,  531. 


INDEX.  1457 

References  are  to  pages. 

The  Analytical  Table  preceding  tliis  Ind'ex  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  tliis  treatise. 

Bankrupt    (continued)  — 

Who  might  be  adjudged,  under  act  of  1800,  7. 
Who  might  be  adjudged,  under  act  of  1S41,  10. 
Who  might  be  adjudged,  under  law  of  1867,  . 


Bankrupt  act- 
Act  of  1800,  7. 
Act  of  1841,  10 
Act  of  1867,  12, 
Act  of  1898, 


Acts  in  England,  4. 
Conflict  of,  with  General  Orders,  656m-. 
Constitutionality  of  act  of  1898,  17. 
Congress  has  exclusive  power  to  pass,  19. 
Effect  of  a  national,  19. 

upon  persons  not  stibject  to  it,  28. 

upon  state  assignment  laws,  29. 

upon  state  insolvent  laws,   23. 
Meaning  of  bankrupt  and  insolvent,  18. 
Power  of  Congress  to  enact,  17. 

states  to  enact,  20. 
State  laws  suspended,  not  repealed,  23. 
Time  when  act  of  1898  took  effect,  23. 

Bankrupt  laws,  history  of— 

England,  4. 
Europe,  2. 
Romans,  1. 
United  States,  6. 

Bankruptcies — 

W^hat  is  meant  by  "subject  of  bankruptcies,"  17. 

Bankruptcy- 
Acts  of,  of  what  to  consist,  183.     (See  Acts  of  Bankruptcy.) 
Adjudication  of,  218,  278. 
Courts  of,  what  are,  33. 
"In  contemplation  of,"   552n.  804. 
Jurisdiction  of  courts  of,  74,  76. 
Partners  of,  243. 
Proceedings  in,  what  are,  84. 

distinguished  from  controversies  at  law  and  in  equity,  76,  97. 

Bankruptcy  estate— 

(See  Estate.) 

Bastard— 

(See  Judgments.) 

Bidding— 

(See  Sale.) 


1458  INDEX. 

References  are  to  pages. 

The  Analytical  Table  precedinfc  this  Ind'ex  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Bill  of  exceptions — 

Necessary  on  writ  of  error,  918,  968. 
None  required  on  appeal,  938. 

Bill  of  excliange — 

Pass  to  trustee,  496. 

Blanks  for  process- 
Furnished  to  referee,  635. 

Bona  fide  purchaser- 
Burden  on,  to  show  purchase  for  value,  625. 
Title  of,  obtained  by  lien,  etc.,  not  affected,  551. 
for  value  protected,  470. 

Bond- 
Appeal,  930. 

amount  of,  930. 

appellate  court  may  change  amoimt,  931. 

approved  by  judge,  930. 

clerk,  commissioner,  etc.,  can  not  approve,  930. 

cured  in  appellate  court,  when  defective,  931. 

necessary  to  "perfecting"  an  appeal.  930. 

not  necessary  to  "taking"  an  appeal,  922. 

operates  as  a  supersedeas,  when,  931. 

payable  to  whom,  930. 

trustee  not  required  to  give,  930. 
Banks  of,  as  depositories  for  money,  421. 
Bankrupt,  of,  to  recover  possession  of  property,  261. 

condition  of,  261. 
Error,  on,  trustee  not  required  to  give,  930. 
Filed,  to  be  in  clerk's  office,  131,  418. 
Indemnify  bankrupt,  to,  on  seizing  his  property,  258. 

condition  of,  259. 
Joint  trustees,  of,  417. 
Petitioner  to  give,  to  hold  property,  etc.,  258. 

condition  of,  258. 

sureties  of,  258. 
Referee's,  131. 

amount  and  condition  of,  131. 

failure  to  give,  creates  vacancy,  131. 

filed  in  clerk's  office,  131. 

sued  on,  how  and  when,  131. 
Release  of  property,  by  bankrupt  to  secure,  261o 
Suits  on,  how  and  when  brought,  131,  418,  430. 
Sureties,  corporations  may  be,  131,  418. 

two  necessary,  131,  418. 

value  of  property,  131,  418. 
Trustees',  417. 

amount  and  condition,  417. 

amount  fixed  by  creditors  or  court,  417. 

approval  of,  by  referee,  136. 

failure  to  give,  creates  vacancy,  418. 

Joint  or  several,  417. 


INDEX.  1459 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Tnd'ex  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Bond   (continued)  — 

jurisdiction  of,  suit  on,  84,  430. 

liability,  418. 

not  required  to  give,  on  appeal  or  for  error,  930. 

sureties  on,  418. 

title,  certified  copy  of  order  approving,  evidence  of,  437. 

where  filed,  418. 

Books — 

Account,  of,  destruction  of,  etc.,  prevents  discharge,  804. 
Account,  of,  proper  to  be  kept,  804. 

failure  to  keep,  as  evidence  of  concealment,  681. 
Evidence  of  insolvency,  189,  625. 
Pass  to  trustee  as  a  part  of  estate,  462. 
Referees  to  keep  separate,  for  each  case,  147. 

to  certify  and  file  with  papers  in  court,  148. 

to  compel  witnesses  to  produce,  630. 

Briefs— 

In  appellate  courts,  942. 

Brokers — 

(See  Agents.) 

Burden  of  proof — 

Confirming  compositions  in,  717. 

Discharge,  opposing,  818. 

Exempt  property,  534. 

Habeas  corpus,  in,  667. 

In  contested  claims,  406,  412. 

Of  domicile,  517. 

On  bankrupt,  277. 

On  bona  fide  purchaser,  625. 

On  creditor  proving  claim,  406. 

On  petitioning  creditors,  277. 

Partnership  assets  of,  309. 

Preferences,  in  suits  to  set  aside,  624. 

Solvency,  as  to,  185,  277,  624. 

Business — 

Principal  place  of,  209. 

Buying  and  selling— 

(See  Sale.) 


c. 

California- 
Territorial  jurisdiction  and  time  of  holding  court  in,  38. 

Canal  companies — 

As  bankrupts,  180. 


1460  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  tliis  treatise. 

Cargo — 

Vessels  on  high  seas  are  within  jurisdiction,  461. 

Carriers — 

Common,  as  bankrupts,  180. 

Cash. — 

Passes  to  trustee  as  a  part  of  estate,  490. 

Certificate- 
Contempt  by  referee,  of  facts  constituting,  699. 
Judge's  absence,  etc.,  by  clerlt  autliorizing  referee  to  act,  153. 
Referee's  record,  of,  148,  787. 
Transcript  of  record  on  appeal,  938. 
U.  S.  circuit  court,  to,  for  jury  trial,  276. 

of  bankruptcy  proceedings  when  district  judge  disqualified,  121. 
U.  S.  supreme  court,  to,  question  of  jurisdiction,  894. 

questions  of  law  from  C.  C.  A.,  895. 

Certified  copies- 
Composition,  of  order  confirming  evidence  of  revesting  title,  724, 

697. 
Referee,  of  proceedings  before,  as  evidence,  136,  787. 

papers  when   issued  by  clerk  or  referee,   787. 
to  transmit  to  clerk,  by  mail,  when,  787. 
Trustees'  bond,  of  order  approving,  evidence  of  title,  437. 
Authority  to  demand  possession,  442. 

Certiorari- 

Issued  by  supreme  court,  when,  886. 

by  C.  C.  A.,  when,  887. 
Cure  or  complete  records,  886. 

application  for,  887. 

issue  and  return,  888. 

return  by  clerk,  888. 
Removing  case  from  C.  C.  A.  to  U.  S.  supreme  court,  889. 

application  for,  890. 

granted  rarely,  892. 

proceedings  on,  in  supreme  court,  893. 

remand  case  to  proper  court  of  bankruptcy,  893. 

time  within  which  to  apply  for,  890. 

when  issued,  892. 

Chattel  mortgage— 

(See  MoRTG.\GE.) 

Chattels — 

Pass  to  trustee  as  a  part  of  estate,  490. 

Checks — 

And  notes,  payment  of,  when  a  preference,  574. 

Dividend,  how  drawn,  783. 

Pass  to  trustee  as  a  part  of  estate,  171. 

Children— 

Of  deceased  bankrupt,  rights  of,  531. 


INDEX.  ]4(51 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Ind'ex  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in   this  treatise. 

Choice — 

Of  new  trustee,  426. 

Choses  in  action — 

Negotiable  instruments  a  part  of  estate,  171. 

Rights  of  actions  on  contracts  pass  to  trustee,  when,  509. 

belonging  to  wife  of  banlvrupt,  510. 

for  personal  skill,  510. 

involving  personal  injury,  512. 
Tort— 

for  injury  to  person,  512. 

for  injury  to  property,  512. 
Trustee  must  reduce,  to  money,  733. 

proper  party  plaintiff,  509,  511. 

Circuit  courts — 

Jurisdiction  in  bankruptcy,  121. 

controversies  certified  to,  121,  276. 

criminal  cases,  688. 

depends  on  residence  of  bankrupt,  126. 

of  offenses  under  the  act,  688. 

over  what  parties,  125. 

suits  at  law  and  in  equity,  123. 
Jury  trials  in,  when,  121. 
Removal  from  state  court  to,  127. 

Circuit  court  of  appeals — 

Appeals  to,  from  judgments.  911. 

adjudging  or  refusing  to  adjudge  bankrupt,  913. 

allowing,  etc.,  debts  of  $500  or  over,  !^14. 

at  law  and  in  equity,  875. 

cross-appeals,  916. 

discharge,  granting  or  denying,  914. 

when  appeal  to  be  taken,  91  . 

writs  of  error,  916. 
Appeals  to  United  States  supreme  court  from  decisions  of,  885. 

amotmt  is  over  $2,000,  885. 

question  is  certified  by  supreme  court  justice,  885. 

record,  how  made,  886. 

time  for  taking,  886. 
Appellate  jurisdiction  in  bankruptcy,  910,  et  seq. 

in  law  and  eqtiity  cases,  875. 

of  controversies  arising  in  bankruptcy,   877. 

what   is  a   "controversy"  as  distinguished   from  a  proceeding 
in  bankruptcy,  869,  877. 
Certiorari,  may  issue  writs  of,  887. 
Practice  in,  888. 
Supervisory  power  of,  900. 

application  for  exercise  of,  906. 

decisions  in  exercise  of,  final,  903. 

exercised  only  after  action  of  court  of  bankruptcy,  902. 

exercised  only  when  no  appeal  lies,  869. 

extent  of,  900. 

matters  of  law  only,  applies  to,  903. 

petition,  907. 


1462  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding-  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  tliis  treatise. 

Circuit  court  of  appeals    (continued)  — 
Supervisory  power  (continued)  — 

proceedings  on  petition  to  review,  910. 

record  on  petition  to  review,  908. 

time  within  which  to  file  petition,  906. 
Review  in  tlie  supreme  court  of  a  decision  of,  how  to,  872. 
Territorial  jurisdiction  and  time  and  place  of  holding,  71. 
Trustees  not  required  to  give  bond  on  appeal  or  writ  of  error,  930. 

Citation — 

Appellate  court  may  issue,  933. 

Death  of  party,  to  whom  directed,  934. 

Issuance  necessary,  934. 

Mandamus  not  granted  to  compel  judge  to  sign,  833. 

Necessary,  when,  934. 

Object  of,  933. 

Perfecting  an  appeal  by,  933. 

Returnable  when,  944. 

Service  of,  944. 

Signed  by  judge,  933. 

Time  within  which,  may  issue,  933. 

Waived  by  appearance,  935. 

(See  also  Notice.) 

Claimants — 

Adverse,  who  are,  105. 

may  recover  property  from  trustee,  when,  78,  445. 

receiver  or  marshal  may  seize  property  of,  when,  81. 

trustee  must  bring  plenary  suit,  when,  100,  616. 

trustee,    may    recover    by    summary    proceedings   property    of, 
when,  81. 
(See  also  Claims.) 

Claims- 
Adverse,  what  are,  78. 

jurisdiction  over,  76,  100. 

jury  trial,  when  entitled  to,  100. 

intervenor  is  not  entitled  to,  459. 
Against  bankrupt,  creditor  may  purchase,  229, 
Allowance  of,  326,  406. 

appeal  from,  413. 

burden  of  proof,  407. 

defective,  406. 

distinguished  from  proof,  400. 

final,  review  of,  413. 

fraudulent,  412. 

objections,  when  usually  made,  411. 

objections,  who  may  make,  409. 
Amount  necessary  for  filing  involvmtary  petition,  229. 
Averments  as  to,  in  petition,  237. 
Bankrupt,  to  examine,  634. 
Bankrupts,  of,  against  each  other,  387. 
Contingently  liable,  proof  by  persons,  388. 

when  entitled  to  share  in  dividends,  763. 


INDEX.  1463 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Ind'ex  shows  where  each  section  and  clause 
of  the  Banicriipt  Act  is  considered  in  this  treatise. 

Claims   (continued)  — 

Debts  which  may  be  proved,  336. 

which  have  priority,  766. 
Discharge  releases  from  what,  828. 

does  not  release  from  what,  834,  et  seq. 
Disputed,  provided  for  in  composition,  724. 
Dividends  payable  on,  allowed,  761. 
False,  penalty  for  presenting,  etc.,  685. 

or  using  in  composition,  685. 
Filed  after  being  proved  in  court  or  before  referee,  402. 
Hearing  objections  to,  408. 
Infants  and  insane  persons,  rights  of,  389. 
Instrument  of  writing,  founded  upon,  to  be  filed  with  proof  of,  395. 

statement  of  loss  filed  under  oath  with,  395. 
Interest  on,  346,  358. 

Jurisdiction  of  courts  of  bankruptcy  as  to,  78. 
Liquidation  of,  337. 

Payment  of,  after  composition  set  aside,  etc.,  730. 
Penalty  or  forfeiture,  debt  due  as  how  far  allowed,  782. 
Petitioning  creditor's  debt  may  be  challenged,  when,  407. 
Preferred  creditors,  of,  not  allowed  unless,  etc.,  397. 
Priority,  debts  which  have,  766. 
Proof  of,  391. 

amendment  to,  403. 

assignee  of  claim  may,  387. 

distinguished  from  allowance,  400. 

fee  for  filing,  403. 

when  founded  upon  writing,  395. 

time  for  proving,  388. 
Purchase,  412. 

creditor  may,  229. 

to  oppose  composition,  720. 
Reconsidered,  may  be  reallowed  or  rejected,  409. 
iKe-examination  of,  409. 

application  for,  409. 
who  must  file,  409. 

burden  of  proof,  412. 

costs,   411. 

default,  409. 

evidence,  preservation  of,  411. 

fraud,  412. 

hearing,   411. 

laches,  411. 

notice  of,  409. 

recovery  of  dividend  on  rejection,  413. 

time,  within  what,  409. 

where  held,  409. 

witnesses,  410. 
Referee,  filed  before  if  case  referred,  402. 
Secured  creditors,  of,  396. 

allowed  for  what  sums,  338,  402. 

individual  undertaking,  secured  by,  402. 

not  entitled  to  vote  at  creditors'  meetings,  324. 

value  of  securities  held  by,  how  determined,  396. 

when  he  may  prove  for  full  amount,  397. 
Status  of,  when  fixed,  337. 


1464  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Ind'ex  shows  where  each  section  and  clause 
of  the  Bankrupt  Act   is  considered   in  this  treatise. 

Codebtor    (continued)  — 

Liability  of,  not  affected  by  bankrupt's  discharge,  849. 
May  prove  debt  when,  388. 

Stockholders'   and   corporate  officers'   liability,  as   affected  by  dis- 
charge, 853. 
Suit  against  one  joint  debtor  on  debt  discharged  as  to  others,  854. 
Sureties  on  bonds  not  affected  by  discharge  of  principal,  852,  854. 

Cognovit — 

(See  Judgment  Liens.) 

Collection — 

Of  assets  by  trustee,  733. 
referee  should  not,  133. 

Colorado — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  39. 

Commencement  of  proceedings — 

.    Involuntary,  224,  et  seq. 
Partnership,  by  or  against,  292. 
Voluntary,  206,  et  seq. 
When  jurisdiction  attaches,  92. 

Commissioner  of  deeds — 

Referee  may  be,  129. 

Commissioner,  United  States — 

May  administer  oaths,  . 

« 

Commissions — 

Referees',  149. 

apportionment,  150. 
Trustees',  431. 

apportionment,  433. 

Commitment — 

Contempt,  for,  power  of  court,  692. 

before  referee,  693. 
Referee  can  not  exercise  power  of,  139. 


C  omp  anie  s — 

Incorporated  (see  Corporattoxs). 
Unincorporated   (see  Partnerships). 

Compensation — 

Attoi-neys',  160. 
Clerks',  155. 
Marshals',  156. 
Referees',  149. 

when  reference  revoked,  150. 

when  case  transferred,  150. 


INDEX.  1465 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act   is  considered   in  this  treatise. 

Claims    (continued)  — 

Time  for  proving,  388. 

Unliquidated  may  be  liquidated,  etc.,  337. 

provided  for  in  composition,  724. 
Unscheduled,  discharge  no  release  from,  839. 

unless  creditors  had  notice,  etc.,  839. 
Withdrawal  from  files,  may  be  when,  403. 
(See  also  Debts.) 

Clerk- 
Accounts  for  fees,  154. 

Certificate  by,  as  to  judge's  absence,  etc.,  154. 
Certifies  to  transcript  of  record  on  appeal,  938. 
Collect  fees,  154. 
Compensation  of,  155. 
Definition  of  the  word,  153. 
Deliver  papers  to  referee,  154. 
Docket  of,  153. 
Duties   of,    153. 
Expenses  of,  155. 

may  require  indemnity  for,  156. 
Fees,  155. 

account  for,  154. 

collect,  of  clerk,  referee,  trustee,  154. 

except  on  affidavit  of  volimtary  bankrupt  of  inability  to 
pay,  154. 

pay  to  referee  and  trustee,  when,  154. 
Indices  of  petitions  and  discharges  to  be  kept  by,  153. 
Issue  certificate  of  absence  of  judge,  154. 
Notice  of  application  for  discharge  given  by,  788. 
Of  referee,  hire  of,  151. 
Papers  filed  with,  153. 
Pay  fee  to  referee  and  trustee,  154. 
Petition,  copy  of,  to  be  filed  for,  216,  240. 
Process  to  he  issued  by,  153,  240. 
.Refer  cases,  when  to.  131,  137,  154. 
Referee  to  call  and  receive  papers  from,  when,  146. 

transmit  papers  to,  14G. 

certified  copies  of,  by  mail,  146. 
Referee  to  employ,  151. 

Schedule,  copy  of,  to  be  furnished  by  bankrupt,  216. 
Subpoena  to  be  issued  by,  240. 
Writs  generally  to  be  issued  by,  153. 

Clerks — 

Wages,  debts  having  priority,  776. 
Who  are  clerks  entitled  to  priority,  776. 

Close  of  bankruptcy — 

When  estate  settled,  785. 

Codebtor — 

Judgment    against    discharged   bankrupt    with   stay   of   execution, 
wnen,  851. 


1466  -  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Ind'ex  shows  when>  each  section  and  clause 
of  the  Baoii-rupt  Act  is  considered  in  this  treatise. 

Compensation    (continued)  — 

Stenographers',  138. 
Trustees',  431. 

apportionment  of,  433. 

withliolding  of,  433. 

Compositions — 

Accepted  how,  708. 

Application  for  confirmation  to  be  filed  when,  712. 

accepted  in  writing  by  majority  of  ci-editors,  etc.,  712. 

consideration  to  be  paid  and  costs  deposited,  713. 

date  and  place  of  hearing,  71.5. 

debts  having  priority,  must  be  secured  before,  715. 

second,  not  usually  allowed,  709. 

what  to  contain,  714. 
Certified  copy  of  order  confirming  evidence  of  title,  724. 
Collateral  attack  of,  728. 
Confirmation  of,  a  discharge  from  debts,  724. 

can  not  be  made  by  referee,  133. 

conditions  of,  723. 

distribution  of  consideration,  727. 
Consideration,  of  what  to  consist,  713. 
Construction  of  provision  relating  to,  708. 
Courts  of  bankruptcy  to  confirm  or  reject,  723. 
Discharge,  refusal  of,  as  a  bar,  709. 
Disputed  claim  provided  for,  724. 
Distribution,  727. 
Effect  of,  724. 

Failure  to  pay,  revives  debt,  726. 
False  claims,   penalty   for  using  in,   685. 
Fraud  vitiates,  722. 
Fraud  presumed  when.  720. 
General  nature  of,  706. 
Hearing  of  application,  715. 

Majority  of  creditors  in  number  and  amount  must  agree  to,  706. 
Meeting  of  creditors  to  consider  terms,  710. 

notice  of,  710. 

petition  for,  710. 

who  may  vote  at,  710. 
Notice  to  creditors  of  hearing,  etc.,  715. 
Offer  of.  when  may  be  made,  708. 

who  may  make,  708. 
Opposing  a  confirmation,  715. 

because  against  interests  of  creditors,  716. 

because  bankrupt  not  entitled  to  discharge,  718. 

because  obtained  by  fraud,  720. 

burden  of  proof,  717. 

evidence,  717. 

hearing  of  objections,  722. 

notice  of  hearing,  722. 

trustee  can  not,  715. 
Order  of  confirmation,  723. 

appeal  from,  724, 

effect  of,  724. 

evidence  as,  724, 


INDEX.  1467 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  wliere  pach  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Compositions  (continued)  — 

Order  of  confirmation   (continued)  — 

judge  must  make,  722. 

operates  as  a  discharge,  724. 

referee  can  not  make,  132. 
Partnerships,    by,    710. 

Payments  of  claims  accruing  after  set  aside,  730. 
Power  of  Congress  to  provide  for,  707. 
Purchase  of  claims  to  oppose,  720. 
Set  aside,  may  be  when,  728. 

court,  by  what,  728. 

on  ground  of  fraud,  728. 

petition  to,  728. 

petition,  when  filed,  729. 

trustee,  elected  when.    kIO. 
Time  within  which  confirmation  may  be  made,  719. 

when  composition  may  be  offered,  708. 
Time  revests  in  bankrupt  on  confirmation  of,  724. 
Vote  on  terms,  who  may,  710. 

Compounding  claims — 

(See    Compromise.) 

Compromise — 

Notice  to  creditors  of  proposed,  731. 

Power  to,  730. 

Trustees  may,  with  approval  of  court,  730,  757. 

Computation  of  time — 

(See  Time.) 

Computing  number  of  creditors — 

To  join  in  involuntary  petition,  226. 

interest  may  be  added,  229. 
Voting  at  creditors'  meeting,  332. 

Concealing — 

Books  of  account,  records  of  bankrupt,  prevents  discharge,  804. 

what  constitutes,  804. 
Property,   by   bankrupt,   678.      (See  Offenses.) 
Property  of  bankrupt  with  intent  to  defraud,  etc.,  effect,  191. 

document  by  trustee,  677. 

Concurrent  bankruptcies — 

Order  of  proceeding,  272-3. 

Conditional  payment — 

(See  Mortgages  and  Transfers.) 

Conditional  sale — 

How  to  recover  property  in  possession  of  trustee  by,  455. 
Property  sold  on,  passes  to  trustee,  when,  448. 

Conducting  bankrupt's  business — 

By  receiver,  254, 


1468  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
ol  the  Bankrupt  Act  is  considered  in  this  treatise. 

Confirmation  of  composition — 

(See  also  Compositiox.) 
Conditions  of,  716. 
Discharge  from  debts,  a,  724. 
Effect  of,  724. 
Judge  must  order,  722. 
Referee  can  not  order,  132. 

Confusion — 

Of  goods  in  bankrupt's  possession,  454. 

Of  trust  property,  500. 

Proceedings  to  recover  such  property  in  possession  of  trustee,  455. 

Congress,  power  of — 

Conferred  by  the  constitution,  17. 

English  banlvrupt  laws  do  not  limit,  17. 

Establish  to,  courts  of  bankruptcy,  19. 

Establish,  to,  system  of  bankruptcy,  17. 

Exclusive  to  extent  exercised,  19. 

Limited  to  no  class  of  persons,  17. 

May  adopt  state  laws,  19. 

Modify  obligation  of  contracts,  18. 

Provide  for  composition,  to,  707. 

Uniformity  required,  what,  19. 

When  exercised  suspends  state  laws,  23. 

When  not  exercised  states  may  enact  such  laws,  20. 

Connecticut — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  39. 

Consent — 

Arbitrators  chosen  by,  732. 

Case  certified  for  trial  to  circuit  court  by,  121. 

Defendant  may  be  sued  in  what  court  by  his,  97. 

Involuntary  petition  can  not  be  dismissed  by,  .until  notice,  287. 

Voluntary  petition  can  not  be  dismissed  by,  until  notice,  222 

Consideration — 

Composition  for,  of  what  to  consist,  713. 
Proof  of  claim  must  be  set  forth  in,  392. 

Consolidation — 

Of  causes  in  bankruptcy,  272. 
Petitions  against  partnerships,  302. 

Constitution — 

Bankruptcy,  provision  relating  to,  17. 

Contravene,    provision   adopting   state   laws   as   to   exemption   does 
not,  517. 
act  of  1898  does  not,  20. 
as  to  mechanic's  liens  does  not,  609. 
as  to  vadility  of  transfers  does  not,  479. 
as  to  exemptions  does  not,  517. 
compositions,  for,  does  not,  707. 
impairing  obligation  of  contract  does  not,  18. 


INDEX.  1469 

References  are  to  pages. 

The  Analytical  Table  Drecedins  this  Intfex  shows  whore  ea^h  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Constitution    (continued)  — 

Does  not  prevent  act  applying  to  partictilar  classes,  18. 

Does  not  limit  to  bankruptcy  as  distinguished  from  insolvency,  18. 

Construction — 

Rule  of,  as  to  provision  for  composition,  708. 

"Contemplation  of  bankruptcy" — 

Meaning  of,  552n,  804. 

Contempt — 

Acts  which  constitute,  692. 

Answer  of  conteninor,  701. 

Arrest  of  bankrupt  for,  659. 

Attorney  by,  160,  697. 

Court  of  bankruptcy  to  punish  for,  692. 

committed  in  another,  675. 

to  release  conteninor,  when,  705. 
Examination,  during,  639. 
Hearing,  702. 

Nature  of  proceedings  for,  698. 
Practice,  pleadings  and  procedure,  699. 
Punishment  for,  705. 
Referee — 

can  not  punish  for  133,  139. 

certifies  facts  to  judge,  139,  699. 
Relief  of  habeas  corpus,  705. 
Review,  705. 

State    court  can  not  punish  for,  before  referee,  640. 
Who  are  guilty  of,  692,  et  seq. 

Contingent  claims — 

How  proved,   388. 

When  entitled  to  share  in  dividend,  763. 

Contract — 

Bankruptcy   does   not   discharge,   509. 

Belonging  to  wife  of  bankrupt,  509. 

Debts  founded  upon  may  be  proved  and  allowed,  360. 

Obligation  of  can  be  modified  by  congress,  18. 

can  not  be  impaired  by  states,  21. 
Trustee  vested  with  title  to  rights  arrising  upon,  507. 

involving  personal   injury,   510. 

for  personal  skill,  511. 

Consular  o£B.cers — 

Oaths,  etc.,  may  administer,  953. 

Controversies — 

Arbitration  of,  730. 

Certified  to  circuit  court  for  trial,  276. 

to  supreme  court  from  C.  C.  A.,  893. 
Compromise  by  trustees  of,  422,  730,  757. 


1470  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  tlie   Bauivnii)t   Act   is   considered   in   this   treatise. 

Controversies   (continued)  — 

Jurisdiction  of  appellate  courts  of,  877. 

Notice  to  creditors  of  proposed  compromise  of,  730,  757. 

What  are,  at  law  and  in  equity,  77,  100. 

Conveyances — 

Act  of  bankruptcy,  as  an,  190. 

Bankrupt  to  execute,  to  trustee  of  foreign  property,  437. 

Constitutes  a  preference,  when  553. 

Fraudulent    under    the    act,    467. 

Set  aside  when  fraudtilent,  624. 

Subsequent  to  act  within  four  months  to  defraud,  etc.,  void,  474. 

Trustee  to  execute  to  purchaser,  753. 

Within    four    months    while    insolvent,    void    by    state    laws,    void 

under  act,  478. 
Within  four  months  to  prefer  a  creditor,  471. 

Copartnership — 

(See  Partnership.) 

Copy — 

Bankrupt  to  prepare  schedules  and  file  in  triplicate,  213,  264. 

claim  for  exemptions,  of,  213,  264. 

list  of  cl-editors,  etc.,  of,  213,  264. 

schedule  of  property,  of,  213,  264. 
Claims  allowed,  withdrawn  may  be,  on  leaving,  403. 
Order  approving  trustee's  bond,  of,  certified,  evidence  of  title,  437. 

confirming  or  setting  aside  composition,  of  jurisdiction,  etc., 
724. 
Papers  of,  certified  to  be  transmitted  to  clerk  by  referee,  when, 

146,  787. 
Petitions  in  duplicate  for  clerk  and  bankrupt,  216,  240. 
Referee,   certified  of  proceedings  before,  evidence,   148,   787. 
Schedule  of,  bankrupt  to  furnish  clerk,  referee  and  trustee,  213,  264. 

Copyrights — 

Pass  to  trustee,  when,  463. 

Trustee  of  publisher  does  not  take,  when,  464. 

Corporation — 

Admission  of  inability  to  pay  debts,  203. 
Bankrupt,  when  to  be  judged  involuntary,  175,  203. 

can  not  be  adjudged  voluntary,  168. 
Debts  owing  by,  to  be  adjudged  involuntary,  168. 
Definition  of,  175. 

Dissolved  may  be  adjudged  bankrupt,  175,  231. 
Domicile  of,  234. 

Officers'  liability,  effect  of  discharge  upon,  853. 
"Person"  includes,  226. 
Private  banker  can  not  be,  170. 
Proof  of  claim  by,  385. 

municipal,  386. 
Punishment  of  agents  of,  by  courts  of  bankn  ptcy,  75. 
Service  on,  how  made,  245. 


INDEX.  i^-ji 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Ind'ex  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Corporation  (continued)  — 

Stockholders'  liability,  effect  of  discharge  upon,  853. 

does  not  pass  to  trustee,  494. 
Sureties  on  referees'  bonds,  130. 
Sureties  on  trustee's  bonds,  418. 
Trustees,  may  act  as,  416. 

Costs — 

Adjudication,  in  contested,  279. 
Administration,  of  entitled  to  priority,  773. 

approved  by  court,  775 

include  attorney's  fee  for  bankrupt,  774. 
attorney's  fee  for  petitioners,  774. 
expense  of  officers,  774. 
fees  and  mileage  of  witnesses,  773. 

payment  of,  not  a  voidable  preference,  541. 
Amendment,  on  payment  of,  284. 
Appellate  court,  in,  947. 

Attachment  proceedings,  and  sheriff's  fees  in,  781. 
Attorneys'  fees  taxed  as,  165. 
Contested  adjudications,  in  case  of,  279. 
Depositions,  of  irrelevant,  etc.,  640. 
Deposit  for,  217,  240. 

one  deposit  for  firm  and  partners,  303. 

when  none  required,  217. 
Exempt  property  to  be  paid  out  of,  528. 
Incltided  as,  what,  773. 
Involuntary  proceedings,  in,  289. 
Judgments    for,  courts  of  bankruptcy  may  render,  76. 

on,  rendered  pending  bankruptcy,  347,  359. 
Partnership  proceedings  in,  303. 
Penalty  on  recovery  of,  782. 

Poor  person  not  required  to  deposit,  when,  217,  240. 
Preserving  estate,  of,  entitled  to  priority,  772. 
Provable  debt,  when,  359. 
Referee's  fees,  149. 
Re-examination  of  claim,  411. 
Removal  of  trustee,  426. 
Revoking  a  discharge,  865. 
Sale,  of,  756. 

Seizure  of  bankrupt's  property,  259. 
Set  aside  a  discharge,  865. 
Taxation  of,  by  courts  of  bankruptcy,  76. 
"When  clerk  to  pay  out  fees  collected  as,  154. 

Connselor  at  law — 

Fees  of,  included  in  cost  of  administration,  773    (see  Fees). 

payable  by  obligators  of  bond,  259. 

payable  by  obligors  of  bond,  259. 
Referee  can  not  practice  as,  148. 
(See  also  Attokney.) 

Counterclaim — 

Allowed,  when,  369  371. 
Of  a  preferred  creditor,  380. 


1472  '    INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 


Counterclaim   (continued)  — 

Provable  debt,  must  be  a,  377. 
Waiver  of,  376,  378. 
When  debt  purchased  as  a,  378. 
(See  also  Set-off.) 

Courtesy — 

Exempt  property,  in,  531. 

Trustee  takes  subject  to,  482 

Trustee  takes  bankrupt's  right  to,  481. 

Courts — 

Appeals  and  writs  of  error,  868. 

to  supreme  courts  of  territories,  898. 

to  U.  S.  circuit  court  of  appeals,  911. 

to  U.  S.  supreme  court,  884. 
Arbitration  of  controversies,  730. 
Creation  of,  of  bankruptcy,  33. 
Depositions,  laws  governing,  278,  411,  647. 
Evidence,  278,  411. 
Jurisdiction  of,   76. 

of  appellate,  867,  et  seq. 

of  circuit  courts,  121,  123. 
Jury  trials,  276. 
Newspapers,  designation  of,  for  notices,  322,  750,  789. 

Oaths  and  affirmations,  administration  of,  . 

Rules,  forms,  etc.,  U.  S.  supreme  court  to  prescribe,  951. 
Suits  by  trustees,  427. 

Courts  of  bankruptcy — 

Adjudge  person,  etc.,  bankrupt,  74,  85. 
Appeal — 

to  supreme  courts  of  territories,  898. 

to  U.  S.  circuit  court  of  appeals,  911. 

to  U.  S.  supreme  court,  730. 
Arbitrator,  appoint,  when,  730. 
Assets,  collect  and  distribute,  733. 
Bar  to  suits  in  other  courts,  proceedings  in,  94. 
Banking  institutions,  designate  as  depositories,  421. 
Business  of  bankrupt  to  be  conducted,  to  permit,  251,  259. 
Claims,  allow  and  reject,  86. 
Confirm  or  reject  compositions,  723. 
Contempt,  punish  for,  692,  75. 
Creation  of,  33. 
Costs,  tax,  76. 
Definition  of,  33. 
Discharge  bankrupts,  75. 
District,  of  bankruptcy,  74. 
District  of  Columbia,  supreme  court  of,  33. 
Exemptions,  determine,  513. 
Extradite  bankrupts,  75,  668. 
Jurisdiction,  general  extent  of,  76. 

attaches  when,  92. 

appellate,  868. 

distinct  from  jurisdiction  as  district  courts,  33. 

limited  in  their  "respective  districts,"  95. 


INDEX.  1473 

References   are  to  pages. 

The  Analytical  Tal)le  preceding  this  Ind'es  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Courts  of  bankruptcy    (coutiniied)  — 

supreme  court  of  United  States,  884. 

U.  S.  circuit  court  of  appeals,  911. 

U.  S.  circuit  courts,  121,  123. 
bankruptcy,  121. 

concurrent  with  courts  of  bankruptcy  of  crimes,  687. 
law  and  equity,  123. 
Marshals,  appoint  to  conduct  business,  251. 
Meetings  of  creditors,  when  to  call,  334. 
Newspapers  to  publish  notices,  designate,  322,  7G0,  789. 
Open  at  all  times,  34. 
Orders,  make  and  enforce,  7.5. 
Paramount  to  state  courts,  when,  116. 
Petition,  debtor's,  in  what  court  to  file,  208. 

creditor's,  in  what  court  to  file,  234, 

to  supervise  in  C.  C.  A.,  900,  907. 
Possession  of,  114,  440. 
Powers  of,  74. 
Powers  unspecified,  74. 
Proceedings  of,  continuous,  34, 

nature  of,  76. 
Punish  bankrupts,  75. 
Receivers,  appoint,  87. 
Referees,  appoint  and  remove,  128. 

confirm,  etc.,  records  and  findings,  75. 
Reference  after  adjudication,  132. 

State  courts  have  concurrent  jurisdiction  with,  when,  91 
Stay  suits,  105,  et  seq. 
Substitute  additional  parties,  75. 
Terms  of,  34. 
Transfer  cases,  272,  273. 
Try  bankrupts,  75. 
Trustees,  appoint,  when,  415. 

direct,  to  prosecute  or  defend  suits,  94. 

official  or  general,  can  not  appoint,  416. 

Coverture — 

As  a  defense,  270. 

Credit — 

Goods  sold  on,  as  a  preference,  574. 
Mutual,  and  debt,  369. 

Set-off,  of  new,  by  preferred  creditor,  380. 
(See  also  Mutual  Debts  and  Credits.) 

Creditors — 

Answer  to  voluntary  petition,  can  not,  219. 
Answer  to  petition  by,  264. 
Appearance  of,  261. 

by  an  attorney  for,  263. 
Attorney  of,  should  not  represent  bankrupt,  159. 
Claims,  allowance  of,  328,  406. 

filing  after  proof,  402. 

hearing  objections,  328,  409. 

lost  or  destroyed,  how  proved,  395. 

of  one  bankrupt  against  another,  387. 


1474  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Creditors    (continued)  — 
Claims    (continued)  — 

penalty,  due  as  liow  far  allowed,  782. 

preferred,  not  allowed  unless,  etc.,  400. 

proof  of,  397. 

when  founded  on  instrument  of  writing,  395. 

reconsideration  of,  409. 

rejected,  dividend  may  be  recovered,  413. 

secured,  of,  allowed  for  what,  396. 

claims  not  counted  unless,  etc.,  324. 
not  entitled  to  vote  at  meetings,  325. 
value  of  securities,  how  determined,  325. 

secured  by  individual  undertaking,  how  proved,  356, 
subrogation  to  extent  of  creditors'  rights,  356. 

time  for  proving,  388. 

claims  liquidated  by  court,  390. 
court  can  not  extend,  389. 
of  infants,  etc.,  389. 

withdrawn,  on  leaving  copy,  404. 

writing  when  founded  upon,  how  proved,  396. 
Class,  of  same,  559. 
Computing  number  of,  to  file  petition,  226. 

employees  not  counted,  229. 

relatives  not  counted,  229. 
Debts  due  as  penalty,  how  far  allowed,  782. 
Definition  of,  322. 
Dividends  paid  first  to  certain  residents,  765n. 

payment  on  allowed  claims.  761,  783. 

recovery  of,  when  claim  rejected,  413. 
Entitled  to  share  in  distribution,  761. 
Estopped  from  joining  in  petition,  227. 
Foreign,  effect  of  discharge  upon,  824. 
Include  agents,  attorneys,  proxies,  322. 
Individual,  sharing  in  partnership  assets,  308. 
Intervene  in  involuntary  proceedings,  may,  262. 

in  partnership  proceedings,  303. 
Involuntary  petition,  number,  etc.,  necessary  to  file,  226» 

amount  of  claims,  229. 

estoppel  to  file  when,  227. 
Joining  in  petition,  261. 
Jury  trial,  not  entitled  to,  275. 
Lists  of,  bankrupt  to  make,  212,  263. 

referee  to  examine,  145. 

to  prepare  and  file  when,  212,  263. 
Meetings,  first,  held  when  and  where,  321. 

bankrupt  to  attend  first,  651. 

call  of,  by  court,  when,  334. 

final,  335,  785. 

notice  of,  785. 

place  of,  785. 

presiding  officer,  duties  of,  328,  335. 

subsequent,  334. 

to  consider  composition,  710. 

voters  at,  322. 
(See  Meetings  of  Creditors.) 
Notice  to,  of  compromise  of  controversy,  721. 


INDEX.  1475 

References  are  to  pages. 

Tlie  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Creditors   (continued)  — 
Notice    (continued)  — 

dismissal  of  involuntary  petiUon,  2S7. 

of  voluntary  petition,  222. 
dividends,  of  declaration  and  time  of  payment,  763. 
examinations  of  bankrupt,  C.34. 
final  accoimt,  of  filing,  785. 
final  meeting,   760. 

hearing,  on  application  for  confirmation,  etc.,  715. 
meetings,  of,  321. 
petition  for  discharge,  789. 
referee  to  give,  146. 
sales  of  property,  737,  741,  743. 
secured  creditors  of  sales  of  property,  to,  743. 
Number  necessary  to  join  in  petition,  226. 
employees  and  relatives  not  counted,  226. 
necessary  for  court  to  call  meeting,  334. 
to  call  meeting  at  designated  place,  334. 
to  accept  an  offer  of  composition,  706,  710. 
to  pass  a  matter  by,  332. 
Oppose  discharge,  when,  V91. 

confirmation  of  compositions,   how,   715. 
Order  for  examination,  may  apply  for,  632. 
Partnership,  may  join  in  petition  against  individual,  295. 

sharing  in  individual  estates,  307. 
Partnership  and  individual,  312. 
Petition,  averments  as  to,  in,  198. 
partnerships,  against,   292. 
number  necessary  to  join  in,  236. 
who  may  join  in,  224. 
Preferred,  who  are,  540,  et  seq. 

claims  not  allowed  unless,  etc.,  397. 
Present  at  meetings  only  counted,  332. 
Priority,  entitled  to,  can  not  vote,  etc.,  325. 
Proof  of  claims  of,  384. 
Proxy,  included  under,  322. 
Referee  to  give  notices  to,  146. 
Relatives  not  counted  in  petition  when,  229. 
Rights  of,  proving  after  dividends  have  been  declared,  764. 
Secured,  defined,  611   (see  Secured  Creditors). 
and  prior,  priority  between,  767. 
can  not  vote,  324. 

claims  allowed  for  what  sums,  396. 
rights  of,  611. 

value  of  securities  held  by,  how  determined,  396. 
Set-offs  between  bankrupt  and,  368. 
Share  in  estate,  who  are  entitled  to,  761. 
Suits  to  set  aside  preferences,  can  not  bring,  619. 
Time  for  proving  claims,  388. 
Tort,  when  may  prove  claim  for,  381. 
Trustee  appointed  by.  415. 
bond  of,  fixed  bv.  417. 
Who  are,   224. 

(See  also  Meetings  of  Creditors,  Secured  Creditor  and  Preferred 
Creditor.) 


1476  INDEX. 

References  are   to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Criminal  proceeding — 

Testimony  of  bankrupt  can  not  be  offered  against  him  in,  643. 
(See  also  Crimes  and  Offenses.) 

Crimes  and  offenses- 
Concealing  property  while  bankrupt,  678.     (See  Offenses.) 
Contempt,  692,  et  secj.     (See  Contempt). 
Courts  may  punish  for,  what,  087. 
Embezzlement  by  trustee,  677. 
Extorting  money,  etc.,  686. 
False  claims,  presenting  under  oath,  685. 

using  in  composition,  685. 
False  oath  or  account,  making,  683.     (See  Offenses.) 
Indictment  or  information,  limitation  of,  688. 
Misappropriation  of  property,  677. 
Practice  and  procedure,  688. 

indictment,  averments  in,  689. 
Receiving  property  from  bankrupt  with  intent  to  defraud,  etc.,  oow. 
Referee  acting  when  interested,  687. 

purchasing  property  of  bankrupt,  687. 

refusing  to  permit  inspection  of  accounts,  687. 
Trustee  refusing  to  permit  inspection  of  accounts,  687. 

misappropriating,  etc.,  property,  677. 

secreting  or  destroying  document,  677. 
Who  may  be  punished,  688. 

Crops — 

When  a  part  of  the  estate,  488. 

Cross-appeal — 

What  is  a,  916. 
When  necessary,  916. 
Writ  of  error,  cross,  918. 

Custody- 
Effect  of,  of  a  court  not  a  court  of  bankruptcy,  115. 
In  a  court  of  bankruptcy,  119. 
Of  bankrupt  court,  what  constitutes,  120. 
Of  court,  jurisdiction  over  property  in,  78. 
Of  state  court,  to  get  property  from,  118. 

what  necessary  to  constitute,  119. 
Property  in  possession  of  strangers,  how  to  obtain,  81,  83,  97. 

in  possession  of  bankrupt  or  his  agent,  how  to  obtain,  85. 

in  possession  of  an  assignee  for  creditors,  how  to  obtain,  117. 

D. 

Damages- 
Allowance  of,  on  dismissing  petition  for  seizure  of  property,  259. 
Instituting  proceedings  against  a  debtor,  for,  289. 

Death- 
Bankrupt's,  does  not  abate  proceedings,  675. 
Party's,  appellate  court,  in,  945. 
Party's,  before  appeal  taken,  946. 
Trustee's,  does  not  abate  suits,  676. 
Widow's,  and  children's  rights,  676. 


INDEX.  2477 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Debt— 

After-acquired,  not  provable,  338. 
Allowance  against  estate,  406. 

account  or  contract,  founded  on,  360. 

costs  taxable  against  involuntary  bankrupt,  plaintiff    359 

costs  taxable  in  appellate  court,  947. 

interest,  358. 

mutual,  and  credits,  368,  et  seq. 

objections  to,  408,  409. 

provable,  founded  on,  reduced  to  judgment  after  filing  petition, 

o49. 
provable,  generally,  336, 
rent,  365. 
review  of,  final,  409. 

torts,  381. 

vote,  to  entitle  creditor  to,  322. 
Amount   necessary   for   involuntary   proceedings,   229. 

interest  may  be  added,  229. 
Any  person  owing,  may  become  voluntary  bankrupt,  168. 
Barred  by  statute  of  limitations,  382. 

Claims,  proof  and  allowance  of   (see  Claims),  391,  et  seq. 
Contingent  demands  and  liability  not,  342. 
Contract  for  breach  of  executory,  362. 
Contract,  founded  on,  allowed,  360. 
Conversion  of  joint  into  several  and  vice  versa.  316. 
Corporation  owing  $1,000    )r  over  may  be  adjudged  bankrupt,  169. 
Created  by  fraud,  released  bv  t'ischarge,  841. 
Definition  of,  318. 
Discharge  releases  from,  what,  828,  et  seq. 

effect  of  on  firm,  265. 
Duty  of  bankrupt  to  examine,  654, 
Equitable,  what  are,  340. 
Firm,  what  are,  312. 

Fixed  liability,  having,  may  be  allowed,  344. 
Fixed  liability,  what  is,  345. 
Individual,  what  are,  314. 
Interest  on,   358. 
Joint  and  several,  what  are,  315. 
Judgments  may  be  allowed,  346. 
Judgments  for  tort  provable,  381. 
Liquidated,   how,   337. 
Meaning  of,  338. 
Mutual,  and  credits,  369,  et  seq. 
Open  account,  foimded  on,  allowed,  360. 
Payment  of,  having  priority,  766  et  seq. 

accruing  after  composition  set  aside,  etc.,  730. 
Penalty  or  forfeiture,  owing  as  how  far  allowed,  782. 
Petitioning  creditors'  denied  in  answer,  269. 
Priority,  having,  766. 

between  lienors,  767. 

costs  of  administration,  773. 
approved  by  20urt,  773. 
includes  what,  773. 

costs  of  preserving  the  estate,  772. 

expenses  of  recovering  concealed  property,  773. 

filing  fees,  773, 


1478  INDEX. 

References  are  to  pages. 

Till'  Aualyrical  Table  preceding  this  Index  shows  where  each  section  and  clansa 
of  the  Banlirupt  Act  is   considered   in   this   treatise. 

Debt   (continued)  — 

Priority    (continued)  — 

labor  claims,  77G. 
assignee  of,  777. 

on  setting  aside  composition,  or  revoking  discharge,  766. 

owing  to  person  entitled  to  priority  by  laws  of,  etc.,  778. 
assignment,  services  in,  777. 
liens  distinguished  from,   767,  781. 
state  insolvency  laws,  by,  780. 

penalty,  due  as,  782. 

referee  to  direct  trustee  to  pay,  766. 

secured  and  prior  creditors,  between,  767. 

secured  creditor,  766. 

taxes,   767. 

United  States,  due  to,  781. 
subrogation  of,  782. 

wages,  776. 
Proved,  how,  391. 

necessary  to  be,  384. 

not  until  filed,  402. 

preferred  creditor,  by,  397. 

secured  creditor,  by,  396. 
Provable,  discharge  releases  from,  828. 

reduced  to  judgment,  346. 

what  are,   336. 
Released  from,  by  discharge,  except,  828. 
dministrators,  846. 

allowed,  need  not  be,  829. 

attorneys,   847. 

claims  not  scheduled,  839. 

codebtor's,  849. 

defalcation  as  officer  created  by,  847. 

embezzlement,  for,  841. 

executors,  846. 

false  pretenses,  etc.,  judgment  in  action  for,  838. 

fiduciary  capacity,  created  while  acting  in,  845. 

fraud,  created  by,  841. 

guardians,  846. 

judgments  in  actions  for  fraud,  etc.,  837.     (See  Judgments.) 

liabilities  for  fraud,  etc.,  834.      (See  Judgments.) 

misapropriation,  etc.,  848. 

not  scheduled,  839. 

officers,  847. 

provable,  must  be,  830. 

taxes,  828. 

sui'eties,  850. 

torts,   830. 

trustees,  846. 
Revived  after  discharge  by  a  new  promise,  855. 

by  failure  to  pay  composition,  726. 
Secured,  how  far  provable,  338,  396. 
Set-offs  allowed  between  bankrupt  and  creditor,  368. 
Status  of,  when  fixed,  337. 
Statute  of  limitation,  barred  by,  382. 


INDEX.  1479 

References  a,re  to  pafres. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clau.-.e 
of   the  Banlirupt  Act   is   considered   in   this   treatise. 

Debt   (continued)  — 

Taxes  payable  in  advance  of  dividends,  767. 

trustee  credited  with,  on  filing  receipt,  etc.,  771. 
Tort,  381. 
What  is  a,  338. 
(See  Provable  Claim.) 

Debtor- 
Absconding,  184,  G63,  668. 
Petition  against,  235. 
Petition  by,  211. 

Petition  by  and  against  firms,  298. 
Property  of,  seized,  258. 
(See  also  Bankrupt,  Involuntary  and  Voluntary  Proceedings.) 

Deceased  insolvent^ 

(See  Death.) 

Declaration — 

(See  Dividends.) 

Deed — 

Pass  to  trustee.  462. 

Trustee  to  make,  to  purchaser,  753. 

Default- 
Proceedings  on,  282. 

Defeasible — 

Title  of  bankrupt  prior  to  appointment  of  trustee,  435. 

Defense — 

Committed  no  act  of  bankruptcy,  268. 

Jurisdiction,  want  of,  267. 

Infancy,  270. 

Involuntary  petitions,  264. 

Married  woman,  270. 

'Non  covipos  mentis,  270. 

Payment.  270. 

Solvency,   268. 

Trustee  may  be  ordered  to  make,  358. 

(See  Burden  of  Proof.) 

Definition  s — 

(See  Sec.  1  of  the  Act.)  . 

DelaAvare — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  39. 

Demand — 

(See  Debt.) 


1480  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  wliere  each  section  and  clause 
of  the  Bankrupt  Act   is  considered   in   this   treatise. 

Bemnrrer — 

To  answer  not  proper,  274. 
To  involuntary  petition,  265. 

Denial  of  bankruptcy — 

As  a  defense,  268. 

Deposit — 

Compositions,  of  consideration  in  case  of  a,  712. 

of  money  to  costs  and  debts  entitled  to  priority,  712. 
Costs,  217,  240. 

except  a  poor  person,  217. 
Fees,  to,  with  clerk,  217,  240. 
Trustee,  to  funds  of  estate,  421. 

Depositions — 

Involuntary  cases,  278. 

Notice  of  taking,  412. 

Prove  claims,  to,  394. 

Referees,  in  proceedings  before,  138,  411,  647. 

Right  to  take,  determined  by  U.  S.  laws,  411,  647. 

Subpoena  duces  tecum,  648. 

Depositories —  • 

Bond  to  give,  421. 

Designation  by  courts  of  banks  as,  for  bankrupt's  money,  421. 

Deputy  Marshal — 

Fees  and  expenses  of,  157. 

Detention — 

Bankrupt,  of,  for  examination,  661 

length  of,  661. 
Property  of,  on  petitioner  giving  bond,  258. 

Diplomatic  officers  of  United  States — 

Oaths,  etc.,  may  administer,  . 

Disability- 
Infant's,  etc.,  time  to  prove,  389. 
Judge's   case  certified  to  circuit  court,  121. 
Judge's  certificate  of,  by  cleric,  154. 
Referee's,  effect  of,  128. 

Discbarge — 

Appeal  from  judgment  allowing,  914. 
Application  for,  788. 

by  whom  made,  788. 

hearing  of,  816. 

hearing  of,  bankrupt  to  attend,  651. 

how  made,  788. 

notice  to  creditors,  789. 

published  in  newspaper.  789. 

second,  79i,  812. 

when  and  where  to  make,  789. 


INDEX.  1481 

References  are   to  pages. 

The  Analytical  Table  preceding  tliis  Index  sliows  wliere  eacli  section  and  clause 
of  tlie  Bankrupt  Act  is  considered  in  this  treatise. 

Discharge  (continued)  — 

Attachment,  effect  on,  824. 

Books  of  account,  concealing,  etc.,  prevents,  805. 

concealing,  etc.,  what  is,  805. 

imputed,  can  not  be,  808. 

in  contemplation  of  bankruptcy,  804. 

intent,  808. 

negligence  in  keeping,  807. 

what  are  proper,  806. 
Codebtor's  liability  not  affected  by,  849. 
Collaterally  attacked,  can  not  be,  862. 
Composition,  confirmation  of,  operates  as,  724. 
"Contemplation  of  bankruptcy,"  meaning  of,  804. 
Court  will  not  seek  grounas  to  defeat,  821. 

what,  determines  effect  of,  828. 
Debts  released  by.  828. 
Discharge  within  six  years  prevents,  812. 
Effect  of,  general,  822. 

claims  not  scheduled,  839. 

codebtor,    upon    liability    of,  849. 

debts  created  by  fraud,  etc.,  841. 
created  by  misappropriation,  848. 
discharge  from,  which  was  formerly  refused,  813,  831. 
not  provable^  829. 
not  scheduled,  839. 
of  a  fiduciary  character,  845. 
officers,  of,  847. 
provable,  must  be,  828. 
what  are,  336,  et  seq. 

determined  by  what  court,  828. 

firm  and  individual  debts,  318. 

foreign,  to  release  domestic  debts,  827. 

foreign  creditors,  on,  domestic,  824. 

fraud,  etc.,  liabilities  for,  841.     (See  Judgments.) 

granted  after  appeal  taken,  860. 

granted  after  judgment  rendered,  860,  836. 

judgments,  on,  834.     (See  Judgment.) 

liens,  on,  823. 

new  promise  waives,  855. 

partnership  cases,  in,  318. 

proceeding,  in  a  second,  821. 

revoking  of,  861. 

stockholders'  and  corporate  officers'  liability,  853. 

surety,  upon  liability  of,  824,  849. 

taxes,  828. 

torts,  830. 

United  States,  debts  due  the,  832. 
False  statement  to  obtain  goods  prevents,  809. 
Fraudulent  transfer  prevents,  811. 
Fraud,  may  be  revoked  for,  861. 
General  nature  of  a,  822,. 
Granted  when,  821. 

when  not  granted.  821. 
Grounds  for  opposing,  800. 
Guarantor's  liability  not  affected,  849. 
Judgment  after,  860,  836. 


1482  ^^^^^- 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Ind'ex  shows  where  each  section  and  clause 
of  the  Bankrupt  Act   is  considered   in   this   treatise. 

Discharge  (continued)  — 

Jurisdiction,  lack  of,  ground  for  opposing,  802. 

Misappropriation,  debts  created  by,  848. 

Must  be  pleaded,  858. 

Offense  punishable  by  imprisonment  prevents,  802. 

Officers,  debts  of,  847. 

Oppose,  appearance  to,  793. 

because  of  failure  to  keep  books,  etc.,  805. 
because  guilty  of  an  offense,  802. 
estoppel,  819. 
grounds  to,  800. 
hearing  objections,  816. 
how  to  oppose  a  discharge,-  793. 
partners,  how  to  oppose,  318. 
pleading  to  objections,  815. 
specification  of  objections,  796, 
who  may,  791. 
Order  granting,  821. 
denying,  821. 

refusal  to  obey,  prevents,  814. 
Partners,  from  what  debts,  318. 
Partnership  cases,  effect  of,  318. 
Payment  of  claims  accruing  after  revocation,  866. 
Pleading  in  bar,  of  suit  on  debt,  858. 
Question  prevents,  refusal  to  answer,  814. 
Records,  destroying,  etc.,  prevents,  804. 
Referee  can  not  grant  or  deny  a,  132. 
Releases,  what  debts,  828,  et  seq. 
Revoked  or  set  aside,  861. 
application,  863. 
effect  of,  866. 

ground  for,  864.  . 

judgment,  865. 
laches,  what  is,  863w. 
payment  of  claims  after,  866. 
proceedings,  SG4. 
title  vested  in  trustee,  866. 
within  what  time,  862. 
Second  application  for,  barred  when,  791,  812. 
Specification  of  objections,  796. 
amended  when,  799. 
burden  to  prove  on  creditor,  818. 
contain  what,  795. 
delay  in  filing,  how  pleaded,  816. 
filed  when,  793. 
must  be  in  writing,  796. 
pleading  to,  815. 
verification  of,  798. 
Sureties,  effect  of,  on,  by,  850. 

on  attachment  bonds,  etc.,  850. 
Time  to  appear  and  file  specifications,  793. 

enlarging  such  time,  794. 
"Waiving,  by  new  promise,  855    (see  New  Pbomise). 
(See  Debts.) 


INDRX.  1483 

References  are   to  pages. 

The  Analytical  Table  preceding  tiiis  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Dismissal — 

Costs,  fees,  etc.,  allowed  respondent  on,  of  petition,  when,  289. 
Notice  to  creditors  of,   involuntary  petition,   287. 

of  voluntary  petition,  222. 
Petition  of — 

by  judge,  288. 

by  petitioners,  288. 

by   referee,    136. 

involuntary,   288. 

voluntary,  222. 

Disobedience — 

Of  orders  (see  Contehipt). 


Distribution — 

Composition  set  aside  after,  730. 

Consideration,  of,  on  confirmation  of  composition,  727. 

Contingently  liable,  claims  of  persons,  763. 

Court  of  bankruptcy  to  make,  25. 

Creditors  having  priority  to  be  paid  in  full,  when,  761. 

between  secured  and  prior,  767. 

only  one  proves  paid  in  full,  when,  761. 

proving  after  dividend  declared,  762. 

secured,  to  be  paid  how,  761. 

unsecured  to  be   paid  jyro   rata,   761. 
Debts  which  have  priority,  766.     (See  Debts.) 
Dividends,   disposition  of  unclaimed,  784. 

first,  when  declared,  763. 

how  declared,  763. 

how  paid,  783. 

recovery  of,  by  trustee,  424. 
Firm  and  individual  estate,  310. 
Funds,  when  there  are  several,  762. 
General  scheme  of,  759. 
Irregular,  effect  of,  764. 
Payment  to  attorneys.  165. 
Rights  of  creditors,  proving  after  dividends  have  been  declared, 

764. 
Reopening  a  case,  786. 
Settlement  of  estate,  785. 
Time,  763. 
Who  are  entitled  to  share,  761. 


District — 

Bankrupt  may  be  adjudged  in  which,  74. 

Involuntary  proceedings,  where  instituted,  234. 

.ludical,  extent  of,  33. 

Partnership  proceedings,  where  instituted,  302. 

Proceedings,  ancillary  in  other  districts,  103. 

Referee  of,  128. 

Removal  of  bankrupt  to  oth-^r,  670. 

Voluntary  proceedings,  where  Instituted,  208. 


1484  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Ind'ex  shows  where  each  section  and  clause 
of  the  Bankrupt  Act   is  considered  iu  this  treatise. 

District  courts  of  United  States — 

Courts  of  bankruptcy,  33,  74. 
Jurisdiction  of,  in  banlvruptcy,  74. 

at  law,  in  equity,  97. 

territorial,  of,  33,  74. 

District  of  Alaska — 

United  States  courts  in,  made  courts  of  bankruptcy,  33,  74. 

District  of  Columbia — 

Appeals  in  bankruptcy  in  the,  884,  898. 

"States"  include,  513m. 

Supreme  court  of,  a  court  of  bankruptcy,  33,  74. 

Territorial  jurisdiction  and  time  of  holding  courts  in,  40. 

Dividends — 

Attachment,  not  subject  to,  782. 
Checks,  how  drawn,  783. 
Contingent  claims  on,  763. 

Creditors   receiving,   not   affected   by   proof   of  subsequent   claims, 
764. 

entitled  to  receive,  761. 

I'esiding  within  United  States  entitled  to  preference,  765m. 
Declaration  and  payment  on  allowed  claims,  763. 

first  declaration  of,  765. 
subsequent,  765. 
Final  time  of,  763,  785. 
First,  when  declared,  765. 
Interest  on  contested  claims  not  allowed,  764. 
Judgment,  on,  pending  in  appellate  court,  765. 
Limit  to  right  to  collect,  764. 
Lists  of  claims  and,  763. 
Minors  may  claim,  when,  764. 

Notice  to  creditors  of  declaration  and  time  of  payment,  760. 
Obtained  from  trustee,  how,  783. 
Payment  of,  when  and  how,  783. 
Recovery  of,  when  claims  rejected,  413,  424. 
Referees  to  declare,  145,  763. 

deliver  to  trustees,  sheets,  764. 
Trustee  to  pay,  when,  783. 
Unclaimed  after  six  months,  disposition  of,  784. 

after  one  year,  784. 
of  minors,  784. 

Docket — 

Of  clerk,  what  to  contain,  153. 

Document — 

Bankrupt's  estate,  a  part  of,  462. 
Definition  of,  462. 

Destroying  or  secreting,  penalty  for,  678. 
Referee  may  require  production  of,  137. 
Trustee  vested  with  title  to,  462. 


INDEX.  yg. 

References  are  to  pages. 

Domicile — 

Bankrupt's,  what  is  the,  516. 

Corporation,  of,  234. 

Exemptions  governed  by  state  of  banlvrupt's,  51G 

Only  one,  at  one  time,  516. 

Proceedings  may  be  instituted  in  district  of,  74,  234. 

DoTver — 

Estate  of  husband,  wife's  not  a  part  of   481 
Exempt,  when,  531. 

contingent  or  inchoate  right,  531. 
Trustee  talies  banlvrupt's  right  of,  481. 
Trustee   takes  subject  to,   482. 
Sale  of  land  free  of,  when,  742. 
When  widow  entitled  to  claim,  482. 

Drafts — 

Pass  to  trustee  as  a  part  of  the  estate,  462. 

Due — 

Debt  not,  may  be  proven,  346. 

Duplicate — 

Petitions  to  be  filed  in,  216,  240. 

Duties — 

Attorney  general's,  158. 

Bankrupt's,  651. 

Clerk's,  153. 

Creditor's,  at  meetings,  328. 

Referee's,  131,  145. 

Trustee's,  418. 


Earlier    acts    of    bankruptcy — 

When  amendments  setting  up  allowed,  286. 

Earlier  acts  of  congress — 

History  of,  6,  et  seq. 

Earnings — 

After  adjudication  belong  to  bankrupt,  507. 

Effect — 

Act  went  into,  when,  23. 

Election — 

Of  trustee,   329,   415. 

To  take  encumbered  property,  443. 

Eligibility— 

Of  referees,  129. 
Of  trustees,  415. 


Um  INDEX. 

References   are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
Ihe  Anaiyticai^^i^^^^  Bankrupt  Act  is  considered  in  this  treatise. 

Embezzlement — 

Debts  created  by,  not  released  by  discharge,  841. 
Penalty  for,  678. 

Employees — 

Creditors,  as,  not  counted  in  petition,  229.^ 
Entitled  to  priority  in  payment,  when,  776. 

Encumibrances — 

(See  Incumbrances.) 

Endorser — 

For  bankrupt  may  prove,  when,  353. 

Not  released  by  discharge  of  bankrupt,  850. 

Enforcement — 

Act,  creditors  should  take  steps  for,  328. 
Liens  and  preferences,  valid,  541,  605. 

dissolution  of,  when,  551. 

effect  of  discharge  upon,  823. 

judical,  obtained  prior  to  four  months,  54i.^ 

judicial,  obtained  within  four  months,  540. 

trustee,  by,  for  benefit  of  estate,  when,  551. 

English  bankrupt  laws — 

History  of,  4. 

Enjoining  suits — 

(See  Staying  Suits.) 

Entry- 
Appearance,  waives  service,  247. 
Appearance  in  appellate  court,  effect  of,  935. 
Cases  on  docket,  153. 

Equity — 

Appeals  taken  as  in  cases  in,  911. 
Jurisdiction  in,  appellate,  874,  877.    _ 

circuit  courts  of  United  States  m,  123. 

courts  of  bankruptcy,  in,  97. 
Law  and,  as  distinguished  from  bankruptcy,  77. 
Process  served  as  in,  244. 
Records  of  referees  kept  as  in  cases  m,  14  i. 
Rule  13  quoted,  244. 

Appellate  jurisdiction  of  matters  of  law,  900.     (See  Circuit  Court 

OF  Appeals.) 
Referee,  of,  by  review  of  judge,  141. 
Writ  of,  in  bankruptcy,  916. 

in  law  and  equity  cases,  916. 


INDEX.  1487 

References   are   to  pages. 

The  Analytical  Table  preceding  tliis  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Estates — 

Administration  of,  733,   759. 

by  tlaree  trustees,  424. 

collection  of,  733,  et  seq. 

distribution,  759. 

partnerships,  306. 
Accretions  to  land  by  alluvium  a  part  of,  481. 
Acquired  after  adjudication  not  a  part  of,  505. 

what  is,  506. 

before  discharge  revoked,  866. 
Actions,  contracts  on,  a  part  of,  508,  512. 

exceptions  to  rule,  510. 

injuries  to  persons  not  a  part  of,  512. 

injuries  to  property  a  part  of,  512. 
Bankrupt  to  examine  claims  against,  654. 
Books,  462. 

Claims,  proof  and  allowance  of,  385,  et  seq. 
Contingent  remainders  not  a  part  of,  481. 
Conveyed  by  trustee  when  sold,  753. 
Costs  of  preserving,  entitled  to  priority,  772. 
Crops  a  part  of,  when,  488. 
Courtesy  and  dower,  481. 
Custody,  in,  of  the  court,  when,  92,  440. 
Debts  which  may   be   proved,   336. 

which  have  priority,  766. 

which  can  not  be  released,  828,  et  seq. 
Depositories  for  money,  421. 

Deteriorating,  proceedings  to  protect,  when,  250,  et  seq. 
Devised  property,  a  part  of,  480. 
Distribution,  general   plan  of,  759.      (See   Distribution  and   Dm- 

DENOS.) 

who  may  share  in,  761. 

composition    set   aside,    730. 
Dividends,  declaration  and  payment,  etc.,  763,  et  seq.     (See  Divi- 
dends and  Distribution.) 

unclaimed  after  six  months,  paid  into  court,  784. 
after  one  year,  distributed,  784. 
rights  of  minors,  784. 
Dower,   481. 
Encumbered  property — 

redeemed,  may  be,  739. 

sale  of,  free  from  lien,  742. 

sale  of,  subject  to  lien,  741. 

trustee  may  elect  not  to  take,  739. 

value  of  encumbrance,  determined  how,  740. 
Equitable  interest  in  lands  a  part  of,  when,  480. 
Equity  of  redemption  a  part  of,  480. 
Exempt  property  not  a  part  of,  513. 

when  it  may  become  a  part  of,  520. 
Fee,  subject  to  an  easement  a  part  of,  when,  481. 
Final  settlement  of,  785. 
Firm  and  individual  property,  310. 
Fixtures,  when  a  part  of,  488. 
Franchise,  part  of,  when,  495. 
Fraudulently  conveyed,  property  a  part  of,  466. 

purchased  by  bankrupt,  when  not  a  part  of,  448,  451,  454. 


1488  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act   is  considered   in   this   treatise. 

Estates  (continued)  — 

Goods  and  chattels  generally  a  part  of,  490. 

Good-will  a  part  of,  488. 

High  seas,  when  property  on,  a  part  of,  461. 

Individual,  partnership  creditors   sharing,   307. 

Information  concerning,  to  be  furnished  by  referee,  145. 

Injunction  to  protect,  256,  442. 

Insurance  policies  (life),  when  part  of,  497. 

bankrupt  may  keep  on  paying,  value,  497. 

exemption  of,  499. 

payable  on  death  of  bankrupt,  498. 
to  bankrupt,  498. 
to  third  persons,  498. 
Insurance  policies  (fire)  do  not  pass,  500. 

when  trustee  may  sue  on,  500. 
Interference  with,  restrained,  256. 
Inventory  of,  442. 

what  to  include,  214,  263. 

when  to  be  filed,  442,  263,  214. 
Lease  a  part  of,  483.     (See  Lease.) 

contracts  to  lease,  when  a  part  of,  487. 
Legacies,  when  part  of,  480. 

Levy,  whether  property  subject  to,  depends  on  state  law,  379. 
Liens  against,  541,  605. 

admiralty,  610. 

dissolved,  when,  543. 

invalid,-  when,  542,  605. 

judical,   543. 

mechanics',  COS. 

mortgages,  581.  583.  587,  591.  594. 

pledges,  598. 

rights  of  lienholder,  602. 

valid,  when,  540,  605. 
Memberships  in  exchanges  a  part  of,  494. 
Merchantable  condition,  trustee  may  put  in,  when,  734. 
Money  belonging  to,  how  and  where  deposited,  421,  759. 
Negotiable  instruments  a  part  of,  490. 
Notice  of  sale  of  property,  736,  737,  740,  742,  743. 
Orders  to  protect,  250. 
Partnership,  of,  310. 

individual  creditors  sharing,  307. 

interest  of  infant  partner,  part  of,  492. 
Pensions  not  a  part  of,  496. 
Perishable  property,  sale  of,  749. 
Possession,  when  trustee  entitled  to,  440. 

property  in,  of  third  parties  vests  in  trustee,  when,  490. 
Property  of  bankrupt,  when  may  be  seized,  258. 

on  which  there  is  a  valid  lien,  541. 

when  released,  261. 
Property  of  husband  or  wife,  when  part  of,  491. 
Protection  of,  250.     (See  Protection.) 
Real  property  a  part  of,  480. 
Receivers  for,  252. 

Redemption  of  encumbered  property,  739. 
Referee  should  not  collect,  133. 
Restraining  order  to  protect,  256. 


INDEX.  14&9 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Estates  (Continued)  — 

Reopened,  may  be,  when,  786. 

Reversion,  with  rent  incident  thereto  a  part  of,  480. 

Sale  of,  750.     (See  Sale.) 

Set-offs  and  counter  claims  allowed,  377. 

Settlement  of,  785. 

Secured  creditors  may  apply  for  sale,  745. 

Separate  property  of  wife,  not  part  of,  510. 

Shrinkage  of,  as  evidence  of  concealment,  681. 

Shares  of  stock  a  part  of,  492. 

Taxable  where,  771. 

Temporary  investment  of  funds  of,  423. 

Title  to,  when  vests  in  trustee,  435. 

when  revests  in  bankrupts,  724. 

where  in  dispute,  749. 
Transfer  restrained,  256,  442. 
Trust,  property  held  by  bankrupt  in,  not  a  part,  of,  500. 

in  which  bankrupt  has  an  interest  is  a  part  of,  504. 

what  is,  502. 
Trustee  may  convey  by  deed,  753. 

may  put  in  merchantable  shape  by  repairs,  etc.,  734. 

power  to  free  from  liens,  735. 

power  to  sell  encumbered  property,  738. 

power  to  sell  unencumbered  property,  736. 

to  report  condition  of,  759. 

what  kind  of  property  passes  to,  as  a  part  of,  460,  et  seq. 

what  title  to,  passes  to,  435. 
Wearing  apparel,  515. 
What  is,   85. 
Wife's  separate  property,  510. 

Estimate  of  value   of  security — 

To  allow  creditor  to  vote,  396. 

Estoppel — 

Creditor,  of,  to  charge  acts  of  bankruptcy,  when,  227. 
to  oppose  discharge,  when,  793. 

Evidence — 

Acts  of  bankruptcy  not  in  petition,  inadmissible,  238. 
Against  bankrupt  can  not  be  used  in  criminal  proceedings,  643. 
Answers  of  witnesses  unsatisfactory,  proceedings,  when,  640. 
Burden  of  proof,  habeas  corpus  proceedings,  667. 

confining  compositions,  717. 

discharge,  opposing,  818. 

exempt  pi-operty,  534. 

involuntary  proceedings,  277. 
of  domicile,  517. 

on  bankrupt,  277. 

on  bona  fides  purchaser,  625. 

on  creditor  moving  claim,  406,  412. 

on  petitioning  creditors,  277. 

partnership  assets,  309. 

solvency,  as  to,  185,  277,  624. 

suits  to  recover  property,  624. 


1490  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act   is  considered   in   this   treatise. 

Evidence    (continued)  — 

Certified  copies  of  proceedings  before  referee  as,  136,  787. 

order  approving  trustee's  bond,  of  title,  437. 

confirming   or    setting   aside    composition,    of   jurisdiction, 

etc.,  724. 
confirming  composition  of  revesting  title,  724. 

papers  issued  by  clerli  or  referee,  as,  787. 
Concealment  of  property  by  bankrupt,  what  is,  of,  678. 
Claims  proof  of,  391. 

instrument  of  writing  to  be  filed  with,  395. 

when  lost  or  destroyed,  395. 
Compulsory  attendance  of  witnesses  by  the  court,  278,  630. 
Compulsory  attendance  of  witnesses  by  the  referee,  630. 
Criminal  proceedings,  testimony  of  bankrupt  can  not  be  offered  in, 

against  him,  643. 
Depositions,  in  involuntary  cases,  278. 

notice  of  taking,  412. 

prove  claims,  to,  394. 

referees,  in  proceedings  before,  411. 
power  to  take,  138. 
power  to  exclude  evidence,  637. 

right  to  take  determined  by  U.  S.  laws,  411,  647. 
Habeas  corpus  proceedings  in,  665. 
Indictment  in  extradition  proceedings  as,   672. 
Manner  of  introducing,  277,  625. 
Order  confirming  composition,  as,  724. 
Referees,  how  taken  before,  637. 

may  be  used  in  civil  cases  to  impeach  witness,  650. 

power  to  take,  138. 

preserved  by,  when,  146,  637. 

record  of,  as,  787. 
Testimony  taken  on  examination  before  referee  may  be  used,  649. 
Title  of  trustee,  437. 

Examination — 

Adjourned,  may  be,  640. 

Answers  unsatisfactory,  when,  640. 

Application  for,  how  made,  632. 

Arrest  of  bankrupt  for,  661. 

Attorney  may  attend  witnesses,  when,  637. 

Bankrupt,  of,  612. 

after-acquired  property,  not  as  to,  507. 

compulsory  attendance  for,  653,  634. 

creditors  to  have  notice,  635. 

custody,  when  in,  629. 

gratify  malice,  etc.,  not  to,  629. 

how  often,  628. 

judge  or  referee  direct  when,  628. 

proof  of  claims,  of,  examine,  654. 

second,  when  cause  shown,  628,  632. 

testimony  of,  may  be  rejected,  640. 

upon  what  topics,  641. 

when  bankrupt  can  not  be  required  to  attend,  634, 

witness  fees,  not  entitled  to.  634. 
Certifying  questions  to  judge  from  referee,  639. 


INDEX.  J495^ 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Examination  (continued)  — 
Conducted  by  whom,  637. 
Contempt,  639. 

Degrading  questions,  may  be  compelled  to  answer,  643. 
■  Deposition,  by,  647. 
Detention  of  bankrupt  about  to  depart,  for,  661,  630. 
District,  within  what,  630,  632. 
Expenses  of,  of  administering  estates,  773. 

of  bankrupt  attending,  when,  634. 
Extradition  for,  630. 
Incriminating  questions  need  not  be  answered,  643. 

waiver  of  privileges,  644. 
Manner  of  making  a,  636. 
Notice  to  bankrupt  of  his,  634. 

to  creditors  of  bankrupt's,  635. 

to  creditors  of  application  not  required,  635. 

to  creditors  of,  of  witness  not  required,  635. 

to  witnesses  of,  how  given,  635. 
Objections,  who  to  decide,  638. 

who  may  make,  638. 
Order  for,  by  whom  application  for  made,  233. 

by  whom  made,  632. 

creditor  may  apply  for,  633. 

extract  of  record,  633. 

trustee  may  apply  for,  633. 
Persons  other  than  bankrupt,  635,  644. 
Persons  outside  district,  647. 
Privileged  communications,  646. 
Punish  aisobedience  of  subpoena,  636. 
Referee  may  make,  of  bankrupt,  628. 

may  make,  of  witnesses,  630. 

must  note  exceptions  taken,  638. 

of  another  district  may  make,  when,  647. 
Refusal  to  answer,  639. 
Service  of  notice  for,  635. 

of  subpoena  for,  636. 
Stenographer  may  be  employed,  637. 
Time  bankrupt  may  be  detained  for,  661. 

within  which  bankrupt  may  be  examined,  629. 
Testimony  upon,  may  be  used  when,  649. 
Topics  upon  which,  of  bankrupt  may  be  made,  641. 

upon  which,  of  witnesses  may  be  made,  644. 
Wife  of  bankrupt,  631. 
Witnesses  of,  630. 

privilege,  646. 

summoned  how,  636. 

upon  what  topics,  644. 

who  may  be  subject  to,  628,  630. 

Exceptions — 

How  taken  before  a  referee,  638. 

Executors — 

Debts  of,  not  released  by  discharge,  846. 
Proof  of  claims  by,  387. 


1492  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  tliis  Ind'ex  siiows  where  each  section  and  clause 
oi  the  Bankrupt  Act   is   considered   in   this   treatise. 

Exemptions — 

Appraising  exempt  property,  535. 
Burden  of  proof,  524. 

Constitutionality  of  provisions  relating  to,  517. 
Construction  of  laws  relating  to,  514. 

Claim  for,  bankrupt  to  prepare  and  file  in  triplicate,  etc.,  212,  2G3, 
524. 
time  of  filing,  525. 

who  may  claim  if  bankrupt  fails  to,  524. 
Costs  to  be  paid  out  of,  218. 

Court  of  bankruptcy  to  determine  claims  for,  520. 
Crops,  on  exempt  homestead,  516. 
Determined  how,  520. 
Domicile  of  bankrupt,  516. 
Domicile  of  bankrupt,  law  of,  governs,  513. 

where  domicile  is  changed,  516. 
Dower,  531. 

contingent  and  inchoate  right  of,  532. 
Fraudulent  conveyance  or  encumbrance,  effect  of,  528,  537. 

waived  by,  when,  528. 
Insurance  policies  exempted  by  state  law,  516. 
Laws  governing,  generally,  513. 
Liens  on  exempt  property,  522. 
Military  uniforms,  arms,  etc.,  513. 
Mortgages  on  exempt  property,  592. 
Partnership  property,  in,  538. 
Property  purchased  on  eve  of  bankruptcy,  in,  537. 
sold  in  bulk,  in,  528. 
subject  to,  does  not  pass  to  trustee,  460. 
Schedules,  should  be  claimed  in,  520. 
Set  apart,  how  to,  532. 
appraisement  to,  535. 
exceptions  to,  534. 
homestead,  in  kind,  536. 
trustee  to,  520. 
Title   to  exempt  property,   518. 

Trustee  has  dominion  over  exempt  property  for  what  purpose,  521. 
may  pass  to,  when,  521. 
to   set   apart,    520. 
Waiver  of,  how  made,  525. 

to  pay  certain  creditors,  525. 
Wearing  apparel,  515. 
What  property  generally  is  exempt,  536. 

Exhibits — 

Attached  to  proofs  may  be  withdrawn,  when,  395. 

Expenses — 

Administering  bankrupt's  estate  of,  774. 

Advanced  by  whom,  152,  156,  157. 

Bankrupt,  of,  paid  attending  examination,  when,  634. 

paid  attending  meetings,  when,  651. 
Clerk,  of,  156. 

Involuntary  proceedings,  in,  289. 
Marshal,  of,  157. 
Partnership  bankrupt,  of,  how  paid,  306. 


INDEX.  1493 

References   are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatlsa 

Expenses   (continued)  — 

Referees,  of,  151. 
Witnesses,    636. 

Expunging  claims — ^ 

When  examined  and  allowed,  409. 

Extortion — 

Punishment  for,  686. 

Extradition — 

Banlvrupt,  of,  668. 

Foreign  country,  from,  668. 

Indictment  as  evidence  in,  672. 

Jurisdiction  of  courts  of  bankruptcy  in,  75. 

Proceedings  to  remove  bankrupts,  670. 

before  commissioner,  670. 

before  judge  for  warrant,  673. 
Removal  of  bankrupt,  how  made,  670. 


Factors — 

Do  not  act  in  a  fiduciary  capacity  for  principals,  845. 

Facts — 

C.  C.  A.  reviews  only  law  on  petition  to  review,  911. 

C.  C.  A.  reviews  facts  and  law  on  appeal,  943. 

Findings  of,  by  a-rbitrators,  732. 

Finding  of,  made  on  appeal  to  supreme  court,  886. 

Reported  by  referee  as  to  contempt,  691. 

Reported  by  referee  as  to  discharge,  819. 

False  account — 

Penalty  for  making,  685.     (See  OFFE>fSES.) 

False  claims — 

Bankrupt  to  disclose  proof  of,  to  trustee,  654. 
Penalty  for  presenting  under  oath,  686. 
using  in  composition,  685. 

False  pretenses — 

Goods  obtained  by,  do  not  pass  to  trustee,  when,  451. 
Liability  in  actions  for  obtaining  property  by,  not  affected  by  dis- 
charge, 638. 

False  representations — 

Liability  in  actions  for  obtaining  property  by,  not  affected  by  dis- 
charge, 638. 

Farmers — 

Involuntary  bankrupts,  can  not  be  adjudged,  170. 

Whether  a  person  is  a  farmer  depends  on  vocation  at  time  of  act 

of  bankruptcy,  171. 
Who  are,  170. 


1494  INDEX. 

References   are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Federal  court — 

Suits  stayed  in,  105. 

(See  also  Court  of  Bankruptcy,  Circuit  Court,  Circuit  Court  of 
Appeals,  and  Supreme  Court.) 

Fees — 

Attorney's — 

allowance  of,  by  referee,  160. 

amount  of,  164. 

assignee  for  benefit  of  creditors  for,  163. 

creditors  of  involuntary  bankrupt,  of,  162. 

included  in  costs  of  administration,  160,  774. 

involuntary  bankrupt,  of,  160. 

lien  of,  for,  163. 

payment  of  attorney  in  contemplation  of  bankruptcy,  165. 

priority  of,  160,  774. 

proved  like  other  debts,  166. 

reasonable,  must  be,  160. 
what  is,  164. 

services  rendered  assignee  before  filing  petition,  for,  163. 

services  rendered  debtor  in  preparing  schedule,  163. 

taxed  as  costs,  165. 

trustee,  of,  162. 

voluntary  bankrupt,  of,  161. 

who  entitled  to,  160. 
Bankrupt  to  deposit,  217. 
Clerk's,  155. 

Filing  payment  of,  not  a  voidable  preference,  541. 
Marshal's,  156. 

Ordered  paid  out  of  the  estate,  152,  158,  434. 
Priority  in  payment  of  certain,  774. 
Referee's,  149. 

when  reference  revoked,  151. 

when  case  transferred,  151. 
Required  on  filing  petition,  217. 
Stenographer's,  138. 
Trustee's,    434. 

apportionment  of,  434. 
Voluntary  bankrupt  not  required  to  deposit,  when,  217. 

may  be  required  to  pay  later,  217. 
Witnesses',  included  in  costs  of  administration,  774. 

first  paid  or  tendered,  when,  636. 

Fiduciary  capacity — 

Attorneys,  847. 

Debt  created  while  acting  in,  not  affected  by  discharge,  845. 

Executors,  trustees,  guardians,  etc.,  846. 

Factor,  agent,  etc.,  not  in,  845. 

Meaning  of,  845. 

Officers  not  released  by  discharge,  debts  of,  847. 

Filing- 
Arbitrators'  findings,  732. 
Claims  for  exemptions  by  bankrupt,  216,  525. 
Claims  before  referee  or  in  court,  402. 


INDEX.  1495 

References   are   to   pages. 

The  Analytical  Table  preceding  this  Index  shows  where  ench  section  and  ^-lause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Filing   (continued)  — 

Discharge,  application  for,  788. 

application  to  revoke,  861. 
Information,  time  of,  688. 
Jury,  of  application  for,  266. 
List  of  creditors  by  banl^rupt,  214,  263. 

by  bankrupt  with  answer  when  more  than  12  creditors,  270. 

by  referee,  when,  146. 
Notice  to  take  depositions  with  referee,  634. 
Schedule  of  property,  of,  by  bankrupt,  214,  263. 

by  referee,  when,  146. 
Trustee's  accounts,  785. 

penalty  for  not  filing  reports,  421. 

Final- 
Accounts  of  trustees,  785. 
allowance  of,  785. 
notice  to  creditors  of,  785. 
oaths  to,  785. 
place  for  examining,  785. 
Meeting  of  creditors,  335. 

Finding — 

Appeal,  to  supreme  court,  on,  886. 

can  not  review  on  petition  for  revision,  911. 

when  not  found  by  master's,  943. 
Arbitrators',  effect,  etc.,  of,  732. 
Referees',  transmitted  with  records  to  judges,  when,  147. 

Fines — 

Orders  of  court  enforced  by.  704. 
Referee,  of,  acting  when  interested,  149. 

purchasing  property  of  estate,  149. 

refusing  inspection  of  accounts,  149. 
Trustee  refusing  inspection  of  accounts,  etc.,  149. 
(See  also  Crimes  and  Offenses.) 

Firm — 

(See  Partnership.) 

Fire  Insurance — 

Policies  do  not  pass,  500. 

When  bankrupt  may  sue  to  recover  for  fire,  500. 

Fixtures — 

When  part  of  bankrupt's  estate,  489. 

Florida — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  40 

Foreign   country — 

Bankrupt  to  transfer  property  in,  to  trustee,  437. 


1496  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shnws  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Foreign  creditors — 

How  affected  by  discharge  in  this  country,  824. 

When  there  are  bankruptcy  proceedings  at  home  and  abroad,  765n. 

Foreign  discharge — 

Effect  of,  in  this  country,  827. 
Effect  as  between  states,  827. 

Forfeiture — 

Debts  due  as,  how  far  allowed,  782. 

Referee,  by,  of  office,  acting  in  case  when  interested,  149. 

purchasing  property  while,  etc.,  149. 

refusing  inspection  of  accounts,  149. 
Trustee,  by,  of  office,  refusing  inspection  of  accounts,'  149. 

Forms — 

Adjudication  of  bankruptcy,  1018. 

debtor  is  not  bankrupt,  1017. 

and  designation  of  newspaper,  1019. 
Affidavit.     (See  Oath.) 

of  lost  bill  or  note,  1054. 
Ancillary  order  to  pay  funds  of  bankrupt  to  a  trustee  appointed 

in  another  district,  1143. 
Answer,  993. 

to  creditors'  petition,  995. 
Appeal,  petition  for,  1165. 

assignment  of  errors,  1169,  1173. 

bond  on,  1167. 

citation  on,  1168. 

motion  and  order  to  dispense  with  printing  record,  1204,  1205. 

order  allowing  cross,  1167. 

order  extending  time  within  which  to  file  record  in  appellate 
court,  1203. 

order  granting,  1166. 

petition  for  review  in  C.  C.  A.,  1175,  1176. 

writ  of  certiorari  for  diminution  of  record,  1207. 
Appearance  of  United  States  in  C.  C.  A.,  without  citation,  1204. 
Appointment,  oath  and  report  of  appraisers,  1028. 
Appraisers,  appointment,  oath  and  report  of,  1028. 
Assignee  for  creditors  to  account,  order  for,  1121. 

pay  funds  to  trustee,  order  that,  1120. 

rule  to  show  cause  why  he  should  not  pay  funds  to  trustee 
in  bankruptcy,  1121. 

rule  to  pay  over  money,  response  of,  1122. 
Assignment  of  errors,  li69,  1170.  1172,  1173. 
Attorney  to  creditor's  petition,  affidavit  by,  989. 

in  fact,  general  letter  of,  1030.  1032. 

order  allowing  fee  to,  1057,  1059. 
Bankrupt,  order  for  examination  of,  1038. 
deliver  assets  to  trustee,  order  that,  1044. 
examination  of,  1038. 
Bill  to  recover  a  preference,  1145. 
Bond  on  appeal,  1167. 
to  marshal,  1005. 
of  referee,  1022. 
of  trustee,  1036. 


INDEX.  1497 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Forms  (continued)  — 

Certificate  by  referee  to  judge,  1133,  1135,  1136,  1137. 

of  referee  to  record  of  proceedings,  1101. 
Certiorari  for  diminution  of  record,  1207. 

petition  to  ttie  supreme  court  for  writ  of,  1211. 
return  to  writ  of,  1209. 
Citation  on  appeal,  1168. 
Claim.     (See  Debt.) 

Composition,  petition  for  meeting  to  consider,  1102. 
application  for  confirmation  of,  1105. 
notice  to  creditors  of  meeting  to  consider,  1104. 
order  for  meeting  to  consider,  1103. 
order  for  hearing  on  petition  to  confirm,  1107. 
order  to  confirm,  1108. 
order  of  distribution  on,  1109. 
Contempt,  motion  for  rule  to  show  cause  against  bankrupt,  1111. 
rule  to  show  cause  against  bankrupt,  1112. 
answer  of  bankrupt  to  rule  to  show  cause,  1113. 
affidavit  of  trustee  that  bankrupt  has  not  obeyed  order  of  ref- 
eree, 1112. 
order  to  take  additional  evidence  on  rule  to  show  cause,  1114. 
order  finding  that  bankrupt  has  concealed  assets,  1115. 
order  committing  bankrupt  for,  1116. 
order  of  referee  recommending  commitment  for,  1117. 
commitment  for,  iil8. 
order  purging  of,  1119, 
Creditors'  petition,  987. 
answer  to,   995. 

order  permitting  creditor  to  join  in,  1002. 
order  to  show  cause  upon,  991. 

to  join  in  petition,  orders  permitting  creditors,  1002.  . 
notice  of  first  meeting  of,  1026. 
minutes  of  meeting  of,  1041. 
notice  of  final  meeting  of,  1096. 
appointment  of  trustee  by,  1033. 
Cross-appeal,  order  allowing,  1167. 
Debt,  affidavit  of  lost  bill  or  note,  1054. 
by  agent  or  attorney,  proof,  1052. 
by  agent,  proof  of,  secured,  1053. 
by  partnership,  proof  of,  1051. 
due  corporation,  proof  of,  1050. 
order   allowing  attorney's  fee,  1057,  1059. 
order  allowing  claim  of,  1057,  1059. 
order  expunging  claim,  1064. 
order  disallowing  claim  of,  1056. 
order  disallowing  and  expunging  claims,  1062. 
order  reducing  claim,  1063. 
petition  to  expunge  claim,  1059. 
proof  of  secured,  1046. 
proof  of  unsecured,  1046. 
proved  at  first  meeting,  list  of,  1029. 
Debtoi-'s  petition,  973. 
Decree.     (See  Judgment.) 
Deed  from  trustee  to  purchaser,  1163. 
Denial  of  bankruptcy,  993. 


1498  INDEX. 

Keferences  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankriiptey  Act  is  considered  in  this  treatise. 

Forms  (continued)  — 

Deposition,  examination  of  bankrupt  or  witness,  1039. 
Discharge,  petition  for,  1149. 

clerlv's  memoranda  of  banlvrupt's  petition  for,  1160. 

notice  of  application  for,  1152. 

of  banl^rupt,  1161. 

order  referring  petition  to  referee,  1156,  1157. 

proof  of  publication,  1153. 

referee's  report  on  petition  for,  1157. 

specification  of  grounds  in  opposition  to,  1153,  1155 
Dividend,  notice  of,  1093. 
Dividends,  list  of  claims  to  be  recorded  by  referee  and  delivered 

to  trustee,  1092. 
Examination  of  bankrupt,  order  for,  1038. 

of  bankrupt  or  witness,  1039. 
Exemptions,  trustee's  report  of,  1086. 
Injunction,  motion  for,  1009. 

order  denying,  1012. 

petition  to  enjoin  disposing  of  bankrupt's  estate,  1006. 

petition  to  stay  pending  suit,  1010. 

temporary  restraining  order,  1009. 

to  stay  suit,  1011. 
Judgment  on  review  of  order  of  referee  by  the  judge,  1138    1139 
1140,   1142.  '  '  ' 

for  sale  free  from  liens,  1070. 

on  mandate,  1210. 
Jury  trial,  order  for,  994. 

Lien,  petition  and  order  for  redemption  of  property  from,  1067. 
Mandate,  final  decree  or  judgment  on,  1210. 
Marshal,  bond  to,  1005. 

warrant  to,   1003. 
Motion  to  correct  journal  entry,  1138. 
Notice  to  creditors  of  meeting  for  composition,  1104. 

of  application  for  discharge,  1152. 

to  attorney  for  bankrupt  with  reference  to  discharge    1151 

of  dividend,  1093. 

of  filing  petition  for  review  in  C.  C.  A.,  1175. 

of  final  account,  declaration  of  dividends,  etc.,  1091. 

of  final  meeting  of  creditors,  1096. 

of  petition  for  removal  of  trustee,  1148. 

of  petition  to  sell  real  estate,  1076. 

of  petition  and  sale  of  chattels,  1086. 

of  sale  of  bank  stock,  1084. 

of  sale  of  uncollected  accounts,  1083. 

of  trustee's  sale  subject  to  lien,  1078. 

waiver  of,  1060. 
Oath  to  Schedule  A,  979, 

to  Schedule  B,  984. 

of  appraisers,  1028. 

by  attorney  to  creditors'  petition,  989. 

of  bankrupt,  final,  1158. 

of  referee,  1022. 

to  final  account  of  trustee,  1089. 
Order  permitting  creditor  to  join  in  creditors'  petition    1002 

to  show  cause  upon  creditors'  petition,  991. 

Of  adjudication  and  designating  newspaper,  1019, 


INDEX.  1499 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Forms   (continued)  — 

Order    (continued) — 

of  reference,  1020. 

of  reference  in  judge's  absence,  1021. 

that  bankrupt  deliver  assets  to  trustee,  1044 

for  choice  of  new  trustee,  1095. 

for  costs  and  confirming  accounts,  1094. 

for  jury  trial,  994. 
Partnership  affairs,  petition  of  administrator  of  deceased  partner 
to  settle,  1001. 

petition,  9S5. 
Petition   of   administrator  of   deceased   partner   to   settle   partner- 
ship affairs,  1001. 

for  appeal  in  bankruptcy,  1165. 

creditors',  987. 

partnership,  985. 

affidavit  by  attorney  to  creditors',  989. 

debtor's,  973. 

answer  to  creditors',  995. 

order  to  show  cause  upon  creditors',  991. 

for  meeting  to  consider  composition,  1102. 

for  discharge,  1149. 

to  expunge  claim,  1059. 

for  receiver,   1012. 

for  removal  of  trustee,  1147. 

to  stay  i>ending  suit,  1011. 

and  order  for  redemption  of  property  from  lien,  1067. 

and  order  for  private  sale,  1080. 

and  order  for  sale  by  auction  of  real  estate,  1065. 

and  order  for  sale  of  perishable  property,  1081. 

and  order  for  sale  subject  to  lien,  1075. 

to  enjoin  bankrupt  from  disposing  of  property,  1006. 

to  review  order  of  referee,   1123,   1127,   1128,   1129,   1130. 

to  sell  real  estate  free  from  lien,  1068. 

to  sell  portion  of  bankrupt's  estate  subject  to  lien,  1077. 

by  assigne  to  review  order  of  a  referee  on  rule  to  pay  over 
money  to  a  receiver  in  bankruptcy,  1127. 

by  trustee  to  review  order  allowing  a  claim,  1123. 

for  review  in  C.  C.  A.,  1176-1195. 

for  review  in  C.  C.  A.,  notice  of  filing,  1175. 

for  writ  of  certiorari  in  supreme  court,  1211. 
Poor  person,  motion  and  order  to  dispense  with  printing  record, 

1204,  1205. 
Preference,  bill  to  recover  a,  1145.    . 

order  to  surrender  before  proving  claims,  1041. 
Publication  of  notice  of  first  creditors'  meeting,  affidavit  in  proot 
of,  1027. 

of  proof  of  application  for  discharge,  1153. 
Purchaser,  deed  of  trustee  to,  1163. 
Receiver,  petition  for,  1012. 

order  appointing,  1014. 

order  refusing  to  appoint,  1013. 

order  to  put  him  in  possession,  1015. 

marshal's  return  on  order  to  put  receiver  in  possession,  1016. 
Record  in  appellate  court,  order  extending  time  within  which  to 
file,  1203. 


1500  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Ind'ex  shows  where  each  section  and  clBiise 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Forms  (continued)  — 

Record    (continued)  — 

certiorari  for  diminution  of,  1207. 

motion  and  order  to  dispense  with  printing,  1204,  1205. 

order  to  send  up  exhibits,  1201,  1202. 

praecipe  designating  parts  of,  1198,  1199. 

of  proceedings  before  referee,  1097,  1098,  1100,  1101. 

stipulation  to  omit  parts  in  printing,  1205. 

stipulation  to  use  printed  records,  1203. 

stipulation  reducing,  1198. 
Referee,  bond  of,  1022. 

oath,  1022. 

appointment  of  trustee  by,  1034. 

list  of  claims  and  dividends  to  be  delivered  to  trustee  by,  109S. 

record  of  proceedings  on  composition,  1100. 

record   of   proceedings — trustee   appointed — assets    distributed, 
1098. 

record  of  proceedings — no  trustee — no  assets,  1098. 

to  record  of  proceedings,  certificate  of,  1101. 

to  judge,  certificate  by,  1133,  1135,  1136,  1137. 

order  confirming  order  of,  1138. 

order  reversing,  1139. 

on  petition  to  discharge,  report  of,  1157. 
Reference,  order  of,  1020. 

in  judge's  absence,  order  of,  1021. 
Sale,  petition  and  order  for  private,  1080. 

of  bank  stock,  notice  and  report  of,  1084. 

of  unmanufactured  stock,  report  of  trustee  of,  1085. 

of  perishable  property,  petition  and  order  for,  1081. 

of  uncollected  accounts,  order  for,  1082. 

of  uncollected  accounts,  notice  of,  1082. 

of  real  estate,  petition  and  order  for,  1065. 

of  real  estate,  notice  of  petition  for,  1076. 

of  real  estate  free  from  lien,  petition  for,  1068. 

of  real  estate  free  from  liens,  decree  for,  1070. 

subject  to  lien,  petition  and  order  for,  1075. 

subject  to  lien,  notice  of  trustee's,  1078. 
Schedule  A,  975. 
Schedule  B,  981. 
Specification  of  grounds  in  opposition  to  discharge,  1153,  1155. 

in   opposition   to   discharge,   order   referring  to   referee,   1156, 
1157. 
State  court,  order  that  trustee  apply  to  be  made  party  to  suit  in, 
1045. 

to  pay  to  trustee  funds  in  court,  order  that,  1045. 
Stay  suit,  injunction  to,  1011. 

pending  suit,  petition  to,  1010. 
Summons  to  witness,  1040. 

and  severance,  order  of,  1166. 
Subpoena  to  bankrupt,  992. 

Supreme  court,  petition  for  writ  of  certiorari  in,  1211. 
Trustee  by  creditors,  appointment  of,  1033. 

appointment  by  referee,  1034. 

bond  of,  1034. 

order  aproving  bond  of,  1037. 

notice  of  appointment  of,  1035. 


INDEX.  15(3^ 

References  aj-e  (o  pa.sres. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Forius   (continued)  — 

Trustee  (continued)  — 

order  for  choice  of  new,  1095. 

order  that  none  be  appointed,  1037. 

petition  for  removal  of,  1147. 

notice  of  petition  for  removal  of,  1148. 

order  for  removal  of,  1148. 

account  of,  1088. 

deed  of,   1163. 

order  allowing  account  and  discharging,  1090. 

to  review  order  allowing  a  claim,  petition  bv,  1123. 

apply  to  be  made  party  to  suit  in  state  court,'  order  that    1045 

order  of  estate  court  to  pay  funds  to,  1045. 

of  sale  subject  to  lien,  report  of,  1079. 

oath  to  final  account,  1089. 

in  bankruptcy,  order  that  assignee  for  creditors  pay  over  funds 
to,  1120. 

order  that  bankrupt  deliver  assets  to,  1044. 

report  of  no  assets,  1087. 

report  of  exempt  property,  1086. 
Warrant  to  marshal,  1003. 
Witness,  examination  of,  1039. 

summons  to,  1040. 

Forms    of    procedure — 

United  States  supreme  court  to  prescribe,  for  courts  of  bankruptcy, 

Franchises — 

Pass  to  trustee,  when,  495. 

Fraud — 

Books  of  account  concealed,  etc.,  by,  prevents  discharge,  804. 

Composition  after  confirmation  set  aside  for,  728. 

Concealing  of  property  by,  punishment,  683. 

Debts  created  by.  released  by  discharge,  841. 

Discharge  revoked  when  obtained  by,  861. 

Liability  in  actions  for,  not  affected  by  discharge,  834. 

Lien  sought  and  permitted,  in,  of  bankrupt  act,  dissolved    etc     553 

Trustee  vested  with  title  to  property  transferred  in,  4G0,'  467,'  474." 

Fraudulent  transfer — 

As  an  act  of  bankruptcy,  190. 

intent  of  transferer  only  material,  191. 
As  a  preference.  553,  et  seq. 
Suits  to  set  aside,  613. 
who  to  bring,  619. 
Void  against  trustee,  466,  467,  474. 

by  laws  other  than  bankrupt  act,  478. 
under  the  bankrupt  act,  466. 

to  prefer  creditors,  471,  et  seq,      (See  Prefebences.) 

essentials  of,  472. 
to  hinder,  delay  and  defraud  creditors,  474. 
essentials  of,  474. 


1502  INDEX. 

References  a,re  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Fraudulent  sales — 

Rescinding  to  recover  property,  451. 

Further  credit — 

When  claim  for,  may  be  set-off,  380. 

G 

Georgia — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  40. 

General  assignment — 

An  act  of  bankruptcy,  199. 

Assets  distributed  under,  recovery  of  by  trustee,  627. 

Assignee  not  liable  to  trustee  for  distributing  assets,  627. 

Creditors  estopped  to  charge  as  an  act  of  bankruptcy,  227. 

In  what  court  property  to  be  administered,  31. 

Legality  of,  29. 

May  be  set  aside  when,   117. 

Services  in,  when  entitled  to  priority,  773,  780. 

Title  of  assignee,  117. 

Validity  of,  as  affected  by  the  national  act,  29,  780. 

General  orders — 

Abbreviations  and  interlineations  in  petitions  and  schedules  for- 
bidden (Order  5),  955. 
Accounts  of  marshal  (Order  19),  961. 
referee   (Order  2G),  965. 
trustee  (Order  17),  960. 
Amendments  of  petition  and  schedules   (Order  11),  958. 
Appeals  (Order  36),  970. 

from  circuit  courts  of  appeals  (Order  36),  970. 
courts   of   bankruptcy    (Order   36),   970. 
supreme  court  of  District  of  Columbia   (Order  36),  970. 
supreme  court  of  territory   (Order  36),  970. 
to  circuit  courts  of  appeals  (Order  36),  970. 

supreme  court  of  territory   (Order  36),  970. 
supreme  court  of  United  States  (Order  36),  970. 
Application  for  approval  of  composition   (Order  12),  950. 
discharge  of  bankrupt  (Order  12),  959. 
form  of  (Order  31),  968. 
Appointment  and  removal  of  trustee  (Order  13),  959. 
Arbitration   (Order  33),  968. 

Assignment  of  claims  before  proof  (Order  21),  963. 
Attorney,  conduct  of  proceedings  by   (Order  4),  954. 

execution  of  letter  of  (Order  21),  963. 
Checks  for  money  deposited   (Order  29),  966. 
Circuit  courts  of  appeals,  appeals  from  (Order  36),  970.. 

to  (Order  36),  970. 
Claims,  assignment  of,  before  proof  (Order  21),  963. 
compounding  of  (Order  28),  966. 
of  persons  contingently  liable  (Order  21),  963. 
proof  of  (Order  21),  963. 
re-examination  of  (Order  21),  963. 
Clerk,  compensation  of   (Order  35),  969. 

indemnity  for  expenses  of  (Order  10),  957.. 
indorsement  of  papers  by  (Order  2),  954. 


INDEX.  1503 

References  are  to  paj;es. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

General  orders    (continued)  — 

Compensation  of  clerk,  referee  and  trustee  (Order  35),  969. 
Composition,  approval  of   (Order  12),  959. 

opposition  to  (Order  32),  968. 
Compounding  of  claims   (Order  28),  966. 
Conduct  of  proceedings  (Order  4),  954. 
Consolidation  of  petitions   (Order  7),  956. 
Costs  in  contested  adjtidications    (Order  34),  969. 
Courts  of  bankruptcy,  appeals  from  (Order  36),  970. 
Creditors,  special  meeting  of  (Order  25),  965. 
Debtor,  imprisoned   (Order  30),  967. 
Debts,  proof  of   (Order  21),  962. 
Deposition  before  referee    (Order  22),  964. 
Discharge  of  bankrupt,  application  for   (Order  12),  959. 

opiX)sition  to   (Order  32),  968. 

petition  for   (Order  31),  968. 
Districts,  petitions  in  different   (Order  6),  955. 
Docket   (Order  1),  953. 
Duties  of  referee   (Order  12),  958. 

trustee  (Order  17),  960. 
Examination  of  witnesses  (Order  22),  964. 

Expenses  of  clerk,  marshal  or  referee,  indemnity  for   (Order  10), 
957. 

allowance  of  (Order  35),  969. 
Fees  of  clerk   (Order  35).  969. 

referee   (Order  35),  969. 

trustee   (Order  35),  969. 
Filing  of  papers   (Order  2),  954. 

after  reference   (Order  20),  962. 
Finding  of  facts  by  referee  (Order  12),  958. 
Forms   (Order  38),  971. 
Frame  of  petitions  (Order  5),  955. 
General  provisions    (Order  37),  970. 
Habeas  corpus  of  imprisoned  debtor  (Order  30),  967. 
Imprisoned  debtor    (Order  30),  967. 
Indemnity  for  expenses  of  clerk,  marshal  or  referee    (Order  10), 

957. 
Injunctions  of  proceedings  of  courts  or  officers   (Order  12),  959. 
Interlineation    and    abbreviation    in    petitions    and    schedules    for- 
bidden  (Order  5),  955. 
Inventory  by  trustee   (Order  17),  960. 
Involuntary  bankrtiptcy,  costs  in  (Order  34),  969. 

schedule  in  (Order  9),  957. 
Judge  to  hear  application  for  composition   (Order  12),  959. 

discharge  of  bankrupt   (Order  12),  959. 

injunction    (Order  12),  959. 

removal  of  trustee   (Order  13),  959. 

review  by  (Order  27),  965. 
Jurisdiction  of  two  petitions  in  different  districts    (Order  6),  955. 
Marshal,  accounts  of  (Order  19),  961. 

indemnity  for  expenses  of  (Order  10),  957. 
Meeting  of  creditors,  first    (Order  12),  958. 

special    (Order  25),  965. 
Moneys  deposited,  payment  of   (Order  29),  966. 
Notices  to  creditors    (Order  21),   962. 
Opposition  to  discharge  of  composition    (Order  32),  968. 


1504  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding;  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this   treatise. 

General  orders   (continued)  — 

Order  of  reference   (Order  12),  958. 
Orders  of  referee   (Order  23),  964. 
Papers,  filing  of  (Order  2),  954. 

after  reference  (Order  20),  854. 
Partnership  cases,  proceedings  in  (Order  8),  962. 
Payment  of  moneys  deposited  (Order  29),  966. 
Perishable  property,  sale  of   (Order  18),  9G1. 

Petition  and  schedules,  abbreviations  and  interlineations  in,   for- 
bidden (Order  5),  955. 

amendments  to   (Order  11),  858. 

for  discharge   (Order  31),  968. 
Petitions,  frame  of   (Order  5),  955. 

in  different  districts    (Order  6),  955. 

two  or  more  against  common  debtor  (Order  7),  956. 
Poor  bankrupts,  payment  of  fees  in  cases  of   (Order  35),  970. 
Practice  and  procedure  (Order  37),  970. 
Priority  of  petitions   (Order  7),  956. 
Proceedings,  conduct  of  (Order  4),  954. 
Process   (Order  3),  954. 
Proof  of  debts   (Order  21),  962. 
Property,  redemption  of  (Order  28),  966. 

sale  of    (Order  18),  961. 
Proved   claims,    transmission   of,   to   clerk    (Order    24),    965. 
Record  of  clerk  (Order  1),  953. 

referee  (Order  1),  953. 

on  appeal  to  supreme  court  of  United  States   (Order  36),  970. 
Redemption  of  property  and  compounding  of  claims    (Order  28), 

966. 
Re-examination  of  claim   (Order  21),  968. 
Referee,  accounts  of  (Order  26),  965.  • 

certificate  of,  to  judge    (Order  27),  965. 

compensation  of   (Order  36),  970. 

duties  of  (Order  12),  958. 

finding  of  facts  by  (Order  12),  958. 

indemnity  for  expenses  of  (Order  10),  957. 

indorsement  of  papers  by  (Order  2),  954. 

orders  of   (Order  23),  954. 

proceedings  before  (Order  12),  958. 

record  of  (Order  1),  953. 

to  notify  trustee  of  his  appointment  (Order  16),  960. 

to  transmit  list  of  proved  claims  to  clerk   (Order  24),  965. 
Reference,  order  of    (Order  12),  958. 

papers  filed  after  (Order  20),  962. 
Removal  of  trustee    (Order  13),  959. 
Review  of  judge  (Order  27),  965. 
Sale  of  property    (Order  18),  961. 

Schedule,   abbreviations  and   Interlineations   in,   forbidden    (Order 
5),  955. 

amendments  to   (Order  11),  958. 

in  involuntary  bankruptcy   (Order  9),  957. 
Special  meeting  of  creditors  (Order  25),  965. 
Subpoena    (Order  3),  954. 
Summons  (Order  3),  954. 


INDEX.  1505 

,  References  are  to  pages. 

The  Analytical  Table  preceding  tiiis  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

General  orders   (continued)  — 

Supreme  court  of  District  of  Columbia,  appeals  from   (Order  36), 
970. 

territory,  appeals  to  (Order  36),  970. 
from    (Order  36),  970. 

the  United  States,  appeals  to  (Order  36),  970. 
Testimony,  taking  of  (Order  22),  964. 
Transmission  of  proved  claims  to  clerk   (Order  24),  965. 
Trustee,  appointment  of  (Order  13),  959. 

compensation  of  (Order  36),  970. 

duties  of  (Order  17).  960. 

no  official  or  general,  to  be  appointed   (Order  14),  959. 

not  appointed  in  certain  cases   (Order  15),  959. 

notice  to,  of  appointment   (Order  16),  960. 

removal  of  (Order  13),  959. 
Witnesses,  examination  of   (Order  22),  964. 
Gift- 
Included  in  the  word  "transfer,"  553. 
Good  faith- 
Liens  given  in,  etc.,  valid,  541,  605. 
Mortgages  given  in,  valid,  583. 
Purchases  made  in,  valid,  551. 

Good  'will — 

When  a  part  of  bankrupt's  estate,  489. 
Guarantors — 

Debts  of,  not  released  by  discharge,  849. 
Guardian — 

Debts  of,  not  released  by  discharge,  846. 


H 

Habeas  corpus — 

Application  for,  664. 

Burden  of  proof,  667. 

Evidence  admissible,  666. 

To  produce  bankrupt  for  examination,  629. 

To  release  bankrupt  from  imprisonment,  663. 

To  release  bankrupt  held  for  removal,  674. 

To  release  contemner,  705. 

Haivaii — 

Territorial  jurisdiction  and  time  of  holding  courts,  42. 

Hearing — 

Bankrupt  to  attend,  on  application  for  discharge,  651. 
Claims,  of  objections  to  allowance  of,  406. 
Confirmation  of  composition,  application  for,  772. 

notice  to  creditors,  772. 
Contempts,  for,  summary,  699. 
Discharge,  of  application  for,  793. 

notice  to  creditors,  789. 
Insolvency,  on  question  of,  275. 
Involuntary  proceedings  in,  275. 
Petition,  voluntary,  of,  218. 


1506  INDEX. 

References  are  to  paws. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

"Hinder,   delay   or   defraud" — 

Act  of  bankruptcy,  when,  183. 
Hire— 

(See  Wage  Earner.) 
Holder  of  lien — 

Trustee  subrogated  to  rights  of,  when,  551,  606,  615. 
(See  also  Secured  Creditor.) 

Holidays — 

Not   counted,    241. 
What  are,  242. 


I 

Idaho — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  42. 

Identity — 

Of  banlfrupt  to  be  established  before  extradition,  671,  673. 
Of  person  proving  claim,  when,  963. 

Illinois — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  43. 

Imprisonment — 

Bankrupt  not  protected  from,  657. 
Bankrupt  subject  to,  for  what  offenses,  677,  et  seq. 
Bankrupt  in  custodj^  of  marshal  for  examination  not  to  be  sub- 
jected to,  661. 
Contempt  punishable  by,  703. 
Courts  of  bankruptcy  to  enforce  orders  by,  75. 
Discharge  prevented  by  offense  punishable  by,  802. 
Offenses  punishable  by,  677,  et  seq. 
Referee  can  not  exercise  power  of,  133. 
Trustee  subject  to,  for  what  offenses,  677. 

Inability — 

Of  judge  to  act,  when  to  certify  to  circuit  court,  122. 

Of  judge  to  act,  when  to  certify  fact  to  referee,  139. 

Of  referee  to  act,  judge  may  act  or  appoint  another  referee,  128. 

Inconvenience — 

Place  of  creditors'  meeting  may  be  fixed  to  avoid,  321. 

Incumbrances — 

Included   in  "transfers,"  553. 

Subsequent  to  act,  etc.,  within  four  months,  to  defraud,  etc.,  void, 

474. 
Within  four  months,  void  under  state  laws,  void  under  act,  478, 
(See  also  Liens,  Mortgages,  Prei-^erences.) 

Indebtedness — 

Amount  of,  to  petitioning  creditors  to  begin  involuntary  proceed- 
ings, 226. 
Total,  of  bankrupt  to  subject  him  to  involuntary  proceedings,  231. 


INDEX.  i^Qj 

References  are  to  paces. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Indemnity — 

Bond  of,  by  petitioner,  on  seizure  of  bankrupt's  property    258 
For  expenses  of  clerk,  156.  i      i       j', 

of  marshal,  158. 

of  referee,  152. 

Indexes — 

Clerks  of,  153. 

open  to  inspection,  154. 

Indiana — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  44. 

Indian  territory — 

'•States"  include,  513w. 

Territorial  jurisdiction  and  time  of  holding  courts  in,  44 

United  States  courts  in,  made  courts  of  bankruptcy,  40,  74. 

Indictments — 

Averments  in,   689. 

Criminal  proceeding  instituted  by,  688. 
Evidence  in  extradition  proceedings,  671,  672. 
Limitation  of  time  as  to  finding,  691. 

Individual — 

Assets,  312. 

Debts,  314. 

(See  also  Partnership.) 

Infants — 

Adjudged  bankrupts,  when,  172. 

Claims  against  bankrupts,  time  for  proving    389 

Defense  of  infancy,  270. 

Unclaimed  dividends,  time  for  claiming,  784. 

In  forma  pauperis — 

Involuntary  cases,  not  in,  240. 
Voluntary  cases,  when,  217. 

Information — 

Criminal  proceedings  begun  by,  when,  688. 
Limitation  of  time  as  to  filing,  691. 
Referee  to  furnish,  145. 
Trustees  to  be  furnished  with,  654. 
to  furnish,  421. 

Injunction — 

Power  of  referee  to  grant,  134. 

To  protect  after-acquired  property,  508. 

To  protect  estate,  252,  256. 

application  for,  256. 

dissolution  of,  when,  257. 
To  stay  suits,  105. 


1508  INDEX. 

References  are  to  pages. 

Th.e  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered   in  this  treatis?. 

Injuries — 

Actions  for,  to  person  do  not  pass  to  trustee,  512. 

to  property  pass  to  trustee,  511. 
Discharge   does  not   release   judgments    in   actions    for   willful,   to 
person  or  property,  834,  838. 

Insane  person — 

Claims  against  bankrupts,  time  for  proving,  389. 
Insanity  as  a  defense,  270. 
May  be  a  bankrupt,  when,  173. 

When  bankrupt  becomes  an,  proceedings  not  abated,  174,  67b. 

Insolvency — 

Admission  of,  in  writing  an  act  of  bankruptcy,  202. 
Burden  of  proving,  185. 

Essential  to  an  act  of  bankruptcy,   when,   185,   et  seq.,   193,   199, 
202. 

to  create  a  preference  by  transfer,  554. 

to  dissolve  a  judicial  lien,  552. 

to  maintain  involuntary  proceedings,  when,  232,  268. 
Evidence  of,  189. 
How   to   determine,   187. 

Involuntary  proceedings  in,  material  when,  268. 
Meaning  of,  187,  233. 
Presumption  as  to,  189,  558. 
Question  of  fact  for  jury,  558. 

may  be  contested,  233. 
Partnership,  of,  187. 
Trial  by  jury,  when,  187,  233. 

application  for  trial  by  jury,  when  made,  233. 

right  to,  confined  to  debtor,  188. 

Insolvent — 

Filing  petition  against,  when,  232. 

Jury  trial,  entitled  to,  233,  275. 

Laws,  effect  of  national  upon  state,  23,  29,  780. 

meaning  of,  18. 

states  may  pass,  when,  20. 

suspended,  not  repealed,  by  national  act,  23. 
Meaning  of,  186. 
Reasonable  cause  to  believe,  552w.8. 

Inspection — 

Docket  open  to  public,  153. 

Penalty  against  referee  and  trustee  refusing,  of  accounts,  687,  149. 

Trustee's  accounts  and  papers  open  to,  421,  149. 

Instrument  of  \trriting — 

Debts  evidenced  by,  allowed,  etc.,  351. 

Filed  with  proof  of  claim,  395. 

Lost  or  destroyed,  statements,  etc.,  to  be  filed  with  claim  under 

oath,  395. 
(See  also  Documents.) 


INDEX.  ^^^ 

References  are  to  pages. 

Insurance — 

Companies  as  bankrupts,  180. 

Policies  of,  effect  of  state  laws  exempting,  499,  516. 
bankrupt  may  keep  on  paying  value    497  ' 
part  of  estate  of  bankrupt,  498. 

payable  on  death  of  bankrupt,  498. 

payable  to  bankrupt,  497. 

payable  to  third  persons,  498. 
Property  of  bankrupt,  on,  131,  254. 
Trustee  does  not  take  policies  of  fire,  500. 
When  trustee  may  sue  on  policy  of  fire  insurance,  500. 

Intent — 

Of  transferee  as  determining  preference,  559. 
In  act  of  bankruptcy  by  legal  proceedings,  196. 

by  preference,   193. 

by  transfer,  190. 

Interlineations — 

When  not  allowable,  235. 

Interest — 

Dividends  on,  when  allowed,  764. 

Judgments  as  debts  proved  and  allowed,   include    347 

May  be  added  in  computing  amount  of  debts,  229* 

Party  in,  who  is  a,  792. 

Penalty,  on  recovery  of,  782. 

Provable  debt,  when,  346,  358. 

Referees,  of,  in  case  disqualifies,   136. 

Trustees  to  account  for  and  pay,  422  n.  759. 

Usury,  recovery  of  by  trustee,  438. 

Interlocutory   orders — 

Protection  of  the  estate,   250. 

to  conduct  business  by  receiver,  251. 

to  restrain  transfer,  252. 

to  stay  proceeding  in  state  court,  251. 

to  sell  perishable  property,  749. 

to  seize  debtor's  property,  252. 
(See  also  Orders.) 

Intervenors — 

Appearance  of,  263. 

Creditors  appearing  to  join  in  or  oppose  petition,  261    265 

Rights  of,  262. 

To  recover  property  in  possession  of  trustee,  445 

Who  may  be,  262. 

Intervention — 

Bankruptcy  proceedings,  in,  261. 

By   claimants   to    recover   property   in    possession   of   trustee,    444. 
et  seg. 

conditional  sales  to  bankrupt,  448. 

confusion  of  goods,  when  may  follow  property,  454. 

distinction   between   sale   and   bailment,    448.  ' 


1510  .         INDEX. 

References  are  to  pages. 

Tbe  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  ti;e   Bankruptcy  Act  is  considered   in  this  treatise. 

Intervention    (continued)  — 
By  claimants    (continued)  — 

fraudulent  sales  to  bankrupt,  when  vendor  may  rescind,  451 

intervening  petition  to  recover  property,  457. 

proceedings  to  recover  property,  jurisdiction  of,  455. 

proceedings  on  an  intervening  petition,  45S. 

reclamation  proceedings,  458. 

recovery  depends  on  claimant's  title,  445. 

state  and  bankruptcy  courts  have  jurisdiction,  455. 

trial  on  intervening  petition,  459. 

Inventory — 

Schedule  furnished  by  bankrupt,  263. 
Trustee  to  prepare,  420. 

Investment — 

Of  money  belonging  to  estate,  422. 

Involuntary  proceedings — 

Adjudication,  order  of,  278. 

proceedings  subsequent   to,  291. 

setting  aside,  279. 
Against  whom  proceedings  may  be  begun,  230. 
Amendments,  237,  266,  283. 

application  for,  must  be  made  within  reasonable  time,  284. 

costs,  284. 

discretion  of  court,  within,  283,  284. 

grounds  of,  284 

referee  may  grant  leave  to,  287. 
Answer  to  petition,  266. 
Bankrupts,  who  may  adjudged,  168. 
Commenced  how,  224. 
Costs  of  adjudication,  279. 

of  proceedings,  289. 
Court  in  which  petition  filed,  234. 
Creditors  appearing  to  be  parties,  261. 

computing  number  of,  226,  241. 

number  of,  required,  226. 

who  may  join  petition,  226,  241. 
Damages,  instituting,  grounds  for,  289. 
Default,  proceedings  on,  282. 
Defenses  to  petition,  266,  et  seq. 
Demurrer  to  petition,  265. 
Dismissing  petition,  287. 
Hearing  or  trial,  274. 
Insolvency,  how  far  essential,  232,  268. 
Instituted  how,  224. 
Jury  trial,  when,  266,  269. 
Motion  to  make  more  definite,  etc.,  265. 

to  dismiss,  265. 
Number  of  petitioning  creditors  required,  226,  232. 
Oath  to  petition,  239. 
Order  of  adjudication,   278. 

appointing  receiver,  251. 

authorizing  business  to  be  conducted,  251. 


INDEX.  1511 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
(rf  the  Bankruptcy  Act  is  considered   in   this  treatise. 

Involuntary  proceedings    (continued)  — 
Order  of  (continued)  — 

proceedings  of,  when  several  petitions  filed,  272,  273. 

restraining  disposition  of  estate,  252. 

reference,  of,  281. 

seizure  of  debtor's  property,  258. 

staying  suits  in  state  courts,  251. 
Partnerships,  proceedings    peculiar  to,  292. 
Petition,  form  of,  236. 

may  be  filed  against  whom,  230. 

service  of  copy  of,  242. 

two  against  same  debtor,  235. 

who  may  join  in,  226. 
Pleading  to  petition,  264. 
Referee,  reference  to,  by  judge,  132. 

reference  to,  by  clerk,  131. 
Reply  to  answer,  273. 
Schedules,  263. 

Seizure  of  debtor's  property,  258. 
Staying  suits  against  debtor,  251. 
Subpoena,  when  necessary,  243. 

service  of,  242. 
Subsequent  to  ajudication.  291. 
Time  within  which  to  file  petition,  240,  241. 
Trial,  274. 

What  is  necessary  to  institute  proceedings,  229. 
Who  may  be  adjudged  bankrupt  in,  168. 
Who  may  institute  proceedings,  224. 

lovra — 

Territorial  jurisdiction  and  time  of  holding  courts,  45. 

Issues — 

Discharge,  on  opposing  a,  800. 
Involuntary  petition,   264. 

acts  of  bankruptcy  denied,  268. 

by  answer,  266. 

determined  by  judge,  278. 

determined  by  jury,  276. 

general  denial,  268. 

solvency,  268. 
Referee,  issue  of  fact  referred  to,  when,  132. 
Supervisory  petition,  no  issue  of  fact  allowed  on,  910,  911. 


J 


Joint  and  separate  debts — 

Of  partners,  what  are,  315. 

Joint  and  separate  property — 

Of  partners,  what  is,  310. 

Joint    stock   company — 

(  See   COKPORATIONS. ) 


1512  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this   treatise. 

Joint  trustees — 

Bonds  of,  joint  or  severable,  417. 

Concurrence  of  two  necessary  to  validity  of  act,  424. 

Creditors  or  court  may  appoint  three,  415. 

Death  of  one  does  not  abate  suits,  427,  676. 

Judge — 

Absence  of,  in,  clerk  to  send  case  to  referee,  136,  154. 
Adjudication,  regularly  makes,  218. 
ApiX)ints  referees,  128. 
Appoints  trustees,  when,  416. 

Disqualified,  may  certify  proceedings  to  circuit  court,  122. 
Jury  trial,  presides  at,  189. 
May  order  an  examination,  632. 

May  order  fees  paid  out  of  the  estate,  when,  134,  155. 
May  refer  cases,  when,  132. 

Referee  may  exercise  certain  powers  of,  on  issuance  of  certificate 
by  clerk,  etc.,  154. 

must  not  be  related  to,  129. 

powers  subject  to  review  by,  135,  137,  141. 

transfer  of  cases  by,  from  one  referee  to  another,  132. 
To  take  possession  of  and  release  bankrupt's  property,  139. 

Judical  liens — 

When  invalid,  542. 

Judgments — 

Alimony,  for,  not  released  by  discharge,  834. 
Attaches  as  a  lien,  when,  546,  547. 
Confession  by,  552n. 
Court,  how  far  will  go  behind,  349. 
Discharges,  effect  of,  on,  against  debtor,  834. 

actions  for  fi^auds,  837. 

actions  for  obtaining  property  by  false  pretenses,  838. 

alimony,  for,  839. 

contempt,  for,  835. 

entered  after  discharge,   836. 

entered  after  filing  petition,  836, 

fines,   834. 

judical  liens,  824. 

malicious  prosecution,  838. 

penalties,  834. 

seduction,  839. 

support  of  child,  839. 
Lien,  created  by,  within  four  months,  etc.,  when  dissolved,  565. 

preserved  for  estate  when,  546. 
Preference,  when  deemed  to  create,  543. 
Provable  debt,  when,  346. 
Verdict  not  a,  835. 

Jurisdiction — 

Ancillary,  103. 

Answer,  challenged  in,  270. 

Appellate,  874. 

Attaches  when,  92. 

Attorney  not  admitted  to  practice  in  court,  158. 

Bankruptcy,  of  court  of,  74,  82,  et  seq. 


INDEX.  1513 

References  axe  tb  pages. 

The  Analytical  Table  precedins  this  Index  sbows  where  each  section  and  clause 
ot  the  Jjaukiuptcy  Act  is  considered  in   this  treatise. 

Jurisdiction      (continued^  — 

Bankruptcy,  of  court  of,  74,  82,  et  seq. 
in,  exclusive,  91. 
in,  general,  76. 
includes  what,  84. 

Certified  copy  of  order  confirming  composition,  etc.,   evidence  of, 

724. 
Circuit  courts,   in  bankruptcy,   121. 

law  and  equity,  123. 

suits  between  trustees  and  adverse  claimant,  125. 
Circuit  courts  of  appeals,  appellate,  in  bankruptcy,  911. 

appellate,  at  law  and  equity,  868. 

to  superintend  and  revise  proceedings  of  courts  of  bankruptcy. 

Concurrent,   between  circuit  courts  and  courts  of  bankruotcv   of 

offenses,  659,  687. 
Consent  to,  97. 
Contested,  when,  802. 
Contempt,   to  punish  for,   692. 
Courts  of  bankruptcy,  of,  74,  et  seq. 

conferred  on  existing  courts,  33. 
Criminal  proceedings,  of,  687. 
Debtor's  petition,  to  hear,  208. 
Depends  on  United  States  laws,  76. 

Determine  title  to  disputed  property,  to,  444,  et  seq.,  749. 
Discharge,  to  determine  effect  of,  828. 
Enjoin  suits  begun  after  bankruptcy,  107. 
Enforce  mechanic's  lien,  610. 
Examine  witnesses,  630,  632. 
Exempt  property,  of,  520,  522.    " 
General  powers  of  a  court  of  bankruptcy,  76. 
Law  and  equity,  of  suits  at,  97. 
Liens,  to  enforce,  738. 
Limitation  to  exercise  of,  95. 
Limited  to  district,  95. 
Mechanic's  lien,  to  enforce,  610. 
Over  adverse  claimants,  100. 
Persons  subject  to  the  act,  extends  only  to,  89. 
^^''*'pn9^^^^^'  °^  courts  of  bankruptcy,  over  one  member  sufficient. 

Persons  over,  court  must  have,  210. 
Petitions,  when,  filed  in  different  districts,  272. 
Plenary  suits  in,  against  adverse  claimant's,  100. 

suit  to  set  aside  preferences  is,  618. 

when  necessary,  100,  695. 
Possession  of  property,  to  obtain,  114. 
Property  in  possession  of  state  court,  over,  115. 
Publication,  by,  249. 
Punish  for  offenses,  to,  687. 
Referee's,  131. 
State  court,  of,  of  suits  by  trustees,  97. 

perjury,  640. 
Stay  suits,  to,  105.     (See  Stay.) 
Summary,  extent  of,  76,  84. 
Supreme  court,  appeals  in  bankruptcy,  884. 

appellate  at  law  and  in  equity,  868. 

appellate  from  state  courts,  881. 

certiorari  to  C.  C.  A.,  890. 


1514  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  sliows  wliere  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Jurisdiction   (continued)  — 

Suits  to  set  aside  preferences,  etc.,  97,  et  seq.,  616. 

on  trustees'  bond,  430. 

against  third  persons,  by  trustee,  97,  et  seq. 
Territorial,  of  each  court  of  bankruptcy,  33. 
When  two  or  more  petitions  are  filed,  272,  273, 

Jury — 

Act  of  bankruptcy,  question  for,  275. 

Adverse  claimant  entitled  to,  281. 

Application  for,  when  to  be  filed,  266,  269. 

Circuit  court,  case  certified  for  frial  by,  to,  121. 

Damages  in  suits  to  recover,  a  question  for  the,  627. 

Insolvent  entitled  to  trial  by,  275. 

Issues,  court  to  determine  without,  when,  278. 

submitted  to,  276. 
Offenses,  for,  right  to  trial  by,  688. 
Right  to,  absolute,  276. 

adverse  claimant  of,  281. 

confined  to  bankrupt,  269,  275. 

discretion  of  court,  not  in,  275. 

on  question  of  act  of  bankruptcy,  275. 

on  question  of  solvency,  188,  233,  275. 
Solvency  a  question  for,  233,  269. 
Special,  summoned  if  one  not  in  attendance,  276. 
United  States  laws  as  to  trials,  applicable  in  criminal  proceeding's, 

688. 
Verdict  directed,  when,  278. 

judgment  contrary  to,  276. 

setting  aside  a,  276,  278. 
Waiver  of  right,  266,  269. 

Justice  of  the  peace — 

referee,  ma,y  be,  129. 


K 

Kansas — 

Territorial  jurisdiction  and  time  of  holding  courts,  48. 

Kentucky — 

Territorial  jurisdiction  and  time  of  holding  courts,  47. 


Labor  claims — 

Priority  of,  776. 

amount,  776. 

assigned,  777. 

for  what  time,  776. 

labor  contract  can  riot  be  apportioned,  777. 

money  loaned  to  pay,  not  entitled  to,  777. 

rendered  by  minor,  777. 

where  priority  is  given  by  state  law,  778. 
What  are,  776. 


INDEX.  ,-,_ 

References  are  to  pages 

Lraclies — 

Discharge,  in  filing  application  to  set  aside,  863n. 
Law  and  equity — 

Distinguished  from  bankruptcy   124 
Jurisdiction  of  court  of  bankruptcy,  at   97 

of  circuit  courts  at,  123. 

circuit  courts  of  appeals,  875. 

U.  S.  supreme  court,  874. 

Law  and  fact — 

Conclusions  and  findings  to  be  separately  stated,  when.  884,  886. 

Lease — 

Bankrupt's  estate,  when  a  part  of  483 

Contract  to,  passes  to  trustee,  when   487 

Covenants  in,  367. 

Surety  on,  liability  of,  488. 

Trustee  takes,  subject  to  equities    487 

may  elect  not  to  take,  367,  366,  483   et  sea 

surrender  of,  by,  487.  ^' 

Legacies — 

Pass  to  trustee,  when,  490. 

Legal  proceedings — 

Act  of  bankruptcy  created  by,  when,  183   196 
Meaning  of,  198.  ' 

Letter  of  attorney — 

Necessary  for  agent,  etc.,  to  prove  claims,  323 

Necessary  for  agent,  etc.,  vote    323 

Oath  to,  administered  by  whoni,  see  sec.  20  B.  A. 

Levies — 

Obtained  against  insolvent  within  four  months,  etc.,  void,  546. 
Liability- 
Debts  which  are  affixed,  allowed,  etc     344 

Liens — 

Admiralty,  how  enforced,  610. 
Attorney,  of,  for  fees,  162. 
Common  law.  what  are,  606. 
Created  by  statute,  607. 

Created  by  suit  within   four  months  of  filing  petition    to  be  di. 
solved  by  adjudication  in  bankruptcyr55r        '  ^'^' 

If  defendant  was  insolvent,  552 
believed  to  be  insolvent.  552 

permitted  in  fraud  of  bankrupt  act    553 

trustee  subrogated  to  rights  of  holder   551 


1516  INDEX. 

References  are  to  pages. 

Tbe  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise 

Iiiems  (continued)  — 

Conveyance,  incumbrance,  etc.,  by  banlirupt  after  act  and  within 
four  months,  etc.,  to  defraud,  etc.,  void,  474. 

except  as  to  purclrasers  in  good  faith  for  consideration,  474. 

property  assets,  and  passes  to  trustee,  474. 

void  under  state  law,  void  under  bankrupt  act,  478. 

property  passes  to  trustee  to  be  recovered  for  creditors, 
478. 
Discharge,  effect  of,  on,  823. 
Dissolution  of,  551. 

Distinguished  from  priorities,  778,  779. 
Enforcement  of,  in  state  court,  746. 

in  banlvruptcy  court,  93,  746. 
Equitable,  what  are,  607. 
Exempt  property,  on,  522. 

marshaling  of,  524. 

where  enforced,  523. 
General  nature  of,  540. 
Given  or  accepted  in  good  faith  for  consideration  not  affected,  etc., 

581,    005. 
Invalid,  when,  542,  605. 
Mechanics',  G08.     (See  Mechanics'  Lien.) 

Mortgage,  581. 

Obtained  through  legal  proceedings  against  insolvent  within  four 
months,  etc.,  void,  543. 
obtained  prior  to  four  months,  547. 

property  passes  to  trustee  as  part  of  estate,  551. 
unless  court  otherwise  orders,  551. 

insolvency  essential,  550. 

court  may  order  conveyance,  651. 

bona  fide  purchaser  for  value  protected,  551. 

when  execution  has  issued,  549. 
Part  of  property  on,  744. 
Preferences,  classification  of,  as  to,  606. 
Preserved  for  benefit  of  estate,  when,  551,  615. 
Sale  of   property,   subject   to   or   free   from,   608,   612,   738,   et   seq. 

(See  Sale.) 
Trustee  subrogated  to  rights  of  creditors,  551,  606. 
May  redeem  from,  738. 
Unrecorded  claims  not,  when,  606. 
Valid,  when,  541,  605. 
When  created,   546,   547. 

determined  by  state  laws,  547. 

liife  insurance  policies — 

(See  Insurance.) 

Limitations — 

Actions  of,  on  bond  of  referee,  131. 

of,  on  bond  of  trustee,  418. 

by  or  against  trustees,  431. 
Application  for  discharge,  790. 
Claims,  time  for  proving,  383,  389, 

rights  of  infants,  etc.,  389. 
Examination  of  bankrupt,  629. 

of  third  persons,  631. 


INDEX.  ^-j7 

References  are  to  pa.'-'es. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
ot  t..e  Bankruptcy  Act  is  considered  in  this  trea  ise.  '-'•'""e 

Limitations   (continued)  — 

Indictment,  of  finding,  for  offenses,  691. 
Imformation,  of  filing,  etc.,  601. 
Prosecution,  of,  for  offenses,  691, 
Revoking  a  discharge,  on,  861. 
Statute  of,  as  a  defense,  270. 

banlvruptcy  stops  running,  383. 

debts  barred  by,  not  provable,   382.      (See  Statutes  of  Limi- 

TATIOX. ) 

Limited  partnerships — 

When  corporations,  175. 

Louisiana — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  49. 

List  of  creditors — 

Bankrupt,  involuntary,  to,  prepare  and  file  in  triplicate    213 
Voluntary,  to  prepare  and  file  in  triplicate,  213. 
Proving  claims  and  voting  at  first  meeting,  328,  329. 
Referee — 

to  prepare,  135,  145. 

to  prepare,  entitled  to  dividends,  145,  763. 
(See  also  Schedules.) 

Lost  bill  or  note — 

How  proven,  395. 

Lunatics — 

May  become  bankrupt,  when,  173. 

Proceedings  do  not  abate  when  person  becomes,  174.     (See  Insaxe 

JtERSOX.  ) 


M 

Mail- 
Expense  of  sending  notices  by,  how  paid,  152    156 
Notices  sent  by,  145. 
Penalty  envelope  may  be  used,  146. 
Referee  to  transmit  certified  copies  of  papers  by,  to  clerk  when,  146. 

Maine — 

Territorial  jurisdiction  and  time  of  holding  courts  in    50 
Majority — 

Minors,  time  to  claim  dividends,  785. 

Number  and  amount  of  creditors  necessary  for,  332 

Place  of  meeting  may  be  designated  by,  334. 

Trustees,  of  three,  to  concur,  424. 

Voter's,  what  constitutes  a,  332. 

Malicious  prosecution — 

Bankruptcy  proceedings  as  a  ground  for  suit,  for,  289. 


1518  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Banliruptcy  Act  is  considered  in  this  treatise. 

Mandamus — 

To  compel  allowance  of  appeal,  922. 

To  compel  clerk  to  produce  transcript,  935. 

To  compel  obedience  to  mandate,  950. 

Will  not  lie  to  compel  judge  to  sign  citation,  935. 

Mandate — 

Court  of  bankruptcy  bound  by,  949. 

may  decide  matters  left  open  by,  950. 
Mandamus  lies  to  compel  obedience  to,  950. 
Supreme  court,  of,  on  certiorari,  893. 
To  whom  directed,  945. 
When  issued,  949. 

Manufacturing  corporation — 

What  are,  176. 

When,  may  be  a  bankrupt,  176. 

Married  Tvonien — 

When,  may  be  bankrupts,  174. 

Marshaling  assets — 

Insolvent  partnership,  of,  306. 

Marshals — 

Bankrupt  held  for  examination  by,  when,  661. 

Compensation  of,  156. 

Conduct  bankrupt's  business  when,  251. 

Duties  of,  156. 

Expenses  of,  157. 

Fees  of,  156. 

"Officer"  includes,  156. 

Property  in  possession  of,  can  not  be  disturbed  by  process  from 

other  courts,  119. 
Return  to  writ  of  subpoena  by,   247. 
Service  of  subpoena,  244. 
Warrant  issued  to,  to  seize  property  when,  258. 

execution  of,  by  seizing  property  not  debtor's,  259. 

Maryland — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  50. 

Massachusetts — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  50. 

Master  in  chancery — • 

Referee  may  be  a,  129. 

Maturity  of  debt — 

Not  necessary  to  make  it  provable,  344. 

Mechanic's  lien — 

Created  by  stature,  608. 
Enforce,  how  to,  610. 


INDEX.  1510 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  wliere  each  section  and  clause 
of  the  Bankruptcy  Act  is  considerrd   in  this  treat  se. 

Mechanic's   lien    (continued)  — 

Jurisdiction  to  enforce,  in  court  of  bankruptcy,  610. 
Trustee  should  be  a  party  to  suit  to  enforce,  610. 
Valid,  when,  608. 

Meetings  of  creditors^ 

Appearance  of  no  creditor  and  no  assets,  332. 
Assignee  of  claim  may  vote,  when,  323. 
Attorney,  agent,  etc.,  may  vote,  when,  322. 
Bankrupt  to  attend  first,  326,  327,  651. 

examination  of,  329. 

when  not  compelled  to  attend,  651. 

expenses  of  attending,  paid  when,  651. 
Compositions,  to  consider,  710. 
Conduct  of  first,  how  to,  327. 
Court  to  call,  when,  334. 

to  fix  place  of  first,  when,  321. 
Creditors,  effect  of  disallowing  claim  of  after  voting,  326. 

entitled  to  vote,  what,  322. 

fail  to  attend  first,  327. 
Final,  called  when,  335. 

proceedings  at,  785. 
First  allowance  of  claims  at,  328. 

bankrupt  to  attend,  326,  651. 

conduct,  how  to,  327. 

court  may  fix  place,  when,  321. 

creditors  fail  to  attend,  when,  327. 

how  to  call,  321. 

notice  to  creditors,  322. 

organizing,  327. 

place  of  holding,  321. 

referee  to  preside,  328. 

time  of  holding,  321,  327. 

trustee  appointed  at,  329. 

vote  at,  who  entitled  to,  322. 
Majority  necessary  to  valid  act  of,  332. 
Notice  of  first,  322. 

of  subsequent,  334. 
Objections  to  allowance  of  claims  at  first,  325. 
Other  than  first,  when  held,  334. 
Present,  who  are  considered,  332. 
Proving  and  allowing  claims,  328. 
Referee  to  preside  at  first,  328. 

preside  at  subsequent  meetings,  need  not,  335. 
Secured  claims,  holders  of,  not  entitled  to  vote,  323,  324. 
Subsequent,  time  and  place,  334. 
Trustees  appointed  at,  329. 

to  lay  detailed  statements  before  final,  785. 
Voters  at,  322. 

Membership  in  exchanges — ■ 

Pass  to  trustee,  494. 

"Mercantile  pursuits" — 

What  are,  180. 


1520  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Michigan — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  50. 

Minnesota — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  51. 

Mileage — 

Banltrupt  entitled  to  expenses,  when,  634. 

Witnesses  before  referees,  of,  when  to  be  first  paid  or  tendered,  636, 

Military  uniforms,  arms,  etc. — 

Exempted,  513. 

Minors — 

Unclaimed  dividends,  time  for  claiming,  874. 
(See  also  Infants.) 

Misappropriation — 

Debts  created  by,  not  affected  by  discharge,  848. 
Offense  by  trustee,  of  property,  "^77. 

Misdemeanor — 

(See  Offenses.) 

Mississippi — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  52. 

Missoiiri — 

Territorial  juris^liction  and  time  of  holding  courts  in,   53. 

Moneys — 

Depositories  designated  for,  421,  759. 
Investment  of,  belonging  to  estate,  422. 
Trustee  to  collect,  deposit,  etc.,  421,  759. 
to  disbui-se,  how,  783. 

Montana — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  55. 

Mortgages — 

Actual  loan,  valid  to  extent  of,  585,  588. 
Avoided  if  invalid  under  state  law,  may  be,  591. 
Court  will  uphold  valid,  581. 
Enforced  in  state  courts,  when,  746. 

in  bankruptcy  court,  747. 
Essential  to  invalidity  of,  587. 
Exchange  of  securities,  586. 
Exempt  property,  valid  on,  592. 

Future  advances,  valid  for,  586.  ^ 

Individual  property  to  secure  firm  debt,  589. 
Preexisting  debt,  invalid  to  secure,  588. 
Preference,  when,  created  by,  581,  et  seq. 
Prior  promise,  when  valid  to  secure,  588,  585. 


INDEX.  1521 

References  are  to  paces. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  an.l  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Mortgages    (continued)  — 

Renewal  valid,  5S6.  ,r>.       ^         ^ 

Sale  of  property  subject  to  or  free  of,  738,  et  seq.     (See  Sale.) 
States,  on  property  in  two,  592. 

laws  of,  followed,  591. 
Third  person  in  trust,  588. 
Trustee  may  redeem  from,  738. 
Unidrntified  part  of  mass,  to,  588. 
Valid  if  not  made  in  four  months,  587,  589. 

to  secure  b07ia  fide  loan,  585. 

by  state  law,  must  be,  591. 

unless  reasonable  cause  to  believe  a  preference  was  intended, 
589. 
Voidable,  when,  581,  et  -eq. 

Motion — 

Dismiss  petition,  to,  265. 

Proper  method  of  objecting  to  irregularity  of  service,  250. 

Receiver,  for,  251. 

Seize  bankrupt's  property,  258. 

Set  aside  aujudication,  to,  280. 

Strike  out  m  answer,  to,  274. 

Temporary  injunction,  for,  256. 

Mutilate — 

(See  Concealing.) 

Mutual  debts  and  credits — 

Debts  acquired  by  purchase  to  be  set  off,  378. 

Meaning  of,  369. 

Must  be  in  same  right,  375. 

exceptions,  377. 

preferred  creditors,  380. 
Mutuality  required,  371. 

deposits  for  specific  purpose,  374. 

deposits  with  power  to  sell,  374. 

intention  not  necessary,  373. 

nature  need  not  be  same,  373. 

preferred  creditors,  380. 
Partnership,  372,  376. 
Payable  at  different  times,  372. 
Preferred  creditors,  380. 
Provable  debts  may  be  set  off,  368,  371,  377. 

costs,  378. 
Waiver,  381. 
What  are,  369. 

N 

National   bank — 

Involuntary  bankrupt,  can  not  be  adjudged,  169. 

Nebraska — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  55, 

Jfe  exeat — 

(See  Bankrupt,  Detention  foe  Examination.) 


1522  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Banliruptcy  Act  is  considered  in   this  treatise. 

Negotiable  instruments — 

Notice  of  dishonor,  496. 

Pass   to   trustee,   496. 

Payment  of,  a  preference,  when,  573. 

Nevada — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  55. 

New  credit — 

When  claim  for,  may  be  set-off,  380. 

Ne\ir  Hampshire — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  55. 

New  Jersey — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  55. 

New^  Mexico — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  56. 

NcTT  promise — 

Declaration  on  old  debt,  855. 

Discharged  debt  revived  by,  855. 

May  be  made  when,  856. 

May  be  made  to  whom,  857. 

Must  be  in  writing,  when,  855. 

Not  negotiable,  858. 

Pleading,  855,  858. 

What  is  necessary  to  constitute,  857. 

New^spaper — 

Notice  of  application  for  discharge  published  in,  789. 
Notice  of  first  creditors'  meeting  published  in,  322. 

New^  trustee — 

When  appointed,  142,  145,  146,  866. 

Sew  York — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  56. 

Notes,  promissory,  etc. — 

Pass  to  trustee,  496. 

North.   Carolina — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  57. 

North  Dakota — 

Territorial  jurisdiction  and  time  of  holding  courts,  58. 

Notary — 

Attorney  may  act  as,  158. 


INDEX.  1523 

References  are  to  pages. 

Tbe  Analytical  Table  preceding  tliis  Index  shows  where  each  section  and  clause 
of  the  Banlii-iiptcy  Act  is  considered  in  this  treatise.  ^"^"^e 

Notice — 

Adjudication  in  voluntary  cases,  none  before,  219. 
Amendment  of,  not  required,  221. 
Application  for  receiver,  253. 
Application  for  removal  of  trustee,  425. 
Arbitrate  or  compromise  of  bearing  of  application  to    731 
Attorney,  to,  160. 

Bankrupt,  to,  of  his  examination,  634. 

Composition,  certified  copy  of  order  confirming  imparts,  when    728 
Creditors,  to   (see  58a  of  act).  .  ,        . 

compromise,  of  hearing  of  petition  to,  731,  757. 
composition,  of  meetings  to  consider  terms  of,  710 
of  hearing  of  objections  to,  715. 
petition  to  set  aside,  729. 
discharge,  of  application  for,  by  mail,  789. 

publication  of  order  of  notice  of,  789. 
dismissal  of  involuntary  petition,  287. 

of  voluntary  petition,  222. 
dividend,  declaration  of,  760,  763. 

payment  of,  760. 
examinations  of  bankrupt,  635. 

of  application  for,  not  required,  634. 
of  witnesses,  not  required,  635. 
final  meeting,  760. 
final  reports  and  closing  estate,  785. 
first  creditors'  meeting,  of,  322. 
meeting,  of  first,  322. 

subsequent  to  first,  334. 
to  consider  terms  of  composition,  710. 
publication  of,  of  first  meeting,  322. 
redeem  property,  of  application  to,  739. 
referees  to  give,  145. 
sale  of  disputed  property,  749. 
encumbered  property,  743. 
perishable  property,  not  required,  749. 
unencumbered  property,  736. 
Depositions,  of  taking,  412. 
Discharge,  of  application  for,  788. 

does  not  release  from  unscheduled  claims  unless  creditor  had, 

petition,  of,  to  set  aside,  864. 
Dishonor  of  negotiable  instruments,  496 
Piling  petition,  how  far,  436,  85. 
Given  by  referee,  145. 
Hearing  of,  275. 

How  far  bankruptcy  proceedings  are,  85    436 
Newspaper    of  application  for  discharge  published  in,  789 

of  first  meeting  published  in,  322 
Partner  to,  of  petition,  301,  304 
Petition,  how  far,  85,  436. 
Petition  involuntary,  not  dismissed  without    287 

voluntary,  not  dismissed  without    222 
Preference  was  intended,  what  is,  561.' 
Protest,  of,  whom  given,  496. 
Reasonable,  what  is,  635. 
Receiver,  application  for   25C 


3o. 


1524  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Notice   (continued)  — 

Re-examination  of  claim,  of,  409. 

Referee  gives,  by  mail,  145. 

Sales,  generally,  737,  739,  741,  749,  750. 

of  pledge  by  pledgee,  604. 
Service,  304. 
Trial,  of,  275. 

Trustee's   bond,    certified   copy   of   order   approving,   recorded   im- 
parts, 437. 
Trustee,  of  his  appointment,  333. 

of  his  acceptance,  333. 

of  application  for  removal,  425. 
Witnesses,  to,  for  examination,  635. 

Number — 

Arbitrators,   of,    732. 

Creditors,  of,  who  may  file  involuntary  petition,  226,  241 

employees  can  not  be  counted,  229. 

nor  relatives  within  third  degree,  229. 

necessary  for  majority  at  creditors'  meeting,  332. 
Referees,  of,  to  be  appointed,  128. 
Trustees,  of,  415. 


o. 

Oath — 

Administered  by  whom,  generally,  211,  239,  395, 

by  referee,  137. 
Affirmation  included  in,  211. 
Answer  to,  271. 
Attorney,  verification  by,  158. 
Bankrupt  to  make,  to  schedule  of  property,  list  of  creditors  and 

claims  for  exemptions,  filed,  etc.,  211. 
Claim  founded  on  lost  writing,  proof  of,  under,  395. 

presenting  false,  under,  penalty,  685. 
Creditors'  petition,  to,  239. 

by  whom  made,  239. 
Debtor's  petition,  to,  211. 

False,  penalty  for  making,  685,     (See  Offenses.) 
Proof  of  claims,  to,  391. 
Referee,  of,  130. 

Schedule  to  be  made  under,  212. 
Trustee's  final  report  to  be  under,  761,  785. 
Verification  by  attorney,  158,  239. 

of  answer,  271. 

of  petition,  239. 

petition  for  discharge  not  necessary,  788. 

specifications  in  opposition  to  discharge,  798. 

Obedience  of  orders — 

(See   Contempt.) 

Objections — 

Adjudication,  how  plead,  against,  264. 
Claims,  to,  proof  of,  406. 
Confirming  compositions,  715. 


INDEX.  1525 

References  are  to  pases. 

Tte  Analytical  Table  preceding  tliis  Index  shows  wliere  each  section  and  clause 
of  the  Banliruptcy  Act  is  considered  in  this  treatise. 

Objections   (continued)  — 

Discharge,  how  to  make,  to  granting,  793. 

grounds  of,  to  granting,  800,  et  seq. 
Referee  must  note,  in  dispositions,  638. 
Sale,  how  and  when  to  raise,  to,  754. 
Service  of  subpoena,  to  make,  to,  250. 

Obligation  of  contracts — 

Congress  may  modify,  18. 
States  can  not  impair,  21. 

Gffenses — 

Bankrupt  act,  under,  677. 
Concealing  property,  678. 

friend,  payment  to,  681. 

husband,  by,  680. 

imputed,  not,  680. 

includes  what,  678. 

knowingly  and  fraudulently,  must  be,  678. 

omission  from  schedules,  680. 

penalty.    683. 

proof  of,  681. 

property  which  passes  to  trustee,  must  be,  of,  680. 

receivership,  after,  680. 

relatives,  payment  of  debts  to,  681. 

secret  trust,  679. 

shrinkage  of  assets  unexplained,  681. 

transfer,  not  a,  679. 
Contempt,    692. 

acts  which  constitute  a,  692,  et  seq. 

answer  of  contemnor,  701. 

attorney,  by,  160,  697. 

courts,  power  of,  to  punish  for,  692,  696. 
committed  in  another  court,  704. 
power  to  release  contemnor,  705. 

hearing,   702. 

nature  of  proceedings,  698. 

petition  or  motion  for  commitment,  allegations  of,  699. 

practice  pleading,  etc.,  699. 

punishment  for,  703. 

relief  by  habeas  corpus,  705.' 

review,  705. 
Embezzlement,    677. 

penalty  for,  678. 
Extorting  money  for  forbearing  to  act,  686. 

punishment  for,  687. 
False  oath  or  account,  making,  685,  683. 

evidence  of,  685,  683. 

examination  on,  by  bankrupt.  683. 
*  indictment,  allegations  in,  683,  684. 

knowingly  made,  must  be,  683. 

penalty  for,  685. 

who  may  be  guilty  of,  683. 
False  claims,  presenting  under,  685. 

penalty  for,  686. 


1526  INDEX. 

References  a.re  to  pages. 

The  Analytical  Table  precedins  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Offenses   (continued)  — 

False  claims  (continued)  — 

using  in  compositions,  685. 

who  may  commit,  685. 
Indictment,  averments  in,  689. 
Information,  688. 

Jurisdiction  to  pimish  for,  what  court  has,  687. 
Jury  trial,  right  of,  688. 
Misappropriation  by  trustee,  677. 

penalty  for,  678. 
Misdemeanors,  are  not  felonies,  but,  688. 
Obtaining  goods  by  false  pretenses,  677. 
Practice  and  pleading  to  punish  for,  688. 

court  which  may  entertain  proceedings,  687. 

indictments,  averments  in,  689. 

information,  when  employed,  688. 

time  for  instituting  criminal  proceedings,  691.  « 
Punished,  who  are  liable  to  be,  690. 
Receiving  property  from  bankrupt,  686. 

penalty  for,  686. 
Referee,  acting  when  interested,  149,  687. 

purchasing  property  of  bankrupt,  149,  687. 

refusing  to  permit  inspection  of  accounts,  149,  687. 
Trustee  refusing,  etc.,  inspection  of  accounts,  687. 

misappropriation  by,  677. 
United  States  laws  applicable  as  to  jury  trials  for,  688. 
(See  also  Crimes.) 

Offer- 
Composition,  of,  when  made,  708. 

Office- 
Referee  can  not  hold  any  other,  except,  etc.,  129. 
must  have,  in,  or  be  resident  of  district,  130. 
term  of,  128. 
Trustee  must  have,  in,  or  be  resident  of  district,  416. 

Officers — 

Attorney-General,  158. 

Clerk,  153. 

Debts  of  an,  not  released  by  discharge,  when,  847. 

Definition  of,  158. 

Marshal,   156. 

Oaths,  authorized  to  administer,  211,  395,  Sec.  20  B.  A. 

Receiver,  158. 

Referee,   128. 

Trustee,  415. 

Official    bonds — 

(See  Bonds.) 

Official  trustee — 

Can  not  be  appointed,  416. 

Ohio- 
Territorial  jurisdiction  and  time  of  holding  courts  in,  59. 


INDEX.  2527 

References  are  to  pages. 

The  Analytical  Table  preceding  tliis  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Oklahoma — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  60, 

Onerous  property — 

Trustee  not  bound  to  take,  443,  483,  495,  499,  508. 

Open  account — 

May  be  proved  against  estate,  360. 

Operation  of  lawr — 

Title  of  bankrupt  vests  in  trustee  by,  43o. 

Opposition — 

Composition,  to  confirmation  of,  715. 
Discharge,  to  granting,  793. 
grounds  of,  800. 

Order — 

Adjudication,  of,  on  debtor's  petition,  218. 

on  creditor's  petition,  278. 

conclusiveness  of,  279. 
Certified  copies  of,  as  evidence,  787. 

approving  trustee's  bond,  437. 

confirming,  etc.,  composition,  724,  728. 
Composition,  of  confirmation  of  a,  723. 
Court  to  enforce,  75,  652. 

what  is  an,  of,  652. 

when  a  person  is  subject  to,  of,  652. 
Discharge,  denying  a,  821. 

granting  a,  821. 
Examination,  for  an,  632. 
Procedure,  as  to.  United  States  supreme  court  to  prescribe.     (See 

General  Orders.) 
Prisoner,  of  court  to  release,  668. 
Proceedings,  of,  when  petition  is  filed  in  different  districts,  272. 

when  several  petitions  are  filed  in  same  district,  273. 
Protect,  to,  the  estate  pendente  lite,  250. 

state  officers  in  releasing  prisoner,  668. 
Reference,  of,  281. 
Referees,  of,  134. 

subject  to  review  by  judge,  135. 
Setting  aside  composition,  728. 

discharge,   861. 

preference  or  conveyance,  626. 
Transferring  cases  in  bankruptcy,  272,  302. 
Trustee,  vesting  title  in,  437. 

for  removal  of,  426. 
Warrant  for  removal  of  bankrupt  to  another  district,  673,  674. 

Orders  in  bankruptcy — 

(See  General  Orders.) 

Oregon — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  61. 


1528  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered   in  this  treatise. 

P. 

Papers — 

Bankrupt  to  execute  and  deliver,  6-54. 

Certified  copies  of,  before  referee  as  evidence,  136. 

Penalty  for  refusing  inspection  of,  by  referee  and  trustee,  149,  687. 

Referees  to  receive  from  clerks,  146,  154. 

to  endorse,  how,  147. 

secure  return  of,  146,  148. 

transmit  to  clerks,  146,  148. 
to  judge,  145. 
Trustee,  of,  open  to  inspection,  149, 

pass  to,  what,  462. 

Parties — 

Additional,  courts  may  substitute  in  bankruptcy  proceedings,   75. 

Appeal,  to  an,  in  bankruptcy,  924. 

Creditors  may  appear  to  become,  261. 

Discharge,  "parties  in  interest"  may  oppose  a,  791. 

Evidenc^  to  be  preserved  by  referee  on  application  of,  146. 

Referee  to  furnish  information  to,  145. 

Trustee  to  furnish  information  to,  421. 

Partners — 

Acts  of  bankruptcy  by,  182. 
Administration  of  property  of,  306. 
Contesting  voluntary  petition,  319. 
Discharge  on,  effect  of  a,  318. 

of  one,  effect  on  others,  850. 
Petition  by  or  against  individual,  293. 
Proceedings  peculiar  to,  292. 

Rights  of  partner  who  refuses  to  join  in  petition,  301. 
Surviving,  may  be  adjudged  bankrupt,  297. 
(See  Partnerships.) 
Partner  sMp  s — 

Acts  of  bankruptcy  by,  182,  238,  296,  298. 

by  less  than  all  the  partners,  299. 
Adjudication,  279,  304,  305. 
Administration  of  estate  of,  306. 

general  rule  waived,  when,   309. 
when  all  are  not  bankrupt,  293,  306. 
Bankrupt,  when,  may  be  adjudged,  292,  296. 
may  be  adjudged  involuntary,  168. 
may  be  adjudged  voluntary,  168. 
not  after  death  of  partner,  297. 
surviving  partner  may  be  adjudged,  297. 
Books  of,  destroyed,  effect  of,  806. 

Business,  settlement  of  when  all  are  not  bankrupts,  2y4. 
Claims,  proof  of,  against  a,  394. 
proof  of,  by  a,  293,  385. 

by  a  solvent  partner  against,  340. 
of,  against  individual  estate,  341. 
Commence  proceedings  by  or  against,  how  to,  298. 
Composition,  who  may  vote  on,  offered  by,  710. 
Creditors  of,  appoint  trustee,  323.       ^.   .^     ,      ^  ^       „         ,    ^^   ooo 
when,  may  vote  for  trustee  of  individual  estate  of  paitner,  6Z6. 


INDEX.  1529 

References  are  to  pages. 

The  Analytical  Table  preceding  tliis  Index  shows  where  each  s^ection  and  clause 
ui  [ue  Bankruptcy  Act  is  considered  in  this  treatise. 

Partnerships    (continued)  — 

Death  of  partner  before  bankruptcy,  297. 
Debts  of,  what  are,  312. 

how   paid,   307. 

joint  and  separate,  315. 
Discharge,  from  what  debts,  318. 

effect  of,  318. 

of  one  partner,  effect  of,  850. 
Dissolution,  may  be  adjudged  bankrupt  after,  297. 
Equitable  principles  followed,  292. 
Estates,  firm  and  individual,  306. 

individual,  partnership  creditors  sharing,  307,  762. 
Exemptions  in  property  of,  538. 
Expenses  of  administration,  306. 

Firm  creditors  may  share  in  individual  estate,  when,  307,  762. 
Firm  property,  what  is,  310. 
In  general,    292. 
Individual,  petition  by  or  against,  293. 

discharge  in,  effect  of,  294. 

partnership  assets  only  administered,  294,  293. 

partnership  creditor  may  join,  295. 

resisted  by  other  partners,  may  be,  301. 

when  no  firm  assets,  295. 
Individual  property,  what  is,  310. 
Infancy  of  one  partner,  effect  of,  298. 
Insolvent,  when,  187. 

Jurisdiction  of  one  partner  sufficient,  299. 
Limited,  when  corporation,  175. 
Mutual  debts  and  credits,  377. 
Payment  of  debts  of,  306. 
Petition  against,  by  creditors,  299. 

by  all  partners,  299. 

by  less  than  all  partners,  219,  293,  300. 

filed  by  partners,  292. 

filed  in  what  court,  302. 

filed  in  several  districts,  302. 

form  of,   302. 

must  charge  what  act  of  bankruptcy,  238. 

partners  should  all  be  named  in,  301. 

when  partner  will  not  join  in,  301. 
Payment  of  debts  of,  order  of,  307. 
Proceedings  peculiar  to,  292. 
Proof  of  claim  against  a,  394. 

by  a,   293,   385. 
Reference,  304. 
Schedules,  303. 

Settlement  of  business  when  all  are  not  bankrupts,  294. 
Several  adjudged  bankrupt,  307. 
Surplus  of   property,   307. 

Surviving  partner  may  be  adjudged  a  bankrupt,  297. 
Transfer  of  cases  against  different  members  of,  302. 
Trustee,  accounts  of,   300. 

administers  firm  and  individual  estate,  30G. 

appointed  by  partnership  creditors,  293,  306. 

who  may  vote  for.  323. 
What  is  firm  and  individual  property,  310. 


1530  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered   in  this  treatise. 

Patents — 

Claims  for  infringement  provable,  when,  382. 
Trustee  invested  with  title  of,  37S. 

Payment — 

Attorneys,  to,  in  contemplation  of  insolvency,  re-examination  of,  575. 
Debts,  of,  which  have  priority,  7G6. 

order  of,  767,  et  seq. 
Defense,  as  a,  to  petition  against  debtor,  271. 
Dividends,  of,  on  allowed  claims,  783. 

notice  to  creditors,  of,  760,  763. 

unclaimed  dividends,  784. 
Preference  created  by,  573,  et  seq. 

Penalties — 

Concealing  property,   683. 
Debts,  339. 

due  as,  how  far  allowed,  782. 
Document,  for  secreting  or  destroying,  678. 
Embezzlement,  677. 
Extorting  money,  etc.,  687. 
False  oath,  making,  685. 
False  claims,  presenting,  686. 

Receiving  property  from  bankrupt,  to  defeat  act,  686. 
Refusing  inspection  of  books  by  referee  or  trustee,  149,  687. 
(See  also  Opfenses.) 

Pennsylvania — 

Jurisdiction  and  time  of  holding  courts  in,  61. 

Pensions — 

Do  not  pass  to  trustee,  496. 

Perishable   property — 

May  be  sold  without  notice  to  creditors,  749. 

Perjury — 

Jurisdiction  of  state  court,  640. 

Personal  property — ■ 

Not  to  be  sold  for  less  than  75  per  cent,  of  appraised  value,  753, 

755. 
Schedule  of,  215. 
Passes  to  trustee,  479,  490. 

Persons — 

Definition  of,  168. 

Involuntary  bankrupts,  who  may  be  adjudged,  168. 

Voluntary  bankrupts,  who  may  be  adjudged,  168. 

Petition — 

Act  of  bankruptcy,  filing  a,  202. 
Allegations  of  a,  169n,  175,  236. 
Amendment  of,  221,  237,  266. 


INDEX.  1531 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Petition  (continued)  — 
Appeal,  for  an,  928. 
Arrest  of  bankrupt,  for,  661. 

Bar  to  subsequent  proceedings  in  state  court,  not,  94. 
Composition,  to  set  aside,  728. 
Compromise  debts,  to,  757. 
Creditor's  petition  against  debtor,  235. 

against  whom  filed,  230. 

by  whom  filed,  224. 

court  in  which  filed,  234. 

number  of  copies  filed,  240. 

number  of,  may  be  filed,  236. 

service  of,  242. 

time  for  filing,  240. 
/hat  to  contain,  169»,  175,  236. 

where  filed,  234. 
•Debtor's,  211. 

amended  when  may  be,  221. 

by  whom  filed,  206. 

court  in  which  filed,  208. 

filing  of,  and  schedule,  216. 
Discharge,  for,  788. 
Dismissal  of — 

involuntary,  287. 

voluntary,  222. 
Filed  against  whom,  230. 

how  to  file,  240. 

In  what  court,  208. 

number  of  copies  to  be,  216. 

where,  216. 
Involuntary,  must  state  what,  169??,  175. 
Multifarious,  238. 

Partnership,  by  and  against,  219,  292,  et  seq. 
Procedure  when  filed  in  different  districts,  272. 

when  several,  filed  in  same  district,  273. 
Redeem,  to,  encumbered  property,  738. 
Rehearing  in  appellate  court,  945.   . 
Sale,  for,  737,  749. 
Service,  242,  248. 
Summons  returnable  when,  243. 
Supervisory,  in  C.  C.  A.,  907. 
To  review  ruling  of  referee,  141. 

what  to  contain,  142. 

where  filed,  141. 
Two  against  same  debtor,  235,  272,  273. 

in  partnership  proceedings,  302. 
Verification,  239. 
Voluntary,  211. 
Who  may  join  in,  241. 


Petitioners — 

Bond,  by,  on  taking  property,  258. 
Who  may  be,  in  involuntary  cases,  224. 
Who  may  be,  in  voluntary  cases,  206. 


1532  IN^^^- 

Ueferences  are  to  pag.s. 

The   \nalvtical  Table  pt-ecedins  this  Index  shows  whore  rnrh  section  and  clause 
The  AnaiMicai^  ^^^^  Bankruptcy  Act  is  considered   in  this  tre::tise. 

Place — 

Business  of,  meaning  of,  209.. 
Courts  of,  liolding,  33,  et  seq. 
Creditors'  meeting,  of,  321. 

when  banlvrupt  required  to  attend,  326,  327,  G51. 

Pleading  and  practice — 

Appeal  at  law  and  in  equity,  8G7. 

banlvruptcy  in,  to  circuit  courts  of  appeal,  911. 
to  territorial  courts,  898. 
to  U.  S.  supreme  court,  884. 
bond,  930. 
citation,  933. 
death  of  party,  945. 
how  to  take  an,  922. 
mandate  issued  when,  842. 
parties  to  an,  949. 

perfecting  an,  and  filing  record,  940. 
petition,  928. 

proceedings  after,  taken,  942. 
record  on,  935. 

amendment  of,  938. 
■supervisory  proceedings,  900,  906. 
time  within  which  to  take  an,  919. 
Appellate  courts,  867. 
Arbitration  of  controversies,  730. 
Arrest  of  bankrupt,  on,  661. 
Compositions,  706. 

application  for  confirmation,  712. 
bankrupt  may  offer  terms  of,  when,  708. 
confirmation  of,  effect  of,  when,  724. 
objections  to  a,  715. 
order  of,  723. 
proceedings  after,  727. 
creditors'  meeting  to  consider  terms,  710. 
hearing  of  objections  to  confirmation,  722. 
objections,  715. 
order  of  confirmation,  723. 

effect  of,  724. 
pleaded  in  bar,  must  be,  726. 
proceedings  after  confirmation,  727. 
setting  aside  a,  728. 
Criminal    proceedings,   in,   688. 
Discharge — 

application  for,  788. 

when  and  where  filed,  788,  790. 
grounds  for  opposing  a,  800,  et  seq. 
hearing  of  objections,  816. 
objections  to,  how  made,  793. 
pleading  a,  to  suit  on  debt,  858. 
to  a  specification,  791,  815. 
revoke  a,  how  and  when  to,  864. 

effect  of,  866. 
specification  of  objections,  796. 
pleading  to,  791,  815. 


INDEX.  1533 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Pleading  and  practice    (continued)  — 
Discharge  (continued)  — 

waiver  of,  by  new  promise,  855,  858. 
who  may  plead,  859. 
Distribution  of  the  estate,  759. 

dividends,  declaration  of,  759,  763. 
manner  of  paying,  783. 
unclaimed,  784. 
order  of  payment  of  claims,  7G7,  et  seq. 
settlement  of  the  estate,  785. 
Equity  practice,  rules  of  applied,  274n. 

Evidence  against  bankrupt  not  used  in  criminal  proceedings    643 
answers  of  witnesses  not  satisfactory,  639. 
burden  of  proof,  habeas  corpus  proceedings,  6G7. 
involuntary  proceedings,  276,  277. 
suits  to  recover  property,  624. 
compulsory  attendance  of  witnesses,  138. 
depositions  in  involuntary  cases,  278. 
notice  of  taking,  412. 
prove  claims  to,  394. 
right  to  take,  278,  411,  647. 
manner  of  introducing,  277. 
referees,  how  taken  before,  637. 
power  to  take,  137. 
preserved  by,  when,  146. 
record  of,  as,  787. 
Forms  prescribed  by  supreme  court,  953. 
Fraud,  where  a  discharge  is  set  up  as  a  defense   815 
Involuntary  cases,  224. 
adjudication,  278. 
against  whom  petition  filed,  230. 
amendments,  237,  266,  283. 
answer,  266. 

bankrupt  to  file  list  of  creditors  and  of  property,  212   263 
default  proceedings  on,  282. 
deposit  for  costs,  240. 
dismissing  proceedings,  287. 
hearing  on  trial,  274. 
order  of  adjudication,  278. 

of  proceedings,  272. 
petition,  involuntary,  235. 

allegations  necessary,  169n,  175,  235. 
dismissal  of,  287. 
filed  where,  234. 
multifarious,  238. 
pleading  to,  264. 
service  of,  244. 
verification  of,  239. 
pleading  to  a  petition,  264. 
proceeding  subsequent  to  adjudication,  291. 
reference,  order  of,  281. 
referee,  case  referred  to,  132,  281. 
reply,   273. 
seizure  of  debtor's  property,  258. 


1534  ^^^^^- 

References  are  to  pag  s. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
iue  Anai>vica^^  ^^^  Bankruptcy  Act  is  considered  m  this  treatise. 

Pleading  and  practice    (continued)  — 
Involuntary  cases   (continued)  — 

service  of  subpoena  and  petition,  244. 
return  of,  247. 

subpoena,  242. 

time  to  plead,  264. 

verification  of  petition,  238. 
Issue,  how  made,  2GG. 

none  permitted  on  petition  to  supervise,  910. 
Jury  trial.     (See  Jury.) 
Limitations,  statute  of,  431. 

Merits,  pleading  to,  waives  formal  defects,  266. 
Multifariousness,  239. 
New  promise,  after  discharge,  855,  801. 
Notices.     (See  Notice.) 
Oaths  and  aifirmations.     (See  Oatiir.) 
Orders  of  reference,  136,  218,  281. 

protect,  to,  estate  pending  adjudication,   2o0. 

referees,  subject  to  review,  135. 
Petition,  involuntary,  must  contain  what  allegations,  169n,  175. 
Rules,  orders,  etc.,  prescribed  by  supreme  court,  953. 
Suits  by  or  against  trustees,  427,  613,  757. 
Voluntary  cases,  206. 

amendments,  221. 

court  in  which  to  file,  208. 

dismissing  proceedings,  222. 

deposit  for  costs,  217. 

how  and  when  to  file  petition,  etc.,  216. 

order  of  adjudication  and  reference,  218. 

petition,  211. 
filing,  216. 
verification   of,   211. 

proceedings  subsequent  to  adjudication,  223. 

schedules,  212. 
filing,  216. 

Pledge — 

Contract  for,  not  sufficient,  599. 

Fraudulent,  when  not,  598. 

Enforcement  of,  598. 

Negotiable  paper,  redelivery  for  collection,  602. 

Possession  necessary,  600. 

Prior  promise,  given  in  pursuance  of,  599. 

Preference,  when,  605. 

Redeemed  by  trustee,  603. 

Rights  of  pledgee  and  trustee,  602. 

Symbolical  delivery,  599. 

Plenary   suits — 

(See  Jurisdiction.) 

Porto   Rico — 

Territorial  jurisdictions  and  time  of  holding  courts,  62. 


INDEX.  1535 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  tlie   Banl<riiptcy  Act  is  considered   in  this  treatise. 

Policies  of  insurance — 

When  pass  to  trustee,  497,  et  seq. 
(See  also   Insurance.) 

Possession — 

Bankruptcy  court,  of,  can  not  be  disturbed  by  process  from  other 

court,  119. 
Bankrupt's  preperty,  of,  pending  hearing,  etc.,  258. 

petitioner  to  give  bond,  258. 

power  of  bankrupt  court  to  take,  114. 

when  bankrupt  is  neglecting  property,  etc.,  258. 
petitioner  to  give  bond  of  indemnity,  258. 
bankrupt  to  give  bond  to  release,  261. 
Exempt  property  of,  by  trustee,  520. 
Referee  to  take,  when,  133,  139. 
Trustee  to  take,  of  bankrupt's  property,  440. 

Powrers  of  appointment — 

Pass  to  and  vest  in  trustee,  when,  464. 

Poiwer  of  attorney — 

Must  be  written,  when,  159,  323. 

PoTvers  of  congress — 

(See  Congress.) 

Povrers  of  courts — 

(See  Jurisdiction.) 

Poivers    of    referee — 

(See  Referee.) 

Powers  tif  trustee — 

(See  Trustee.) 

Preference — 

As  an  act  of  bankruptcy — 

created  by  the  debtor,  192. 

examples,  194. 

intent  necessary,  193. 

voidable  by  trustee,  need  not  be,  193. 

what  necessary,  192. 
created  by  legal  proceedings,  196. 

insolvency  necessary,  196,  197. 

intent  not  necessary,  196. 

legal  proceedings,  what  are,  198. 

must  be  acquired,  when,  199. 

suffered  or  permitted,  197. 

voidable  by  trustee,  need  not  be,  198. 

what  constitutes,  196. 
Costs  of  preserving  estate,  payment  of  not  avoidable,  541. 
of  administration,  payment  of  not  avoidable,  541. 

when  committed.  196. 


1536  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Preference    (continued)  — 

Create,  what  is  necessary  to,  472. 

Creditors,  of,  residing  in  United  States,  765w. 

non-residents,  555. 
Filing  fees,  payment  of  not  avoidable,  541. 
Foreigner,  given  to  a,  555. 
Four  monttis,  must  be  witliin,  546. 

when  within,  547.  , 

General  nature  of,  540. 
Given  within  four  months,  546. 
Insolvent,  must  be  by,  550. 
Intent  of  transferee^  559. 
Insolvency  essential,  550. 
Invalid,  when,  542. 
Judgments,  attachments,  etc.,  543. 

attachments,  levies,  etc.,  543. 

obtained  prior  to  four  months,  541. 

obtained  within  four  months,  543. 
Lien,  as  a.  605. 

attaches  when  a,  547. 

court  may  preserve  a  judicial,  when,  551. 

valid,  541. 
Mortgage,  when  a,  581.     (See  Mortgages.) 
Payment,  when  a.  573,  et  seg. 
Pledge,  when  a,  598. 

Property  transferred  to  prefer  creditors  passes  to  trustee,  471. 
"Reasonable  cause  to  believe,"  552h.  5G0. 
Return  of  goods  purchased  on  credit,  580. 
Sale,  when  a,  579,  et  seq. 
Suits  to  set  aside  a,  613. 

bankruptcy  proceedings,  not,  618. 

burden  of  proof,  G23,  624. 

bona  fide  purchaser  protected,  626,  625. 

damages,  where  property  has  been  sold,  627. 

decree,  626. 

demand,  not  necessary,  619. 

failure  to  contest  claim,  not  a  bar,  620. 

in  what  court,  616. 

in  what  district,  617. 

order,  626. 

order  of  bankruptcy  court,  trustee  need  not  obtain,  619. 

petition,  allegations  in,  623. 

pleading  and  practice,  618. 

plenary,  are,  618. 

trustee,    must   bring,   614,    617. 

trustee  represents  general  creditors,  614. 

trustee  subrogated  to  right  of  creditors,  615. 
Surrender,  what  constitutes  a,  400. 

when  necessary,  397. 

whether  it  must  be  voluntary,   402. 
Taxes,  payment  of,  not  a  voidable,  541. 
Time  begins  to  run,  when.  590. 

four  months'  limit,  587. 
Transfers  by,  553. 


INDEX.  1537 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this   treatise. 

Preference  (continued)  — 
Transfers  (continued)  — 

to  one  who  has  cause  to  believe  it  a,  560. 
voluntary  or  by  threat,  555. 
Valid,  when,  541. 
Voidable,  when,   542. 
Voluntary  or  by  threat,  55. 
Wages,  payment  of  not  a  voidable,  541. 

Preferred  creditors — 

Claims  of,  not  allowed  unless,  etc.,  397. 

Prove  claims,  388. 

Set-off  of  further  credit  by,  380. 

When  preference  voidable,  542. 

Who  are,  540,  et  sea. 

(See  also  Creditors.) 

Preliminary  injunction — 

To  protect  the  estate,  250,  256. 
(See  Injunction.) 

Presumption — 

As  to  solvency,  189,  558. 

As  to  intent  to  prefer,  189. 

As  to  fraud  in  compositions,  721. 

Knowledge  of  attorney,  from,  865. 

Priority — 

Debts  which  have,  766,  et  seq.     (See  Debts.) 

Principal   place   of  business — 

W^hat  is,  209. 

Procedure — 

United  States  supreme  court  to  prescribe  rules,  etc.,  853. 
(See  Pleading  and  Practice.) 

Proceedings — 

Dismissal  of,  222,  287. 

Nature  of,  85. 

Subsequent  to  adjudication,  223,  291,  321. 

To  recover  property  by  trustee,  613,  et  seq. 

To  recover  property  from  a  trustee  by  a  claimant,  455,  et  seq. 

When  commenced,  85. 

Where  instituted,  208,  234. 

Process — 

Bankrupt  exempt  from  arrest  upon  civil,  655. 
Issued  by  clerk  unde"  seal  of  court,  954. 
Service  of.  242. 
(See  Writs.) 

Proof,  burden  of — 

Bona  fide  purchaser,  625. 
Confirming  compositions,  717. 


1538  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the   Bankruptcy  Act  is  considered   in   this  treatise. 

Proof,  burden  of   (continued)  — 
Discharge,  opposing,  818. 
Exempt  property,  534. 
In  contested  cases,  406,  407,  412. 
Habeas  corpus,  in,  667. 
On  bankrupt,  277. 
Of  domicile,  517. 
On  petitioning  creditors,  276. 
Partnership  assets,  of,  309. 
Preferences  in  suits  to  set  aside,  558,  623. 
Solvency,  as  to,  185,  276,  558. 

Proof  of  claim — 

Administrators,  executors,  receivers,  etc.,  by,  387. 
Affidavit   in,   what  to   contain,    392. 
Allowance  of  claims,  326,  406. 

burden  of  proof,  407. 

defective,  406. 

distinguished  from  proof,  399. 

final,  review  of,  413. 

fraudulent,  412. 

objections,  when  usually  made,  408. 

objections,  who  may  make,  407, 
Amendment  of,  401,  403. 
Appearance  to,  effect  of,  263. 
Assignee  of  claim,  by,  387,  394. 

for  creditors,  by,  386. 
Attorney  may  act  as  notary,  158. 

may  make,  385. 
Change  of.  405. 

Consideration  to  be  stated,  392. 
Contingent  claims,  388,  763. 
Corporation,  by  a,  385. 
Filing,  402. 
Form  of  proof,  392. 
Founded  on  a  writing,  395. 
How  to  make,  391. 

assignee,  by,  387,  394. 

attorney  or  agent,  by,  385. 

consideration,   392. 

exhibits,  395. 

forms  of,  392. 

founded  on  instrument  in  writing,  395. 

founded  on  open  account,  394. 

partnership  against,  394. 

payments  must  be  stated,  392. 

security  must  be  stated,  394. 

signed  by  creditor,  must  be,  391,  395. 

under  oath,  must  be,  391,  395. 
Necessity  of,  384. 
Notary,  attorney  may  act  as,  158. 
Oath  to,  391. 

Objections  to  allowance,  406. 
Open  account,  in,  394. 
Partners  by,  385. 


INDEX.  ]5;39 

References  are  to  pases. 

The  Analytical  Table  preceding-  tliis  Index  shows  where  each  section  and  clause 
of  the   Liankruptcj'  Act  is  considered   in  this  treatise. 

Proof  of  claim,  (continued)  — 
Partnership,  against  a,  394. 

by  a.  293,  385. 
Petitioning  creditors  must  make,  384. 
Preferred  creditors  must  malie,  388. 

how  to  malve,  by,  397. 

surrender  of  preference,  399. 

surrender,  what  constitutes,  400. 
Receivers,  by.  387. 

Re-examination  of,  409.     (See  Claims.) 
Review  of  final  action  on,  413. 
Scheduling  not  suflBcient,  384. 
Secured  creditors  must  make,  384,  396. 

amendment,  401. 

how  to  make,  by,  396,  et  seq.,  Gil. 
Solvent  partner  by,  340. 

surety,  by,  for  principal,  353,  et  seq. 
Time  within,  may  be  made,  388. 

by  person  prevented  by  fraud,  390. 
Trustee  of  bankrupt,  by,  387,  423. 
United  States,  by,  388. 
Who  may  prove,  385. 

examples,  385. 
Withdrawal,  403. 
(See  Claims,  Creditoes.) 

Property — 

After-acquired,  what  is,  505. 

Concealing,  embezzling,  etc.,  penalty  for,  677,  et  seq. 

Custody,  in,  of  court  other  than  court  of  bankruptcy,  118. 

can  not  be  taken  by  process  from  another  court,  115. 
Encumbered  trustee  not  bound  to  take,  443. 
Foreign  countries  conveyed  in,  by  bankrupt,  437,  461. 

personal  in,  461. 
Individual,  what  is,  310. 
Insured,  may  be  ordered,  141,  254. 

Judgments  in  actions  for  willful  injuries  to,  not  released,  etc.,  838. 
Partnership  of.  administration  of,  306. 
Partnership,  what  is,  310. 
Passes  to  trustee,  what,  435,  et  seq..  460. 
Possession,  of,  of  bankrupt,  when  taken  by  creditors,  258. 

when  taken  by  referee,  133. 

when  taken  by  judge,  139. 

when  taken  by  trustee,  440. 

in,  of  third  persons,  how  collected,  115,  613,  757. 
Receiving  from  bankrupt  with  intent  to  defraud,  686. 
Referee  purchasing  when  interested,  penalty.  687. 

to  take  possession  and  release  when,  133. 
Seizure  of,  258. 
Sold,  can  not  be  for  less  than  75  per  cent,  of  appraised  value,  753. 

conditionally,  448. 
Title  to,  vests  in  trustee  when,  435. 
Transferred  before  adjudication.  436. 

between  adjudication  and  appointment  of  trustee,  435. 

revests  in  bankrupt,  when,  440,  724,  728. 


J  540  INDEX. 

References  are  to  pages. 

The  Aualytica!  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Property  (continued)  — 

Third  persons,  of,  in  possession  of  bankrupt,  444,  695. 

fraudulent  sales,  451. 
Trustee  to  convey,  sold,  753. 

secreting  or  destroying,  677. 

title  to,  vests  in  when,  435. 

title  to  what,  vests  in,  425,  et  seq.,  460. 

turned  over  to,  by  bankrupt,  694. 
(See  also  Estates.) 

Prosecution — 

(See  Offen.se.) 

Protection — 

Bankrupt,  of,  from  arrest,  655,     (See  Arrest.) 
Estate,  to,  mode  of  proceeding  for  the,  250. 

applications  for,  how  made,  251. 

appoint  receiver,  etc.,  251,  252. 

injunction  for,  252,  256. 

seizure  of  property  of,  258. 

Protest — 

Notice  to  whom  given,  496. 

Provable  claims — 

Assignee,  387. 

Assignee,  expenses  of,  340. 

Bankrupt  is   endorser,   etc.,   where,   352. 

Contingent  demands  and  liabilities,  342,  345 

Contracts,  founded  upon,  3G0. 

contingent,  3G2. 

contract  may  be  oral,  3C0. 

contract  must  have  been  made  prior  to  proceedings,  363. 

covenants  in  lease,  367,  366. 

examples,  365,  et  seq. 

illegal  consideration,  365. 

patent,  382. 

quasi  contract,  361,  381. 
Costs,  359. 

Counter  claims,  369.  \ 

Damages  to  persons,  381. 
Debts  "absolutely  owing,"  345. 

due  at  a  future  date,  346. 

evidenced  by  a  writing,  351. 

evidenced  by  a  judgment,  346. 

founded  on  contract,  3G0. 

founded  on  open  account,  360. 
Equitable  debts,  340. 
Expenses  of  administration,  340. 
Fixed  liability,  what  is  a,  339. 
How  to  prove,  384. 
Interest,  358. 

amount  of,  358. 

rebate  of,  359. 


INDEX.  1541 

References  are  to  pages. 

The  Analytical  Table  preceding  tiiis  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Provable  claims   (continued)  — 

Interest   (continued)  — 

stops  on  filing  petition,  359. 

usury  dependent  on  state  laws,  358. 
Judgments  pending  bankruptcy,  349. 

prior  to  bankruptcy,  347. 
appealed,  348. 
going  behind,  349. 
must  be  for  a  "debt,"  347. 
obtained  within  four  months,  348. 
Liens  barred  by  limitation,  383. 
Liquidated,  must  be,  337. 

Mutual  debts  and   credits,  368,  et  seq.     (See  Mutual  Debts  and 
Credits.  ) 

what  are,  3G9. 
Penalties,  339,  782. 

Preferred  creditors,  rights  to  set-offs,  380. 
Principal  and  surety  both  bankrupts,  356. 
Proved  within  one  ye^ar,  must  be,  383,  388. 
Rent,  365.     (See  Rent.) 
Secured  claims,  338. 
Set-offs  and  counter  claims,  389,  370,  377. 

acquired  by  purchase,  371,  378. 
Surety  for  bankrurt,  352,  et  seq. 

amount   fo'-  whi''-h  principal  creditor  may  prove,  354. 

amount  for  which  surety  may  prove,  355. 
Statute  of  limitations,  whr.t  are  barred  by,  382. 
Stockholders"  liability,  3Cln. 
Torts,  381. 
What  are,  336. 
(See  Dedt. ) 

Proxy — 

Penalty  for  using  false  claim  In  composition,  as  or  by,  686. 
Vote  at  creditors'  meeting,  when  may,  322. 

Publication — 

Application  for  discharge  of,  789. 
Notice  of  first  creditors'  meeting,  of,  322. 
Service,  by,  when  permitted,  248. 
partnership  proceedings,  in,  304. 

Punisbment — 

(See  Offenses.) 

Purchaser — 

Bankrupt  may  be  a,  at  sale,  752. 

Bona  fide,  for  value,  etc.,  title  by  levy,  lien,  etc..  not  impaired,  551. 

for  present  consideration  protected,   470. 
Referee  can  not  become  a,  149,  687,  752. 
Trustee  can  not  become  a,  752. 

attorney  or  agent  of,  can  not  be,  752, 


1542  INDEX. 

References  are  to  paues. 

The  Analytical  Table  preceding  this  Index  shows  where  ench   i-'"ction  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 


Qualification — 

-  Referees,  of,  129. 
Trustees,  of.  415. 
Vote  to,  at  creditors'  meetings,  322. 


R 

Railroad  companies — 

Can  not  be  adjudged  bankrupt,  181. 

Real  estate — 

Advertising  for  sale,  750. 

Included  in  schedule,  212,  2G3. 

Not  to  be  sold  for  less  than  75  per  cent,  of  appraised  value,  713,  753. 

What  passes  to  trustee,  480. 

Reallo\irance  of  claims — 

When  may  be  made,  409. 

Reasonable  attorney  fee — 

(See  Attorneys.) 

Reasonable  cause  to  believe — 

That  preference  has  been  given,  552n,  560. 

Receivers — 

Ancillary,  253. 
Application  for,  252. 

notice  of,  253. 
Appointment  of,  an  act  of  bankruptcy,  1S4,  201. 
Appointment  of  by  bankrupt  court,  252. 
Business  of  bankrupt  may  be  conducted  by,  251. 
Compensation  of,  255. 
Courts  of  bankruptcy  to  appoint,  251. 
Judge  to  appoint,  252. 
Objections  to  report  of,  255. 
Officers  to  include,  158. 
Powers  of,  253. 
Proof  of  claims  by,  387. 
Referees  may  appoint,  139,  253. 
Reports  of,  objections  to,  255. 
Sell,  may,  when,  735. 

Reclamation — 

(See  Intervention.) 

Reconsideration  of  claims — 

(See  Re-allowance  of  Claims.) 

Record — 

Appeal — 

amendment  of,  upon,  937,  938. 
failure  of  appellant  to  file,  941. 


INDEX.  2543 

References  are  to  pages. 

The  Analytical  Ta!)le  preceding  this  Index  shows  wliei-e  pach  section  and   clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Record  (continued)  — 
Apeal   (continued)  — 

filed,  when  must  be,  940. 

printing,  942. 

what  must  consist  of,  93G. 
Bankrupt's  destruction  of,  prevents  discharge,  804. 
Decree  of  adjudication,  of,  437. 

Inspection  ot,  retused  by  trustee  or  referee,  149,  689. 
Notice  imparted  by,  of  order  confirming  composition,  728. 

trustee's  title,  of,  is,  437. 
Referee's — 

dividends,  to  contain,  7G4. 

how  made,  145,  147. 

to  be  made  by,  145,  735. 

transmitted  to  judge  with  findings  by,  when,  145. 
Time  after,  only  counted  in  four  months'  limitation,  204. 

Recovery — 

Dividends,  of,  on  reconsidered  claims,  424. 
Fraudulent  conveyances,  of,  429,  470,  613,  757. 
Property  of,  transferred  to  attorney,  1G5. 

Redeeming — 

Encumbered  property  from  liens,  etc.,  738. 

Re-examination — 

Claims,  of,  409.     (See  Claims.) 
Payments,  of,  made  to  attornej^s,  424,  575. 

Referee — 

Absence  or  disability  of,  128. 

Accounts,  penalty  for  refusing  inspection  of,  149. 

Accounts  of  trustee,  to  audit,  420,  759,  761. 

Acts  only  after  reference,  131. 

Administrative  duties  of,  145. 

Adjudication,  reference  after,  131,  136,  219,  281. 

to  make  when,  133,  136. 
Administration  of  oaths  by,  137,  211,  239,  395,  622. 
Allow  attorney's  fees,  160. 
Amendments,  may  allow,  221,  287. 
Appointment  of,  128. 
Attendance  of  witnesses  before,  137. 
Attorney — 

bankrupt  cases,  can  not  act  as,  in,  136. 

should  be,  129. 
Bond  of,  130. 

amount  of,  130. 

failure  to  give,  creates  a  vacancy,  130. 

filed  of  record  in  clerk's  office,  131. 

sureties  on,  130. 

value  of  property,  130. 

suits  on,  how  and  when  brought,  131. 
Books  containing  record,  etc.,  to  keep,  147. 

certify  and  transmit  to  court,  147,  787. 


1544  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Referee  (continued)  — 

Certified  copies  of  proceedings  before,  evidence,  136,  787. 

Claim  for  exemptions,  banlirupt  to  file  copy  of,  for,  21G,  2G4,  520, 

525,  533,  654. 
Claims  filed  before,  when  case  referred,  402. 
Clerk  hire  of,  151,  138. 
Clerk  to  collect  fees,  154,  217. 

except  when,  217. 

pay  when,  155. 

referee  to  employ,  138. 
Collect  estate  of  bankrupt,  should  not,  133. 
Commissioner  of  deeds,  may  be,  129. 
Commissions  on  dividends,  149. 

Commitment,  can  not  exercise  power  of,  133,  139,  630. 
Compensation  of,  149. 

non  except  that  expressly  authorized,  149. 

when  case  transferred,  150. 

when  reference  revoked,  150. 
Compositions,  can  not  approve,  132,  712,  723. 
Contempt  before,  133,  139,  410,  692,  et  seq. 

proceedings  to  punish  for,  139,  699. 
Copies  of  proceedings  before,  130. 

Counselor  at  law  can  not  act  as,  in  bankruptcy  cases,  149. 
Court  may  act  as,  128. 

Creditors'  lists,  to  make  and  file,  when,  146. 
Deposition,  notice  to  take,  filed  with,  412. 

power  to  take,  138. 

power  to  exclude  evidence,  637. 
Disability,  effect  of,  128. 
Discharges,  can  not  determine,  132. 

may  report  the  facts  on,  817. 
Districts  of,  court  to  designate,  129. 
Dividends,  to  declare,  145,  759,  7G3. 
Dividend  sheets,  to  prepare  for  trustee,  145,  759. 
Duties  of,  145. 

Encumbered  property,  may  order  sale  of,  741. 
Evidence,  to  preserve  when,  146,  147,  411. 

to  make  up  record  embodying,  etc.,  148. 
Examination — 

bankrupt,  of,  power  to  regulate,  628. 

may  conduct  an,  to  be  used  in  another  district    when,  632. 

may  order,  631. 
Expenses  of,  151. 

must  keep  accurate  account  of,  151. 

may  require  indemnity  for,  when,  152. 
Fees  of.  149. 

apportionment  of,  150. 

claim  for  must  be  passed  upon  by  court,  150. 

clerk  to  collect,  154. 

may  be  ordered  paid  by  judge,  150. 
Fined,  for  what  offenses,  149,  687. 
Findings,  to  transmit,  etc.,  to  judges  when,  148. 
Fix  time  and  place  of  acting  upon  matters  before  them,  may,  131. 
Forfeit  office,  when,  149. 


INDEX.  154^3 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  ?bows  wlure  rnrh     -r-tiou  and  cIhiksp 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Referee  (continued)  — 

Government   penalty   envelopes,   may   use,   14G. 
General  powers  of,  131. 
Information  to  furnish,  when,  145. 
Injunction,  power  to  grant,  134. 
Inspection  of  books,  etc.,  must  allow,  when,  687. 
Interested,  penalty  for  acting,  when,  149,  687. 
.lurisdiction  of,  131,  et  seq. 
administer  oaths^  137. 
clerk,  employ,  138. 
consider  petitions,  136. 
examine  witnesses,  137. 
stenographers,  employ,  138. 
take  possession  of  and  release  property,  139. 
Jury  trial,  should  not  preside  at,  189. 
Justice  of  the  peace,  may  be,  129. 
Limitation  of  action  on  bond,  131. 
List  of  creditors,  bankrupt  to  file  copy,  for,  213. 

when  to  prepare  and  file,  135. 
Marshal,  may  appoint  to  take  possession  of  bankrupt's  property  140 
Master  in  chancery,  may  be,  129. 
Meetings  of  creditors — 
calls  first,  321. 
presides  at  first,  135,  327. 
Notices  to  creditors  given  by,  145,  146. 
to  take  depositions,  filed  with,  412. 
Number  of,  128. 
Oath  of  office  by,  130. 

to  administer,  137,  211,  239,  395,  662. 
not  in  court,  137. 
Offenses — 

acting  when  interested,  148,  687. 
purchasing  property  while,  148,  687. 
refusing  inspection  of  accounts,  etc.,  148,  687. 
Office,  can  not  hold,  except,  129. 

must  be  in  district,  unless  resident  of   130. 
term  of,  128. 
Officers  of  courts  are^  128. 
Orders  of — 

subject  to  review  by  judge,  135. 
what  should  be  recited  in,  134. 
Papers  to  receive  from  clerks  when,  146,  154. 
penalty  for  refusing  inspection  of,  149,  687. 
to  be  endorsed  how.  147. 
to  transmit  to  clerk,  when,  148. 
Parties  in  interest,  to  furnish  information  to,  145. 
Payment  of  fees  to,  by  clerk,  154. 
Penalty  for  offenses  by,  148,  687. 
Persons   holding   office    under   a   state   or    the   United    States   not 

eligible,  except,  129. 
Petition,  to  consider,  etc.,  136,  282. 

Possession  of  bankrupt's  property,  to  take,  when,  133,  252. 
Powers  of,  131,  et  seq. 
Powers  denied  to,  132,  135. 
Property  surrendered  to  trustee,  may  order,  141. 


1546  INDEX. 

References  are  to  pages. 

The  Analytical  Table  procediug  this  Ind'ex  shows  where  each  section  and  clause 
of  the  Bankrupt  Act   is  considered   in   this   treatise. 

Referee  (continued)  — 

Preserve  evidence,  when,  146. 
Punishment  for  contempt  before,  139,  609. 

for  offenses  by.  145.  687. 
Purchaser,  can  not  be,  of  bankrupt's  property,  when,  145,  687,  752. 
Qualifications,  129. 
Receivers,  may  appoint,  140. 
Records — 

certified  by,  136,  147. 

penalty  for  refusing  an  inspection  of,  145,  687. 

to  keep  and  transmit  to  clerks,  146,  148. 

to  make  up  and  send  to  judges,  146,  148,  787. 

what  to  include  in,  147,  329,  759. 
Reference — 

cases  of,  after  an  adjudication,  132,  218,  281. 

voluntary  cases,  184. 

when  and  by  whom  cases  are  referred  to,  218. 
Related  to  judges  of  courts,  etc.,  can  not  be,  129. 
Release  property  of  bankrupt,  when,  139,  252,  261. 
Remove,  court,  may,  128. 

Resident  of,  must  be,  or  hold  office  in  district,  130. 
Review,  powers  subject  to,  135,  141. 
Rulings  of,  may  be  reviewed  by  judge,  141,  et  seq. 
Sale,  can  not  bid  at,  149,  687,  752. 

Stay  proceedings  of  other  courts,  have  no  power  to,  133. 
Schedule,  to  examine  and  amend,  145,  214,  221. 

copy  of,  to  be  filed  for,  213,  655. 

to  prepare  and  file,  if  bankrupt  neglects,  etc.,  146. 
Stenographer,  to  employ,  138,  411,  637. 
Subpoenas  should  not  be  issued  by,  133. 
Term  of.  128. 

Time  of  bringing  suit  on  bond,  131. 
Transfer  of  cases,  to,  132,  272,  302. 

apportionment  of  fees,  150. 
Trustees — 

appointment  of,  by,  in  certain  cases,  135. 

approve  the  bond  of,  may,  136. 

discharge,  when  may,  786. 

notify  trustees  of  appointment,  to,  135,  417. 

removal  of,  135. 
Vacancy,  filling,  128,  130. 

failure  to  give  bond  creates,  130. 
Warrant  for  detention  of  bankrupt,  no  power  to  issue,  132. 
Who  may  conduct  proceedings  before,  138. 
Witnesses — 

attendance  before,  137,  410,  633. 

may  compel  to  produce  books,  630. 

may  examine,  137. 

may  summon,  137. 

Reference — 

Absence  of  judge,  131,  136,  154. 
Adjudication,  after,  132,  218,  281. 
Involuntary  cases,  in,  281. 


INDEX.  1547 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Reference    (continued)  — 

Order  of — 

to  be  served  on  referee,  220. 
Partnership  cases,  in,  304. 
Proceedings  after,  220,  321. 
Voluntary  cases,  in,  218. 
When  made,  154,  219. 

Rehearing — 

In  appellate  cases,  945. 

Relationship — 

Computing,  226. 

Relative — 

Creditor,  of  bankrupt,  can  not  be  counted  in  petition,  etc.,  229. 
Referee,  not  to  be,  of  judges  of  United  States  courts,  etc.,  129. 

Release — 

Bankrupt's  property  of,  giving  bond,  140,  261. 
Referee,  by,  of  property,  when,  140,  261. 
What  debts  discharge.     {See  Discharge.) 

Removal — • 

Bankrupt,   of,  from  one   district  to   another,   670,   675.      (See  Ex- 
tradition. ) 

Cases  to  circuit  court,  122. 

Property  of  bankrupt,  of,  with  intent  to  defraud,  etc.,  effect,  183, 
190,"  191. 

Referee,  of.  128. 

Trustee,  of,  effect,  425,  676. 
by  judge  only,  135,  425. 
on  hearing  and  notice,  425. 

(See  Trustee.) 

Rent — 

As  a  provable  debt,  865. 

after  adjudication,  365,  487. 

apportionment,  365. 

before  adjudication,  3G5. 

covenants  in  lease,  367. 

election  by  trustee,  365,  et  seg. 

lien  for,  368. 

surety  for,  liability  of,  488. 

Reopening  estate— 

When  court  will,  786. 

Replevin — 

Action  of,  will  not  lie,  when,  444. 

Reply — 

When  necessary,  273. 


1548  INDEX. 

References  are  to  pajres. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act   is   considered   in   this   treatise. 

Report — 

Annual,  of  Attorney-General,  158. 

Officers,  by,  of  expenses  of  administering  estates,  151. 
Trustee,  by,  of  condition  of  estate,  when,  420,  759,  763, 
final,  when,  734. 

Representations — 

Judgment  in  action  for  false,  not  released  by  discharge,  836. 

Residence — 

Banking  institutions,  depositories,  etc.,  to  be  convenient  to  trustees, 

421. 
Departure  of  bankrupt  from,  cause  for  detention,  630,  661. 
Dower  fixed  by  law  of  bankrupt's,  481,  531,  676. 
Expenses  ot  bankrupt,  attending  examination  from,  634. 
List  of  creditors  filed  by  bankrupt  to  show,  212,  214,  264. 
Persons  adjudged  bankrupt,  of,  206,  234,  235,  246,  296,  302. 
Referee's,  in  district,  etc.,  130. 
Sureties  on  bond  when  property  seized,  258. 
Taxes  of,  bankrupt  not  released  from,  by  discharge,  832. 
Trustees,  in  district,  etc.,  416. 

Respondent — 

Costs,  counsel  fees,  etc.,  allowed  on  dismissal  of  petition,  279. 

Restraining  orders — 

To  protect  an  estate,  256. 

Return — 

Subpoena,  247. 

Revesting — 

Of  title  in  bankrupt,  when,  440,  724,  730. 

Revieiy — 

By  circuit  court  of  appeals,  900,  et  seg.      (See  Circuit  Court  of 

Appeals.  ) 
Contempt  proceedings,  of,  705. 
Final  allowance  or  rejection  of  a  claim,  413, 
Referee,  of  action  of,  135,  141,  et  seg. 

Revivor — • 

On  death  of  party,  in  appellate  court,  945. 

Revocation — 

Discharge  of  bankrupt,  of,  when  may  be  made,  861. 
Title  vested  in  trustee  on,  of  discharge,  440,  866. 

Rliode  Island — 

Territorial  jurisdiction  and   time  of  holding  courts   in,   62. 


INDEX.  1549 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  wbei-e  each  section  and  clause 
of  the  Bankrupt  Act  is  considered   in  tliis   treatise. 


Rules — 

€ 
I] 

proceedings,  953 


es — 

Amendment  of,  by  supreme  court  of  United  States,  953. 

Supreme   court  of   tiie   United    States   to   prescribe   in   bankruptcy 

nrnfppdinp-o     QK'i 


s 

Salary — 

Persons  receiving,  of  $1,500  can  not  be  involuntary  bankrupt,  169. 

Sale — 

Advertising,  as  to,  750. 

Application  for,  wlio  may  make,  741,  742. 

Appraising  property  before,  752. 

Approval  of  court,  753. 

Auction,  usually  by,  750. 

Bankrupt,  may  purchase  at,  752. 

Conditional,  to  bankrupt  may  not  pass  title,  448. 

Conducted  how,  750. 

Confirmation  of,  when,  753. 

Costs  of,  756. 

Encumbered  property,  of,  608,  612. 

application  for,  how  made,  738,  et  seq. 
should  be  made,  when,  741. 

free  from  encumbrance,  742. 

petition  for,  741,  742. 

proceeds,  how  dealt  with,  744. 

purchase  by  lienor,  745. 

subject  to  encumbrance,  741. 

trustee  represents  whom,  741. 
Fraudulent,  to  bankrupt  may  not  pass  title,  446. 
Grounds  for  setting  aside  a,  754. 
Mortgage  or  lien,  subject  to  or  free  of,   741,  742. 
Must  be  for  75  per  cent,  of  appraisement,  753. 
Notice  to  creditors  of,  737,  741,  742,  743. 
Order  of  court,  should  be  by,  735. 

must  be  strictly  followed,  752. 
Perishable  property,  749. 
Power  of  trustee  to  make  a,  733. 
Preference  created  by  a,  578,  et  seq. 
Price,  inadequacy  of,  ground  for  setting  aside,  754. 
Private,  or  public,  757,  742,  743,  750. 
Property,  to  be  conveyed  by  trustee,  753. 
Property  in  dispute,  749. 
Receiver,  by,  735. 
Referee  can  not  bid  at,  149,  687,  752. 

purchasing  at,  penalty  for,  148. 
Setting  aside  a,  754. 
Title  of  bankrupt  only,  transferred,  753. 
Trustee  can  not  bid  at,  752, 
Unincumbered  property,  of,  736. 
Who  may  bid  at.  752. 


i^^n  INDEX. 

References  are  to  pages. 

ThP  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
iut  AUdiju.   ^^  ^^^  Bankrupt  Act  is  considered  in  this  treatise. 

Schednle — 

A,  214. 

amendment  of,  221. 

B,  215. 

Bankrupt  to  make  oath  to  and  file,  when,  654. 
Composition  can  not  be  offered  before  filing.  708. 
Copies  in  triplicate  to  be  filed  by  bankrupt,  213,  264. 
Discharge  does  not  release  from  unscheduled  claims,  839. 

unless  creditors  had  notice,  839. 
Filed  in  involuntary  cases,  240,  243,  654. 

in  voluntary  cases,  216,  654. 

when  bankrupt  absent,  264. 
Form  of,  213. 
Referee  to  examine  and  amend,  145,  214. 

prepare  and  file  when,  145. 
Signed,  each  sheet  should  be,  214. 
Voluntary  bankrupt  to  file,  with  petition,  213,  654. 
What  to  contain,  212. 


Seal  of  court — 

Authentication  of  record,  necessary  to,   938. 
Process  issued  under,  954. 

Secured  creditors — 

Allowance  of  claims^  for  what  sums,  396. 
Claims  secured  by  individual  undertaking.  397. 

subrogation  of  obligor  discharging,  397. 
Definition  of,  611. 

Enforcement  of  security  by,  93,  745. 
Meetings  of  creditors,  not  entitled  to  vote  at,  324. 

claims  not  counted,  etc.,  unless,  etc.,  226. 
Paid  in  full,  when,  761. 
Pay  costs  of  sale,  when,  756. 
Priority  of,  as  to  prior  creditors,  767. 
Prove  deficiency  and  rely  on  security,  611. 

how  to,  claims,  396. 
Rights  of,  611. 

Sale  of  property  on  application  of,  745. 
Security,  may  rely  on,  and  not  prove,  611. 

enforcement  of,  93,  745. 

must  be  stated  in  proving  claims,  394, 

value  of,  how  determined,  396,  611,  740,  748. 
Surrender  security  and  prove  claim,  may,  612. 
Vote,  entitled  to,  when,  324. 

Trustee  may  elect  not  to  take  encumbered  property,  443,  739. 
(See  also  Creditors  and  Preferred  Creditors.) 


Seduction — 

(See  Judgments.) 


INDEX.  1551 

References  are  to  pages. 

The  Analytical  Talile  precedini,'  this  Index  shows  where  each  section  and  clause 
of  tlie  Bankrupt  Act  is  considered  in  tliis  treatise. 

Seiznre — 

Bankrupt's  propfiity,  ot   258. 

applicatioa  for,  258. 
Proceedings  where  property  not  bankrupt's  is  taken,  259. 
Redelivered,  when  and  how,  of  property,  259. 
Referee  may  order,  when,  139,  258. 

Servant — 

Wages  due,  etc,  have  priority,  776. 

Service — 

Notice  of  examination,  of,  634. 

to  take  depositions,  of,  412. 

to  testify  without  district  of  his  residence,  410. 

upon  bankrupt,  634. 
Partnership  proceedings,  in,  304. 
Petition  of,  with  subpoena  for  involuntary  bankrupt,  242. 

manner  of,  242,  244. 
Subpoena  of,  etc.,  242,  244. 
How  to  object  to  irregularity  of,  250. 
Manner  of,  244. 
Publication  by,  248. 
Return  of.  247. 
Waived  by  appearance,  247. 
(See  also  Notice  and  Subpoena.) 

Set-off- 
Allowed  between  creditor  an.l  bankrupt,  when,  369,  371,  377. 

not  between  debtor  and  bankrupt,  when,  374. 
Preferred  creditor,  by,  giving  further  credit,  etc.,  380. 
Waiver  of,  381. 
(See  Mutual  Debts  and  Credits.) 

Setting  aside — 

Confirmation  of  a  composition,  728. 

Discharge,  order  granting,  SCI. 

Preferences  and  fraudulent  conveyances,  613. 

Settlement — 

Controversies   of,   by   arbitration,   730,   757. 
Estate,  of  the,  733. 

Shrinkage  of  assets — 

Evidence  of  concealment,   681. 

Sickness — 

Judge  of,  referee's  powers  when  exercised,   139. 

Solicitor — 

(See  Attobney.) 

Solvency — 

Burden  of  proof  as  to,  185,  277. 

Defense,  a  complete,  when,  185,  193,  200,  203,  232,  268. 

Jury,  trial  by,  as  to,  233,  269. 


1552  INDEX. 

References  are  to  pagres. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Solvent  debtor — 

Can  not  give  a  preference,  557. 

South  Carolina — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  62. 

South  Dakota — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  62. 

State  banks — 

Can  not  be  adjudged  involuntary  bankrupt,  170. 

State  courts — 

Bankrupt  may  be  released  by  habeas  corpus  issued  by,  664. 

Bankruptcy  proceedings,  can  not  enjoin,  207. 

Decisions  of,  bankruptcy  courts  will  follow,  when,  768. 

Determine  effect  of  discharge,  when,   828. 

Enforce  mortgage  or  lien,  when,  746. 

Jurisdiction  at  law  and  in  equity,  91. 

Perjury  before  referee,  can  not  punish  for,  640. 

Suits  in,  may  be  stayed,  94,  105. 

United  States  supreme  may  revise  decision  of,  when,  881. 

State  laws — 

Adopting,  as  to  exemptions,  constitutional,  517. 

as  to  mechanics'   liens,  constitutional,  G09. 

as  to  validity  of  transfers,  constitutional,  479. 
Assignment,   effect  of  national  act  upon,   29. 
Bankrupt  or  insolvent,  may  be  enacted  when,  20. 
Can  not  discharge  debtor  from  existing  contracts,  21. 

debts  owing  to  non-resident,  21. 

impair  obligation  of  contract,  21. 
Dower  of  widow  fixed  by,  531. 
Effect  of  repeal  of  national  act  on,  20. 
Exemptions  governed  by,  513. 
Insurance  policies,  exemption  of,  by,  499. 
Insolvency,  780. 

Liens,  time  of  attaching  governed  by.  547. 
Superseded  only  when  congress  acts,  19. 
Transfers  void  under,  void  in  bankruptcy,  478. 

State  officer — 

Will  be  protected  in  obeying  order  of  court  of  bankruptcy,  668. 

Statement — 

Bankrupt  to  file,  of  his  assets  and  debts,  654.  ^ 

Trustee  to  lay  detailed,  before  final  meeting  of  creditors,   (60,  tHb. 
(See  also  ScHEori-ES.) 

Statistics — 

Attorney-general  to  lay  tables  of,  annually  before  congress,  158. 
Officers  to  furnish,  to  attorney-general  on  request,  158. 


INDEX.  1553 

References  are  to  pases. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Statutes  of  limitation — 

Bankruptcy  stops  running  of,  3S3. 

Debts  barred  by,  not  provable,  382. 

Defense,  as  a,  270. 

Liens  barred  by,  383. 

Time  for  claiming  dividends,  784. 

proving  claims,  383,  388. 

taking  appeals,  919. 

Statutes  of  United  States  (quoted)  — 

Act  of  March  3,  1891,  Sees.  5  and  6,  874,  875. 

Bankruptcy  act  of  1898,  1227. 

Bankruptcy  law  of  1867,  1315. 

Equity  rule  13,  244. 

R.  S.  Sec.  601,  transfer  proceedings  to  circuit  court,  122. 

R.  S.  Sec.  709,  revising  decision  of  state  court  in  supreme  court, 

881. 
R.  S.  Sec.  1007,  supersedeas,  931. 
R.  S.  Sec.  1014,  extradition,  669. 

Stay — 

Application  for,  of  suits  in  state  court,  107,  132. 

M^ho  may  make,  107. 

how  made,  107. 

what  to  contain,  113. 
Begun  after  bankruptcy,  107. 
Effect  of,  of  suits,  113. 

Founded  on  debt  discharged,  of  suits  only,  106. 
In  different  district,  114. 
Judge  and  not  referee  may,  suits,  109. 
Length  of,  108,  113. 
May  be  had  at  any  stage,  106. 
Referee's  power  to,  132. 
Suits,  power  to,  105. 

in  federal  court,  105. 

in  state  court,  105,  256. 
When  granted,  110. 
When  two  or  more  petitions  are  filed,  272. 

Steamboat  companies — 

As  bankrupts,  180. 

Stenographer — 

May  be  employed,  138,  411,  637. 

Stock,  shares  of — 

Fictitious  person,  in  name  of,  492. 

Pass  to  trustee,  492. 

Transfer  on  books  to  trustee,  492. 

Trustee  may  recover  unpaid  subscriptions,  493. 

can  not  recover  stockholder's  liability,  494. 

may  elect  not  to  take,  493. 

may  vote,  493. 

Stockholders — 

Liability  on  discharge  of  corporation,  853. 
does  not  pass  to  trustee,  494. 


1554  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  tliis  Index  shows  where  each  section  and  clause 
of  the  Bankrupt  Act  is  considered  in  this  treatise. 

Subpoena — 

Disobedience  of,  how  to  punish,  636. 

How  issued,  243,  244. 

May  run  into  other  districts,  137. 

Necessary,  when,  243. 

Return  of,  by  marshal,  etc.,  247. 

Service  of,  243,  244. 

when  personal,  can  not  be  made,  246. 

when  served  without  district,  636. 
Should  not  be  issued  by  referee,  133,  137. 
Witness,  to,  to  testify  before  referee  or  court,  635. 

Subrogation — 

Claims  secured  by  individual  undertaking,  of  person  discharging, 

354. 
Labor  and  lien,  777. 
Trustee,  of,  to  rights  of  creditor  or  holder  of  lien,  551,  606,  615. 

of,  to  rights  of  creditors  to  recover  property,  424. 

Suits — 

Bankrupt,  by  and  against,  427,  435. 

appearance  of  trustee,  428,  94. 

commenced  by,  prior  to  adjudication,  427. 

stay  of,  against,  86,  94. 
Bonds  of  referees  and  trustees,  on,  131. 

in  name  of  United  States,  etc.,  131. 

limitation  of  action  on,  131. 
Equity,  where,  in,  123. 

Expense  of.  to  recover  concealed  property  entitled  to  priority,  766. 
Injury  to  property,  right  to  bring  for,  passes  to  trustee,  508. 

to  person,  right  to  bring  for,  does  not  pass  trustee,  510. 
Instituting  bankruptcy  proceedings  as  grounds  for,  289. 
Law  and  equity,  may  be  brought  in  court  of  bankruptcy,  when,  97. 

what  are,  124. 
Lien  created  pursuant  to,  etc.,  when  dissolved,  551. 
Measure  of  damages  in,  to  recover  property  sold,  627. 
Mechanics'  lien,  to  enforce,  610. 
Plenary,  against  third  persons,  100,  695. 
Prosecuted  after  discharge,  may  be,  when,  823. 
Referee,  on  bond  of,  131. 

can  not  stay,  109. 
Review,  how  to,  at  law  and  equity,  867. 
Set  aside,  to  conveyances,  613. 

bankruptcy  proceedings,  not,  618. 

burden  of  proof,  624,  623. 

bona  fide  purchaser  protected,  626,  627. 

damages,  where  property  has  been  sold,  627. 

decree,  in,  626. 

demand  not  necessary,  619. 

failure  to  contest  claim  not  a  bar  in,  620. 

in  what  court,  616. 

in  what  district,  617. 

order  in,  626. 

order  of  bankruptcy  court,  trustee  need  not  obtain,  619. 

petition,  allegations  in,  622. 


INDEX.  1555 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Ind'ex  shows  where  each  section  and  clause 
of  the  Banliruptcy  Act  is  considered  in  this  treatise. 

Suits  (continued) 

Set  aside   (continued)  — 

pleading  and  practice,  616. 

plenary,  are,  618. 

trustee  must  bring,  619. 

trustee  represents  general  creditors  in,  614. 

trustee  subrogated  to  right  of  creditors,  615. 
Staying  suits  in  state  court,  86,  93,  105,  251.     (See  Stay.) 
Trustee,  on  bond  of,  418. 

by,  brought  in  what  courts,  98,  429. 

death  or  removal  not  to  abate,  427,  676. 

not  bound  by  price  of  sale,  when,  627. 

time  of  bringing,  by  or  against,  431. 
on  bond  of,  418. 

"Suflfered  or  permitted" — 

Meaning  of,  197. 

Summary  proceediugs — 

(See  Jurisdiction.) 

Summons — 

(See  SuBPOEN.A..) 

Summons  and  severance — 

When  necessary,  926. 

Sunday — 

In  computing  time,  203. 

Supersedeas — 

Appeal  does  not  operate  as,  931. 
How  obtained,  931. 

Supervisory  power- 
Circuit  courts  of  appeal  may  exercise,  906. 
How  invoked  and  exercised,  906. 
(See  also  Appellate  Proceedings.) 

Supreme  Court  District  of  Columbia- 
Appeals  from,  884. 
A  court  of  bankruptcy,  33,  74. 
Jurisdiction  of,  74. 

Supreme  court  of  a  territory — 

Created  an  appellate  court,  867. 
Practice  and  procedure  in,  898. 

Supreme  court  of  United  States — 

Appeal  in  bankruptcy  lies  to,  from  C.  C.  A.,  when,  885. 

from  C   C.  A.  not  in  exercise  of  supervisory  powers,  911. 

from  supreme  court  of  District  of  Columbia.  884. 
Appellate  jurisdiction  at  law  and  equity  from  federal  courts,  874. 

from  state  courts,  881. 


]556  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Supreme  court  of  United  States  (continued)  — 

Certifying  questions  of  jurisdiction  to,  894. 

of  law  to,  895. 
Certiorari  to  correct  record  in,  886. 

to  remove  cases  from  C.  C.  A.  for  review,  889. 

practice  in,  890. 

Sureties — 

Bankrupt,  for,  may  prove,  when,  354,  355. 
Effect  of  discharge  on,  824,  849. 
discharge  of  principal,  849. 
Liable  for  covenants  in  lease,  when,  488. 
Proof  of  claim  of,  when,  397. 
Referee,  on  bond  of,  130. 

Surrender — 

Value  of  insurance  policies,  499. 
What  constitutes  a,  of  preference,  401. 
"Whether  it  must  be  voluntary,  402. 


Taxations  of  costs — 

By  courts  of  bankruptcy,  76. 
(See  Costs.) 

Taxes — 

Discharge  of  bankrupt  not  to  affect,  832. 
Payment  of  not  a  voidable  preference,  541. 
Priority  in  payment  of,  766. 

Tennessee — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  63. 
Terms — 

Courts  of  bankruptcy,  of,  34. 
Referee's  office,  of,  128. 

Territorial  jurisdiction — 

Courts  of  bankruptcy  in  each  state,  33. 
Court's,  limited  to  its  respective  district,  95. 

Territories — 

District  courts  of,  made  courts  of  bankruptcy,  33. 
Jurisdiction  of,  74. 

appellate,  of  supreme  courts,  898. 
States  include,  513?^. 

Testimony — 

Bankrupt  to  give,  as  to  estate,  655. 

Criminal  proceeding,  in,  can  not  be  offered  against  bankrupt,  643. 

655. 
Manner  of  introducing,  277. 
Persons  denying  insolvency  to  give,  277. 


INDEX.  1557 

References  are  to  pages. 

The  Analytical  Table  preceding  tliis  Index  shows  where  eacli  section  and  clause 
of  the  Baukruptey  Act  is  considered  in   this   treatise. 

Texas — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  64. 

Temporary  injunction — 

To  protect  the  estate,  when  granted,  256. 
(See  Injunction.) 

Time — 

Accounts,  by  trustee,  of  filing,  420,  761,  785. 
Actions,  of  bringing,  by  and  against  trustees,  431. 

on  bonds  of  referees,  131. 

on  bonds  of  trustees,  418. 
Adjudication  should  be  made,  278. 
Answer,  to,  271. 
Appeal  in  bankruptcy  can  not  be  extended,  921. 

to  circuit  court  of  appeals,  919. 

to  supreme  court  of  territories,  898. 

to  supreme  court  of  United  States,  885. 
Application  for  jury  must  be  made  within  what,  266. 
Bankrupt  may  be  examined  within  what,  629. 
Bonds  of  referees,  of  giving,  130. 

of  trustees,  of  giving,  418. 
Certiorari  to  remove  case   from  C.  C.   A.,  of  application   for,   890. 
Citation  may  be  issued,  within  which  a,  933. 
Claims,  of  proving,  388. 
Composition,  of  filing  application  to  set  aside,  729. 

may  be  made  within  what,  719. 
Computation  of,  as  to  acts  of  bankruptcy,  203. 

as  to  filing  petition,  240. 

as  to  creating  preferences,  572. 
Creditors'  meetings,  of,  321,  334. 
Discharge,  of  application  for,  790. 

of  appearance  to  oppose,  793. 

to  oppose  may  be  enlarged,  794. 

specifications,  to  be  filed,  796. 
Dividends,  of  declaring,  763. 

of  paying.  424,  760,  783. 

unclaimed  dividends,  784. 
Examination  may  be  made,  within  which,  628. 
Exemptions  should  be  claimed,  when,  525. 
Holding  courts,  34,  et  seq. 
Involuntary  petition,  to  file  under  act,  240. 
Jury  trial,  of  filing  application  for,  266. 
Notice  to  creditors,  of  giving.     (See  Notice.) 
Petition  against  insolvent,  of  filing,  240. 
Pleading  to  petition,  of,  264. 
Preference  created,  within  which,  566. 

when,  begins  to  run  as  to,  567. 
Record,  of  filing,  in  appellate  court,  940. 
Referees  fix,  and  place  of  acting,  131. 
Subpoena,  of  return  of,  247. 
Trustees,  when  to  give  bond,  417. 

account,  to  file  final,  761,  785. 

limitation  of  actions  by  and  against,  431. 
on  bond,  418. 


1558  "  l^DEX. 

Rpferences  are  to  pages. 

Tlie  Analytical  Table  preceding  tliis  Index  shows  where  eacli  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Time  (continued) 

Trustees    (continued)  — 

report,  to  malve  final,  761,  785. 
Voluntary  petition,  to  file  under  act,  216. 

Title- 
Between  adjudication  and  appointment  'of  trustee,  435. 
Confirmation  of  composition,  on,  440,  724,  728. 
Discharge  upon  revolving  a,  440,  886. 
Estate,  prior  to  appointment  of  trustee,  435. 

when  no  trustee  is  appointed,  435. 
Exempt  property,  to,  519. 

in  bankrupt,  when,  519. 

in  trustee,  when,  519. 
Foreign  property,  to,  437. 
Proof  of  vesting" of,  in  trustee,  437. 
Revests  in  bankrupt,  when,  724. 
Trustee  to  convey,  613,  753. 
Vests  in  trustee,  435. 

when  composition  set  aside,  440,  724,  730. 

Torts — 

Actions  for,  pass  to  trustee,  what,  511. 
Claims  for  damages  in  provable,  391. 
Liabilities  for  not  released  by  discharge,  829. 

Trade  marks — 

Vest  in  trustee,  462. 

Trading   corporations — 

May  be  involuntary  bankrupts,  177. 
what  are,  177. 

Transfer — 

Act  of  bankruptcy,  when,  190. 

intent  of  transferor  only  material,  191. 
Attorneys,  to,  re-examination,  etc.,  when,  575. 
Bankrupt  to  execute,  to  trustee  of  foreign  property,  437. 
Before  adjudication,  466. 
Cases,  of,  by  court  of  bankruptcy,  272. 

when  petition  filed  against  member  of  partnership,  302. 
Definition  of,  553. 

Fraudulent,  what  constitutes  a,  466.     (See  Fraudulent  Teansfebs.) 
"Hinder,  delay  or  defraud,"  to,  474. 
Mortgage,  by,  581,  et  seg.     (See  Mortgages.) 
Payment,  by,  573. 
Preferences,  when  given  by,  533.     (See  Preferences.) 

insolvent  person  to  creditor,  by,  556. 

creditor  must  receive  a  greater  percentage  than  others  of  same 
class,  559. 

reasonable  cause  to  believe  a  preference  intended,  560. 

within  four  months,  must  be,  566. 
Sales,  by,  578. 
Solvent  debtor,  by,  effect  of,  557. 


INDEX.  1559 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Transfer    (continued)  — 

Subsequent  to  act,  within  four  months,  etc.,  void,  474. 

Suits  to  set  aside,  613. 

Within  four  months,  void  under  state  laws,  void  under  act,  478. 

Traveling  espenses — 

(See  Expenses.) 

Trial— 

By  jury,  when.     (See  Jury.) 

Involuntary  petition  on,  274. 

Intervening  petition  to  recover  property  of  trustee,  459. 

Solvency,  of  question  of,  188,  269. 

Suits  to  recover  property  for  the  estate,  62.5. 

Triplicate — 

Schedules,  copies  of,  filed,  216,  264. 

Trust — 

Companies  may  be  trustees,  416. 

Courts,  to  settle  what  is  trust  property,  504. 

Property  held  by  bankrupt  in,  does  not  pass,  500. 

in  which  bankrupt  has  an  interest  passes,  504. 

whether  bankrupt  has  interest,  how  determined,  505. 

Trustees — 

Acceptance  of  appointment  by,  333. 
Accounts,  etc.,  open  to  inspection,  421,  687. 

objection  to,  786. 

partnership  cases,  in,  306,  420. 

referee  to  audit,  420,  759,  761. 

sale  of,  738. 

to  keep,  420. 

to  file  final,  when,  761,  785. 
Accretions  to  land  by  alluvion  pass  to,  481. 
Actions  on  contracts,  right  of,  pass  to,  509. 

injury,  for,  to  property  pass  to,  511. 
to  persons  do  not  pass  to,  510. 
Adjudication,   decree   of,   must  file,   420. 
After-acquired  property  does  not  pass  to,  505. 
Alimony  does  not  pass  to,  460. 
Appeal  bond,  not  required  to  give,  930. 
Appointment  of,  329,  415. 

creditors  to  make,  when,  329,  426. 

judge  or  referee,  to  make,  when,  331,  415. 

new,  after  removal,  426. 

upon  setting  aside  composition,  730. 

upon  revoking  discharge,  866. 

by  referee,  135,  415. 

setting  aside,  415. 

when  no  assets  and  no  creditors  appear,  416. 

who  are  qualified  for,  416. 
Arbitration,  trustee  to  submit  controversies  to,  422,  730. 
Assigned  for  benefit  of  creditors,  780. 


1560  INDEX. 

References  are  to  pages. 

Tlie  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Trustees  (continued)  — 

Attorney  of,  should  not  represent  bankrupt,  159. 

creditors  may  elect  159. 

may  employ  when  necessary,  159,  162,  422. 
Bankrupt,  to  inform,  of  attempt  to  evade  act,  654. 

may  be  adjudged,  169. 
Banks  as  depositories,  to  deposit  money  in,  421. 
Bid  at  sale,  can  not,  752. 
Bonds  ot  417. 

amount,  333. 

creditors  to  fix,  33,  417. 
court  to  fix,  when,  417. 

appeal,  not  required  to  give,  930. 

evidence  of  title,  certified  copy  of  order  approving,  etc.,  437. 

failure  to  give,  effect,  418. 

filed  where,  418. 

joint  or  several,  etc.,  417. 

recording  of,  how  far  notice,  437. 

suits  on,  418. 

sureties  approved  by  court,  418. 
corporations  may  be,  418. 
number  of,  418. 
value  of  property,  etc.,  418. 

court  to  require  evidence,  418. 

time  of  giving.  418. 
Business  of  bankrupt,  when,  conducted  by,   251,  735. 
Circuit  courts,  when  suit  by,  in,  123. 
Collect  and  reduce  to  money  the  estate,  to,  423,  733. 
Commissions  of,  432. 
Compensation  of,  431. 

apportionment  of,  433. 

withholding,  433. 

who  is  an  attorney,  163. 
Composition  can  not  object  to,  715. 
Compromise  controversies,  may,  when,  422,  730,  757. 
Concurrence  of  two,  necessary,   424. 
Condition  of  estate,  to  report  when,  421,  759,  785. 
Confirmation  of  composition,  title  upon,  440,  724,  728. 
Contingent  remainder  does  not  pass  to,  481. 
Contracts,  rights  under  pass  to,  subject  to  election,  508. 

exceptions  to,  510. 
Controversies,  arbitration  of,  422. 
Convey  title,  613,  753. 
Copyrights  pass  to,  462. 
Corporations  authorized  to  act  as,  416. 
Created  by  act,  415. 
Creditors  to  appoint  when,  415,  426,  730.  866. 

when  no  creditor  proves  claim,  416. 
Creditors'  meetings,  to  make  detailed  statement  at  final,  785. 
Crops  pass  to,  48S. 
Courtesy,  trustee  takes  subject  to,  482. 

trustee  takes  bankrupt's  right  to,  481. 
Death  or  removal,  effect  of,  427,  676. 
Depositories,  deposit  money  in,  421,  783. 

disbursed  by  check  on,.  783. 


INDEX.  1561 

References  are  to  pages. 

Tbe  Analytical  Table  preceding  this  Index  sliows  where  eacli  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Trustees  (continued)  — 

Devise,  property  by,  passes  to,  480. 
Discharge  of,  761,  786. 

debts  of,  not  released  by,  846. 
Distribute  estate,  to,  418. 
Dividends,  to  pay  when,  424,  783. 
Documents,  etc.,  pass  to,  462. 

punishment  for  secreting,  destroying,  etc.,  678.. 
Dower,  trustee  tal^es  subject  to,  481. 

trustee  takes  bankrupt's  right  to,  481. 
Duties  of,  418. 

Elect  to  take  incumbered  property,  may,  443,  738 
Election  of,  443. 
Embezzlement  by,  677. 
Emblements,  488. 
Encumbered  property  may  be  sold  by,  608,  612,  738. 

not  bound  to  take,  433. 
Equitable  interest  in  land  pass  to,  when,  480. 
Equities,  takes  subject  to,  439. 
Equity  of  redemption  pass  to,  480. 
Error,  not  required  to  give  bond  on,  930. 
Estates  pass  subject  to  equities,  439. 

merchantable  form,  may  put  in,  when,  734. 
to  close  up,  etc.,  423. 
Examination,  may  apply  for  an  order  for,  633. 
Exemption,  property  subject  to  does  not  pass  to,  519. 
for  what  purposes  it  may  pass,  519. 
to  set  apart,  519,  533. 
Expenses,    431. 

Failure  to  qualify  creates  a  vacancy,  333. 
Fee  subject  to  an  easement  passes  to,  480. 
File  decree  of  adjudication,  must.  420. 
Final  accounts  to  file,  when.  761,  785. 

reports  to  make,  420,  761,  785. 
Fixtures,  when  pass  to,  488. 
Foreign  property,  title  acquired  to,  437,  461. 
Franchises,  pass  to,  when,  494. 

Fraud  of  the  act,  property  transferred  in,  passes  to,  474. 
property  transferred  in,  passes  to,  466. 

property  purchased  in,  by  bankrupt,  does  not  pass  to,  451, 
Goods  and  chattels  generally  pass  to,  490. 
Good  will,  when  passes  to,  489. 
Governed  by  whom,  419. 
Information,  to  furnish,  421. 
Inspection  of  papers,  penalty  for  refusing,  149. 
Insurance  policies  pass  to,  497,  et  seq.     (See  Ixsurats^ce.) 
Interest,  to  pay,  422n,  759. 
Inventory,  when  to  file,  420. 
Invest  funds,   when  may  temporarily,  422. 
Lease,  when  passes  to,  367,  483. 

contract  to,  when  passes  to,  487. 
may  elect  not  to  take,  483,  et  seq. 
takes  subject  to  equities,  487. 
surrender,  may,  487. 
waste,  487. 
Legacies,  pass  to.  when,  490. 


1562  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Banki'uptcy  Act  is  considered  in  t'lis  treatise. 

Trustees  (continued)  — 

Lien,  subrogated  to  rights  of  holder  of,  551,  606,  615. 
Limitations  as  to  suits  by  or  against,  431. 

must  be  pleaded,  431. 
Memberships  in  exchanges,  franchises,  etc.,  pass  to,  494. 
Meetings  of  creditors,  make  statements  before  final,  785. 
Money,  deposit  in  designated  depository,  421. 

disbursed  by  check,  etc.,  421. 
Negotiable  instruments  pass  to,  496. 

notice  of  dishonor,  of,  to  be  given  to,  496. 
Notice  of  appointment,  333,  417. 
Notice  of  equities,  takes  with,  419. 
Number  of,  415. 

Object  to  composition,  can  not,  715. 
Offenses  by,  677. 
Office  of,  where,  416. 
Officers  of  the  court,  are,  415,  418. 
Official  or  general,  can  not  be  appointed,  416. 
Partnership,  creditors  to  appoint,  323. 

how  to  administer  an  estate  of,  306. 
Patents,  copyrights  and  trade  marks  pass  to,  462. 
Pay  dividends,  to,  424. 

the  taxes  on  estate,  422. 
Payments  to  attorneys,  re-examined  by,  when,  424. 
Pensions   do   not   pass   to,   496. 
Perishable  property  may  be  sold  by,  749. 
Personal    property    of,    passes    to,    479. 
Possession,  entitled  to,  440. 

constructive,  440. 

of  unscheduled  property,  442. 
Powers  of  appointment  pass  to,  464. 
Preferences,  voidable,  to  set  aside,  423. 
Property  of  bankrupt,  to  collect,  423,  733. 

transferred  to  preferred  creditors,  471. 

fraudulently  transferred  passes  to,  466. 

fraudulently  purchased  does  not  pass  to,  451. 

in  hands  of  factor  or  agent,  passes  to,  490. 

on  which  there  is  a  valid  lien,  542. 

what  passes  to,  435.     (See  Estates.) 
Prove  claims  of  estate  against  other  estates,  387,  423, 
Punishment  for  offenses,  148,  677,  et  seq. 
Purchaser  at  sale,  can  not  be,  752. 
Qualifications  of,  416. 

Real  property  subject  to  levy  passes  to,  480. 
Recovery  of  property  by,  418,  613,  et  seq. 
Reduce  the  estate  to  money,  to,  418,  423. 
Removal  of,  425. 

application  for,  425. 

by  judge  only,  135,  425. 

cause    for,    426. 

costs,  426. 

does  not  abate  any  suit,  427,  676. 

hearing  and  notice,  426. 

new  trustee  appointed  after,  426. 
Rent,  liability  for,  365,  487. 


INDEX.  1563 

References  are  to  pages. 

The  Analytical  Table  preceding  tliis  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Trustees  (continued)  — 

Reports,  to  make,  420,  759. 

final,  when.  761,  785. 
Represent  whom,  419,  614,  741. 

Residents  of,  must  be,  or  have  office  in  district,  416. 
Resignation  of,  427. 

Reversion  with  rent  incident  thereto  passes  to,  480. 
Sale  of  property,  power  to  make,  733.     (See  Sale.) 
Schedule,  copy  of,  to  be  filed  for,  264. 
Separate  property  of  wife,  does  not  take,  510. 
Shares  of  stock  pass  to,  492. 

may   vote,   493. 
Subrogation  to  rights  of  individual  creditors,  424. 

to  rights  of  lienholders,  551,  606,  615. 
Successor  may  prosecute  or  defend  suit,  427. 
Suits  by  or  against,  93,  427. 
appeal   in,  428. 

courts  to  be  brought,  in  what,  97,  98,  429,  616. 
how  far  bound  by,  428. 

leave  of  court,  must  obtain,  when,  428,  430. 
limitation  of,  by  or  against,  431. 

on   bond,   418.  ' 

to  set  aside  preferences  and  fraudulent  transfers,  613.      (See 
Suits.) 
Summoned  as  witness  by  referee,  can  not  be,  138. 
Taxes,  credited  with,  on  receipt  filed,  for  payment  of,  422. 
Third  person,  when  property  of,  passes  to,  444. 
Title  to  proi^erty  vested  in,  435,  et  seg. 

on  revocation  of  discharge,  440,  866. 
all    kinds   of   property    which   may   be   applied   to   pay    debts 

vests  in,  460. 
exempt  property,  518. 
extent  of,  438,  et  seg. 

holds,  until  conveyed  or  estate  settled,  440. 
what  passes,  438. 
Transfer,  void  under  state  law,  void  under  act,  478. 

penalty  for  unlawful,  678. 
Trade  marks  pass  to,  462. 
Trust  property  does  not  pass  to,  500. 

in  which  bankrupt  has  an  interest  passes  to,  504. 
what  is,  504,  et  seg. 
Two  trustees  must  concur  when  three  act,  424. 
Unencumbered  property  may  be  sold  by,  736. 
Unpaid  subscription  on  stock  may  be  recovered  by,  493, 
Vacancy,  appointment  in  case  of,  418,  427,  866. 
by  failure  to  give  bond,  418. 
by  failure  to  qualify,  333. 
Vested  with  title  to  property  on  high  seas,°461. 
Vested  with  title  to  property,  when,  435. 
What  passes  to,  435,  et  seg.,  460. 
When    appointed,    415. 
Who  may  be,  416. 

Unclaimed  dividends — 

Disposition  of,  784. 


u 


1564  INDEX. 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Uniformity- 
Uniformity  required  by  constitution,  19. 

Unincorporated  company — 

May  be  adjudged  involuntary  bankrupt,   181. 

United  States — 

Bankrupt  statutes  of,  history  of,   6. 
Discharge  on  debts  due,  effect  of,  832. 
Proof  of  claims  by,  388. 
Prove  claims,  failure  of,  to,  388. 
Taxes  of,  discharge  not  to  affect,  828. 

United  States  commissioner — 

Proceedings  before,  to  remove  bankrupt  to  another  district,  670. 

United  states  courts — 

(See   Courts,   Ctrcuit   Courts,    Circuit   Courts   of   Appeals   and 
Supreme  Court.) 

Unliquidated  claims — 

Provable,  when  and  how,  337. 

Utah- 
Territorial  jurisdiction  and  time  of  holding  courts  in,  67. 

V 

Vacancy — 

Referee's  office,  in,  128. 

court  appoints  successor,  128. 
Trustee's  office,  in,  on  failing  to  qualify,  333. 

on  failure  to  give  bond,  418. 

how  filled,  418. 

Vacating  orders — 

(See  Set  Aside.) 

Value — 

Exemptions,  of,  to  be  set  apart,  determined  by  what  law,  513. 
Sale,  no,  for  less  than  75  percent  of  appraised,  753,  755. 
Securities  of,  how  determined,  740. 

Verdict — 

Court  can  not  enter  judgment  contrary  to,  276. 

Directing,  278. 

Setting  aside,   278,  276. 

Vermont — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  67. 

Virginia — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  67. 


INDEX.  1565 

References  are  to  pages. 

The  Analytical  Table  preceding  this  Index  shows  where  each  section  and  clause 
of  the  Banliruptcy  Act  is  considered  in  this  treatise. 

Verification — 

(See  Oath.) 

Vesting  of  title — 

(See  Title.) 

Violation  of  law — 

(See   Offenses.) 

Void  conveyances — 

(See  Preferences.) 

Voluntary  bankruptcy — 

Act  of  bankruptcy  to  file  petition  in,  203. 

Adjudication,  order  of,  218. 

Court  in  which  petition  filed,  208. 

Dismissing  proceedings,  222. 

District  in  which  petition  may  be  filed,  208,  210. 

time  within,  209. 
.  Enjoin  proceedings  in,  state  court  can  not,  207. 
Filing  petition,  216. 

after  assignment  for  benefit  of  creditors,  207. 

after  involuntary  petition  filed,  207. 

fees  required,  on,  217. 

in  two  districts,  211. 
How  instituted,   211. 
In  forma  pauperis,  217. 
Partnership  cases,  219,  296. 
Petition,   211. 

number  of  filed,  207. 

who  may  file,  206. 
Proceeding  in,  206,  211. 

subsequent  to  adjudication,  223, 
Reference,  order  of,  218. 
Schedules,  216. 

number  of,  to  be  filed,  216. 
State  court  can  not  enjoin  proceedings  in,  207. 
Subsequent  to  reference,  proceedings,  223. 
Void  if  court  has  no  jurisdiction,  210. 
Who  may  file  petition,  168,  206. 

Voters — 

At  creditors'  meetings,  322,  et  seq. 
Claim  disallowed  after  voting,  325. 
How  to  count  votes,  329. 
Referee  can  not  be  a,  327. 
Secured  creditor  can  vote,  when,  324. 

w 

Wage-earners — 

Can  not  be  adjudged  involuntary  bankrupts,  169. 
Who  are,  169. 


1566  INDEX. 

References  aj'e  to  pnpres. 

The  Analytical  Table  preceding  this  Index  shows  where  eacli  section  and  clause 
of  the  Bankruptcy  Act  is  considered  in  this  treatise. 

Wages — 

Entitled  to  priority,   764,  776.      (See  Labok  Claims.) 
Payment  of,  not  a  voidable  preference,  541. 
(See  also  Wage-eaknebs. ) 

Waiver — 

Act  of  bankruptcy  of,  by  consent  of  petitioning  creditor,  227. 

Appearance  is,   of   service,   247. 

Discharge,  effect  of,  by  new  promise,  855.     (See  New  Promise.) 

estopped  by  consent  to  allege  act  against,  793. 

right  to  oppose   by  not  appearing  to   oppose  in  time,   794. 
Examination  before  United  States  Commissioner,  of,  671. 
Exemptions,  of,  525. 

Formal  defects  of,  pleading  to  merits,  266. 
Jury  trial,  of,  266,  269. 
Set-offs  and  counter  claims,  381. 

Want  of  prosecution — 

Involuntary  petition   not   dismissed   for,   287. 
Voluntary  petition  not  dismissed  for,  222. 

Warrant — 

Bankrupt,  for  removal  of,  674. 

for  detention  of,  referee  can  not  issue,  132. 
Seizure  of  debtor's  property,  for,  258. 

W^ashington — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  68. 

West  Virginia — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  69. 

Widowr — 

Entitled  to  dower,  when,  487,  531. 

Wisconsin — ■ 

Territorial  jurisdiction  and  time  of  holding  courts  in,  70. 

W^ithdraw^al —  \ 

Appearance  of,  263. 

Of  proof,  403. 

Of  wiitten  evidence  of  debt,  when  and  how  allowed,  395. 

Proof  of  claim,  of.  403. 

Written  evidence  of  debt,  395. 

Witnesses — 

Attendance  before  referee,  137,  410,  632. 

Competency  not  regulated  by  state  laws,  631. 

Compulsory  attendance   to  be  examined,   630,   632. 

Contempt  for  refusal  to  appear,  etc.,  636. 

Court,  how,  are  brought  before,  635. 

Evidence  before  referee  may  be  used  in  civil  suits  to  impeach,  647, 

650. 
Examine,  power  of  court   to,  630,   632. 


INDEX.  1567 

Ucfprcnces  ;iro  to  pages. 

The  Analytical  Tai)le  prPcedinR  this  Index  shows  where  each  section  and  clausf 
of  the  Baulvrnptcy  Act  is  considered  in  this  treatise. 

Witnesses    (continued)  — 

Examined,  refusal  of,  to  be,  639. 

before  a  referee,  139. 
Expenses  of,  indemnity  for,  152. 

Fees  and  mileage  of,  to  be  first  paid  or  tendered,  636, 
How  examination  of,  is  made,  636. 
Irrelevant  questions,  need  not  answer,  645. 
Privileged  communications,  646. 
Service  of  summons,  635. 

without  district,  when,  636. 
Sign  depositions  taken  before  referee,  640. 
Summons  by  referee,  137. 

to  testify,  635. 
Topics  upon  which,  may  be  examined,  644. 
Who  are  subject  to  service  of  process,  246. 
Who  may  be  summoned  as.  before  court,  G30,  613. 

before  referee,  137. 

Women — 

Married,  as  involuntary  bankrupts,  174. 
Married,  may  file  voluntary  petition,  168. 

Workmen — 

Wages  of,  have  priority,  776.     (See  Labor  Cl.\ims.) 

Writ— 

Certiorari,  of,  to  complete  record,  886. 

to  remove  case  to  U.  S.  supreme  court,  889. 
Error  of  in  bankruptcy,  916. 
Seize,  to,  property  of  bankrupt,  258. 
Subpoena,    of,    242. 

Writing — 

Debts  evidenced  by  provable,  351,  et  seg. 
Filed,  to  be,  with  proof  of  claim,  395. 
List  of,  included  in  schedule,  216. 
Pass  to  trustee,  what,  462,  496. 

Written— 

Admission,  act  of  bankruptcy,  when,  202. 
Evidence  of  claim,  how  proved  and  withdrawn,  395. 
Reports  of  trustee  to  court,  420. 

Wyoming — 

Territorial  jurisdiction  and  time  of  holding  courts  in,  71. 


LAW  LIBRARY 

UNIVERSITY  OF  CALIFOKKU 

LOS  ANGELES 


UC  SOUTHERN  REGIONAL  LIBRARY  FACILITY 


AA    000  729  639    5 


